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Organisation An organization (or organisation) is a social entity that has a collective goal and is linked to an external environment.

The word is derived from the Greek word organon, itself derived from the better-known word ergon which means "organ" – a compartment for a particular task. It can also be termed as a group of people who have a particular shared purpose or interest. Organizational Structure An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.[1] It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decisionmaking processes, and thus to what extent their views shape the organization’s actions. For simpler businesses in which the owner employs only himself, there is no need for an organisational structure. However, if the business expands and employs other people, an organisational structure is needed. When employing people, everybody needs a job description. These are its main advantages:  People who apply can see what they are expected to do.  People who are already employed will know exactly what to do. Here is an example of a Job Description taken from the book:

it means that they are specializing in different jobs.  Helps train workers.  Why some managers don't want to delegate:  Managers are afraid that their employees will fail. However. Pros for the subordinates:  Work becomes more interesting and rewarding.  Employees feel important and trusted. as well as why some managers choose not to delegate. Delegation Delegation refers to giving a subordinate the responsibility and authority to do a given task. Here are the advantages of delegation for managers and employees. making them feel insecure. managers have more time to do more important tasks.  Managers are less likely to make mistakes if tasks are done by specialist employees.  Managers are scared that the subordinate will do tasks better than them. . Pros for the manager:  By letting subordinate do smaller tasks. the final responsibility still lies with the person who delegated the job to the subordinate.  Managers can measure the success of their task more easily.When there is more than one person in a small business and they all do different things. giving them better career opportunities.  Managers want total control.

There are different levels in the business which has different degrees of authority. they will have to create an organisational chart to work out a clear structure for their company. Here is another example of an organisational chart from the book: Here are the most important features of the chart: It is a hierarchy. meaning how many subordinates one person controls. which has their own function. and who they take orders from. Makes employees aware of the communication channel that will be used for messages to reach them. It is organised into departments. Organisational charts Eventually. when a business grows larger and employs many people. Advantages of an organisational chart: The charts shows how everybody is linked together.Delegation must mean: A reduction in direct control by managers or supervisors. Gives people a sense of belonging since they are always in one particular department. An increase in trust of workers by managers or supervisors. Employees can see their position and power. It shows the relationship between departments. of the business. . It shows the chain of command. and span of control. People on the same level have the same degree of authority. which is how power and authority is passed down from the top of the hierarchy.

Spans of control will be wider. If the subordinates are poorly trained. This is called de-layering. When it is short. whole levels of management were removed. managers could lose control. Therefore. In recent years. the longer the chain of command.Chain of command and span of control: Here are two organisations. the business will have a wider span of control. this makes: The manager delegate more. and we already know the advantages of delegation. the taller the business hierarchy and the narrower the span of control. one having a long chain of command and the other a wide span of control. The message has to pass through less people. Workers gain more job satisfaction and feel trustedbecause of delegation. . In some cases. Managers are closer to all employees so that they can understand the business better. people have began to prefer to have their business have a wider span of control and shorter chain of command. This is because short chains of commands have these advantages: Communication is faster and more accurate. if the span of control is too wide. meaning that the manager would have to take care of more subordinates. many mistakes would be made. However.

Lack of specialization. A separate person will look after the activities of the department and he has full control over the department.In this type of organization. he can independently make decisions of his own. 3.It is the most simple and oldest method of administration. It is sometimes called the traditional organizational structure.TYPE of Organisational Structure A. Unified control ensures better discipline. Better discipline. expert advices whatever decisions are taken by line managers are implemented in the same way. every line executive has got fixed authority. Merits of Line Organization 1. 2.In these organizations.The control is unified and concentrates on one person and therefore. 5. 2. Each department is a complete self contained unit. Simplest. Prompt decision. Unity of Command. power and fixed responsibility attached to every authority. Fixed responsibility.Due to the factors of fixed responsibility and unity of command. line officials are independent and can flexibly take the decision. For example. superior-subordinate relationship is maintained and scalar chain of command flows from top to bottom. This flexibility gives satisfaction of line executives.A line organization flows in a scalar chain from top to bottom and there is no scope for specialized functions.There is a co-ordination between the top most authority and bottom line authority. 6.The line executive’s decisions are implemented to the bottom. It is followed mainly in military organization. Flexibility. authority flows from top to bottom vertically. 4. . It is oldest type of organization followed. Since the authority relationships are clear. Under this the line organization. Demerits of Line Organization 1. Over reliance. Line Organisation A line organization is an organizational structure in which authority rests with the top management and flows in a chain of command to the last person in the organizational hierarchy. the officials can take prompt decision. This results in over-relying on the line officials.

