UN IT 5

ORGANIZATION & HUMAN

RESOURCE MANAGEMENT
Organization
• Organization is an association of two or more individuals
working together coordinating to achieve a common goal.
• An Organization is a collection of people working together
in a division of labor to achieve a common purpose.
• It is a social aspect as an essential part of human life.
• The concept of organization has been developed from very
beginning of human civilization since people stated living in
group.
• Nowadays, different form/types of organization on the
basis of their goals consisting of business, social, religious,
clubs and so on.
• People used to join organization when they could not
perform the job/work solely in an effective manner.
• The term ‘organization’ used for four different senses;
• AS a process (dynamic process which performs managerial
activities.)
• As a structure of relationship (Among jobs or position
which is created to achieve certain objectives.)
• As a group of person (Group of people contributing their
efforts towards the attainment of common goals.)
• As a system (Unique properties, capabilities, and mutual
relationship)
“ Organization is a system of consciously coordinated
activities or forces of two or more persons”
– Chester I. Barnard
“ Organization is any group of individuals, large or
small, that is operating under the direction of executive
leadership in accomplishment of certain common
objectives” – Keith Davis
“ Organization is a systematic arrangement of people
brought together to accomplish some specific
purpose.” – Decenzo & Robbins
Characteristics of Organization
1. Collection of people
2. Common goal
3. Division of work
4. Coordination
5. Hierarchy of authority
6. Perpetual existence
7. Environment
8. Technology
Types of Organization Structure
Traditional Organizational Structure
1. Simple/Line Organization
2. Functional Organization
3. Line & staffs Organization
4. Divisional Organizational
Modern Organizational Structure
1. Matrix Organization
2. Team Organization
3. Network Organization
Line Organization
• It is simple type organizational structure.
• It is also know smile or military organization
structure
• Line organization is the oldest and traditional from of
organizational structure.
• In line organization, There is direct of line of authority
from superior to the subordinate level through an
unbroken.
• Such types of structure is suitable in small and
medium scale organization.
• All manager have direct control over their respective
subordinates through chain of command.
• Every subordinate is directly responsible to his
immediate superior.
• In this structure, business is divided into various
departments on the basis of nature of work.
• such as production, finance, marketing, human
resource, r&d department etc.
• A department head is appointed in each department
and given the required authority and responsibility
to manager his department.
Advantage of Line Organization
• Simple Structure
• Quick decision and implementation
• Maintains discipline
• Fixed responsibility
• Flexibility
• Effective management
• Economical
Disadvantage of Line Organization
• Overload on managers
• Lack of specialization
• Autocratic leadership
• Problems of coordination
• Inefficiency
• Lack of stability
• Unsuitable in present day environment
Functional Organization
• F.W. Taylor, the father of scientific management,
initiated the concept of a functional organization under
the scheme of functional foremanship.
• This concept is limited only to the top level
management and not implemented in the subordinate
level.
• In Functional organization, all business activities of an
organization are divided into a number of functions as
line organization and each function is entrusted to a
specialist.
• Functional specialist has to authority or right to gives
orders regarding his function, which function is
performed in the organization.
• Under this organizational structure, the subordinates
have to receive instructions from different specialists.
• If anybody in the frim has to take any decision relating
to a particular function, it has to be consultation with
the functional specialist.
• The functional specialists interact with each other
through the general manager or the chief executive of
an organization.
Advantages of Functional Organization
• Benefits of specialization
• Increase of efficiency
• Healthy competition among experts
• Relief of executives
• Mass production
• Facilitates growth and expansion
• Suitable for present environment
Disadvantages of Functional Organization
• Multiple command system
• Lack of coordination
• High administrative
• Delay in decision making
• Spoils human relations
• Narrow outlook of specialists
• Shifting responsibility
Line and staff Organization
• Line and staff organization is the combination of line and
functional organization.
• Line organization has a simple pattern of structure and lack
of managerial specialization.
• Functional organization structure creates complexity in
operation due to lack of defined relationship between
superiors and subordinates.
• So this organizational structure has been developed to strike
a balance between the unity of command and functional
specializations
Advantages of Line & Staff Organization
• Managerial specialization
• Better coordination
• Limited functional authority
• Practical decisions
• Facilitates growth
• Better utilization of resources
• Greater flexibility
Disadvantages of Line & Staff Organization
• Problem of conflict
• Greater confusion
• High cost of structure
• Over-dependence on staff
• Inefficient staff
• Lack of responsibility
• Complication for management
Matrix Organization Structure
• Matrix organization structure is a special type of problem
solving from of an organization.
• It is formed to complete various types of project of specific
and unique nature.
• In this structure, a major project is assigned to the project
manager and he is given a team of specialists from different
disciplines.
• The team members may be from various such R&D,
production, marketing, finance etc.
• The team provides support to general manager to complete
the project in a given time frame.
• It is combination of and interaction of functional and project
managers.
• The project manager are responsible for the overall direction
and integration of activities and resource of concerned
project.
• Each subordinates works under two superiors: project
manager and functional manger
• The project manager support of implementation of project
activities and the functional manager support to technical
guidance.
Advantages of Matrix Organization
• Better coordination and control
• Adoptable to dynamic environment
• Maximum uses of resources
• Participative management
• Sufficient time to top management
• Excellence in inter-disciplinary specialization
• Development of teamwork
Disadvantages of Matrix Organization
• Violation of unity of command
• Costly structure
• Problem of over-specializations
• Difficult to balance
• Feeling of insecurity
• Lack of wide coordination
• Lack of commitment
Centralization
• Centralization is the systematic reservation of decision
making a the top level of management.
• Top level manager has direct control over each and every
business activities of the organization while the decision
making authority is also vested on him.
• It facilitates a manager to keep touch with all the activities of
the organization and facilitates quick decision.
• This system is appropriate in small scale organizations
preforming business activates.
• In big scale business organization, centralization becomes
impractical

