UNIT III & IV

ORGANISING
Meaning and Definition
The process of organizing involves establishing an intentional structure of roles for the
staff at all levels of hierarchy in the organization. It is the function of identifying the required
activities, grouping them into jobs, assigning jobs to various position holders, and creating a
network of relationship, so that the required functions are performed in a co-ordinated manner,
leading to the accomplishment of desired goals.
According to Koonts O Donnel. ―Organizing involves the grouping of activities necessary
to accomplish goals and plans, the assignment of these activities to appropriate departments,
and the provision of authority delegation and Co-ordination.‖

According to GR Terry, ―Organizing is the establishing of effective behavioral

relationship among persons so that they may work together effectively and gain personal
satisfaction in doing selected tasks under given environmental conditions for the purpose of
achieving some goal or objectives.‖

Steps in Organizing
The logical sequence of steps in organizing is mentioned below:-
1. Establishing objectives
2. Designing Plans and Policies
3. Identifying specific activities
4. Grouping activities according to available resources
5. Delegating the authority necessary to perform the activities.
6. Tying the groups together through authority relationship and communication.

Functions of Organisation
The following are the important functions of organization

1. Determination of activities:- It includes the deciding and division of various activities

required to achieve the objectives of the organization. The entire work is divided into
various parts and sub parts.
2. Grouping of activities :- Here, identical activities are grouped under one department.
3. Allotment of duties to specified persons:- For the effective performance, the grouped
activities are allotted to specified persons.
4. Delegation of authority:- Assignment of duties should be followed by delegation of
authority. It is difficult to perform the duties effectively, if there is no authority to do it.
5. Defining relationship:- When a group of person is working together for a common goal,
it is necessary to define the relationship among them in clear terms.
6. Co- ordination of various activities:- The delegated authority and responsibility should
be co-ordinated by a responsible perso
Principles of Organisation
The following are the important Principles to be followed by management for the success
of an organization.
1. Principle of definition: - It says that, it is necessary to define and fix the duties,
responsibilities and authority of each work. In addition to that the organizational
relationship of each worker with others should be clearly defined.
2. Principles of Objectives:- The objectives of different departs should be geared to
achieve the main objective of the organization.
3. Division of work:- A work should be assigned to a person according to his educational
qualifications, experience, skill and interest. It will result in attaining specialization in a
particular area.
4. Principles of continuity: It is essential that there should be a re operation of objectives,
re adjustment of plants and provision of opportunities for the development of future
management. This process is taken over by every organization periodically.
5. Principles of Span of Control: This principles determines the number of subordinates a
superior can effectively manage.
6. Principles of Exception: Here, all the routine decisions are taken by the subordinates;
senior managers will only deal with exceptional matters. It is known as management by
exception.
7. Principles of flexibility: The organizational set up should be flexible to adjust to the
changing environment of business.
8. Principles of Unity of Direction: All departmental goals are tuned to achieve common
goal. So there should be co-ordination of all the activities.
9. Principles of Balance: There are several units functioning separately under on
organizational set up. So, it is essential that the sequence of work should be arranged
scientifically.
10. The scalar principle: It says that each and every person should know who is his superior
and to whom he is answerable.
11. Principle of efficiency: The work should be completed with minimum members, in less
time, with minimum resources and with the right time.
12. Delegation of Authority: Authority should be delegated to the subordinate for the
successful completion of assigned job.
13. Principles of responsibility: Each person is responsible for the work completed by him.
So the responsibility of the subordinates should be clearly defined.
 14. Principles of Uniformity: The work distribution should be in such a manner that there
should be an equal status and equal authority and powers among the same line officers.
15. Simplicity and Accountability: The structures of the organization should be simple and
the higher authorities are accountable for the acts of their subordinates

