The document discusses the concept of organization in management, highlighting its formal structure, authority, and responsibility as key components for achieving goals. It compares various organizational concepts like the 'herd-concept,' 'person-to-person' concept, 'group' concept, and different types of organizational structures including line and functional organizations. Furthermore, it examines the merits and demerits of line organizations, emphasizing their simplicity and direct authority flow while addressing issues such as lack of specialization and potential instability.

2. What is Organisation?
In general it refers to any institution like:
Educational Institutions
Private agencies
Government institutions
Any form of Business etc.

3. But in the context of management, Organising refers to formal
structure of arrangement of work among different members
with a clear identification of authority and responsibility
associated with the work so that the goals and objectives can
be effectively achieved.
It is the working of two or more persons in a co-ordinated way
for achieving common objectives.
It refers to the process of bringing Human and Non-human
resources, defining and establishing the authority and
responsibility relationship for achieving the common goals.

4. Concept of Organization:
o The ‘’Herd-Concept’’ :
The “Herd” concept: It
views organization as a group
of people who direct efforts
towards organizational goals
through coercion, punishment
and strict adherence to rules
and regulations. It empowers
the superiors to decide for the
subordinates and wants
subordinates to obey their
directions, orders and
instructions

5. Subordinates are not viewed as ‘’herd’’
by the superiors, rather each
subordinate has a direct contact with the
superiors who in turn delegates
necessary authority and responsibility to
the subordinates to attain the overall
goals successfully.
It is a vertical relationship between the
superior and the subordinates.
The ‘’Person-to-Person’’ concept:

6. It recognises a lateral or horizontal
relationship between people working
at the same level.
The interaction between the people
at all the level is the focus of the
group concept of modern
organization and empirically proves
that the efforts of all individuals as a
group are oriented towards a unified
direction to achieve maximum returns
at minimum efforts.
The ‘’Group’’ concept:

7. It is a process of organizing work,
people and system. It is a chain of
various activities. Under this
concept, organization is concerned
with the process of determining
activities that may be necessary for
achieving an objective.
The ‘’Process / Dynamic’’ concept:

8. Organization is viewed as a structure, an entity or network of specified
relationship. The posts are created and relationship of individuals
working in various positions are established.
The ‘’Structure of Relationship / Static’’ concept:

9. Organisation Process:
Organizing
Process
Determination of objective
Division and grouping of activities
Assigning Responsibility
Defining authority and responsibility
Co-ordination of activities
Reviewing and re-organising

10. Importance:
 Facilitates Administration
 Creation of Synergies
 Establishment of Accountability
 Optimum Use of Technology
 Helps in Communication
 Facilitates Creativity

11. Organisation Chart

12. TYPES OF ORGANISATION
TRADITIONAL FORMS MODERN FORMS
A. Line Organisation A. Simple Form
B. Functional Organisation B. Bureaucratic Form
C. Line and Staff Organisation C. Horizontal Organisational Form
D. Committee form of Organisation D. Network Form
E. Matrix Organisation E. Virtual Form of Organisation
F. Free Form of Organisation

13. Line Organisation Structure
Line organization (also called
Military / Scalar organisation) is
the most oldest and simplest
method of administrative
organization. According to this
type of organization, the authority
flows from top to bottom in a
concern. The line of command is
carried out from top to bottom.
This is the reason for calling this
organization as scalar
organization which means scalar
chain of command is a part and
parcel of this type of
administrative organization.

14. Line Organisation Structure
It was first developed in the Roman Army
and later adopted by armies all over the
world.
Under this system, every manager
exercises direct authority on the
subordinates who are directly responsible
to their superiors.
There are no supportive units (viz.
Accounting, labour etc.) separately. Every
manager is required to incorporate these
in the departments.

15. Line Organisation
Features :
 It is the most simplest form of organization.
 Line of authority flows from top to bottom and responsibility flows
upwards and they are clearly specified for each person.
 Each subordinate receives order fprm one superior and is
answerable to him / her only.
 Specialized and supportive services do not take place in these
organization.
 Unified control by the line officers can be maintained since they can
independently take decisions in their areas and spheres.
 This kind of organization always helps in bringing efficiency in
communication and bringing stability to a concern.

16. Merits of Line Organisation:
1.Simplest- It is the most simple and oldest method of administration.
2.Authority and Responsibility - Under this system, authority and responsibility
of each person is clearly defined with reference to the assignment of task given.
3.Unity of Command- In these organizations, superior-subordinate relationship is
maintained and scalar chain of command flows from top to bottom.
4.Better discipline- The control is unified and concentrates on one person and
therefore, he can independently make decisions of his own. Unified control ensures
better discipline.
5.Fixed responsibility- In this type of organization, every line executive has got
fixed authority, power and fixed responsibility attached to every authority.

