INTRODUCTION - Organisation Structure and Design

ORGANISATION is the process of establishing relationships among the members of the

enterprise. The relationships are created in terms of authority and responsibility. each member in
the organization is assigned a specific responsibility or duty to perform and is granted the
corresponding authority to perform his duty. The individual jobs and the tasks that must be
accomplished are called the basic building blocks of formal organization. If these jobs are to be
effectively performed. There must be some ordering of the relationship between the task to be
accomplished. organizational behavior is basically framework within which the manager’s
decision making behavior take place. Structure basically deals with relationships.it is an
important scientific concept. All organization have a structure and perhaps, this party explains
the fact that organizations have structure is the oldest and most thoroughly studied area in
management literature. Right organization structure is a prerequisite of performance. although
good structure does not guarantee success, poor structure can adversely affect the work of even
good managers.

CONCEPT OF ORGANISATION STRUCTURE

Organizational structure is used to develop how groups and individuals are arranged or
departmentalized to help meet an organization's goals. It defines a reporting structure, jobs,
compensation and responsibilities for each role. Designing an organizational structure requires
consideration of an organization's values, financial and business goal.

The wrong organization structure puts the spotlight on the wrong issues, increased irrelevant
disputes and makes a mountain out of trivia. therefore, it it highly important to develop right
organization structure that bring together the people and the work in a harmonious manner.

Design of basic structure involves such issues as how the work of the organization will be
divided and assigned among various positions, groups, divisions, departments etc. and how the
coordination necessary to accomplish total organizational objectives will be achieved.

Organization structure is the mechanism through which management directs, coordinates and
controls the business. It is indeed, the foundation of management.
DEFINATION:
“It is a method of reducing the variability in behavior 0f those who work for the organization. It
is a method of regulating behavior in order to achieve a common purpose in a coordinated
manner.”

NEED FOR ORGANISATION STRUCTURE

The organization facilitates management process, encourages growth and diversification,
provides for optimum use of technological improvements, encourages human use of human
beings and stimulates creativity.

1) Facilitating management: A properly designed organization facilitates both

management and operation of the enterprises.
- Management work takes place with certainty and continuity only if appropriate function
took places.

2) Stimulating creativity: an organization based on specialization which stimulates

creative thinking and initiative.
- It provides well defined area of work with provision of development of new and
improved ways of working.

3) Encouraging growth: the organization requires a flexible structure where changes may
be incorporated.
- Moreover, organization structure facilitates growth by increasing the efficiency.

BENEFITS OF ORGANISATIONAL STRUCTURE

1) The organization can employ greater variety of skills because functional structure can
result into high degree of specialization, as a unit or department is concerned only with
one aspect for total activities.

2) Functional structure brings order and clarity in the organization by prescribing what one
is expected to do. As everyone understands their job clearly and add to efficiency.

3) It promotes professional achievement as a person is restricted to his own area of

specialization.
Components of organization structure

1) Identification of activities: in designing the

Factors of organization structure
1) Spam of management:

Depending upon the complexity of organizational activities and relationships amongst

superiors and subordinates, it becomes important the superiors manage an optimum
number of subordinates that result in optimum organizational output.

All the subordinates cannot be managed by one superior. There has to be a limit on the
number of subordinates who can be effectively managed by one superior.

The number of subordinates that a superior can effectively supervise is known as span of
management or span of control.

MANAGER FACE PROBLMES LIKE

1. Overburdened with work.
2. Difficulty in coordinating the activities of large number of people.
3. Difficulty in controlling.

Thus, optimum number of subordinates that a manager could supervise was determinable
but today, it is not so. Exact number of employees that managers can effectively
supervise cannot be defined. Span of management is situational in nature.

Factors Affecting Span of Management:

The following factors help in determining the suitable span of management:
1. Competence of managers:
If managers are competent in their jobs, they can have a wide span of management. Competence
of managers is judged by their ability to make decisions related to motivational plans, leadership
styles, communication channels and chains, techniques of control etc.
Managers who rank high on these parameters can effectively supervise larger number of
subordinates.
2. Nature of work:
If employees perform similar and repetitive work, managers can supervise large number of
subordinates and, thus, have a wide span of control.
Changes in the nature of work also affects the span of management.
wide span of management as superiors’ directions are not frequently required to carry out the
work processes.
DEPARTMENTALISATION:

Departmentalization involves dividing an organization into different departments, which

perform tasks according to the departments' specializations in the organization.
Departmentalization as a means of structuring an organization can be found in both public
and private organizations.

