ORGANISING

MEANING- Organising can be defined as the process of identifying and grouping the work to be
performed, assigning duties and establishing reporting relationships to complete objectives.
Steps in the process of Organising
1. Identification and division of work
2. Departmentalisation
3. Assignment of duties
4. Establishing reporting relationship

1. Identification and division of work-

This step involves identifying and dividing the work into manageable activities so that
duplication can be avoided and the burden of work can be shared among the
employees.
2. Departmentalization- Those activities which are similar in nature are grouped together.
This grouping process is known as Departmentalization. Department can be created on
the basis of territory(NEWS) and products(Cosmetics,footwear etc.)
3. Assignment of duties- After departmentation, jobs are allocated to the members of
each department according to their skills and competencies for effective performance.
There should be a proper match between the nature of a job and the ability of an
individual.
4. Establishing reporting relationship- It should be clearly established so that each
individual know who he has to take orders from and to whom he is accountable. This
helps in coordination among various departments.
Importance of Organising
1. Benefits of specialisation- Organising leads to a systematic allocation of jobs among
the workforce.
It reduces the workload.
It leads to specialisation
Increases productivity.
2. Clarity in working relationship- It clarifies the lines of communication and specify who
is to report to whom. It helps in fixation of responsibility Removes ambiguity
(misunderstanding) in transfer of Information and instructions
3. Effective administration- It provides a clear description of jobs and working relationship
for effective administration.
It helps to avoid confusion and duplication.
4. Optimum utilization of resources- It leads to property utilization of all material,
financial and human resources.
It removes overlapping and duplication
Prevent confusion and minimising the wastage of resources.
5. Adaptation to change- It allows a business enterprise in adaptation to change by
modification in organisation structure as per changing environment.
Provides stability and pave the way to smooth transition and growth.
6. Expansion and growth- It helps in growth and expansion of an enterprise by adding
more job position, departments, product lines new geographical territories etc.
 7. Development of personnel- It increases creativity among the managers by delegation.
Because of delegation, managers can develop new methods and ways to perform task.
This also develops in the subordinates the ability to effectively deal with the challenges.
ORGANISATION STRUCTURE
* It is the outcome of the organising process.
* It can be defined as a framework within which managerial and operating tasks are performed.
SPAN OF MANAGEMENT
* It refers to the number of subordinates that can be effectively managed by a superior.
(No. of subordinates under a superior)
* It determines the levels of management in the structure.

Narrow span of management Tall Org.Structure

Wider span of management Short Org.Structure

TYPES OF ORGANISATION STRUCTURE

Functional Structure Divisional Structure

! !
Managing Director Managing Director
! !
---------------------------------------------------------- Cosmetics Footwear Garments
! ! ! ! ! (same) ! (same)!
HR Dept. Pur.Dept. Sales Dept. Prod.Dept. ----------------------------------------------------------
! ! ! !
HR Dept. Pur.Dept. Sales Dept. Prod.Dept

FUNCTIONAL STRUCTURE
Meaning- In this structure similar nature of activities are grouped together and departments are
created on the basis of specified functions like production, finance,purchase,sales etc.
ADVANTAGES
1. Specialisation-
It leads to occupational specialisation *Improve performance
*Promote efficiency in utilisation of manpower.
2. Control -It promotes control and coordination within a department because of similar
jobs performed by workers.
3. Managerial eficiency- It helps in increasing managerial and operational efficiency with
increased profit.
4. Lower cost- Because of minimum duplication of efforts, economies of scale and lower
cost is possible.
5. Training- It makes training of employees easy because the focus is only on limited
range of skills.
6. Due attention- It ensures due attention to different functions.
DISADVANTAGES
1. Conflict of interest- It leads to conflicts because of differences in interest of the
department.
2. Inflexibility- It leads to inflexibility because of narrow outlook of people with the same
skill.
3. Lack of coordination- In this organisation structure it is difficult to establish coordination
between different departments because information has to be exchanged between
different departments.
4. Less importance to organisational objectives- In this structure more emphasis is
given on achieving departmental objectives. So it is difficult to achieve organisational
objectives.
SUITABILITY
# Large size of products
# Diversified activities
# High degree of specialisation
#Single product
DIVISIONAL STRUCTURE
Meaning- In this structure activities are grouped and separate units/divisions/departments are
created on the basis of products produced like Purchase Dept, Sales Dept. etc.
ADVANTAGES
1. Accountability- Divisional heads are accountable for profits as revenues and costs of
different departments can be easily identified.
2. Fixation of responsibility- It helps in fixation of responsibility in case of poor
performance and remedial reaction can be taken.
3. Product specialisation- Product specialisation helps in the development of skills in a
divisional head. This prepare him for higher positions.
4. Flexibility- Units are independent so there is faster decision making and it also
promotes flexibility.
5. Expansion and growth- It helps in expansion and growth because new divisions or
new product line can be added easily.
DISADVANTAGES
1. Costly process- It may lead to increase in cost because of duplication of activities in
each division or units.
2. Conflicts- There may be conflicts among different divisions with reference to allocation
of funds.
3. Ignorance of organisational interest- Divisional heads focuses only on their divisional
interest. It may lead to ignorance of organisational interest.
SUITABILITY
# Organisation having a large variety of products using different productive resources.
# Introduction of new levels of Management(growth,no.of employees, new departments
etc.)
# Products specialisation.
DELEGATION OF AUTHORITY
Meaning- Delegation refers to the downward transfer of authority from superior to subordinate.
 Superior
!
!
Subordinate
ELEMENTS OF DELEGATION OF AUTHORITY
1. AUTHORITY- *It refers to right of an individual to command his subordinate.(to take
action within the scope of his position)
*Flows from top to bottom (Downwards)
*Arises from formal position(Scalar chain)
*It can be delegated.
2. RESPONSIBILITY-*It refers to the obligation of a subordinate to perform assigned task.
*Flows from bottom to top (Upwards)
*Arises from delegated authority.
* It cannot be completely delegated.
3. ACCOUNTABILITY-*It refers to the answerability for the final outcome.
*Flows bottom to top (Upwards)
*Arises from responsibility
* It cannot be delegated.
IMPORTANCE OF DELEGATION
1. Effective management- Through delegation managers get more time to concentrate on
important matters.
It helps in effective management.
It provides them opportunities to excel in new areas.
2. Development of employees -It empowers the employees by providing them a chance
to use their skills and develop themselves for high positions.
It helps in preparing better future managers.
3. Motivation of employees- It helps in improving the confidence of employees so that
they can improve their future performance.
4. Growth- Delegation helps in expansion and growth of an organisation by providing a
ready workforce to take up leading positions in a new ventures.
5. Better coordination- It helps to avoid overlapping and duplication of efforts.
It gives a clear picture of the work being done.
6. Management hierarchy- It established a clear picture of superior subordinate
relationships.
It determines who is to report to whom.
CENTRALISATION- The concentration of decision making authority retained by the top
management is known as centralisation
DECENTRALISATION- It refers to the delegation of authority throughout all the levels of
management and in all the departments.

