ORGANISATION

Organisation - Organizational Structure - Organisational Chart

1. Introduction To Organisation

Organisation is one important element of the management process. It is next to planning. In

management, organisation is both the process as well as the end-product of that process which is
referred to as organisation structure. Such structure acts as the foundation on which the whole super-
structure of management is built. Sound organisation structure is essential for the conduct of business
activities in an efficient manner. It is within the framework of the organisation that the whole
management process takes place. The success of the management process will be determined by the
soundness of the organisation structure. Organising involves integration of resources in order to
accomplish the objectives.

The term 'Organisation' is derived from the word 'organism' which means a structure of body divided
into parts that are held together by a fabric of relationship as one organic whole. In an enterprise, many
managers and employees work together for achieving common objectives. It is the organisation
structure which binds them together and brings proper adjustment and coordination in their work. The
division of work and authority and the establishment of relationship among individuals or groups are
possible due to the organisation structure.

In simple words, organizing means arranging the ways and means for the execution of business plan. It is
the creation of administrative set-up for the execution of the plan. It suggests the framework within
which the management functions. The term organisation suggests a functional group working together
for achieving common purposes/objectives. Organisation provides mechanism for integrated and co-
operative action by two or more persons with a view to implementing any plan. Organisation facilitates
efficient administration, direction and control. It avoids wastage of raw materials and human efforts.
Every management has to establish its own organisation structure for efficient conduct of business
activities

There are different structures which can be given to an organisation. They include line, functional and so
on. An organisation deals with a number of elements which defines the relationships between the
members of a group. It is concerned with the channels of communication and lines of authority. It also
defines the degree of authority and responsibility of each person in the organisation. In short,
organisation clarifies relationships and provides a framework within which all managerial actions take
place.

Organisation involves the following aspects: -

a. Identifying the activities required to achieve organizational objectives.

b. Grouping up of these activities into workable units (Departmentation).

c. Assigning duties and responsibilities to subordinates in order to achieve the tasks assigned.

d. Delegating authority necessary and useful for the accomplishment of tasks assigned.

e. Establishing superior-subordinate relationship.

f. Providing a system of co-ordination for integrating the activities of individuals and departments.

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2. Definitions of Organisation

1. An Organisation has been defined by E. F. L. Breach as "a system of structural interpersonal

relationships. In it, individuals are differentiated in terms of authority, status and roles with the
result that personal interaction is prescribed, and anticipated reactions between individuals tend
to occur while ambiguity and spontaneity are decreased".

2. According to Louis A. Allen, Organisation is "the process of identification and grouping the work
to be performed, defining and delegating responsibility and authority and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives".

3. James Mooney defines organisation as "the form of every human association for attainment of a
common purpose".

3. Importance of Organisation

1. Ensures optimum utilisation of human resources: Every enterprise appoints employees for the
conduct of various business activities and operations. They are given the work according to their
qualifications and experience. Organisation ensures that every individual. Is placed on the job
for which he is best suited.

2. Facilitates coordination: It acts as a means of bringing coordination and integration among the
activities of individuals and departments of the enterprise. It establishes clear-cut relationships
between operating departments and brings proper balance in their activities.

3. Facilitates division of work: Different departments are created for division of work,
specialization and orderly working of the enterprise. Similarly, delegation relieves top level
managers from routine duties.

4. Ensures growth, expansion and diversification: Sound Organisation structure facilitates

expansion/diversification of an enterprise. Organisation structure has in-built capacity to absorb
additional activities and also effective control on them. A business enterprise brings
diversification in its activities within the framework of its Organisation.

5. Stimulates creativity: Organisation provides training and self-development facilities to managers

and subordinates through delegation and departmentation. It also encourages initiative and
creative thinking on the part of managers and others.

6. Facilitates administration: Effective administration of business will not be possible without the
support of sound organisation structure. Delegation, departmentation and decentralisation are
the tools for effective administration.

