ORGANIZATION
- Meaning & Definition
- Principles of Organization
- Formal & Informal Organization
- Organization Structure & their Features
- Types of Organization
- Span of Management
- Factors influencing the Span of Management
- Authority & Responsibility
ORGANIZATION
Delegation
- Principles of Delegation
- Centralization & Decentralization & their Advantages & Disadvantages
Departmentation
- Significance of Departments
- Methods / Basis of Departmentation
Creative phase of planning
What is to be done?
Who will do it?
Since the work is done by no of people working
together, manager has to define
Who will do what?
What will be the relationship?
This aspect is taken up by the managers in the form of organizing.
Which is basically involves analysis of activities performed for
achieving organizational objectives.
Organization
Organization is the structural framework of duties
and responsibilities required of personnel in
performing various functions with a view to achieve
business goals through organization.
Definition
Louis Allen
Organization is the process of identifying and grouping work
to be performed, defining and delegating responsibility and
authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing
objectives.
Organization
To Sum-up
Organization is the establishment of authority
relationship among persons so that it helps in
the achievement of organizational objectives.
Characteristics of Organization
Division of work
Co-ordination
Common objectives
Co-operative relationship
Well-defined authority-responsibility
relationships
Principles of Organization
Taylor and Fayol have derived certain principles on the basis
of their past experiences for a sound business organization.
Objective
Specialization
Co-ordination
Authority and Responsibility
Definition
Span of control
Balance
Continuity
Uniformity
Unity of command
Exception
Simplicity
Efficiency
Scalar Principle
Formal & Informal organization:
Differen
ce
Formal
Informal
Consciously
Spontaneous personal
Meanin
coordinated
g
relationships
relationships
Delegation of
Personal needs,
authority,
Basis
Attitudes, Like &Dislike
Procedures &
etc
Regulations
Stable &
Unstable &
Nature
Predictable
Unpredictable
Definite structure & Structure less and full
Form
well defined jobs
of discretions
Source
of
Informal, without
Organization Structure:
Every business sets some goals
Some activities are to performed.
Classified and Grouped.
Assigned to individuals / groups.
Authority and Responsibility is assigned
A system of Co-ordination is established among various
activities & persons
Framework of organization structure.
Developing an Organization Structure:
The two variables i.e.
Basic Structure & Operating
Mechanism
The Basic structure involves issues such as how the work of the
organization is to be divided and assigned among positions, groups,
departments, divisions etcand how to bring the required co-ordination
for achieving organizational goals.
The Operating mechanism includes factors like
information system, control procedures & application of
organizational principles and practice.
Developing an Organization Structure:
Basic Structure
Operating Mechanism
How the work of the
organization is to be divided
Information system
Assigned among positions,
groups, departments,
divisions
Control procedures
How to bring the required
co-ordination
Application of organizational
principles and practice.
Role of Organization Structure
Encourages efficiency
Communication
Optimum utilization of resources
Job satisfaction
Creative thinking
Facilitates management
Features of a good organization structure
Clear Line of Authority
Less Managerial Levels
Simple and Flexible
Types of Organization
An organization structure is mainly concerned with the allocation of
duties and responsibilities and delegation of authority. It represents
hierarchial arrangement of various positions in the organization.
Line organization.
Line organization
This organization is a vertical structure where one person delegates
authority to his subordinate and who in turn delegates to his
subordinate and so on.
Authority flows vertically from top level person to all the persons
responsible for the execution of work.
Responsibility, on the other hand, flows upwards. Everybody is
responsible for his work and is accountable to his boss.
Since authority and responsibility flows in an
unbroken straight line
it is called line organization.
Line organization
Chief Executive Officer
G.M
R&D
RM-1
G.M.
Finance
G.M.
Marketing
G.M.
Production
RM-2
RM-3
RM-4
ASM -1
ASM -2
ASM -3
G.M.
Human
Resources
RM-5
Types of line organization
The line organization is of two types
Pure line organization &
Departmental line organization
Types of line organization
Pure line organization
Production Manager
Foreman - A
Worker-1
Foreman - B
Worker-2
Foreman - C
Worker-3
Worker-4
Types of line organization
Departmental line organization
General Manager
Marketing
Manager
Finance
Manager
Production
Manager
Deputy Manager -1
Supervisor-1
Worker-1
Personnel
Manager
Deputy Manager -2
Supervisor-2
Supervisor-3
Worker-2
Supervisor-4
Worker-3
Merits of line Organization
Simplicity
Identification of authority and responsibility
Co-ordination
Effective communication
Economical
Quick decisions
Unity of command
Effective control and supervisions
Flexibility
Demerits of line organization
Excess work / overloading
Lack of specialization
Lack of co-ordination
Lack of initiative
Favoritism
Instability
Staff / functional organization
The functional organization often called functional foremanship was
originated by F. W. Taylor to bring about specialization of
management.
