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2. functions or activities so that all of them unified in har mony. the work may be divided.2 Common Features 1.2 Organizing Organizing refers to formal grouping of people and activities to facilitate achievement of the firm s objectives. 2. Coordination Having divided up the work. In fact. functioning and performance of organization and the behaviour of groups and individuals within them. the interest of which is goal directed. Division of labour Organization structure comes into existence when total work considered necessary for realization of common objective is divided into activities and functions. say. 3. according to functions like production. groups and subgroups interacting in some relatively patterned sequence of activity.1 Approaches y Organisation as Process Organization is understood as a dynamic process and managerial activity which is necessary for bringing people together and unifying them in the pursuit of common objectives. marketing. finance and personnel. 2. Organization theory is defined as a set of interrelated constructs. Accomplishment of goals or objectives An organization structure has no meaning or purpose unless it is built around certain clear-cut goals or objectives. Organisation theory is study of structure. an organization structure is built up precisely because it is the ideal way of making a rational pursuit of objectives. definitions and propositions that present a systematic view of behaviour of individuals. y Organization as Structure Organization refers to the structure of relationships among positions and jobs through which goals are sought to be attained. 4. it becomes necessary to link up or integrate the various divisions. In business organization. Authority-responsibility structure .
Span of management: It is widely recognized that a manager can directly supervise only a limited number of executives. Unity of objectives: Every part of the organization and the organization as whole should be geared to the basic objective determined for the enterprise. Scalar Principle (Chain of command): The chain of command or the line of authority must be clearly defined for building sound organization. Division of work: A good organization should consist of departments established to reflect the most efficient breakdown of enterprise activities. It is necessary to have proper number of executives. 3. This is called exception principl e. Proper departmentalization is an important principle of sound organization. from the social point of view. If it does so. Functional definition: The duties and the authority relationships in a good organization must be properly and clearly defined. 2. an organization will be efficient when it contributes the maximum toward the welfare of the society. answerable to the top manager. 4. Efficiency: The organization should be able to attain the predetermined goals and objectives at the minimum cost. it will satisfy the test of efficiency. 6. From the point of view of an individual.3 Principles of Organization 1. a good organization should provide the maximum work of satisfaction. Every subordinate must know who is superior and to whom policy matters beyond his own authority must be referred for decision. 5. An organization cannot serve certain specific purposes or goals unless some positions are placed above the others and given authority to bind them by their decisions. Hence an organisation structure is quite often defined as a structure of authorityresponsibility relationships. . 7. 2. Exception principle: A good organization is so arranged that only exceptionally complex problem are referred to the higher levels of management and the routine matters are dealt with by executive at lower levels. so that there is no confusion or overlapping.An organisation structure consists of various positions arranged in a hierarchy with a clear definition of the authority and responsibility associated with each of these. Similarly. Most of the authorities prescribe a maximum of six for this.
If each person in a department begins to work under a different plan or program of action. Flexibility: The organization must avoid complicated procedures. sell machinery or run vehicles on commercial basis. red -tapism and excessive complication of control so that it can adapt itself easily and economically business and technical changes. 15. manufacture cloth. If it is not so. the short-term and the long-term objectives. there must be proper provisions for executive development or training. nothing but confusion will follow.8. Facilitation of leadership: The organization structure should be so devised that there is enough opportunity for the management to give effective lead to enterprise. 13. 10. a business firm must decide whether it will publish books. 11. each subordinate should have one superior whose command he has to obey. 14. 2. This will avoid conflict of commands and help in fixing responsibility. 9. the superior is responsible for the activities o f his subordinates and the subordinates must be held responsible to their superiors for the performance of the tasks assigned to them. Responsibility: In a good organization. Unity of direction: There must be only one plan for a group of activities directed towards the same end. 12. Balance: Some matters may be left to disposed of by the subordinates at the lower or the lowest level while some other must be centralized and a balance between centralization and decentralization should thus be achieved.4 Process of organizing 1. Enumeration of activities . For this. Determination of objectives Organizations are built around objectives. Continuity: The organization must be so arranged as to provide for continuity of the enterprise. Unity of command: In a good organization. The overall enterprise objectives will depend on the immediate. th e subordinates cannot discharge their responsibility for want of necessary power to proceed with the task assigned. For example. Authority and responsibility: The authority and responsibility must be coexisting in an organization. 2.
may be grouped and classified as production department activities. Each person in the group will be given a specific part of the job to do and will be made responsible for it. delegation of authority to help complete the assigned part of the job is the next step in organising. there may be a department and for each sub-class. Assignment of authority for action Each member of the group. 5.The first step in organizing group effort is the division of total job into essential activities. For each class of activity. will be able to proceed only when he has authority to proceed with it. the next step w ill be to fix suitable and well qualified persons into these activities. having been given the responsibility for its completion. 2. Hence. Fitting individuals to functions Having determined the various activities of the job to be done.5 Types of Organization y y y y y Military or Line System Functional system Line and Staff system Matrix System Hybrid Design . the work of an industrial concern may be divided into the following major functions y y y y y Production Financing Purchasing Sales Personnel 3. The various activities connected with production. available for a particular part of the job. a section of the department and so on. 4. for example. For example. Classification of activities The next step will be to classify activities according to similarities and common purposes and function and taking the human and material resources into account.