7. Determines optimum use of technology: Sound Organisation structure provides opportunities to

make optimum use of technology. It facilitates proper maintenance of equipment and also
meets high cost of installation.

8. Determines individual responsibility: Responsibility is an obligation to perform an assigned work.

In a sound Organisation, the manager finds it easy to pinpoint individual responsibility when the
work is spoilt.

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4. Organization As A Structure

The term organisation can be studied as a structure and also as a process. In a static sense, organisation
is a structure. A group of people functions within this structure and try to accomplish certain objectives.
Organisation is a structure for the conduct of business activities efficiently. In the words of Kast and
Rosenzweig, "structure is the established pattern of relationships among the component parts of the
organisation". In this sense, Organisation structure refers to the network of relationships among
individuals and positions in an Organisation.

5. Organization Structure Suggests Its Framework

Just as human beings have skeletons that define their parameters likewise organisations have structures
that define their parameters. While preparing an architectural plan, an architect considers different
factors such as space, cost, time, special features and resources. In the same way, a manager is expected
to take into account factors such as channels of communication, before designing Organisation
structure.

Organisation structure specifies which individuals will work as subordinates to which superiors. It
defines the interpersonal relationships that should exist between individuals and work. Such invisible
framework is intended to promote co-ordination in the functions and activities of members of the
group. Because of specific assignments of authority and responsibility, each person will look after his
part of pre-established plans in proper relation to the parts of others in the group. Organisation suggests
the structure within which people associate for the attainment of an objective

6. Organisation As A structure - Implies 4 Elements

a. Intentionally created: In order to attain specific goals, Organisation structure is deliberately

created which converts resources (of management) into a productive enterprise.

b. Provides framework: Organisation structure usually takes the shape of a pyramid. Once
established, it acts as a framework that can either constrain or facilitate managerial actions.

c. Use of Chart: In an Organisation, the structural relationships are normally shown through
Organisation charts. These charts indicate the intended final relationships at a given time.

d. Provides formal picture: Organisation structure may be horizontal or vertical. The horizontal
aspects display basic departmentalization and vertical aspects display creation of hierarchy of
superiors and subordinates.

7. Principles of Organisation / Organising

There are some principles which are common to all organisations that are established in a classical form
i.e. the form where there is hierarchy of authority and responsibility and it flows downwards. The
principles of Organisation offer guidance for the creation of a sound, efficient and effective Organisation
structure. In other words, these principles are the sound criteria for efficient organising. They ensure
smooth and orderly working of a business enterprise.

Principles of organising are not given in a serial order by any authority on management. Management
thinkers (Henry Fayol, F. W. Taylor, U. L Urwick and others) have laid down certain statements regarding
organising function of management. Such statements are treated as principles of organisation. Well
accepted principles of organisation/organising are as explained below.

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 1. Unity of Objectives: Objectives of the enterprise influence the Organisation structure and hence
the objectives of the enterprise should first be decided clearly and firmly. In addition, there
should be unity among the objectives decided. This gives clear direction to the whole
Organisation and it will be geared for the achievement of such objectives. The Organisation acts
as a tool for achieving the objectives. The objectives may be divided into departmental
objectives and organizational objectives. There should be unity of objectives as such unity gives
one clear direction to the whole Organisation. In addition, objectives should be made clear to all
concerned persons so as to enable them to do their best to achieve the objectives.

2. Division of Work and Specialization: Division of work leads to specialization. Every department
of an Organisation should be given specialized functions. This will raise the overall efficiency and
quality of work of an Organisation. At the same time, specialization and departmentation should
not have any adverse effect on the total integrated system. Coordination must be established
among the departments and activities. Specialization is necessary for raising the efficiency of the
whole Organisation structure. The functions given to each department should be preferably only
of one category. Employees should be assigned duties to different departments as per their
qualifications, qualities and so on.