17. Merits : (contd.)
6.Economical - line organization is easy to operate and less expensive. Since
there is no staff personnel to advice line officers, line officers take their own
decision which reduces the enterprise cost to a great extent.
7.Prompt decision - Due to the factors of fixed responsibility and unity of
command, the officials can take prompt decision.
8.Flexibility - There is a co-ordination between the top most authority and bottom
line authority. Since the authority relationships are clear, line officials are
independent and can flexibly take the decision. This flexibility gives satisfaction of
line executives.

18. Demerits of Line Organization
1.Over reliance- The line executive’s decisions are implemented to the bottom.
This results in over-relying on the line officials.
2.Lack of specialization- A line organization flows in a scalar chain from top to
bottom and there is no scope for specialized functions. For example, expert
advices whatever decisions are taken by line managers are implemented in the
same way.
3.Inadequate communication- The policies and strategies which are framed by
the top authority are carried out in the same way. This leaves no scope for
communication from the other end. The complaints and suggestions of lower
authority are not communicated back to the top authority. So there is one way
communication.

19. Demerits (contd.)
5.Excess Work - In line organization, too much is expected from the executives.
They are expected to take numerous decesions and supervise a good number of
subordinates . Thus the work load goes increasing with the increase in size of the
organization.
6.Favouritism - There is always a chance of favouritism as the superiors judge the
performance of their subordinates as per their likings.
7.Instability - Since all business decisions are taken by few persons, therefore
their leaving the job can make the business instable.

20. LINE AUTHORITY :
It is a position that a person enjoys by virtue of his placement in
the organisational hierarchy.
STAFF AUTHORITY :
It is position that person enjoys by virtue of his specialised
knowledge and skills to deal with a particular problem area.

21. LINE AND STAFF ORGANISATION
BOARD OF DIRECTORS
MANAGING DIRECTORS
GEN. MANAGER
(PRODUCTION)
GEN. MANAGER
(FINANCE)
GEN. MANAGER
(MARKETING)
MANAGER
(R & D)
MANAGER
(PERSONNEL)
MANAGER
(PURCHASE)
LINE AUTHORITY STAFF AUTHORITY

22. DIFFERENCE BETWEEN LINE AND STAFF AUTHORITY
BASIS LINE STAFF
1. Purpose. Responsible for accomplishment
of major Organizational goals.
Assist line managers in
accomplishing the goals.
2. Authority They have direct authority over
the sub-ordinates.
They do not have any such
authority.
3. Direction of
Authority
It flows from top to bottom. It is
vertical in nature.
It flows between managers of
different functional areas. It is
horizontal in direction.
4. Nature of
function
Primary Supportive
5. Sources of
Power
It is derived from organizational
hierarchy. Use reward and
punishment to get the work
done.
Cannot use reward and
punishment to get the work done.
Derive power from their expert
knowledge and skills.

23. CONFLICT BETWEEN LINE AND STAFF
1. Attitude of Line and Staff:
2. Ultimate responsibility:
3. Absence of motivation:
4. Managerial Problems:
5. Call for help:
6. Encroachment over line authority:
7. Practical approach to the problem:
8. Staff advice is sought for as a last resort:

24. FUNCTIONAL ORGANIZATION
It is a form of organization where “ the right Is delegated to an
individual or department to control specified processes,
practices, policies or other matters relating to activities
undertaken by persons in other departments”
-Koontz and Weihrich
The authority over people of different departments is exercised
not only by their line managers but also by manahers of
different departments.
One individual thus receives orders from different functional
managers and thus the principle of UNITY OF COMMAND is
violated.

25. BOARD OF DIRECTORS
MANAGING DIRECTORS
GEN. MANAGER
(PRODUCTION)
GEN. MANAGER
(MARKETING)
GEN. MANAGER
(PERSONNEL)
MANAGER
(CONSUMER GOODS)
MANAGER
(INTERMEDIATE GOODS)
MANAGER
(PRODUCER GOODS)
GEN. MANAGER
(FINANCE)
ASSISTANT
MANAGER
SUPERVISOR WORKERS
LINE AUTHORITY
STAFF AUTHORITY
FUNCTIONAL ORGANIZATION

26. ADVANTAGES:
SPECIALISATION :
Each functional heads are assigned the authority to manage the
activities of the entire organisation with respect to his functional areas.
Thus it ensures specialisation.
ECONOMICAL :
One department looks after the needs of all other departments in
specific their area which leads to economy of costs.
REDUCTION IN FUNCTIONAL HEAD’S BURDEN :
In this type of organisation, the functional heads are relieved from the
burden of acquiring the knowledge of other functional areas to run their
departments .

27. CO-ORDINATION:
Since each functional managers looks after all the activities related to his
areas, it brings co-ordination of all the departments.
UNIFORMITY OF OPERATION:
Through co-ordination and functional authority, uniformity of operation is
ensured.
CONTROL:
Co-ordination and uniformity ensures better control in organizational
activities with respect to each functional areas. Functional heads can apply
various techniques of control in their areas.
ADVANTAGES: