Management

1. ORGANISING
As one of the functions of mgt., organising ensures
smooth running of the enterprise & ensures continuity &
success for the organisation. Thus, it can be considered
as the backbone of any organisation.
The term organisation can be studied from different view
points. They are
•Organisation as a group of persons
•Organisation as a structure of relationship
•Organisation as a function of management
•Organisation as a process

2. Concept of Organizing
• Division of labour
• Coordination & Communication
• Authority and responsibility
• Objectitves

3. Definition
• McFerland has defined as” an identifiable
group of people contributing their efforts
towards the attainment of goals.”
• According to Louis A Allen,” Organisation is
the process of identifying and grouping the
work to be performed, defining and delegating
responsibility and authority, and establishing
relationship for the purpose of enabling people
to work most effectively together in
accomplishing objectives.”

4. Purpose/Importance of Organisation
According to Kenneth C Towe, “ A sound form
of organisation is the answer to every business
problem, that a poor organisation could run a
good product into the ground and that good
organisation with a poor product could run a
good product out of the market.”

5. • Benefits of specialization
• Clarity in working relationship
• Effective administration
• Optimum utilisation of resources
• Expansion and growth
• Adaptation to change
• Development of personnel

6. Principles of Organisation
• Division of work and specialization
• The principle of objectives
• The Scalar principles
• The principle of departmentation
• The principle of Span of
Management/Control
• The principle of Unity of command

7. • Principle of Flexibility
• Principle of Balance
• Principle of Exception
• Principle of Decentralisation
• Principle simplicity
• Combination of Line and staff organisation
• Principle of coordination
• Principle of communication

8. Organisation structure:
An organisation structure shows the authority &
responsibility relationships between the
various positions in the organisation by
showing who reports to whom.
A good organisation structure should not be
static but dynamic. It should be subject to
change from time to time in the light of
changes taking place in its environment.

9. Significance of organisation structure:
• Clear-cut authority relationship
• Pattern of communication
• Location of decision centres
• Proper balancing – activities which are
more critical to the organisation's success
become the responsibilities of top mgt.
Activities of moderate importance might be
assigned to middle level mgt. & activities
of lesser importance to lower level mgt.

10. • Stimulating creativity – creative thinking &
initiative among members can be
encouraged by providing well defined
pattern of authority.
• Encourages growth – a flexible structure
will help in meeting challenges & creating
opportunities for growth.
• Taking advantage of technological
improvement –a flexible structure will
modify the existing pattern to take
advantage of technological improvements.

11. Span of management:
Span of mgt. or span of control/ supervision/
authority represents a numerical limit of
subordinates to be supervised & controlled
by a manager.
Graicunas, a French mgt consultant, has
suggested the fixation of ideal number of
subordinates based on mathematical
calculation. He has identified three types of
superior-subordinate relationships.
• Direct single relationships: it arises from the
direct individual contacts of the superior with
the subordinates.

12. • Direct group relationship: it arises between
the superior & his subordinates in all
possible combinations.
• Cross relationships: it arises because of the
mutual interaction of subordinates working
under the common superior.

13. According to Graicunas, the ideal span for a
manager is six subordinates involving 222
relationships.
However, all these relationships are not
equally important from management’s
point of view. Further, he has not
considered other possible relationships.
Therefore, practically, span based on mere
number of relationships can not be fixed.

14. Factors affecting span of management:
1. Capacity of the superior –
2. Capacity of subordinates
3 Nature of work.
4 Degree of decentralisation –
5 Degree of planning –
6 Communication techniques –
7 Use of staff assistance –
8 Supervision from others –

15. Wide span of supervision:
Span of supervision is wider when the
number of executives needed to supervise
the subordinates is less.
This will make the org. structure wider as
well as short as there will be large no. of
subordinates under each supervisor.
Since the no. of levels is less, better
communication & coordination is possible
& such a structure would be less expensive.
However, quality of performance might come
down as one manager has to supervise large
no. of subordinates.

16. Narrow span of supervision:
Under narrow span, there will be few
subordinates under the direct supervision
of each manager & thus the structure will be
very tall.
Communication & coordination becomes
more complicated as compared to wide
span.
However, ensures better personal contact
between superior & subordinates.
Also ensures strict control & close
supervision.

17. Organization Chart of the
Commissionarate Indirect Tax

18. Forms of organisation structure:
• Line organization
• Functional organization
• Line and Staff organization
• Project organisation
• Matrix Organization
• Committee

19. Forms of organisation structure:
Line organisation –
• The line organisation represents the structure
in a direct vertical relationship through which
authority flows.
• It is the simplest form of structure & is also
known as scalar or military form of structure.
• Under this, the authority flows vertically
downward from top to bottom throughout the
org.
• This form is very popular, particularly in small
orgs. with few levels of authority having
limited number of employees.

20. Functional organisation:
It lies in between L & S authority. It means placing
specialists in top positions throughout the org. It
confers upon the holder of function position limited
power of command.
Under functional organisation, various activities of the
org. are classified according to certain functions like
production, marketing, finance, personnel etc. & are
put under the charge of functional specialist.
The subordinates under this form receive orders &
instructions from several functional specialists or
they are accountable to different functional
specialists.

21. Line & staff organisation ( relationship):
The line executives are often described as the
individuals who stand in the primary chain of
command & are directly concerned with the
accomplishment of primary objectives of the
org.
In L & S org., the line authority remains the same
as it does in line org. i.e. authority flows from
top to bottom.
The major difference between the two is that –
In line orgs. the line executives are generalists &
they do not possess specialised knowledge in
problem handling.

22. In L & S orgs., specialists are attached to line
managers to advise them on imp. matters.
These specialists called staff stand ready with
their specialised knowledge to serve line as &
when required & these staff do not have any
power of command.
Staff means a supporting function intended to
help the line managers.
The use of staff can be identified with the need
for help in handling details, gathering data &
offering advice on specific managerial
problems.

23. Project organization:
Project organization is usually structured to
facilitate the completion of specific projects like
planning & designing of new product,
completion of assigned task etc.
The complete responsibility for the project as well
as all the resources needed for its completion are
usually assigned to one person known as Project
Manager.
The project led by project manager consists of
specialists drawn from different areas.

24. Matrix organisation:
Matrix org. also known as grid is of recent
origin in order to achieve flexibility in its
functioning.
It is created by merging the two complementary
organisations – the project & the functional
It represents combination of functional &
project organisation.
This form of organisation cuts across
functional lines. The project team consists of
people drawn from various functional depts.
Important features of matrix organisation -
• Matrix org. is built around a specific project.

25. Committee:
Literally, committee means group of people under
the leadership of chairperson to whom some
matter or charge is committed.
Can be defined as a body of persons appointed to
meet on an organised basis for the discussion &
dealing of matters brought before it.
Features of committees:
1. It is a group of persons
2. It can deliberate only on matters brought before
it.
3. Members of the committee draw authority
through delegation.
4. A committee may be formed at any level in the
organisation.

26. Advantages of using committees:
• Pooling of knowledge & experience
• Facilitates coordination
• Fear of too much authority getting concentrated in a
single person can be avoided
• Transmission & sharing of information
• Motivation through participation
Team:
A team is a group of people in the org. constituted for
completing certain assignments.
The major difference between team & task force is that
a task force is created to solve unusual problems
whereas a team is constituted quite frequently to
complete the given assignments. For e.g. in IT
companies, most of the works are done by teams.

27. Authority:
Authority is the right to order or command & is delegated
from the superior to the subordinate to discharge his
responsibilities.
It is the sum of the powers & rights entrusted to make
possible the performance of the work assigned.
Managerial authority has the following features –
• It is the right or power to command & control the
subordinates
• Granted to a position to achieve the organisational
objectives
• May be exercised through persuasion or sanctions. If
subordinates do not obey, superior has the right to take
disciplinary actions.

28. Responsibility –
It is the obligation of the individual to perform
assigned duties to the best of his abilities under
the direction of his executives.- Davis
Responsibility is the obligation to carry out
assigned activities to the best his abilities.-
George R Terry
Accountability
It means holding an individual answerable to final
results.
Accountability arise from responsibility.

29. Delegation of authority
• Based upon the simple principle of Division
of work.
• The process of sharing task with its
corresponding authority with the
subordinates is known as delegation of
authority.
• In the words of Moore, “ Delegation means
assigning work to others and giving them
authority to do it.”

30. Delegation of authority:
Delegation means devolution of authority on
subordinates to make them perform the
assigned duties or tasks.
It is a process by which a superior makes it
possible for others to share the work of
accomplishing organisational objectives.
Delegation consists of granting authority or the
right to decision-making in certain defined areas
& charging the subordinates with responsibility
for carrying through the assigned task.

31. Elements/Process of delegation of authority –
• Entrustment of responsibility to another
• Granting of authority for the accomplishment
of responsibility
• Creation of obligation or accountability on the
part of the person to whom delegated i.e.
holding him answerable for final results.
A manager should delegate the authority to do
the routine work; but he can not delegate his
authority to take policy decisions to his
subordinates.
However, he can keep the control mechanism
with him & let the subordinates execute the
policy decisions.

32. Significance/advantages of delegation:
• Effective management
• Reduces the burden of manager
• Ensures healthy relation between superior &
subordinates.
• Facilitating employee growth and development
• Helping the expansion of business
• Motivation to employees
• Achieving business goals.

33. Difficulties in delegation of authority:
Difficulties on the part of superior –
• Lack of receptiveness – ‘I can do better myself’
• Lack of ability to delegate
• Unwilling to let go – desire of dominance over the work
of subordinates
• Lack of trust in subordinates
• Ineffective control
Difficulties on the part of subordinates –
• Lack of self-confidence
• Desire to play safe
• Lack of incentives
• Overburden with duties
• Inadequacy of authority, information & other facilities

34. Difficulties on the part of organisation –
• Defective org. structure
• Lack of clarity in authority-responsibility relation
• Inadequate planning
• Splintered authority
• Lack of effective control mechanism
• Infringement (disregard) of the principle of unity
of command
How to make delegation effective/successful?
• Well-defined goals
• Adequate control system
• Effective communication

35. • Assignment of duties in terms of results expected
• Clarification of limits of authority
• Incentive system to take up the responsibility
• Unity of command
• Parity of authority & responsibility – that much
authority should be granted which is sufficient to
fulfill the responsibility.
Centralisation & decentralisation of authority:
Centralisation of authority – means concentration of
decision-making power at the top hierarchy of mgt.
It is the systematic & consistent reservation of
authority at central point within the org.

36. Why centralisation? – advantages
• To facilitate personal leadership
• To promote uniformity in action
• To provide for integration of efforts
• While handling emergency/unexpected situation
Disadvantages –
• Delay in decision making as it is to be taken at the top
• Delay in the communication of the decision taken
• Delay in getting the work done from subordinates
• No scope for the growth of middle & lower level
executives
• Fate of the org. depends only on few top executives

37. Decentralisation of authority – means dispersal
of decision-making power to the lower levels in
the org.
It refers to the systematic efforts to delegate to the
lowest levels all authority except that which can
only be exercised at central points.
When decentralisation ?
• Has to take quick & appropriate decision on
the spot in order to cash the opportunity
present
• Has to reduce the communication work
• Urge for growth & diversification
• Physical dispersion of activities

38. Decentratisation is not the same as delegation; it
is something more than delegation.
Delegation basically means, entrustment of
responsibility & authority from one individual
to another; but decentralisation means
scattering of authority throughout the org.
Delegation can take place without
decentralisation; but decentralisation can not
take place without delegation.

39. Advantages of decentralisation –
• Reduction in the burden of top executive
• Quick decisions
• Diversification of activities
• Development of managerial personnel
• Effective control & supervision
• Improves the level of motivation & morale

40. Limitations –
• Increases administrative cost as personnel
should be specially trained at various levels.
• Coordination among various activities might
become difficult
• Might result in inconsistency in action
throughout the org.

41. Formal Vs Informal Organisation
When the managers are carrying on organising process then as a result of
organising process an organisational structure is created to achieve systematic
working and efficient utilization of resources. This type of structure is known
as formal organisational structure.
Features of Formal organisation:
(1) The formal organisational structure is created intentionally by the
process of organising.
(2) The purpose of formal organisation structure is achievement of
organisational goal.
(3) In formal organisational structure each individual is assigned a
specific job.
(4) In formal organisation every individual is assigned a fixed authority or
decision-making power.
(5) Formal organisational structure results in creation of superior-
subordinate relations.
(6) Formal organisational structure creates a scalar chain of

42. • Informal Organisation:
In the formal organisational structure
individuals are assigned various job positions.
While working at those job positions, the
individuals interact with each other and
develop some social and friendly groups in
the organisation.
This network of social and friendly groups
forms another structure in the organisation
which is called informal organisational
structure.

43. Features of informal
organisation:
(1) Informal organisational structure gets created
automatically without any intended efforts of
managers.
(2) Informal organisational structure is formed by the
employees to get psychological satisfaction.
(3) Informal organisational structure does not follow
any fixed path of flow of authority or communication.
(4) Source of information cannot be known under
informal structure as any person can communicate
with anyone in the organisation.
(5) The existence of informal organisational structure
depends on the formal organisation structure.