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Organising

Organising - nature, importance, steps, organisation structure and principles

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Organising
Meaning 
Organisation is the detailed arrangement of 
work and working conditions in order to 
perform the assigned activities in an effective 
manner.
Definition 
• “it is the process of identifying and grouping 
of the works to be performed, defining and 
delegating responsibility and authority and 
establishing relationships for the purpose of 
enabling people to work most efficiently" 
- Louis A. Allen
Purpose of organising 
• Coordinates activities 
• Cluster job into units 
• It ensure optimum use of resource 
• Establish relationship among individual groups 
• It facilitates growth, creativity
CHARACTERISTICS OR FEATURES OF 
ORGANIZING OR ORGANIZATION 
• Organisation is a process 
• Organisation is a group of individuals 
• Organisation is a “means” not an “end” 
• Important function of management 
• Related to objectives
NATURE OF ORGANIZING 
• Division of work 
• Common objectives 
• Cooperative effort 
• Communication 
• Rules and regulations 
• Dynamic element

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Organising

  • 2. Meaning Organisation is the detailed arrangement of work and working conditions in order to perform the assigned activities in an effective manner.
  • 3. Definition • “it is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently" - Louis A. Allen
  • 4. Purpose of organising • Coordinates activities • Cluster job into units • It ensure optimum use of resource • Establish relationship among individual groups • It facilitates growth, creativity
  • 5. CHARACTERISTICS OR FEATURES OF ORGANIZING OR ORGANIZATION • Organisation is a process • Organisation is a group of individuals • Organisation is a “means” not an “end” • Important function of management • Related to objectives
  • 6. NATURE OF ORGANIZING • Division of work • Common objectives • Cooperative effort • Communication • Rules and regulations • Dynamic element
  • 7. IMPORTANCE OF ORGANIZING • Specialization. • Role clarity. • Clarifies authority and power. • Avoid duplication of work. • Coordination. • Source of support and security. • Adaptation. • Promotes human relations.
  • 8. STEPS IN THE PROCESS OF ORGANIZING 1.Division of work 2.Grouping of jobs into departmentation 3.Assigning duties 4.Establishing authority and responsibility. 5.Delegation of authority 6.Effective communication 7.Coordination of activities Steps of organizing
  • 10. LINE ORGANIZATION GENERAL MANAGER PRODUCTION MANAGER FINANCE MANAGER MARKETING MANAGER SUPERINTENDENT ASST.FINANCE MANAGER ASST.MARKETING MANAGER FOREMAN ACCOUNTANTS SALE SUPERVISORS WORKERS CLERKS SALESMAN
  • 11. ADVANTAGES OF LINE ORGANIZATION  Easy to establish  Facilitates unity of command  Clear cut identification of authority & responsibility relationship  Ensures excellent discipline DISADVANTAGES  Makes the superiors too overloaded with work  Concentration of authority at the top  Not suitable to big organizations  Lack of communication
  • 12. LINE & STAFF ORGANIZATIONS BOARD OF DIRECTORS Executive committee Controller of Managing Director Manager Division B Manager Division C Manager Division A finance Assistant to managing director
  • 13. Advantages of line & staff organizations • Specialized knowledge • Reduction of burden • Proper weightage • Better decisions • Flexibility • Unity of command
  • 14. Disadvantages • Conflict between the line & staff executives • Allocation of duties • Not accountable • Difference between the orientation of the line & staff men
  • 15. Line organization vs. Line & Staff organization Line organization Line & staff organization • Refers to those positions which have the responsibility for providing advice & service to the line in attainment of organizational objectives • Have experts to assist & advice • Always a risk of friction between line & staff • Loose discipline • Based upon planned specialization • Refers to those positions which have the responsibility of achieving the primary objectives of the organization • No experts to assist & advice • No scope of friction between line & staff • Strict discipline • Not based upon planned specialization
  • 16. Functional organization Advantages  Specialization  Executive development  Reduction of workload  Scope for expansion  Better control
  • 17. Disadvantages • Violates the principle of unity of command • Operation is complicated • Los of overall perspective • Lack of coordination
  • 18. LINE organization VS.FUNCTIONAL organization LINE organization • The line of authority is vertical as it follow the principle of scalar chain • Line managers are generalists • Unity of command is followed • Strict discipline • It is suitable for small scale operations FUNCTIONAL organization • Line of authority is functional or diagonal. The functional manager has authority over his function wherever it is performed • Functional managers are specialists • Unity of command is not followed • Loose discipline • It is suitable for large scale operations
  • 20. A committee structure is were a group of persons are entrusted in a task. Types of committee structure : 1. Standing or permanent committee. 2. Temporary or ad hoc committee. 3. Executive committee. 4. Advisory committee. 5. Formal committee. 6. Informal committee.
