NATURE AND CONCEPT OF BUSINESS ORGANISATION

1. By- Jyoti Rastogi
Assist. Professor

2. An organisation can be
defined as:
 A social arrangement which pursues collective goals,
which controls its own performance and which has a
boundary separating it from its environment.
 Organisations can include businesses such as companies and
partnerships, clubs, charities, government departments,
hospitals and schools. Most organisations have some sort of
internal structure.
 For example, a manufacturing business will have a factory
where goods are made, a warehouse where they are stored
and offices where information is stored and administration
carried out. Each of these can then often be subdivided.
 For example, a factory might be subdivided into component
production, assembly and finishing departments.
By- Jyoti Rastogi (Assistant Professor)

3. Basic Concept
 There is need for an organisation whenever groups of
people work together to reach common goals. Thus, in
essence, organisation is a group of individuals with a
common goal, bound together by a set of authority-
responsibility relationships. One of the functions of
management is to co-ordinate available resources of an
organisation for effective operations.
 Thus organising is the management function that establishes
relationships between activity and authority.
By- Jyoti Rastogi (Assistant Professor)

4. The term ‘organising’ is interpreted in four
different ways.
 The way management designs a formal structure to most
effectively use the financial, physical, material and human
resources of the organisation.
 How the organisation groups its work into activities, with each
group being placed under a manager having the authority to
supervise group members.
 Establishing proper relationships among functions, jobs, tasks
and employees.
 The way managers subdivide the tasks to be accomplished in
their respective departments and delegate the necessary
authority to perform the tasks.
By- Jyoti Rastogi (Assistant Professor)

5. ‘Organisation’ is a broad term.
Important concepts
 Division of labour, or specialization,
 Use of formal organisation charts,
 Chain of command,
 Unity of command,
 Communication channels,
 Departmentation,
 Levels of hierarchy,
 Span of management,
 Use of committees,
By- Jyoti Rastogi (Assistant Professor)

6. Organisation - As a
Structure
 An organizational structure is a system that outlines how
certain activities are directed in order to achieve the goals of
an organization. These activities can include rules, roles, and
responsibilities.
 The organizational structure also determines how information
flows between levels within the company. For example, in a
centralized structure, decisions flow from the top down, while
in a decentralized structure, decision-making power is
distributed among various levels of the organization.
 An organizational structure outlines how certain activities are
directed to achieve the goals of an organization.
 Successful organizational structures define each employee's
job and how it fits within the overall system.
By- Jyoti Rastogi (Assistant Professor)

7. Organisation – As a Process
 Organizing, like planning, must be a carefully worked out
and applied process. This process involves determining
what work is needed to accomplish the goal, assigning
those tasks to individuals, and arranging those individuals
in a decision‐making framework (organizational structure).
 The end result of the organizing process is
an organization — a whole consisting of unified parts
acting in harmony to execute tasks to achieve goals, both
effectively and efficiently.
By- Jyoti Rastogi (Assistant Professor)

8. Organisation Process
Fixing the Objectives.
Identifying activities (work) required for achieving objectives.
Grouping the similar (related) activities.
Defining responsibilities of each employee.
Delegating authority to employees.
Span of management
Coordinating efforts of all for achieving the objective.
By- Jyoti Rastogi (Assistant Professor)

9. Nature of Business
Organisation
Business Organisation— an Art:
Before discussing business organisation as an art it is essential
that we must know what is an art?
“Art is bringing about of a desired result through application of
skill”. – G. L. Terry
 Therefore, an art is a system for the attainment of a given
end. Art is concerned with the application of knowledge and
skills.
 So, business organisation is an art in so far as one has to
use his skill and knowledge in solving many complicated
problems of business to achieve the enterprise objectives.
Organisation is one of the most creative art in the sense that
it is concerned with getting work done through others by
motivating them to work and coordinating their activities.
By- Jyoti Rastogi (Assistant Professor)

10. Business Organisation—a Science:
 Science has three basic important features:
(a) It is a systematized body of knowledge that uses scientific methods of
observation.
(b) The principles are evolved on the basis of continued observation.
(c) The principles are exact and have universal applicability without any limitation.
 Business organisation is a science as it is an organized body of knowledge
built up by management practitioners, thinkers and philosophers, over a
period of years. It has developed certain principles and rules after continued
observation. But unlike Physics, Chemistry and Biology, business
organisation is not an exact or accurate science. Its principles cannot be
considered as fundamental truths.
 Sometimes, they may not bring desired results and may not have universal
applicability. The main reason for this in exactness is that it deals with human
beings whose behaviour cannot be predicted. Thus, organisation is a ‘Soft
Science’ or “Behavioural Science”.
By- Jyoti Rastogi (Assistant Professor)

11. A good organisation has to fulfil
four special functions
 It must enable the management to maximise the outputs
through provision of an efficient man-machine system.
 It must ensure smooth and effective net-work of
communication and information.
 It must offer interesting and meaningful jobs to all
individuals working in the organisation. This alone will
ensure job satisfaction. Organisation is developed for
people. It must, therefore, be humanistic also and not
merely mechanistic. Both the approaches can be
reconciled.
 It must create, maintain and develop its own image or
individuality. This ensures customer goodwill. Investors
will also have confidence in the enterprise. Employees
can develop a sense of belonging to the organisation.
By- Jyoti Rastogi (Assistant Professor)

12. WHAT IS ORGANISATION?
 Organisation is the backbone of management because
without an efficient organization no management can
perform its functions smoothly.
 In the management process this organization stands as a
second state which tries to combine various activities in a
business to accomplish pre-determined goals.
 It is the structural framework of duties and responsibilities
required of personnel in performing various functions with
a view to achieve business goals.
By- Jyoti Rastogi (Assistant Professor)

13. THANKS
By- Jyoti Rastogi (Assistant Professor)