Through managerial control enables the manager to exercise control at the point of action. it is also important to decide about the level of achievement of performance which will be regarded as good or satisfactory. Features of Control y Control is forward looking because one can control future happenings and not the past. After setting the standards. y Control is an executive process from the point of view of organization as a system. always the past performance is measured. Measurement of Performance This step involves measuring the performance in respect of a work in terms of control standards. In the light of measurement. y Control is continuous process. In the sense. . In control process. As an executive process. 2. 3.1 Steps in Controlling Desired Performance Implementation of Correction Corrective action plan Analysis of causes of deviation Actual Performance Measurement of Performance Comparison of actual & standard Identification of deviation 1. Establishment of Control Standards Every function in the organization begins with plans which are goals. managers suggest corrective actions for future period. standards are established which are criteria against which actual results are measured. each manager has to perform control function in organization.3 Controlling Control is an element of management process involves analysing whether actions are taken as planned and taking corrective actions to make these to conform to planning. objectives or targets to be achieved. y A control system is coordinated-integrated system. control system is single system but it is more accurate to think of it as a set of interlocking subsystems. In the light of these.
3. it may be of three types y y Control of inputs that are req uired in an action known as feed forward control Control at difference stages of action process known as concurrent. divisions and departments.2 Types of control Strategic and Operational Control Strategic control is the process of taking into accounts the changing planning premises both external and internal to organisation on which the strategy is based. real-time. 3.strategic business units.3 Stages of control Depending on the stages at which control is exercised. Operational Control is concerned with action or performance and is aimed at evaluating t he performance of the organisation as a whole or its different components . or steering control y Post action control based on feedback from completed action known as feedback control Feed Forward Control Concurrent Control Inputs Processing Output Feedback Control . Correction of deviations This is the last step in the control process which requires that actions should be taken to maintain the desired degree of control in the system or operation.3. continuously evaluating the strategy as it is being implemented. and taking corrective actions to adjust the strategy to new requirements. Comparison Actual and Standard performance This step involves two steps y y Finding out the extent of deviation Identify the causes of such deviations 4.
4 Control Areas For effective control. The identification of these areas of control enables the management to y y y Delegate authority and fixing up of responsibilities Reduce the burden of supervising each activity in detail Have means of securing satisfactory results Following are the control areas y Control over Policies: Policies are formulated to govern the behaviour and action of the personnel in the organisation. If inputs are not as planned. Feed-forward control monitor inputs into processes to determine whether the inputs are as planned. the corrective action is undertaken. . Based on this measurement. Feedback Control Feedback control is based on measurement of the results of an action. Feed forward control Feed-forward control involves evaluation of inputs and taking corrective action before a particular sequence of operation is completed. It provides measures for taking corrective action or making adjustments while the programme is still in operation and before any major damage is done. y Control over Personnel: Head of personnel department keeps control over personnel in the organization. enabling rationalisation of organization structure. 3. 3. 2. Concurrent Control Concurrent control is exercised during the operation of a programme. y Control over Organisation Structure: Organization structure attempt at solving organization problems and conflicts. corrective action is taken to adjust the inputs according to the plan so that desired results achieved within the pl anned input. helping in proper designing and clarification of each part of organization. if any deviation is found between performance standards and actual performance.1. it is important to know what the critical areas where control would be exercised. making long-range organisation planning possible.
y Control over Capital Expenditure : Control over capital expenditure is exercised through the system of evaluation of projects. . y Control over Foreign Operations: Foreign operations are controlled in same way as domestic. through authorising the head of service department to evaluate the request of service. y Control over Methods and Manpower : Control over methods and manpower is exercised to ensure that each individual is working properly and timely. y Control over Costs: Control over costs is exercised through making comparison between standard costs and actual costs. sales and research departments. y Control over Service Department: Control over service department is effected either through budgetary control within operating departments. Cost control is also supplemented by budgetary control system which includes different types of budget. ranking of projects on the basis of their importance. through putting the limits upon the amount of service an individual department can ask. y Control over External Relations : External relations are regulated by the public relations department. 3.5 Design of Effective Control System Managers face a number of challenges in designing a control system that provides accurate feedback in a timely and economical fashion that is acceptable to organisation members.y Control over Wages and Salaries: Control over wages and salaries are done by having programme of job evaluation and wage and salary analysis. sales or profit. y Control over Research and Development: Control over research and development is exercised through a budget for research and development and by evaluating each project keeping in view saving. generally on the basis of their earning capacity. y Control over Line of Products : Control over line of pr oducts is exercised be a committee whose members are drawn from production. y Overall Control: Control over each segment of organisation contributes to overall organisation control. Standard costs are set in respect of different elements of costs.