  • 21. Merits of committee structure :  Proper control and coordination among individuals and departments. Motivation through participation. Check against misuse of power.
  • 22. Demerits of committee structure :  Expensive to constitute a committee.  Time consuming and slow decision making.  Compromise decision.  Suppression of ideas.
  • 24. A project structure is one were various projects are undertaken. It varies from organisation to organisation depending on the project adopted. The time period also depends on the project as more time period is required for long term projects and vice versa. The team leader organises and coordinates all the actions and activities.
  • 25. Merits of project structure :  Maximum utilisation of knowledge and skills.  Unity of command exists.  Fixation of individual responsibility.  Focuses attention on specific projects.  Ensures better coordination.
  • 26. Demerits of project structure :  Pressure and uncertainity due to several opinions.  Difficulty in decision making.  Evaluation of performance is difficult due to difference in performance, work, and ability.
  • 28. A matrix structure is suitable where there are large number of small projects. Also called : - Multiple command system. - Linking pins.
  • 29. Merits of matrix structure :  Best utilisation and allocation of resources.  Benefits coordination under each projects.  Promotes communication.  Permits high degree of flexibility and adaptability.
  • 30. Demerits of matrix structure :  Is against the unity of command.  Quick decision making is not possible.  Gives scope for conflicts.
  • 31. CONCEPTS OR PRINCIPLES OF ORGANIZING
  • 32. Chain of command • The order in which authority and power in an organization is wielded and delegated from top management to every employee at every level of the organization. • Instructions flow downward along the chain of command and accountability flows upward. • Henry Fayol is the main contributors.
  • 34. ADVANTAGES • Existence of clear reporting relationships • Solve the problem of multiple masters • Responsibility & accountability are clearly assigned CHALLENGES • This is not suitable where, the organisation needs faster decision making. • Time consuming.
  • 35. Work Specialization Work specialization, refers to the degree to which an organization divides individual tasks into separate jobs. Job is broken down into steps, and a different person completes each step. Individual employees specialize in doing part of an activity rather than the entire activity.
  • 36. Advantages of specialization • Each employee can be an expert to some degree. • Task refinement by the specialist leads to higher levels of productivity. • Work can be completed faster and more efficiently due to specialization. • Gives employees a sense of pride and job security due to their specialized skills. • All of the previously stated could lead to higher profit potential.
  • 37. AUTHORITY “ Authority is the right to order or command and is delegated from the superior to the subordinate his responsibilities.” † Right or power to command and control. † Granted to a position for achieving objectives. † Exercised through persuasion or sanctions.
  • 38. SOURCES OF AUTHORITY The Formal Authority Theory The Acceptance Theory The Competency Theory
  • 39.  The Formal Authority Theory :-Authority is viewed as originating at the top of an organization and flows downward by the process of delegation. The Acceptance Theory :-The authority is the power which is accepted by others. The Competence Theory :- An individual derives authority because of his personal competence.
  • 40. DELEGATION OF AUTHORITY Delegation means devolution of authority on subordinates to make them perform the assigned duties or tasks.
  • 41. COMPONENTS OF DELEGATION i. Entrustment of Responsibility or Duty :- Responsibility means the work or duties assigned to a person by virtue of his position in the organization. ii. Granting of Authority :- Authority is the right or power granted to an individual to make possible the performance of work assigned. iii. Creation of Obligation or Accountability :- Accountability is the obligation to carry out responsibility and exercise authority in terms of performance standards established.