3. Delegation of Authority: There should be proper delegation of authored in every Organisation,

particularly in large organisations. The basic idea behind delegation is to see that decision-
making power is placed at a proper place. Delegation should go to the lower levels of
management. Everyone should be given authority which is adequate to accomplish the task
assigned to him. Delegation is useful for getting the things done through others. A successful
manager normally does not perform the jobs by himself. He delegates the authority and
responsibility to his subordinates. He also motivates his subordinates and see that they take
initiative, work efficiently and contribute for achieving organizational objectives.

4. Coordination: Organisation involves division of work and departmentation. This naturally

suggests the need of proper coordination among the departments and efforts of people working
in an Organisation. Due to coordination one clear-cut direction is given to people/ departments
and efforts will not be wasted or misdirected. Coordination also brings integration in the basic
functions of management. The principle of coordination is important as it facilitates
achievement of overall objectives of a business Organisation. It also brings unity of action in the
Organisation. Coordination will not be available automatically. For this, working relationships
need to be established within the Organisation.

5. Unity of Command: Unity of command principle suggests that each subordinate should have
only one superior whose command he has to obey. Dual subordination is undesirable as it leads
to confusion, disorder, uneasiness and indiscipline. An employee should not have more than one
boss to whom he has to report and also function as per his orders and instructions. Reporting to
more than one boss leads to confusion.

6. Flexibility: According to the principle of flexibility, the Organisation structure should be flexible
and not rigid. Such structure is adaptable to changing situations and permits expansion or
replacement without any serious dislocation and disruption. There should be an in-built
arrangement to facilitate growth and expansion of an enterprise.

7. Simplicity: The Organisation structure should be simple for clear understanding of employees.
The structure should be easy to manage. Internal communication will be easy due to simplicity

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 of Organisation. The Organisation structure should be simple as far as possible. The levels of
management should also be limited.

8. Span of Control: The span of control, as far as possible, should be small and fair. This means a
manager should not be asked to keep supervision on large number of subordinates. The span of
control should be narrow and manageable. It should be properly balanced.

9. Scalar Principle (Chain of Command): The principle of chain of command suggests that the line
of authority from the chief executive to the first line of superior should be clearly defined. The
line of authority should be properly defined so as to avoid any confusion as regards the line of
authority. This principle suggests that as far as possible, the chain of authority should be short
and should not be broken.

10. Exception Principle: The executives at the higher level are busy in important matters and have
limited time for the study of routine administrative matters. It is not desirable to take routine
matters to the top-level managers frequently. Very crucial and exceptionally complex problems
should be referred to the top executives and routine matters should be dealt with by the junior
executives at the lower levels. Moreover, time of top executives is saved. They can use their
time for dealing with more important and complex problems.

11. Authority and Responsibility: Authority acts as a powerful tool by which a manager can achieve
a desired objective. Authority of every manager should be clearly defined. Moreover, it should
be adequate to discharge the responsibilities assigned. The superior should be held responsible
for the acts of his subordinates. He cannot run away from the responsibility simply by delegating
authority to his subordinates. In fact, the responsibility of the superior for the acts of his
subordinates is absolute.

12. Efficiency: The Organisation structure should enable the enterprise to function efficiently. This
will enable the enterprise to accomplish its objectives quickly and also at the lowest cost. For
this, the structure introduced should be suitable to the nature, size, activities etc. of the
Organisation. A suitable Organisation structure ensures full and purposeful utilisation of
available human and material resources and ensures efficiency.

13. Proper Balance: Proper balance is necessary in different aspects of the Organisation. This means
there should be reasonable balance in the size and functions of departments, centralisation and
decentralisation of the Organisation, span of control, chain of command and finally in between
human and material resources. This principle of balance suggests that the top management
should see that the vertical and horizontal dimensions of the Organisation are fairly balanced.

14. Separation of line and staff functions: Line functions should be separated from the staff
functions even when they are supplementary in character. Line functions are directly connected
with operations while staff functions are auxiliary to the line functions. These functions should
be coordinated when necessary but normally they should be kept separate.

