The document discusses the concepts of organizing and organization. It defines organizing as identifying and grouping work activities, delegating responsibilities, and establishing relationships to enable effective teamwork. Organization refers to the relationships between people, work, and resources used to achieve goals. The document outlines different organizational models like hierarchical, flat, and holacratic structures. It also discusses key organizational concepts such as departmentalization, span of control, authority, and staffing.

1. ORGANISING
BUSINESS MANAGEMENT 1.7

2. Defintion
"Organising is the process of defining and grouping
the activities of the enterprise and establishing the
authority relationships among them."
• According to Louis Allen,
"Organising is the process of identifying and
grouping the work to be performed, defining and
delegating responsibility and authority and
establishing relationships for the purpose of enabling
people to work most effectively together in
accomplishing objectives."
According to Mooney and Reiley:
“Organisation is the form of every human association
for the attainment of common purpose.”

3. Meaning
Organising or Organizing in management refers
to the relationship between people, work and
resources used to achieve the common
objectives (goals).
In the first sense, ‘organising’ refers to a dynamic
process and a managerial activity by which diffe-
rent elements or parts of an enterprise are
brought together to obtain a desired result.

4. Nature of Organisation
• Organisation as a group
Activities of an enterprise are required to be distributed between the departments, units or sections as
well as between the persons for securing the benefits of division of labour and specialisation, and are
to be integrated or combined for giving them a commonness of purpose.
• Organisation as a Process – Humanistic, Dynamic
As a process, organisation is an executive function, it becomes a managerial function involving the
following activities:
(i) Determining activities necessary for the accomplishment of the business objectives,
(ii) Division of work,
(iii) Grouping of inter-related activities,
(iv) Assigning duties to persons with requisite competence,
(v) Delegating authority,
(vi) Co-ordinating the efforts of different persons and groups.
• Organisation as a structure(or, framework of relationships) - Channel of communication, Flow
of authority and responsibility
As a structure, organisation is a network of internal authority and responsibility relationships. It is the
framework of relationships of persons operating at various levels to accomplish common objectives.
An organisation structure is a systematic combination of people, functions and physical facilities.

5. Steps:
1. Defining Objectives – Clear terms
2. Determining activities – Identify and list out
3. Grouping of activities – Similar grouped together –
Departments - Sections
4. Assigning duties – Ability & aptitude, Avoid duplication and
overlapping of effort
5. Delegation of authority – Sufficient for work allotted
6. Co-ordinating activities
7. Provision of physical facilities and good environment
8. Establishment of structural relationship

6. Importance :
1. Facilitates Administration and managerial efficiency
2. Facilitates Growth & diversification
3. Scope for Training & development
4. Use of new technological developments
5. Optimum use of human resources
6. Promotes Co-ordination & communication

7. Principles of organisation
Principles of objectives Unity of direction
Division of labour Management by exception
Principle of definition Delegation of authority
Scalar chain Principles of balance
Unity of command Simplicity
Span of control Stability
Flexibilty Accountability

8. Formal & Informal Organisation

9. Distinction between
Formal Organisation Informal Informal
To achieve predetermined objectives No predetermined objectives
Structure - Well defined Structure – not well defined
Authority and responsibility - Clearly defined Not well defined
Long lasting Does not last long
Created by - top management By Personnel relationship
Goverened by - specific rules and regulations No specific rules and regulations
Communication channels - Official Unofficial
Large Small
Can be depicted in organisation chart Cannot be depicted in organisation chart
Emphasis on authority Personal relationship

10. Organisational Models

11. Hierarchical Organisations
• Board of directors  Senior managers – Strategy,
overall business decisions
• Middle managers  Specific functions(Marketing,
Finance etc.)
• Clear definition of employee roles and relationship
with each other
• Span of control  Narrow at top and broad
towards bottom
• Specialist managers
• Lines of communication, promotion, boundaries of
job
• Centralise power and authority  top level

12. Flat Organisation
• Flat  no job titles, seniority,
managers, or executives.
• Everyone is seen as equal.
• Self-managed organizations All the
employees can see what projects
are being worked on and can join
whichever project they want.
• More suitable to smaller and
medium size companies
• Problems  Informal hierarchies
,Accountability, Groups

13. Flatter Organisation
• Most widely adopted
• Seeks to open up the lines of
communication and collaboration
• For larger/middle size organizations 
most practical, scalable, and logical
approach to deploy across an entire
company
• Requirements:
robust set of technologies
 understanding by executives and
managers that employees don't need to
work at your company, they
should want to work there and as a
result everything should be designed
around that principle.
an understanding that managers exist to
support the employees and not vice versa
 Organisation must change

14. Flatarchies
• In between hierarchies and flat organizations 
a little bit of both structures.
• Can be more hierarchical and then have ad-hoc
teams for flat structures or they can have flat
structures and form ad-hoc teams that are more
structured in nature.
• Dynamic in nature
• New teams  Far more autonomy, more
resources, and much less bureaucracy.
• Focus on innovation which is quite a strong
competitive advantage in the future of work