“Centralization is the process of systematically retaining power

and authority in the hands of higher level managers”
-Ricky W. Groffin
“Centralization is the degree to which decision making is
concentrated as a single point in the organization.”
- Robbins and Coulter
Advantages of Centralization
• Facilitates unified decision
• Simplifies structure
• Facilitates quicker decision
• Economy in operation
• Integrate operation
• Suitable for small firms
Disadvantages of Centralization
• Unsuitable for large organization
• Manager is over burdened
• Possibility of power misuse
• Low moral and motivation
• Lack of environmental adaptation
• Inappropriate for routine decisions
Decentralization
• Decentralization is the philosophy of systematic and
scientific delegation of managerial authority to the middle
level and lowers level managers accordance their
responsibility.
• Top management should keep limited authority and
delegate maximum authority to operating level.

• Every organization has to decide how much authority should

be centralized and how much decartelized.
• It depends on the size and nature of organization
• The top level management has to delegate such degree of
authority to lower level so that quick decision and their
implementation is possible.
“Decentralization is the systematic and consistent delegation
of authority to the level where the work is performed.”
- Louis A. Allen
“ Decentralization is the tendency of disperse decision making
authority in as organized structure.” – Koontz and Weihruch
Advantages of Decentralization
• Relief to top management
• Facilitates managers development
• Possibility of better decisions
• Effective control
• High morale and motivation
• Facilitates divarication
• Environmental adaptation
Disadvantages of Decentralization
• Increase in expenditure
• Conflict
• Unsuitable for emergency situations
• Maximizes risk
• Difficulty in communication
• Unsuitable for specialized services
Human Resource Management
• HRM is concerned with the human beings in an organization.
• “The management of man” is a very important and
challenging job because of the dynamic nature of the people
• Human resource management is the process of managing
human energy and competences for achieving organizational
goal.
• It is concern with the development of human skill,
knowledge and ability to perform the organizational task
effectively and efficiently.
• It is concern with the development of human skill,
knowledge and ability to perform the organizational task
effectively and efficiently.
• It is also concerned with managing people in organization.
Human resource management is the improved version of the
personnel management.
• It helps to ensure the right man for the right position and at
the right time in a changing environment.
“The HRM is the process of attracting, holding and motivating all
manager line and staff.”
-Dunn and Stephens
Functions/Components of HRM
1. Human Resources Acquisition
• This is the staffing function.
• Concern with hiring competent employees
• It consists of following activities:
• Human resource planning
• Job Analysis
• Job description & specification
• Recruitment of HR
• Selection & placement of HR
• Socialization
Human Resource Development
• It is concerned with imparting knowledge and skill to
perform the task properly.
• It plans appropriate training and development packages to
the employees.
• Development function consists of following activities
• Analyzing training and development needs.
• Employee training. ( On the job & Off the job)
• Management development.
• Career development.
 Human Resource Utilization
• It is concerned with managing performance and improving
productivity.
• Utilization ensures willingness of employees for doing jobs
effectively.
• It consists of employing people productively through:
• HR Motivation
• Performance appraisal.
• Compensation/Remuneration management
• Record management
• Allocation of Jobs
• Guidelines
Human Resource Maintenance
• is the effort to encourage the employees to continue the job
for long years.
• It ensures that employees maintain their loyalty and
commitment to the organization.
• It consists of:
• Employee discipline
• Labor relation. (Employer-employee relation, grievance
handling etc.)
• Employee welfare. (Safety, health, sports, recreation,
canteen facilities etc.)
• Refreshment programs