8. Types Of Organisation Structure

Organisation structure is defined as "The logical arrangement of task and the network of relationships
and roles among the various positions established to carry out the activities necessary to achieve the
predetermined objectives of business". Internal Organisation structure constitutes the arteries and veins
through which the blood of work flows in the body of Organisation.

Internal Organisation structures can be broadly classified into the following types/forms:
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 1. Line Organisation structure.

2. Functional Organisation structure.

3. Line and staff Organisation structure.

4. Product Organisation structure.

5. Committee and Matrix Organisation

structure.

8.1 Line Organisation Structure

Line Organisation (also called Military/Scalar Organisation) is the oldest and the simplest form of
internal Organisation structure. It was first developed by the Roman army and later adopted by armies
all over the world. Factory owners also used line Organisation structure in its purest form in the
nineteenth century in England.

In the line Organisation, the line of authority moves directly from the top level to the lowest level in a
step-by-step manner. It is straight and vertical. The top-level management takes all major decisions and
issues directions for actual execution. The general manager, for example, issues order to various
departmental managers. Thereafter, the departmental manager issues instructions to works manager.
The works manager will issue instructions to foreman. In this manner, the orders and instructions will be
issued to the workers working at the lowest level. Thus authority moves downward and also step-by-
step. The responsibility, on the other hand, moves in the upward direction.

Line Organisation structure is given in the following chart:

8.1.1 Advantages of Line Organisation Structure

1. Simplicity: Line Organisation structure is easy to understand and follow by superiors and
subordinates. It is simple and clear as regards authority and accountability.
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 2. Prompt decisions: Line Organisation facilitates prompt decision-making at all levels as the
authority given is clear and complete.

3. Discipline: It brings discipline in the Organisation due to unity of command, delegation of

authority and direct accountability.

4. Economical: Line Organisation is economical as experts are not appointed.

5. Attraction to talented persons: Line Organisation brings out talented workers and develops in
them quality of leadership. It offers opportunities of self-development to employees.

6. Quick communication, high efficiency, flexibility and high employee morale are some more
advantages of line Organisation structure.

8.1.2 Limitations of Line Organisation Structure

1. Heavy burden on line executives: The line executives are given too many duties and
responsibilities. Even the quality of the decisions of executives may suffer due to heavy burden
of duties and responsibilities.

2. Non-availability of services of experts: There is absence of skilled experts in line organisation.

Expert assistance is not available promptly when needed by line executives.

3. Favoritism: There is wide scope for favoritism and nepotism in the line organisation. Leadership
of departmental executive is autocratic due to heavy concentration of powers. He may favour
some employees at the cost of others.

4. Too much dependence on limited executives: In the line organisation, all powers are
concentrated in the hands of a few executives. Naturally, the success and stability of the entire
organisation depends on their personal skill, initiative and interest. Special difficulties arise
when one executive is to be transferred/replaced/promoted.

5. Rigidity: There is rigidity in the working of line organisation.

6. Delays in communication, limited freedom to employees and unsuitability to modern large

business units are some more demerits of line Organisation.

8.2 Functional Organisation Structure

F.W.Taylor, founder of scientific management, conceived the functional Organisation structure.

According to him, it is unscientific to overload a foramen with the entire responsibility of running a
department. He introduced a system of functional foremanship in his Organisation. In his functional
foremanship, there will be eight specialists' foremen who will be required to guide, direct and control
the work. Workers at the plant level will have to follow the instructions of all these eight specialists
called bosses.

In the functional Organisation suggested by F.W.Taylor, the job of management is divided according to
specialization. As a result, functional departments are created. For example, the personnel department
will look after the recruitment, selection, training, wage payment, etc. of all persons of the Organisation.
Similar will be the position of other departments like production, sales, etc. The scope of work of the
department is limited but the area of authority is unlimited.