An organization can be departmental on different bases depending upon its needs. Some of
the important bases are given under.

DEPARTMENTALIZATIONAL consist of

1)FUNCTIONAL DEPARTMENTALISATION
2) DIVISIONAL DEPARTMENTALISATION.

1. Functional Depart mentation:

Similar tasks requiring similar skills grouped into work unit are referred to as functional
structure or functional depart mentation also known as U-form organization.
Functional depart mentation can be used for any type of organization. The functions may
change according to the objectives of that particular organization. The main merit behind
this kind of structure is to achieve size advantage by putting people with common stills and
organizations into similar units.
 Table 10.1: Merits and limitations of Functional Depart mentation:

Merits Demerits

– Maintain power and – Focus on department rather than goals and

prestige of major- Economy
of scale with efficient use of
resources
- Task assignment in
consistency with expertise
and training
– Better quality technical
problem
– Facilitates tighter control
by chief executive
issues.
- Difficulties in pinpointing responsibilities for
things like cost containment, service quality
and innovation
- Expertise only in narrow field.
– Functional chimneys problem due to
people’s mindset and breakdown of
cooperation.
– Slow decision making due to reference to
top management.

2. Divisional Structure:

When people who work on same product process, customer group or geographic reason are
grouped, it is known as divisional structure (also known as M-form organization, with the M
representing “multidivisional”). Divisional structures are self – contained divisions. Thus, the
merits and limitations of each one of the above have their own merits and limitations On the
whole the merits and limitations of divisional structure have been shower in Table 10.2.
Table 10.2: Merits and Limitations of Divisional structures:

Merits Limitations

– Better flexibility to respond to — Reduction in size of economy.

environmental challenges. -
Better coordination across
functional departments.
- Greater responsibility for product
or service delivery
— Increase in cost due to duplication of
resources and efforts in every division.
— Competition or lack of cooperation among
deferent divisions for resources and top
management attention.

Functional structure consists of:

Matrix Structure:
The focuses in functional structure remain on specialization, and in divisional structure it is on
the results. But divisional structures suffer from duplication of resources and efforts. Matrix
structure provides the benefits of both functional and divisional and it is known as Matrix
structure and minimizes the limitations of the two.
The foundation of matrix is a set of functional departments. A matrix organization is a complex
structure because it depends upon both vertical and horizontal flows of authority and
communication. Whereas functional and divisional structures depend primarily on vertical flows
of authority and communication.
The special feature of the matrix is that employees have two bosses – the functional boss (parent
department) and the project pass (host department). Project boss has authority in relation to
project goals. But promotions, salary hikes and annual reviews come under the functional boss.
In this structure the different functional departments depute their specialists to work on the
project under the project boss, thus cross – functional teams share their expertise and information
in a timely manner to solve problems.
The benefits and Limitations of Matrix Structure are given in table 10.3.
Benefits and Limitations of Matrix Structure:
(a) More cooperation across functions.
(b) Improved Decision making.
Project Structure:
A project structure is an advanced type of matrix structure. A project structure has no formal
departments where employees can go back at the completion of a project. Rather, employee takes
their skills, abilities and experiences to other projects, one after the other. In project structures all
work is performed by teams.
The advantages of a project structure are that since there is no depart mentation or employee job
titles, decision making is not slowed. Secondly, herein managers work as facilitators, coaches
and mentors. However, project structure remains to be ‘fluid and flexible” organizational
designs.
Although there are theoretical differences between matrix and projects structure, most of the
people discuss the two together.

Project structure chain:

Network Structure:

In the traditional organization structure, every activity was to be done in-house or to own
everything. The new model or network structure also called as cluster structure says concentrate
only on “Core” activities and go for strategic alliance cooperative strategy and or “outsourcing”
the peripheral activities.
Outsourcing means contracting business functions to outside contractors or suppliers.
Example –
1) All-India examination body outsources receipt of examination forms, preparation of list of
cheese, filling deposit slips of the bank, dispatch of admis2) The firm itself is very small,
comprises a few full-time core employees working from headquarters. The insurance company
has outsourced preparation of insurance policies, call center, claim settlement and the accounting
function; and has entered into an alliance with a bank, who would be selling the insurance
policies through its all-India network.
3) The availability of information technology has made the job of outsourcing very easy.
Network structure enables firms to remain Cost-Competitive, very learn and streamlined. The job
of the core people is merely to coordinate with the outside related firms.
The merits and limitations of network structure are given in Table 10.4.
Table 10.4: Advantages and limitations of network structures: 

