This series include Organising function of management for XII Business Studies students for AISSCE preparation.

1. Organising
XII Business Studies
Formal Organisation
Session : 6 Vikash Residential School

2. Prepared by Pratap Naik
Formal Organisation
Learning Objectives
 Concept
 Features
 Advantages
 Easier to fix responsibility
 No overlapping of work
 Unity of command
 Easy to achieve objectives
 Stability in the organisation
 Disadvantages
 Procedural delays
 Lack of initiative
 Emphasis on work only

3. Prepared by Pratap Naik
Formal Organisation
What is Formal Organisation?
Formal organisation is a type of group that is deliberately designed by the management to accomplish a
specific goal.
Schools, hospitals, military and companies are just a few examples.
 Modern formal organizations allow us to accomplish tasks in the most efficient way.
 Formal organisation specifies clearly the boundaries of authority and responsibility.
 These are designed to guide and constrain the behaviour of the employees in the organisation.
 It works along pre-defined set of policies, plans, procedures, schedules and programmes.
 Hence, here there is systematic coordination among the various activities to achieve common goals.
 The structure in a formal organisation can be functional or divisional.

4. Prepared by Pratap Naik
Formal Organisation
Features of Formal Organisation
1. It is deliberately created by the top management for smooth functioning.
2. It clearly defines the authority and responsibility of every individual.
3. This clarifies who has to report to whom.
4. It is based on rules and procedures which are in written form.
5. It is impersonal i.e. does not take into consideration emotional aspect.
6. It is created to achieve organizational objectives.

5. Prepared by Pratap Naik
Advantages
1. Easier To Fix Responsibility
 In formal organisation mutual relationships are clearly defined.
 It means the scope of authority and responsibility every job position well defined.
 This also clarifies who has to report to whom.
 So in the event of non-achievement of objective responsibility can easily be fixed..
2. No Overlapping Of Work
 Organising leads to a systematic allocation of jobs amongst the work force.
 Also there is no ambiguity in the role of each member.
 As authority and responsibility are clearly defined.
 Thus helps in avoiding duplication of effort.
Formal Organisation

6. Prepared by Pratap Naik
Advantages
3. Unity of Command
 Unity of command is maintained through an established chain of command.
 The establishment of working relationships clarifies lines of communication.
 This also removes ambiguity in transfer of information and instructions.
4. Easy To Achieve Objectives
 Formal organisation provides framework for the operations to be performed.
 The framework or Organisation Structure is designed keeping in view the organisational goal.
 This ensures that each employee knows the role he has to play.
 Thus helps in completion of work effectively and productively.
Formal Organisation

7. Prepared by Pratap Naik
Advantages
5. Stability in The Organisation
 Formal organisation is based on rules and procedures which are in written form.
 All the employees are bound by specific rules to guide them.
 Thus the behaviour of employees can be fairly predicted.
 Managers can exercise better control over the activities of employees.
 This enables the enterprise to function as an integrated unit.
 Thus formal organisation provides stability to the organisation.
Formal Organisation

8. Prepared by Pratap Naik
Disadvantages
1. Procedural Delays
 There is established chain of command in formal organisation.
 Formal communication lead to procedural delays as it flows through various level.
 This results in delay in decisions making.
 Also there are chances of distortion of message.
2. Lack of Initiative
 Poor organisation structure does not allow any deviations from rigidly laid down polices.
 This leads to inadequate recognition to creative talent.
 So people tend to think along the same lines as others.
 There will be nothing new or innovative in such a case.
Formal Organisation

9. Prepared by Pratap Naik
Disadvantages
3. Emphasis on Structure and Work Only
 Formal organisation places more emphasis on structure and work.
 It is also impersonal i.e. does not take into consideration emotional aspect.
 Thus does not provide a complete picture of how an organisation works.
 It is also difficult to understand all human relationships and employees behaviour in an enterprise.
Formal Organisation

10. Prepared by Pratap Naik
Formal Organisation
 Suitability
 Features
 Advantages
 Easier to fix responsibility
 No overlapping of work
 Unity of command
 Easy to achieve objectives
 Stability in the organisation
 Disadvantages
 Procedural delays
 Lack of initiative
 Emphasis on work only
Recap

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Session Complete Vikash Residential School
XII Business Studies