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In the functional Organisation structure, there will be separation of planning of work and execution of
the plan prepared. The basis of division is the function and naturally the Organisation structure created
will be called "Functional Organisation".

In the functional foremanship, there will be eight specialists/functional heads called bosses. Out of eight
bosses, four bosses will be at the planning level and the remaining four will be at the slop floor level.

8.2.1 Foremen At Planning Level (Planning Dept.)

1. Time and Cost Clerk: He is concerned with preparing standard time for the completion of certain
piece of work and compiling the cost of that work.

2. Instruction Card Clerk: He lays down the exact method of doing the work. He specifies the tools
to be used for conducting the production and also gives other instructions on the instruction
cards prepared by him.

3. Route Clerk: The route clerk lays down the exact route through which each and every piece of
work should move through various stages till completion. He decides the production schedule
and the sequence of steps by which the production process is to move.

4. Shop Disciplinarian: He is concerned with the discipline, insubordination, violation of rules of

discipline and absenteeism. All cases relating to these matters will be managed by the shop
disciplinarian.

8.2.2 Foremen At Shop Floor Level (Shop Floor)

1. Gang Boss: He assembles and sets up various machines; and tools for a particular piece of work.
He is in-charge of assembling line of production.

2. Speed Boss: He is concerned with the speeding of machines used for production. He keeps
proper speed of the machines and see that workers complete the production work as per the
schedule time.

3. Repair Boss: The repair boss looks after the proper maintenance of machines, tools and
equipments required during the production process.

4. Inspector: The inspector controls quality of the products by keeping adequate check/control
when the production work is in progress.

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The functional Organisation structure is given in the following chart:-

8.2.3 Merits of Functional Organisation Structure

1. Facilitates specialization: Functional Organisation structure facilitates division of work and

specialization. Each boss has specialized knowledge of his functional area. He is in a better
position to guide and help the workers.

2. Benefits of large-scale operations: Functional Organisation offers the benefit of economy of

large-scale operation. In this Organisation, one administrative unit manufactures all products.
The available machinery, equipment and facilities are used fully for large-scale production.

3. Facilitates effective coordination: Functional Organisation facilitates effective coordination

within the function. This is possible as one boss is in-charge of a particular function and he looks
after all activities, which come within that function.

4. Operational flexibility: Functional Organisation possesses operational flexibility. Necessary

changes can be introduced easily to suit the needs of the situation without any adverse effect
on the efficiency.

5. Ensures effective supervision: Functional Organisation facilitates effective supervision by the

functional heads and foremen. Due to specialization, they concentrate on the specific functional
area and also keep effective supervision on their subordinates.

8.2.4 Demerits of Functional Organisation Structure

1. Absence of unity of command: Unity of command is absent in the functional Organisation as

each worker gets orders and instructions from several bosses.

2. Fixing responsibility is difficult: In functional Organisation, responsibility is difficult to fix on a

specific person. This is because the responsibility itself is divided among many.

3. Unsuitable to non-manufacturing activities: Functional Organisation can be introduced in the

case of manufacturing activities. However, its application to non-manufacturing activities such
as marketing, etc. has not been successful.

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 4. Costly: Functional Organisation is costly, as more specialists are required to be appointed.

5. Creates confusion among workers: Functional Organisation is based on specialization as function

is taken as a base for dividing the work. The authority is overlapping the responsibility is divided.
This confuses workers.

6. Conflicts among foremen, delays in decision-making and limited discipline within the
departments are some more demerits of functional Organisation.

9. Line and Staff Organisation Structure

In the line and staff Organisation, line executives and staff (specialists) are combined together. The line
executives are 'doers' whereas staff refers to experts and act as 'thinkers'. The following chart shows
line and staff Organisation structure:

The line executives are concerned with the execution of plans and Policies. They do their best to achieve
the organizational objectives. The staff concentrates their attention on research and planning activities.
They are experts and conduct advisory functions.