Classification of Organization
1. Formal Organisation: It is an organizational structure which clearly defines
the duties, responsibilities, authority and relationship as prescribed by the top management. It
represents the classification of activities within the enterprise, indicate who reports to whom and
explains the vertical flow of communications which connects the chief executive to the ordinary
workers.
2. Informal Organisation: It is an organizational structure which establishes the
relationship on the basis of the likes and dislikes of officers without considering the rules,
regulations and procedures. The friendship, mutual understanding and confidence are some of
the reasons for existing informal organization.
Differences between formal and informal Organisation:
Formal Organisation Informal Organisation
1. It is created deliberately 1. It is spontaneous.
2. Authority flows from top to bottom 2. Informal authority flows from top to
bottom or horizontally.
3. It arises from man‘s quest for social
3. It is created for technological purpose satisfaction
4. There is no such permanent nature
4.It is permanent and stable and stability
5. It gives importance to people and
5. It gives importance to terms of their relationship.
authority and function. 6. It arises due to social interaction of
6. It arises due to delegation of people
authority 7. No such written rules and duties.

7. Duties and responsibilities of workers 8. Informal organisation tends to remain

are given in writing smaller.
8. Formal organization may grow to
maximum size
ORGANISATION STRUCTURE
Organisation is designed on the basis of principles of division of labor and span of
management. The success of the organization depends upon the competence and efficiency of
the officers. It is necessary to chalk out line of authority among the people working in an
organization.
Types of Organizational Structure
A brief explanation of the important types of organizations is given below:-

LINE ORGANISATION
Under Line organization, each department is generally a complete self contained unit. In this
type of organization, the line authority flows from top to bottom vertically. It clearly identifies
authority, responsibility and accountability at each level, departmental heads are given full
freedom to control their department. This type of organization is followed in the army on the
same pattern. So, it is also called military organization.

Features of Line organization

1. It consist of vertical direct relationship
2. Authority flows from top to bottom
3. Operations of this system is very easy.
4. It facilitate to know from whom one should get orders and to who one should give orders
5. Existence of direct relationship between superior and subordinates
6. The superior will take decisions within the scope of his authority.

LINE AND STAFF ORGANISATION

In this type of organization Line officers have authority to take decisions and implement
them, but the staff officers will assist them while taking decisions. The function of staff officers
are only an advising one. They should advise and help line managers to take proper decisions.
In the fast developing industrial world, the line officers are not in a position to acquire all the
technical knowledge, which are necessary for taking right decisions. That gap may be bridged
with the help of staff officers. The staff officers may be experts in a particular field.

Features of Line and Staff Organisation

1. Authority flows from top to bottom
2. Line Officers will takes decisions on the basis of suggestions given by staff officers
3. Staff officers have no power to take decisions and no control over subordinates.
4. The workers get the instructions only from the line officers
Advantages of Line and Staff Organisation:
1. A line officer can take sound decisions on the basis of proper advice from the staff
officer.
2. The work load of line officers would be reduced to some extent,
3. It promote the efficient functioning of the line officers
4. The principles of unity of command are followed in the line and staff organization.
5. A very good opportunity is made available to the young person to get training.
6. It facilitates the workers to work faster and better.
7. It enables the organization to effectively utilize the staff officer‘s experience and advice.
Disadvantages of Line and Staff Organisation
1. If the powers of authority is not clearly defined , it will lead to confusion though out the
organization.
2. The line officers may reject the advice from staff officers without assigning any reason.
3. The staff officers may under estimate the powers of line officers.
4. The staff officers are not involved in the actual implementation of the programme.
5. The staff officers are not responsible if favorable results are not obtained.
6. The difference of opinion between line officers and staff officers will defeat the very
purpose of specialization.
7. The line officers may misunderstand the advice given by staff officers.
FUNCTIONAL ORGANISATION
In this type of organizations, specialists are appointed in top position through out the
organization. Various activities of the enterprise are classified according to functions and
functional heads will give directions related to his functions. Workers, under functional
organization, receive instructions from various specialists.

Characteristics of Functional Organisation

1. The work is divided according to specified functions.

2. Authority is given to specialists to give orders and instructions in relation to specific

functions.