IMPORTANCE OF DECENTRALISATION-
1. Relief to top management- It gives reliefs to top management. The top management
gets more time to devote on important policy decisions.
 2. Decision making- It helps in quick decision making because decisions are taken at the
points of action.
* There is no need to take approval from different levels.
3. Control- It leads to better control by evaluating performance at each level of
management.
# Department can be held accountable for the results.
4. Growth- It increase competition among the departments which leads to increase
productivity and higher profits.
5. Develop managerial talent for the future- It develops managerial talent for the future
by giving them a chance to prove their abilities.
6. Develops initiative among the subordinates- It develops initiative among
subordinates by promoting confidence among them.
Lower management are given decision power.
DIFFERENCE BETWEEN DELEGATION AND DECENTRALUSATION
BASIS DELEGATION DECENTRALISATION

1. Nature Compulsory act Optional policy decision

2. Freedom of action Less freedom- more control Greater freedom- less control
by superiors by superiors

3. Status Process followed to share Result of policy decision

tasks

4. Scope Narrow scope Wide scope

5. Purpose Reduce (Lessen) the burden Increase the role of

of manager subordinates

TYPES OF ORGANISATION
1. FORMAL ORGANISATION
2. INFORMAL ORGANISATION
FORMAL ORGANISATION- Formal organisation refers to the org. structure that is
designed by the management to accomplish a particular task.
– It specifies clearly the boundaries of authority & responsibility and there is a systematic
coordination among the various activities to achieve organizational goals.
Features
1. It is deliberately created by the top management.
2. It is based on rules and procedures which are in written form.
3. It is impersonal i.e. does not takes into consideration emotional aspect.
4. It clearly defines the authority and responsibility of every individual.
5. It is created to achieve organizational objectives.

Advantages
1. Easier to fix responsibility - since mutual relationships are clearly defined.
2. No overlapping of work - because things move according to a definite plan.

3. Unity of command - is maintained through an established chain of command.

4. Accomplishment of goals-by providing a framework for tge operations to be performed.

5. Stability to the organisation – because there are specific rules to guide behaviour of
employees.

Disadvantages
1. Procedural delays- The Work is based on rules which causes unnecessary delays.

2. Lack of initiative: The employees have to do what they are told to do and they have no
opportunity of thinking.

3. Limited in scope: It is difficult to understand all human relationships in an enterprise as it

places more emphasis on structure and work.

INFORMAL ORGANISATION
An informal organization is that organization which is not established deliberately but comes into
existence because of common interests, tastes and religious and communal relations.
#The main purpose of this organisation structure is getting psychological satisfaction. For
example, employees with similar interest in sports, films, religion etc. may form their own
informal groups.

Features
1. It originates from within the formal organization as a result of personal interaction among
employees.

2. It has no written rules and procedures.

3. It does not have fixed lines of communication.

4. It is not deliberately created by the management.

5. It is personal means the feelings of individuals are kept in mind.

Advantages
1. Speed: Prescribed lines of communication are not followed which leads to faster spread of
information.

2. Fulfillment of social needs – It enhances job satisfaction which gives them a sense of
belongingness in the organization.
3. Quick solution of the problems – because the subordinates can speak without hesitation
before the officers, it helps the officers to understand the problems of their subordinates.

Disadvantages
1. Creates rumours: All the persons in an informal organization talk careless and sometimes a
wrong thing is conveyed to the other persons.

2. Resists change - It resists change and lays stress on adopting the old techniques.

3. Priority to group interests: Pressurizes members to conform to group expectations.

Difference between Formal Informal Organisation

Basis Formal Organisation Informal Organisation

1. Meaning It refers to the structure It refers to the network of

designed by the top social relationships which
management (well defined develops automatically.
authority and responsibility)

2. Nature Rigid and stable Flexible and unstable

3. Authority Arises by virtues of positions Arises out of personal

in management qualities.

4. Behaviour Directed by rules There is no set behaviour

pattern

5. Leadership Managers are leaders Leaders may or may not be

managers. They are chosen
by group.

6. Formation/ Origin Arises as a result of company Arises as a result of social

rules and policies interaction

7. Flow of Authority Authority flows from top to Authority flows vertically as

bottom i.e. downwards well as horizontally

8. Flow of Communication takes place Flow of communication in any

communication through the scalar chain direction

Neeta Bala