Advantages Limitations

Allows firms to what they do best
and contract out the balance to
those who do them the best
- To remain cost-competitive.
Small number of employees.
The more complex the business or mission more
complicated the network of contracts & alliances.
If one part of the network fails to deliver, the
whole system has to suffer. Loss of control over
activities performed outside. Hidden costs of
outsourcing
-vendor search & contracting, transitioning to
vendor, managing the effort, and transitioning
after outsourcing.
 Organizational relationships

Formal Structure
Formal structure is primarily concerned with the relationship between authority and
subordinate.
A typical organization chart illustrates the formal structure at work in a company or part of a
company. The hierarchical organization begins at the top with the most senior leader and then
cascades down to the subordinate managers and then subordinate employees below those
managers. There are job titles, financial obligations and clear lines of authority for each box on
the organization chart.

Features of Formal organization:

(1) The formal organizational structure is created intentionally by the process of organizing.
(2) The purpose of formal organization structure is achievement of organizational goal.
(3) In formal organizational structure each individual is assigned a specific job.
Advantages of formal relationship
2. Achievement of Organizational Objectives:
Formal organizational structure is established to achieve organizational objectives.
3. No Overlapping of Work:
In formal organization structure work is systematically divided among various departments and
employees. So there is no chance of duplication or overlapping of work.
4. Co-ordination:
Formal organizational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
Formal organizational structure clearly defines superior subordinate relationship, i.e., who
reports to whom.

Disadvantage of formal relationship

1. Delay in Action:
While following scalar chain and chain of command actions get delayed in formal structure.

2. Ignores Social Needs of Employees:

Formal organizational structure does not give importance to psychological and social need of
employees which may lead to demotivation of employees.

3. Emphasis on Work Only:

Formal organizational structure gives importance to work only; it ignores human relations,
creativity, talents, etc.
Informal Structure

Informal structures typically develop around social or project groups. Because informal
structures are based on a more immediate response from individuals. This saves people time and
effort, thus making it easier to work with in informal structures. People also rely on informal
structure if the formal structure has stopped being effective, which often happens as the company
grows or changes but doesn’t reevaluate work groups.

Features of informal organization:

(1) Informal organizational structure gets created automatically without any intended efforts of
managers.
(2) Informal organizational structure is formed by the employees to get psychological
satisfaction.
Advantages of informal relationship

1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster spread of communication.

2. Fulfills Social Needs:

Informal communication gives due importance to psychological and social need of employees
which motivate the employees.

3. Correct Feedback:
Through informal structure the top level managers can know the real feedback of employees on
various policies and plans.

Disadvantage of informal relationship

1. Spread Rumors:
According to a survey 70% of information spread through informal organizational structure are
rumors which may mislead the employees.

2. No Systematic Working:
Informal structure does not form a structure for smooth working of an organization.

3. May Bring Negative Results:

If informal organization opposes the policies and changes of management, then it becomes very
difficult to implement them in organization.

4. More Emphasis to Individual Interest:

Informal structure gives more importance to satisfaction of individual interest as compared to
organizational interest.
Beneficiary of organizational relationship in an organization

1) Formal and informal structures can be beneficial or detrimental to a company depending on

how well they are understood and used.
2) Formal structures should be evaluated as the organization grows or takes on new
responsibilities. Take the time to understand the informal structure of your company as well.
3) Often groups that develop into an informal entity make a lot of sense, and are more efficient
and productive than the formally structured groups.
4) advantage and maybe even consider putting some informal structures into a more formal role.
 ORGANISATIONAL STRUCTURE DESIGN
Mechanism for designing structure

While designing an organization structure, there are three basic issues which should take
care of. these are:

1) Number of different units of the organization?

2) Components to be joined together and components to be kept apart.
3) 3) relationship and placement of different unit.

Drucker has referred three types of analysis which should be made in designing the structure.
These are activities analysis, decision analysis and relations analysis.
Another way of classifying the approaches fir organizational design is process approach, result
approach, and decision approach.

PURPOSE
Organizational design is a step-by-step methodology which identifies dysfunctional aspects of
work flow, procedures, structures and systems, realigns them to fit current business
realities/goals and then develops plans to implement the new changes.
Infect it is clear strategy for managing and growing your business.