Taylor suggested the division of supervisory functions into two
groups
Office specialists & Shop specialists.
Staff / Functional Organization
Office specialists:
They are concerned with the design, scheduling recording and planning
of work.
The office staff consists of following persons.
Route clerk
Instruction card clerk
Time and cost clerk
Disciplinarian
Shop specialists:
They guide and supervise the work in the factory.
The following are the shop specialists.
Gang boss
Speed boss
Repair boss
Inspector
Merits of staff Organization
Specialization
Increase in efficiency
Flexibility
Relief to top executives
Economy of operations
Better supervisions
Scope for growth
Demerits of Staff Organization
Conflict in authority
Lack of co-ordination
Difficulty in fixing responsibility
Delay in taking decisions
Expensive
Group rivalries
Line & Staff Organization
Both line and staff organization suffers from some drawbacks.
Line organization is autocratic and Staff organization has loose control.
Hence, there was need for a new system which could avoid the defects of
these systems. This need has fulfilled by
Line and Staff Organization
The staff which is responsible for Planning and the Line for the Actual
execution of the work. The staff is attached to the line to assist the line
in discharging its duties efficiently.
This method clearly distinguishes the difference between two aspects of
administration i.e. Planning and Execution.
The staff officials prepare plans and recommend to the line officials who
implement them with the help of their departmental personnel. Thus, the
staff members are thinkers while the line officials are doers.
Merits of Line &staff Organization
Specialization
Better Discipline
Sound Decisions
Growth & Expansion
Development of employees
Quick actions
Demerits of Line & Staff Organization
Expensive
More dependence on staff
Lack of Responsibility
Demerits of Line & Staff Organization
Conflicts between Line & Staff
The line view point:
The line managers have the following to say about staff people.
Staff authority undermines line authority and interferes in the
work of line managers.
Advice given by the staff is not always sound. Advice is only
theoretical and unrealistic.
Staffs takes credit if the programme is successful & blame the line
if it is not successful.
Demerits of Line & Staff Organization
Conflicts between Line & Staff
The Staff view point:
The staff authorities have the following complaints against line officers
Line officers do not make proper use of advice given by staff.
Line officers are slow to accept new ideas and they
resist change.
Line officers reject the advice without giving
reasons.
Improving of Line & Staff
The limit of authority of both line and staff should be prescribed
clearly.
Staff authority should be restricted to a purely advisory role.
Line officers should give due consideration to staff advice. They
should state reasons in case they cannot accept the advice.
The advice of staff should be realistic and practicable.
Both line staff should try to understand each others
responsibilities and difficulties and try to co-operate with each other for
achievement of enterprise objectives.
Line and Staff Organization:
Line Organization Staff Organization
Centralized authority
Decentralized authority
One superior- One
subordinate
Several advisors to one
subordinate
Responsibility is always
fixed
No fixed responsibility
Less expensive
More expensive
Suitable for Small Business
Suitable for Big Business
Span of Management
Space between two supports of a
structure
When applied to management span refers to the numbers of
subordinates a manager or superior can supervise / manage or
control effectively and efficiently.
Therefore, refers to the optimum number of
subordinates that a manager or supervisor can
manage or control effectively.
Span of
Supervision
Span of Control
Span of Management
Span of Responsibility
Span of Authority
Span of Direction
Factors influencing the Span of Supervision:
The capacity and ability of the executive
Competence and training of subordinates
Nature of work
Degree of decentralization and extent of delegation
Quality of planning
Effectiveness of communication system
Degree of physical dispersion
Rate of change
Difference Between Authority and Responsibility
Differen
ce
Meaning
Basis
Delegatio
n
Duration
Authority
Difference
Authority
Responsibility
Responsibility
It is the right of a
superior to command
the subordinate
It normally arises either
from legal provisions &
formal contract.
Can be delegated from a
superior to a
subordinate
It is the obligation of a
subordinate to perform an
assigned task.
It arises from superior
subordinate relationship.
It may continue for a
long period
It is over when the assigned
task is completed
It can not be delegated.
Delegation:
Delegation is an administrative process of getting things done by
others by giving them responsibility.
Board of Directors.
Chief executive
Marketing
Manager
Production
Manager
Finance
Manager
HR
Manager
Delegation
Every superior delegates the authority to subordinates for getting a
particular work done. The process goes to the level where actual work
is executed.