3. The decision is taken only after making consultations with the functional authority
relating to his specialized area.

4. The executives and supervisors discharge the responsibilities of functional authority.

 ADVANTAGES OF FUNCTIONAL ORGANISATION
The following points will explain the benefits of functional organization.
1. Benefit of specialization:- In this type of organization, each work is performed by a
specialist. It helps to enhance the efficiency of the organization.
2. Reducing work load: Each person is expected to look after only one type of work. It
reduces the unnecessary work allotted to them.
3. Relief to line executives: Under functional organization, the instructions are given by the
specialists directly to the actual workers. Hence, the line executives do not have any
problem regarding the routine work.
4. Mass production: Large scale production can be achieved with the help of specialization
and standardization.
5. Flexibility: Any change in the organization can be introduced without any difficulty.
DELEGATION OF AUTHORITY
AUTHORITY
It is the power to make decisions which guide the actions of others. In other words, it is the
power to give orders and make sure that these orders are obeyed. In order to finish the work in
time, there is a need to delegate authority and follow the principles of division of labour.
Definitions
According to Koonts and O‘Donnell, ― Authority is the power ot command others to act
or not to act in a manner deemed by the possessor of the authority to further enterprise or
departmental purposes.‖
According to Luis Allen,‖It is the sum of powers and rights entered to make possible the
performance of the work delegated.‖
RESPONSIBILITY
It is the obligation to do something. In other words, it is the obligation to perform the tasks,
functions, or assignments of the organization. The essence of responsibility is obligation. If a
person is entrusted with any work, he should be held responsible for the work that he completes
Definitions
According to Davis, ‖Responsibility is the obligation of individual to perform the assigned
duties to the best of his ability under the direction of his executive leader.‖
In the words of Theo Haimann,‖ Responsibility is the obligation of subordinates to perform the
duty as required by his superior.‖
DELEGATION OF AUTHORITY
Delegation is a process which enables a person to assign a work to others with adequate
authority to do it. The authority can be delegated but not the responsibility. Delegation of
authority is considered to be one of the most important methods of training subordinates and
building morals. It is acknowledged that delegation of authority is one of the surerest and best
methods of getting better results.
PRINCIPLES OF DELEGATION
The following are the important principles of delegation.
1. Delegation to go by results: The superiors should clearly know what he expects from the
subordinates before delegation of authority. It should be noted that the objective of the
organization are to be accomplished in time.
2. Non-delegation of responsibility: Assigning duties does not mean delegation of
responsibilities. A superior can delegate authority but not responsibility.
3. Parity of authority and responsibility: Responsibility without authority will make a
person an inefficient one. So there should be a proper balance between authority and
responsibility.
4. Unity of command: A subordinate should be assigned duties and responsibilities only by
one superior and he is accountable only to the concerned superior.
5. Definition of limitation of authority: There should be a written manual which help a
person to understand the authority in right direction.
STEPS IN SUCCESSFUL DELEGATION PROCESS
The following steps will help the successful delegation of authority.
1. Deciding the goals to be achieved: The purpose of delegation is to enable efficient
accomplishment of organizational objectives. If it is not clearly defined, the subordinate
may hesitate to accept the authority.
2. Establishment of definite responsibility: The authority and responsibility of each
subordinate should be clear in terms. It helps to avoid duplication of authority.
3. Determining what to delegate: This will necessitate the evaluation of the capacity of the
individual and needs of the organization.
4. Training: Subordinate should be properly trained in handling delegated work.
5. Control system: There should be a suitable control system to keep a careful watch over the
performance of the subordinates.