  • 42. ADVANTAGES OF DELEGATION • Sharing of work-load • Quick decision-making • Motivation • Training • Better performance • Better relations
  • 43. WEAKNESS OF DELEGATION WEAKNESS SUPERIOR Lack of trust in subordinates Lack of Ability to Direct Ineffective controls SUBORDINATE Lack of self confidence Lack of incentives Overburden with duties ORGANIZATION Inadequate planning Lack of effective control mechanism Defective organization structure
  • 44. PRINCIPLES OF DELEGATION • Assignment of Duties in terms of result Expected • Clarification of Limits of Authority • Parity of Authority and Responsibility • Absoluteness of Accountability • Authority Level Principle • Unity of Command • Scalar Chain • Effective Communication
  • 45. SPAN OF MANAGEMENT It is also called as span of control or span of supervision. It refers to the number of employees that can be handled and controlled effectively by a single manager.
  • 46. TWO TYPES OF SPAN NARROW SPAN OF MANAGEMENT  Tall organization.  Manager oversees “few” subordinates.  better communication.  example : handicraft , ivory work , etc.
  • 47. WIDE SPAN OF MANAGEMENT  Flat organization .  Manager oversees “large” number of subordinates.  Less overhead cost of supervision .  less personal contact  example: repetitive jobs. 12/9/2014
  • 48. Narrow span wide span of control of control
  • 49. THEORY OF GRAICUNA’S He was a French management consultant. He followed a different path and distinguished three types of relationships between superior and subordinates.
  • 50. THREE TYPES OF RELATIONSHIP Direct relationship (superior has direct link with subordinates).  Direct group relationship(arises between manager and group of subordinates ).  Gross relationship ( relationship among subordinates).
  • 54. FACTORS DETERMING SPAN OF MANAGEMENT Nature of work Type of technology Ability of the manager Ability of subordinates Degree of decentralization Quality of planning Rate of change Communication techniques
  • 56. CENTRALIZATION According to Allen, “Centralization” is the systematic and consistent reservation of authority at central points in the organization” The implication of centralization can be :- • Reservation of decision making power at top level. • Reservation of operating authority with the middle level managers. • Reservation of operation at lower level at the directions of the top level.
  • 57. DECENTRALIZATION • According to Allen “Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points” • “Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization”
  • 58. DEPARTMENTATION It is a process of grouping individual jobs into departmentation. TYPES: Departmentation by function. Departmentation by products. Departmentation by territory. Departmentation by customers. Departmentation by process. Departmentation by time and numbers.
  • 59. 12/9/2014 Departmentation by FUNCTIONS Deparmentation done by the functions.
  • 60. MERITS & DEMERITS Provides scope of specialization. Effective control over performance. Facilitates delegation of authority. Interdepartmental conflicts. Difficulty in coordination of activities
  • 61. 12/9/2014 DEPARTMENTATION BY PRODUCTS It is suitable for different lines of products.
  • 62. MERITS & DEMERITS Reduces problem of coordination. Performance evaluation can be done easily. It is flexible and adaptable to change . There may be underutilization of plant capacity when the demand of product is not adequate.
  • 63. TERRITORIAL Departmentation Used for large scale enterprises whose activities are geographically spread over.
  • 64. MERITS & DEMERITS Better coordination of activities. Facilitates expansion of business to various regions Due to geographical distance problem of communication. Coordination and control becomes less effective.
  • 65. Departmentation By Customers Each department will serve the particular type or class of customers.
  • 66. MERITS & DEMERITS Offer scope of specialization. Enterprise gain ultimate knowledge about needs of various categories of customers. Lead to duplication of activities.
  • 67. DEPARTMENTATION BY PROCESS OR EQUIPMENT The activities are grouped according to process or equipment. It is generally used in manufacturing industries. Lead to specialization. No confusion. Proper utilization of manpower and machine engaged in proper way.
  • 68. TIME AND NUMBER DEPARTMENTATION TIME: The activities or group on basis of time EXAMPLE: Call centers or any factory. NUMBER: The activities or group on basis of performance by certain number of persons.
  • 69. Formal Organization • The Formal Organization is a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability. Louis Allen • Formal Organization is a system of consciously coordinated activities of two or more persons toward a common objective. Chester Barnard
  • 70. Formal Organization • The formal organization is a goal-oriented entity that exist to accurate the efforts of individuals and it refers to the structure of jobs and positions with clearly defined functions, responsibilities and authorities
  • 72. Objectives of Formal Organization • To facilitate the accomplishment of the goals of the organization • To facilitate the co-ordination of various activities • To aid the establishment of logical authority relationship • To aid the establishment of division of labor • Create group cohesiveness
  • 73. Characteristics of Formal Organization: 1. Well defined rules and regulation. 2. Determined objectives and policies. 3. Limitation on the activities of the individual.