A manager is not judged by the work he actually performs on
his own but the work he gets done through others. He assigns
duties and authority to his subordinate and ensures the
achievement of desired organizational goals.
Delegation
Allen
The entrustment of a part of the work or responsibility and
authority to another, and the creation of accountability for
performance.
Hiner O.S.
Delegation takes place when one person gives anther the right to
perform work on his behalf and the second person accepts
corresponding duty / obligation to do what is required of him.
Characteristics of Delegation
Delegation takes place when a manager grants some of his powers
to
subordinates.
Delegation occurs only when the person delegating the authority
himself that authority.
Only a part of authority is delegated to subordinates.
A manager delegating authority can reduce, enhance or take it back.
He exercises full control over the activities of the subordinates even
after delegation.
It is only the authority which is delegated and not the responsibility.
Centralization & Decentralization
They refer to the location of DECISION-MAKING authority in
an organization.
Centralization implies the
Concentration of authority at the top level
While Decentralization means
dispersal of authority
throughout the organization.
Centralization & Decentralization
Henry Fayol
everything which goes to increase the importance
of the subordinates role is decentralization;
everything which goes to reduce it is centralization.
Advantages of Centralization:
Effective utilization of talents of the top leader.
Helpful in achieving uniformity of action.
Effective in handling emergencies.
Duplication of functions and facilities are
minimized.
Disadvantages of Centralization:
Destroys individual initiative
Over burden of few
Slow down the operation
No scope for specialization
Advantages of Decentralization:
Reduces burden of top executives
Quick Decisions
Facilitates diversification
Motivation of subordinates
Disadvantages of Decentralization:
Lack of co-ordination
Difficulty in control
Expensive
Lack of able managers
Centralization Vs Decentralization
Sl
No
1
Centralization
Authority in the hands of top
Management
Minimum delegation
Span of control is narrow,
management levels are
many, and Organization
tends to centralized.
Most of the subordinates
under this system perform
routine activities. They
cannot perform meaningful
and challenging work.
Hence, they are dissatisfied.
Sl
No
1
2
Decentralization
Authority in the hands of
subordinates
Extensive delegation
Span of control is wider,
Management levels are only
few and organization tends to
be decentralized.
Under this system,
subordinates are freedom to
act & freedom to make
decisions. This increases
their dedication,
commitment, their feeling of
status and loyalty towards
organization. This leads to
Departmentation
Process of grouping of similar activities of a
business concern into small units for the purpose of
facilitating administration.
Definition
Koontz & ODonnell
Departmentation is a process of dividing the large
monolithic functional organization into small and flexible
administrative units.
Significance of Departmentation
It increases the efficiency of the enterprise since
various activities are grouped into workable units.
It renders the task of fixation of accountability for
results very easy since activities are well defined and
responsibilities are clearly laid.
It provides for fixation of standards for performance
appraisal and thus ensures effective control.
It creates opportunities for the departmental heads to
take initiative and thus develop managerial facilities.
Methods / Basis of Departmentation:
Functional Departmentation.
Product wise Departmentation.
Territorial / Geographical Departmentation.
Customer wise Departmentation.
Process / Equipment wise Departmentation.
Methods / Basis of Departmentation:
Functional Departmentation.
Managing Director
GM
Finance
GM
Marketing
GM
Production
GM
R&D
Methods / Basis of Departmentation:
Product wise Departmentation.
Director Marketing
Mktg Mgr
Agro
products
Mktg Mgr
Electronics
products
Mktg Mgr
Audio
products
Mktg Mgr
Video
products
Methods / Basis of Departmentation:
Geographical Departmentation.
G M ( Marketing)
Mktg Mgr
North
Region
Mktg Mgr
Southern
Region
Mktg Mgr
Western
Region
Mktg Mgr
Eastern
Region
Boundary less organization
Aboundary less organizationis a contemporary approach
inorganization
design. It is an organization that is not
defined by, or limited to, the horizontal, vertical, or external
boundaries imposed by a predefined structure. This term was
coined
by
formerGeneral
ElectricchairmanJack
Welchbecause he wanted to eliminate vertical and
horizontal boundaries within the company and break down
external barriers between the company and its customers
and suppliers.
Many companies are finding that a flexible and unstructured
approach are effective means to running a company
Virtual Organization
Virtual organizations
outsource all non-essential
functions
A flexible network of independent entities linked by
information technology to share skills, knowledge and
access to others' expertise in non-traditional ways
A form of cooperation involving companies,
institutions and/or individuals delivering a product or
service on the basis of a common business
understanding. The units participate in the
collaboration and present themselves as a unified
organization.
Thanking You