TYPES OF DELEGATION
A brief explanation of the different types of delegation is given below:
1. General delegation: It means granting authority to the subordinate to perform various
managerial functions and exercise control over them.
2. Specific delegation: Here, orders or instructions are delegated to a particular person
specifically.
 3. Written delegation: When authority is delegated in written words it is known as written
delegation.
4. Unwritten delegation: If authority is delegated on the basis of custom or usage etc, it is
known as unwritten delegation.
5. Formal delegation: If duties and authority are shown in the organizational structure of
the enterprise, then it is called formal delegation.
6. Informal delegation: If a person exercising authority without getting it from the top
management in order to perform his assigned duties, it is a case of informal delegation.
7. Downward delegation: It is a case where the superior delegate duties and authority to
his immediate sub ordinate.
8. Sideward delegation: A person delegate authority to another person who is also in the
same rank as he is in the organization.
CENTRALISATION AND DECENTRALISATION
Centralization: It means concentration of decision making authority at the top level
management. All the decision are taken by the top management without delegating to the
subordinate. As far as a big organization is concerned, it is not possible to run the organization
for long period without delegating the authority.
Decentralization: In decentralization, each section has its own workers to perform activities within
the department. According to Allen,‖ Decentralisation refers to the systematic efforts to delegate to
the lowest levels all authority except that which can only be exercised at central point.‖
Advantages of Decentralization
1. It saves the time of top executive and give relief to the top executive
2. Decentralisation gives the subordinates the freedom to act and make some decisions. It
gives him a feeling of status and recognition.
3. It helps to coordinate the activities of the organization in a better way.
4. It helps to take prompt and quick action at the earliest.
5. It is a best devise to develop future business executives
Disadvantages of Decentralisaiton
1. It is suitable only to a big business enterprise.
2. It creates problem of co-ordination among various levels
3. There is a chance to miss the uniformity in policies and procedures.
 SPAN OF CONTROL
Span of management or Span of control means the number of people managed efficiently by a
single officer in an organization. It is an accepted truth that large number of subordinates
cannot be supervised and their efforts coordinated effectively by a single executive. Only
limited numbers of persons are allocated to the executive for dividing the work. The limit of
number of members for span of control may be increased or decreased according to the levels of
management.
According to Urwick, the ideal number of subordinates is four in case of higher level
management and eight to twelve in case of lower level management.

Factors affecting the span of Control

The following are some of the factors which influence the span of control.
1. Nature of work: If the works are repetitive in nature, the supervisor can control a large
number of subordinates and vice versa.

2. Leadership qualities of the supervisor: If the supervisor has more skill and capacity to
control the subordinates, the span of management may be increase and vice-versa.

3. Capacity of the subordinates: If the subordinates have enough talent to perform the
work assigned to them, the manager or the supervisor can control more number of
subordinates.
4. Delegation of authority: If the authority delegates the powers of decision making,
planning and execution to the subordinates, the span of control may be increased.
5. Level of supervision: Depending up on the requirement of supervision needed, the span
of control may vary. In other words degree of span of control can be increased at bottom
level and decreased at top level.
6. Fixation of responsibility: In case the responsibility of subordinate is clearly defined,
then the superior can supervise large number of subordinates.
7. Communication methods: The methods used for communication is very important. If new
and modern techniques are used, then lesser time is required to control and vice-versa.
8. Using of standards: If standards are used to detect the errors, then the executives can
control more number of subordinates.

STAFFING
Staffing may be defined as a process of recruiting and equipping the people to handle
various positions and perform assigned tasks in line with the structure and the overall goals
of the organisation. It is the managerial function which involves managing the organisation
structure through proper and effective selection, appraisal and development of the personnel
to fill the roles assigned to the employers/workforce.
According to Theo Haimann ― Staffing pertains to recruitment, selection, development
and compensation of subordinates .‖
In the words of Benjamin, ―It is the process involved in identifying, assessing, placing,
evaluating, and directing individuals at work place.‖

Staffing Process:
The following specific activities are included in the staffing process.
1. Identification of areas of specialization to match the nature and mandate of the
organisation.
2. Estimation of the future manpower requirements
3. Recruitment
4. Selection and Placement
5. Performance Appraisal
6. Placing and Training
Staffing Function
Staffing function involves Man power planning, Recruitment, Selection, Training and
Development and Performance Appraisal.