15. Holacratic Organisation
• Brian J Robertson  2007
• The basic goal  allow for distributed
decision making while giving everyone the
opportunity to work on what they do best.
• Form of structure based on circles or
departments
• Information is openly accessible and issues
are processed within the organization during
special and ongoing meetings
• More viable  smaller or medium size
organizations or perhaps larger organizations
that have started off with holacracy as their
base operating model
• Emerging structure

16. Span of management
• The Span of Management refers to the number of subordinates
who can be managed efficiently by a superior.
• Factors:
1. Capacity of superior
2. Capacity of subordinate
3. Nature of work
4. Degree of decentralization
5. Availability of staff assistance
6. Supervision from others
7. Communication techniques

17. “Delegation of authority merely means the granting
of authority to subordinates to operate within
prescribed limits” – Theo Haimann
Types:
• Specific or general
• Written or unwritten
• Formal or informal

18. Authority
• The sum of powers and rights entrusted to make possible the
performance of work assigned – Louis A Allen
• Types of authority:
Legal
authority
Traditional
authority
Charismatic
authority
Technical
authority
Position
authorities

19. Responsibility
• Responsibility is the obligation of a subordinate to perform duty
as required by his supervisors – Theo Haimann

20. Principles of Delegation
• Principles of delegation by results
expected
• Principles of functional definition
• Parity of authority and responsibility
• Unity of command
• Authority level principle
• Scalar principle
• Principles of communication
• Advantages
• Difference between Authority and responsibility

21. Centralisation and Decentralisation
• “The systematic and consistent
reservation of authority at central
points in an organisation” – Allen
• “Decentralisation refers to the
systematic effort to delegate to the
lowest levels all authority except
that which can only be exercised at
central points” – Louis A Allen

22. Need of Decentralisation
• Relief to the top executive
• Development of future executives
• Highly motivational
• Better co-ordination of activities
• Leads to prompt actions and quick decisions
• Effective control
- Limitations

23. Departmentation
• The process of departmentalising an enterprise for gaining
efficiency and coordination
• The grouping of tasks into departments and subdepartments and
delegating of authority for accomplishment of the tasks
• According to Koontz and O’Donnell, “A department is a distinct area,
division or branch of an enterprise over which a manager has
authority for the performance of specified activities.”‘
• In the words of Louis Allen, “Divisionalisation is a means of dividing
the large and monolithic functional organisation into smaller flexible
administrative units.”

24. 1. Departmentation by Function
• Similar activities of a business
are grouped into major
departments or divisions under
an executive who reports to the
chief executive.
• This departmentation is most
widely used basis for organising
activities and is present in every
organisation at some level

25. 2. Departmentation by Product
• Suitable for multiproduct
organization
• Activities are grouped on the
basis of produce or product
lines.
• All functions related to
particular product are bought
together under the umbrella of
product manager.

26. 3. Departmentation by Territory
• Suitable for organisations having wide
geographical market such as
pharmaceuticals, banking, consumer
goods, insurance, railways etc.
• The market is broken up into sales
territories and a responsible executive
is put in charge of each territory.
• The territory may be known as district,
division or region.

27. 4. Departmentation by Customers
• Adopted by enterprises offering
specialized services.
• To give the attention to heterogeneous
groups of buyers
• To organisations serving several
segments like a pharmaceutical
company supplying to institutional
buyers such as hospitals and
government and non-institutional
buyers as wholesalers and retail
chemists.

28. 5. Project or Matrix Departmentation
• Project or matrix departmentation is a form
of hybrid departmentation in which any two
types of departmentation are conjoined to
address a unique requirement.
• The personnel are either assigned to the
projects on a full-time or part-time basis
depending upon the extent of their
involvement/requirement in the projects.
During the period of their involvement in
projects, such employees have dual
reporting—to their functional head and the
project head.

29. 6. Departmentation by Process
• Production function subdivided on the basis of the process of
production (production process has distinct activity groups)
• Suitable when the machines or equipment’s used are costly and
required special skill for operating.
• It is useful for organisations which are engaged in the manufacture of
products which involves several processes.

30. 7. Departmentation-Combined Base
• Several bases of departmentation may be used
simultaneously.
• Organisation is divided on the basis of functions.
The marketing department is further divided on
the basis of product lines i.e., refrigeration and
chemical division.The refrigeration division is
further divided on the basis of territory and the
territory is further divided on the basis of
customers i.e., retail and wholesale.
• Combined base departmentation/ composite
departmentation/ mixed departmentation.
• Provide the benefits of both functional and
product structures. But the conflicts between
different departments and division may increase.
It becomes necessary to differentiate clearly
between the line authority and functional
authority of managers.

31. Staffing
• The staffing function pertains to the
recruitment, selection, development,
training and compensation of subordinates
– Theo Haimann
Nature Need and Importance
• Concerned with employees • Key to other managerial functions
• Creation of cordial environment • Better performance of enterprise
• Continuous process • Adoption of latest technology
• Ensures economic, social and individual
satisfaction
• Higher productivity
• Related with personnel policies • Maintaining good human relations
• Getting it right and retaining
• Line of authority