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Published by: Deepak Ehn on May 28, 2011
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Study Note - 1
Organisation and its Meaning
DefinitionsOrganisation as a ProcessOrganisation as a StructureDifferent Organisation StructureFree Form OrganisationConflict between Line and Staff 
Different bases of Organisation
DepartmentationDelegation of AuthorityDecentralisation
Formal and Informal Organisations
Meaning of Formal OrganisationsNature of Formal OrganisationsSteps in designing Formal OrganisationsDeterminants of Formal OrganisationsNeed and Significance of Formal OrganisationsPrinciples of Formal OrganisationMeaning and Nature of Informal OrganisationDistinction between Formal and Informal OrganisationNeeds and Significance of Informal OrganisationDangers from Informal OrganisationHow to Manage Informal Organisation
Grouping of Activities - Departmentation
Meaning of DepartmentationNeed and Importance of DepartmentationBases or types of DepartmentationChoosing a basis for Departmentation
Question for Review and Discussion
This Study Note includes
Organisations normally mean entities (like hospitals, schools, churches, business units, charitableinstitutions, etc.). As Amitai Etizioni contends “we are born in organisations, educated byorganisations, and most of us spend much of our lives working for organisations”. Most whatwe eat, what we do, where we go,- our values, hopes, dreams etc. are basically part of organisations that surround us and influence us. In fact, organisations invade us and shape ourdestinies. One simple fact is that organisations are made of people, systems, procedures, andobjectives.The term ‘organisation’ is used in several ways.(i)Organisation is considered as an activity in the sense it is one of the importantfunctions of management
organising.(ii)Organisation may refer to an ongoing business unit
a unit, which is purposefullycreated to attain some objectives with resources.(iii)Organisation may be used in a static way representing a static structure of i,responsibilities of authorities. !(iv)Organisation may be used in a dynamic way referring to a process by which the
structure is created, maintained and used.
1.1.1. Definitions
Some of the very important definitions of organisation are captured hereunder :- Joseph L. Massie : “Organisation is defined as the structure and process by which ; cooperativegroup of human beings allocates its tasks among its members, identifies relationship andintegrates its activities toward common objectives”. ;W. Richard Scott: “Organisations are defined as collectivities that have been established ; forthe pursuit of relatively specific objectives on a more or less continuous basis”.Pfiffner ad Sherewood : “Organisation is the pattern of ways in which large number of . people,too many to have intimate face-to-face contact with all others, and engaged in complexity of tasks, relate themselves to each other in the conscious, systematic establishmeni andaccomplishment of mutually agreed purposes”. Johnson, kast and Rsenzweig: “The organisation is an assemblage of people, materials machinesand other resources geared to task accomplishment through a series of interactio: and integratedinto a social system”;Koontz and O’Donnel: “Organising involves the establishment of an intentional structure orroles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part of it: the grouping of these activities, the assignment such groups of activities to manager, the delegation of authority to carry them out, a provision for coordinationof authority and informational relationship horizontally a -vertically, in the organisationstructure”.
An organisation always refers to people; it is developed for people. People interact with oneanotherin some way or other in organisations. These interactions are specified by some sort of structure.These interactions are ordered to achieve some specific joint objectives.
1.1.2 Organisation as a Process
as a process means identifying and grouping the activities to be performed,assigning duties or responsibilities and delegating authority. It involves establishingrelationships among the people for the purpose of enabling them to work most effectively inachieving the objectives for which the organisation is set up. Thus, organisation as a processrefers to certain dynamic aspects like what tasks are to be performed, who is to do them, howthe tasks are to be grouped, who is to report tc whom and where the decisions have to be made,etc. This process view includes both differentiation and integration of organisational activities.As a process, the organisation function of management involves the following steps.
(i)Identifying the work
: The first logical step in the organisation is to identify the workthat must be done to achieve the organisational objectives. Every organisation isestablished to attain certain objectives. The objective of a business unit is to produceand distribute goods and services and thereby earn maximum profits. A hospital isestablished to provide medical care to the sick people. A cricket team is established toplay and win the matches. The work to achieve these objectives should be identified,classified in a systematic way so th.-’t each person in the organisation gets a separateand distinct task.
(ii)Division of work
: After identifying the work to be performed, the next step is todivide the work systematically so that it can be distributed among the personnel insuch a way that everyone gets his share of work. Division and distribution of work isnecessary because no one can handle the total work in an organisation single-handed.The total work load of a distributive agency can be divided into purchase, storage,display, advertising, sales, correspondence, accounting, etc.
(ii)Grouping the work
: Division of work necessitates the groupihg of work or tocoordinate the divided work. That is to say, similar activities are grouped togetherand departments are created. For example, all the activities concerned with thepurchases are kept under the head of purchasing department, all the activitiesconcerned with the finance and accounting are brought together under ‘Finance andaccounting’ department etc. In order to provide for smooth flow of work, it is absolutelyessential to group the similar activities under one umbrella. Further, responsible peopleare asked to head the concerned department that is created in this process. For instance,purchase department is headed by purchase manager; accounting department isheaded by the accountant; sales department is headed by. the marketing manager,etc.
Assignment of duties : Not only that various departments are headed by competentindividuals, within each department duties are to be assigned to all the people. Theassignment of duties to each and every individual in the organisation should beappropriate, taking into consideration the qualifications and experience, capacity of the people to perform the given tasks, etc.

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