Through downward communication. In overcome these challenges. Second the organization itself provides motivation or de-motivation to the people to work. Therefore th ere should be proper integration of these two systems. This integration can be achieved by developing consistency of strategic objectives and performance measures.Most of these challenges can be traced back to decision about what need to be controlled and how often progress needs to be measured. 3. managers should design their control system based on following principles y Integrating Strategic Planning and Control System Strategic planning and management control are two most important processes and system contributing to the effectiveness of business organization. y Organisation Communication The organization has to design a communication network for carrying the control information both downward and upward. the upward communication is used to get control information from subord inates that is what they have done. being gregarious. the actual system in an organisation requires some specific design. y Motivational Dynamics The control is affected by the motivational dynamics of people and how organisation is going to satisfy the various needs of the people. following are certain requirement which should be kept in mind . Human beings. In this tailoring of control system.6 Essentials of Effective Control System While the basic principals involved in designing the control system in organisation may be universal. a superior send the information about what a subordinate is expected to do. y Identifying Strategic Control Points Managers should identify strategic control points in t he system at which monitoring or collecting information should occur. firs t a control system should focus adequately on the need of the participant ants and suit them. The motivational dynamics have two-fold role in control. The method for selecting strategic control points is to focus on the most significant elements in a given operation. seek to remain in the organization.
y Pointing out Exceptions at Critical Points: Control should point out exception at critical points and suggest whether action is to be taken for deviations or not. The standard of measurement should be quantified as far as possible. y Objective: Control should be objective. . Economy is relative since the benefits vary with the importance of the activity. Some deviation in organization have no impact while others through very little in quantity. y Forward Looking: The control should be forward looking. The manger should choose an appropriate tool for control which helps him in controlling actions according to plans. the expense that might be incurred in the absence of control and the contribution that control system can make. definite and determinable in a clear and positive way. y Economical: Control should be economical and must be worth its costs. unforeseen circumstances or outright failures. the size of the operation. y Motivating: Control system should motivate both controller and cont rolled. y Reflecting Organisation Pattern: Control should reflect organization pattern by focusing attention on positions in organization structure through which deviations are corrected. y Promptness in Reporting Deviations : Ideal control system detects deviations promptly and informs the manager concerned to take timely action. A control system should be such that it provides aid in planning process.y Reflecting Organisation Needs: All control systems and techniques should reflect the functions they are to perform. may have great significance. y Flexible: Control system should be flexible so that it remains workable in the case of changed plans. This is done through designing good appraisal and information systems. This is done in two ways: it draws situation where new planning is needed and it provides some of the data upon which plans can be based. y Simple: Control system must be simple and understandable so that all managers can use it effectively. The design of control system should be such that aims at motivating people by fulfilling their needs.
Expressing work performance in qualitative way may have different interpretations as the concept of quality is influenced by personal factors Because of these individual factors. 3. y Curb on Freedom: The basic notion of the term control is to curb freedom as it tries to regulate behaviour and performance in a specified way. there is clash between those who exercise control and who are controlled. There is lack of trust between controller and controlled and control information is used to devise reward and punishment system. In these situations. they resist it to safeguard their career. Since the control results are used as basis for progression of the individual s career in the organization. control is resisted to make it more meaningful. there is difference between specified way and natural way of behaving. y Curb on Creativity and Innovation: Human being have endowed with great amount of creativity and innovation.8 Overcoming Behavioural Problems Approaches to overcome behavioural problem . y Rigid Control Standards: Individual s resistance to control emerge from the feeling that control standards are set too high and observed rigidly. However they can use their creativity and innovation in conductive environment which must be free from control and regulations as these put unnecessary curbs on the motivation to be creative and innovative. This specified way may not match with individual s own way of behaving and doing. y Fear of Discrimination: Individual may perceive that they are likely to be discriminated by those who exercise control. often.7 Causes of Resistance to Control Control implies and involves a continuous check on the performance and behaviour of people in the organization. y Faulty Evaluation System: Individual object to control because of the perception that evaluation system through which the performance is measured may not be objective and many shortcomings may emerge in the evaluation process. individuals tend to resist control terming it as unfair.3. To the extend.
y Management should reinforce both economic and non -economic needs of the people. This is the problem related with setting right organisation climate. y Management should have long-term perspective in designing control system so that frequent and abrupt changes do not take place. . direct hierarchical pressure should be avoided. y Management should build communication network based on open and two -way communication. y Management should build cooperation through participation. y For obtaining co-ordination and co-operation in control.y As far as possible. group processes must be strengthened. This problem can be overcome by structural arrangement.
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