Involves decisions about six key elements:

 Work specialization.
 Departmentalization.
 Chain of command.
 Span of control.
 Centralization/decentralization.
 Formalization.
Conclusion
The structure of an organization varies depending on a number of influencing factors. Structure
is influenced by the external environment in which the business operates as well as its culture
and the nature of the work and activities it undertakes.

The structure can have both a positive and negative impact on a business. Having the right
structure allows a business to respond and adapt to changes in the market quickly. Innovation
and creativity are usually found in flatter organizational structures and in organizations with an
entrepreneur
organizational structure of an organization tells you the character of an organization and the
values it believes in. Therefore, when you do business with an organization or getting into a new
job in an organization, it is always a great idea to get to know and understand their organizational
structure.

Every organization needs a structure in order to operate systematically. The organizational

structures can be used by any organization if the structure fits into the nature and the maturity of
the organization.
In most cases, organizations evolve through structures when they progress through and enhance
their processes and manpower. One company may start as a pre-bureaucratic company and may
evolve up to a matrix organization.
Conclusion
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 INDORE INSTITUTE OF LAW
(Affiliated to D.A.V.V. & BCI)
{{

B.B.A.LL.B. (HONS)

Project No.
______________________________
Project Subject English
Project Topic Aadhaar card and Right
to Privacy
Submitted to:
Submitted by:

Asst. Prof.Sakshee Sharma NAME:

Anjali Mukaty
Date-:___/___/____ Semester :
1st

Marks Obtained_________

CERTIFICATE

This is to certify that Ms. Anjali Mukaty has successfully completed the project work Titled

“ Aadhaar card And Right to Privacy ” which is a case based study. It is an original work carried
out by a student under my supervision, and this work has not formed the basis for the award of
any degree, diploma or such other titles.

This Project Is the Record of Authentic Work Carried Out During the Academic Year 2017-2018

Date: ………………………………..
 DECLARTION
I declare that this project is done by me and no other person has completed any part of this
project. I also declare that any information given in this project if is a copyright or is not to be
copied and any such material found is my responsibility; college is not at all responsible for the
same.

Anjali Mukaty
 ACKNOWLEDGEMENT

It was not possible to prepare this project report without the assistance and encouragement of
other people. This is certainly no exception. On the very outset of this project I would like to
extend my sincere and heartfelt obligation towards all the personages who have helped me in this
endeavour. Without their active guidance, help co-operation and encouragement, I would not
have made headway in the project.

I am ineffably thankful to Ms.Sakshee Sharma for conscientious guidance and encouragement to

accomplish this assignment.

I extend my gratitude to INDORE INSTITUTE OF LAW for giving me this opportunity.

I also acknowledge with a deep sense of reverence, my gratitude towards my friend and member
of my family who has always supported me morally as well as economically.

Thanking You

Anjali Mukaty
 INDORE INSTITUTE OF LAW
(Affiliated to D.A.V.V. & BCI)
{{

B.B.A.LL.B. (HONS)

Project No.
______________________________
Project Subject PPM
Project Topic Organisation N
Structure And Design

Submitted to:
Submitted by:
 Asst. Prof.Rewa Mishra NAME:
Anjali Mukaty

Date-:___/___/____ Semester :
1st

Marks Obtained_________

CERTIFICATE

This is to certify that Ms. Anjali Mukaty has successfully completed the project work Titled
“Organisational Structure and Design” which is a case based study. It is an original work carried
out by a student under my supervision, and this work has not formed the basis for the award of
any degree, diploma or such other titles.

This Project Is the Record of Authentic Work Carried Out During the Academic Year 2017-2018

Date: ………………………………..

DECLARTION

I declare that this project is done by me and no other person has completed any part of this
project. I also declare that any information given in this project if is a copyright or is not to be
copied and any such material found is my responsibility; college is not at all responsible for the
same.

Anjali Mukaty

ACKNOWLEDGEMENT
It was not possible to prepare this project report without the assistance and encouragement of
other people. This is certainly no exception. On the very outset of this project I would like to
extend my sincere and heartfelt obligation towards all the personages who have helped me in this
endeavour. Without their active guidance, help co-operation and encouragement, I would not
have made headway in the project.

I am ineffably thankful to Mr. Rewa Mishra for conscientious guidance and encouragement to
accomplish this assignment.

I extend my gratitude to INDORE INSTITUTE OF LAW for giving me this opportunity.

I also acknowledge with a deep sense of reverence, my gratitude towards my friend and member
of my family who has always supported me morally as well as economically.

Thanking You

Anjali Mukaty