OM Class Notes

An organisations is necessary for the following reasons

1. Complexity of industr

2. Growing competitio

3. Optimal utilisation of resource

4. Reduced labour proble

5. Fixation of authority and responsibilit

6. Coordinating and directing effort

Principles of organisations
1. Unity of objectives: objectives must be clearly de ned for entire enterprise for each
department and even for each position in the organization structure. All efforts can be
concentrated on achieving the set goals at minimum cos

2. Division of Labour and Departmentalization: Degree to which tasks are subdivided into
separate jobs. Grouping of related activities into units. Like we have departments: CSE,
IT, etc. people have speciliazition and are grouped together.

3. Chain of Command: Line of authority from top to the bottom of the organization. Who
gives order to whom? Where is the order owing fro

4. Span of Management: It is the number of employees reporting to manager. The number

of employees reporting to one manager affects the number of levels of managers. Like
our teacher has 60 students under her. It is a level of hierarchy. Example sections alb,
cad in CS

5. Centralizaed and Decentralised authority: Who is the one who makes decision. When
centralized authority extent to which decision making is concentrated. If concentrated to
a few people it is centralised. If distributed, it is decentralise

6. Coordination: The division of labour and departmentiliazation comes the need to

coordinate the work of alll department

7. Simplicity: The organization structure should be simple with minimum number of levels.
Example our teachers designing our exam papers

8. Flexibility: The organisational structure should be exible enough to permit slight

alterations and expansions whenever needed due to changed circumstances. Example:
Kodak was not exible in adapting to digital cameras and kept using the same old
strategy of lm photos. They lost market
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 9. Communication: Not only executive should pass down information to the subordinated,
there should be feedback ie replies should come from those who receive information.
For better results it should have free two way communication. Unilaterial or Bilateral. My
boss tells me what is to be done like in defence courses. But in organization, two way is
important

Formal Organization: refers to organization deliberately created by management for

achieving the objectives of enterprise . It is network of of cial authority responsibility
relationships and communication follows . It is a rational structure. Consiciously created.
Purposely created. Example Section A of CSE

Informal Organization: refers to pattern of activity interactions and human relationships and
emerge spontaneously due to social or psychological forces. Not deliberately created. For
example: Like students have fav teachers, teachers form fav students. But they should not
form such organisations. Eg. Someone is CSE likes photography and other people in CSE
like photo so we form a club. Not purposefully crated, Spontaneously.

How many management functions are there:

Ans: 4 (planning, organising, leading and controlling

.

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From other sources you can nd anywhere from 3-13 other functions, but ma’am wants
these 4 in exams.

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 Ef ciency: input to output ratio, example mileage of car. Getting Maximum value out of it

effective: how useful is it.

Example: If a student is taught a really good course on management, but the student was
not interested in it, then it is not effective. But it cans till be ef cient
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Planning is course of action from point a to point b. How do you reach your goals
?

Planning involves taking a holistic view of your corporation, instead of a myopic view of
your organization
.

Flip was a camera that opped. By Cisco. It was discontinues.

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Long term- over 5 yr

Medium term - 2to5 yr

Short- 1 yrs

Corporate plan: example Tata as a whole corporate decide that we will go into steel, we
will go into salt namak dish ka namak, Tata chemical

Tata hotels will be another SBU (strategic business unit

When Tata hotels launches as its own, then it is a divisional plan. Example: MUJ is result
of corporate plan. Even though it acts very independent but they are a part of larger group.
They have their own balance sheet, p and l account, salary, expense etc.

 (S) Strengt

(W) Weaknes

(O) Opportunitie

(T) Trend

Tools for planning.

Q. What is internal analysis vs external analysis

Ans: S+W = internal, O+T = externa

SWOT analysis can be applied to industry analysis as well as product analysis.

Michael Porter’s tools have made it to HBR (Harvard Business Review

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Q. Porters forces is an industry analysis tool or product analysis tool

A. It is an industry analysis tool only.