MAN POWER PLANNING

Meaning and Definition
Planning of man power resources is a major managerial Responsibility to ensure adequate
supply of personnel at the right time both in terms of their quality, quantity and aptitude
Man power planning, which is also called HR Planning consists of putting right number of
people at the right place, right time doing the right things for which they are suited for the
achievement of goals of the Organisation.
Man power planning is carried out in a set of procedures. The procedure is as follows:
a. Analyse the current man power inventory
b. Marketing future man power forecasts
c. Developing employment programme
d. Design training programme.

According to Geisler,‖ Man power planning is the process including forecasting,

developing, implementing and controlling – by which a firm ensures that it has the right
number of people and right king of people, at the right place, at the right time, doing things
for which they are economically most suitable.‖
 Features of Man power Planning:
1. It involves determination of future needs of man power.
2. It deals with effective utilization of manpower.
3. It is a process for ensuring the availability of right people in the organisation.
4. It relates to establishing job specifications.
5. It give emphasis on better working conditions.

Man power Planning Process

The various steps of manpower planning can be identified as follows:-
1. Projecting Manpower requirement:- The first step in Manpower planning is to forecast
organization structure that will meet the future needs of the organisation. Most of the
organisations change over the period of time in terms of expansion of business, change in
the nature of business etc such changes require changes in the composition of man
power.

2. Job Analysis: It is a systematic study of jobs to know the nature and characteristics ofo
people to be employed in different kinds of job. It give a clue about type of personnel
required. It provides information about the nature of job, and the qualifications that are
desirable in the job holder. It includes:-
Job description:- It is a detailed study of job to know the nature and characteristics of
the people in different kinds of job. It prescribes the nature of job to be performed,
relationship with other jobs, purpose of the job etc. The job description statement is
helpful in the process of selection, training, performance appraisal and job evaluation.

Job specification:- The result of the job analysis is written in a statement known as job
description. Job specification refers to the summary of the personal characteristics required for the
job. It describes the type of person required in terms of qualification, experience , aptitude etc.
The basic difference between job description and specification is that the former
describes the details of the job, which latter describes the requirements of the person performing
the job.
3. Man power inventory: It is not simply counting of heads presently available in
organisation, but cataloguing of their present and future potentialities and aptitudes. This
process involves four steps.
1. Determination of personnel to be inventories.
2. Cataloguing of factual information on each individual.
3. Detailed study of those individuals who have potential for development.
4. Identification of Gap between availability and Required man power:- Now the
organisation is in a position to determine the actual needs of personnel and their availability.
While determining the future requirement, we have to consider the loss of personnel due to
quits, discharge, mutually agreed release, death, retirement etc. After identifying the gap
between the available and required man power, it should be filled up by recruitment and
selection.

RECRUITMENT AND SELECTION

Recruitment is the process of finding the apt candidate and inducing them to apply for the job
in an organisation. The success of any recruitment depends upon the procedure followed by
the company while recruiting the members.

Definition
According to McFarland, ―The term recruitment applies to the process of attracting potential
employees of the company.‖
In the words of Edwin B Flippo, ‖It is the process of searching for prospective employees
and stimulating them to apply for the job in the organisation.‖

Sources of Recruitment
Sources of recruitment may be external or internal.
External sources: - It includes
a. Advertisement
b. Employment agencies
i. Public Employment Exchanges
ii. Pvt. Employment agencies
c. Campus recruitment
d. Deputation
e. Employee recommendations
f. Labour unions
g. Gate Hiring
h. Un solicited applications
i. Jobbers and Contractors
j. Walk in interviews

Advantages of External Sources:

1. Wider Option: - The HR manager will get wider choice in selection of candidate.
2. New Outlook: - It will bring some fresh air and a new approach to the problem.
3. Wide experience: If the new candidate has experience in various fields, the company can
get the benefit of the Candidates experience.
 Disadvantages
1. It is an expensive way of selecting employees
2. Lack of co-operation from the existing employees
3. It is a time consuming process
4. In this case there is a danger of non adjustment
Internal Sources: It includes
1. Transfers
2. Promotion and Demotion
Merits of Internal Sources
1. It is economical in all respect
2. It requires lesser time
3. It helps to improve the morale of the employees
4. It is a more accurate and reliable source
5. It induces the staff members to work hard
6. It helps to derive job satisfaction
7. There is no need of any industrial training

Demerits of internal Sources

1. Limited options
2. No fresh air into the organisation.
3. Chances of reducing productivity by way of frequent transfers.
SELECTION
It is the process adopted by an organisation to select adequate number of persons who are fit
for the job. Selection procedure starts with the end of recruitment. Since it is a process of
rejecting the application of a candidate who is not suitable for the job, selection is described
as negative process.

Steps/Stages of Selection Process

Generally, the selection procedure has the following stages:
1. Receiving and screening of Applications: Prospective employees have to fill up Some sort
of application form. After getting the filled application form, the personnel department will
screen the application. Based on the screening of application, only those candidates are
called for further process of selection who are found to be meeting the job standards of the
organization.
2. Preliminary interview: - The object of conducting this interview is to know whether the
applicant is physically and mentally fit for the job.
 3. Blank application: The applicants who were selected at preliminary interview are
required to fill up a blank application form. It is basically a printed form used to collect
the individual bio data of the candidate.
4. Tests: The test is conducted by the organization for the purpose of knowing more about
the applicants to be selected or rejected. There are mainly two tests. Proficiency test and
aptitude test. Proficiency test refers to the testing of skills and abilities possessed by the
candidate. Aptitude test refers to measuring the skills and abilities which may be
developed by the applicant to perform the job in future.
5. Interviews: It is considered as a method of personal appraisal through a face to face
conversation and observation. Interview helps the employer to evaluate the candidate
regarding the personality, smartness, intelligence, attitude etc.
There are different types of interviews are used by different organizations, like
Direct interview, Indirect interview, Patterned interview, Stress interview, Systematic in
depth interview, group interview etc.
6. Checking references: Sometimes, the applicants are requested to furnish references. The
applicants may include the name and address of present educational institutions or
respected or reputed persons in his locality. The information furnished in the application is
checked from these persons.
7. Medical Examinations: This is carried out for the purpose of assessing physical fitness
of the prospective employees.
8. Final Selection: A suitable applicant is selected on the basis of performance in the above mentioned
tests and interviews. Only the required number of applicants is selected by the management.
9. Placement: Here a position is assigned to an individual where he can use all his efforts
consistent with the requirement of his total working group and then he will get job
satisfaction.
Differences between Recruitment and Selection
Basis Recruitment Selection
Meaning It is an activity of establishing It is a process of picking up more
contact between employers competent and suitable employees.
and applicants.
Objectives It encourages large number of It attempts at rejecting unsuitable
candidates for a job candidates
Process It is a simple process It is comparatively a complicated process
Approach It is a positive approach It is a negative approach
Sequence It precedes selection It follows recruitment
Time consuming Less time is required More time is required
TRAINING
It refers to a Programme that facilitates an employee to perform the job effectively
through acquiring increased knowledge and skills.
According to Edwin B Flippo,‖ Training is the act of increasing the knowledge and skills
of an employee for doing a particular job.‖
Types of Training
The training may be of
I. On the Job Training
II. Off the Job Training
I. On the Job Training: It refers to the learning while actually performing a particular work
or job. This type of training is more suitable to every type of employees. It includes:
a. On specific job training
b. Rotation of position /job rotation
c. Special projects
d. Apprenticeship training
II. Off the Job Training: Under this method, a trainee is removed from his normal working
place and spends his full time for training purpose in any other place. It includes:
a. Special course and lectures
b. Conference
c. Case study
d. Role playing
e. Management games etc