  • 74. cntd… 4. Strict observance of the principle of coordination. 5. Messages are communicated through vertical chain. 6. Status symbol.
  • 75. Functions of Formal Organization: • Set specific Goals for organization • Establishing working relationship • Create group cohesiveness • Organizational Development • Discipline • Human Resource Development
  • 76. Advantages of Formal Organisation • Systematic Working • Achievement of Organisational Objectives • No Overlapping of Work • Co-ordination • Creation of Chain of Command • More Emphasis on Work
  • 77. Limitations of Formal Organization: • Limited Flexibility • Slowness of processing • Communication Barrier • Quality of decision • Slowness in Problem detection & processing
  • 78. Types Of Formal Organisation coercive organization • which maintains control through force. • Once you enter a coercive organization, you cannot leave without permission. • The culture is one of strict obedience and order, and members are typically stripped of individuality and forced to conform. • Eg. Prison and military
  • 79. Utilitarian Organizations • which maintains control through bartering. • People join utilitarian organizations because they have something to gain. • The culture is one of productivity and purpose. • Members are compensated for their contributions. • Colleges and universities are also examples of utilitarian organizations.
  • 80. Normative Organizations • which maintains control through shared moral commitment. • Membership in normative organizations is purely voluntary. • People join because they want to or because of a strong, positive sense of obligation. • Members work together to promote an important social cause. • Churches, political parties, and fraternities are examples of normative organizations.
  • 81.  An Informal organization is an aggregate of interpersonal relationships without any conscious purpose but which may contribute to joint results. Chester Barnard  Informal organization is a network of interpersonal relationship that arise when people associate with one another . Keith Davis
  • 82. • The informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations.
  • 84. Informal Leader- • The leader of an informal organization is elected by the members of the groups for different reasons such as age, seniority, technical, competence, work location, and responsive personality, etc. depending upon the work situation. Role of Informal Leader: a) To help the group reach its goals, and b) To maintain and enhance group life.
  • 85. Characteristics of Informal Organization: • Evolving constantly • Excellent at motivation • Treats people as individuals • Flexibility • Difficult to pin down • Essential for situations that change quickly or are not yet fully understood
  • 86. Functions of Informal Organization: • Perpetuate the cultural and social values. • Provide social status and satisfaction.
  • 87. Functions of Informal Organization: • Provide social control • Promote communication among members
  • 88. Benefits of Informal Organization: • Better Total System • Lighter workload for management • Work group satisfaction • A safety valve for emotions • Cohesiveness • Channel of employee communication • To plan and act more carefully • Encourage Cooperation • Encourage improved management practice
  • 89. Problems Associated with Informal Organization: 1) Resistance to change 2) Role conflict 3) Rumor 4) Conformity 5) Undermine discipline 6) Power politics 7) Interpersonal and intergroup conflicts
  • 90. Difference between..... BASIS FORMAL INFORMAL Definition •has its own rules and regulation that must be followed by the members (employees and managers) • has a system of co-ordination and authority. •does not have its own rules and regulation. •has no system of co-ordination and authority doesn't have any superior-subordinate relationship. •communication is done through the grapevine Formed by formed by the top level management formed by social forces within the formal organization Rules and regulations The members have to follow certain rules and regulations. These rules are available in writing . They are made by a formal authority (superiors). do not have to follow any rules and regulations
  • 91. Cntd... BASIS FORMAL INFORMAL Duties and responsibilities the duties, responsibilities, authority and accountability of each member is well-defined there are no fixed duties, responsibilities, authority, accountability, etc. for the members Goals or objectives The objectives or goals are specific and well-defined The main objectives include productivity, growth, and expansion The objectives are not specific and well-defined They want to achieve friendship, security, common interest, individual and group satisfaction, etc Benefits The members get financial benefits and perks like wages or salaries, bonus, travelling allowances, health insurance, etc. The members get social and personal benefits like friend circle, community, groups, etc.