Whatever decisions are taken by the line officials. are carried down and implemented in the same way. The complaints and suggestions of lower authority are not communicated back to the top authority. 5. Lack of Co-ordination. 4. . This leads to autocratic leadership and monopoly in the concern. Therefore.The policies and strategies which are framed by the top authority are carried out in the same way.The line officials have tendency to misuse their authority positions. Inadequate communication. Authority leadership. This leaves no scope for communication from the other end. the degree of effective co.3.ordination is less. in certain situations wrong decisions. So there is one way communication.

Example of Line Organisation BOARD OF DIRECTORS MANAGING DIRECTOR/GENERAL MANAGER FLOW OF AUTHORITY MARKETING MANAGER PRODUCTION MANAGER FINANCE MANAGER FLOW OF RESPONSIBILITY WORKS MANAGER FOREMEN SUPERVISOR WORKERS .

"compulsory advice" or "compulsory consultation" in which line managers must consider the staff person's advice." with line managers choosing whether or not to seek advice from the staff person. accounting. Staff workers derive influence from expert authority or "authority of knowledge. Line managers have total authority over their direct reports. Their function is to create. This always includes production and sales. but staff workers have primarily advisory authority rather than direct authority.[5] Management theorists advise that functional authority for staff positions should be extremely limited in scope: it should cover only a tiny aspect of the line managers' job. human resources.[2] Both terms originated in the military." in which the line manager cannot finalize a decision without the agreement of the staff person. reimbursement policies and quality standards. Line and Staff Organisation Staff and line are names given to different types of functions in organizations. it should relate only to areas in which line managers have no expertise. which flows to line workers in the form of advice. but can choose not to heed it.[1] A "staff function" supports the organization with specialized advisory and support functions. and it should be granted only where company-wide uniformity is required. A "line function" is one that directly advances an organization in its core work. "concurrent authority. Common types of functional authority for staff positions include authority over recruiting standards. and what to do with it once they get it. and "functional authority" in which the staff person has complete formal authority over his or her area of specialty." from their control of information which may be vital to line managers. and sometimes also marketing.B. Staff positions can have four kinds of authority: "advise authority. develop. collect and analyze information. public relations and the legal department are generally considered to be staff functions. and from their closer access to upper management . For example.

the functional head and Marketing Director directs the subordinates throughout the organization in his particular area. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise. Three authorities exist. 4. 3. finance. This is an organization in which we can define as a system in which functional department are created to deal with the problems of business at various levels. 2. C. This helps in maintaining quality and uniformity of performance of different functions throughout the enterprise. Features of Functional Organization 1. Complex form of administrative organization compared to the other two. marketing and personal relations.The above figure shows the representation of Line and Staff Organisational chart. For example. managers working above them. Functional Organisation Structure Functional organization has been divided to put the specialists in the top position throughout the enterprise.Line. The concept of Functional organization was suggested by F. This means that subordinates receives orders from several specialists. staff and function. The entire organizational activities are divided into specific functions such as operations.W. . Taylor who recommended the appointment of specialists at important positions. Functional authority remains confined to functional guidance to different departments.

Difficulty in fixing responsibility. 5. Thus. Checks and balances keep the authority within certain limits. it is difficult to fix responsibility. there is no unity of command.Because of multiple authority. Principle of unity of command does not apply to such organization as it is present in line organization. 2.Maintainance of specialist’s staff of the highest order is expensive for a concern. . Effective Control.Expert knowledge of functional manager facilitates better control and supervision.Disciplinary control becomes weak as a worker is commanded not by one person but a large number of people. especially when it is carried out at low levels.ordination becomes difficult. 5.Better division of labour takes place which results in specialization of function and it’s consequent benefit. 4.Greater efficiency is achieved because of every function performing a limited number of functions. Specialists may be asked to judge the performance of various sections. co.ordination. Specialization. Lack of Co. 2. Demerits of Functional Organization 1.The functional system is quite complicated to put into operation. They may not agree on certain issues.5. Confusion. Economy. 4. Costly.There may be conflicts among the supervisory staff of equal ranks. 3. Therefore. Efficiency. 3.Management control is simplified as the mental functions are separated from manual functions. Merits of Functional Organization 1.Specialization compiled with standardization facilitates maximum production and economical costs. Conflicts. Expansion.