Staff specialists are regarded as 'thinkers" while execution function is given to line executives who are
"doers". The staff is supportive to line. The staff specialists offer guidance and cooperation to line
executives for achieving organizational objectives. This reduces the burden of functions on the line
executives and raises overall efficiency of the Organisation. For avoiding the conflicts between line and
staff, there should be clear demarcation between the line and staff functions. This avoids overlapping of
functions and possible conflicts. In short, the line and staff functions are different but are supportive and
can give positive results if adjusted properly i.e. by avoiding the conflicts. They suggest/recommend but
have no power to command the line executive. However, their advice is normally accepted because of
their status in the Organisation.

According to Louis Allen, "Line refers to those positions and elements of the Organisation, which have
the responsibility and authority and are accountable for accomplishment of primary objectives. Staff
elements are those which have responsibility and authority for providing advice and service to the line in
attainment of objectives".

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9.1 Characteristics of Line and Staff Organisation

1. Planning and execution: There are two aspects of administration in this Organisation, viz.,
planning and execution.

2. Combining line and staff: Planning function is entrusted to staff specialists who are 'thinkers'
while execution function is given to line executives who are 'doers'. The staff is supportive to
line.

3. Role of authority: The line managers have authority to take decisions as they are concerned with
actual production. The staff officers lack such authority.

4. Guidance from staff: The staff provides guidance and advice to line executives when asked for.
Moreover, line executives may or may not act as per the guidance offered.

5. Exercising control: The staff manager has authority over subordinates working in his
department.

6. Scope for specialization: There is wide scope for specialization in this Organisation as planning
work is given to staff and execution work is given to line executives.

7. Possibility of conflicts: Conflicts between line and staff executives are quite common in this
Organisation but can be minimized through special measures.

8. Suitability: Line and staff Organisation structure is suitable to large-scale business activities.

9.2 Merits of Line and Staff Organisation

1. Less burden on executives: Line executives get the assistance of staff specialists.This reduces the
burden of tine executives. This raises overall efficiency and facilitates the growth and expansion
of an enterprise.

2. Services of experts available: The benefits of services of experts are provided to line managers.
Highly qualified experts are appointed and they offer guidance to line executives.

3. Sound decision-making: Line and staff Organisation facilitates sound management decisions
because of the services of experts and specialists. The decisions are also taken in a democratic
method i.e. in consultation with the experts.

4. Limited tension on line managers: The pressure of work of line bosses is brought down as they
are concerned only with production management.

5. Benefits of specialization: There is division of work and specialization in this Organisation.

Naturally, the benefits of division of work and specialization are easily available.

6. Training opportunities to employees: Better opportunities of advancement are provided to

workers. The scope for learning and training for promotions are available.

9.3 Demerits of Line and Staff Organisation

1. Delay in decision-making: The process of decision-making is delayed, as line executives have to

consult staff experts before finalizing the decisions. The decisions of line managers are likely to
be delayed due to this lengthy procedure.

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 2. Buck passing among executives: The line bosses are concerned with actual execution of work.
However, they depend on staff experts for guidance. If something goes wrong, the attempt is
made to pass on the blame by one party to the other. Thus, there is shifting of responsibility or
buck-passing.

3. Conflicts between line and staff executives: In this Organisation, quarrels and conflicts between
line managers and staff specialists are quite common. The line managers are generally not
interested in the advice offered by experts. Secondly, specialists feel that the line bosses lack
knowledge of new ideas. Such conflicts lead to bitterness.

4. Costly Organisation: Line and staff Organisation is a costly Organisation as the line executives
are supported by highly paid staff executives who are experts. All this adds to the overhead
expenses and the cost of production increases.

5. Complicated operation: This Organisation is too complicated in actual operation because of dual
authority, division of functions and too much dependence on staff. The unity of command
principle is violated.

6. Internal discipline is affected adversely: The internal discipline is likely to be affected adversely
due to decentralisation and division of loyalty of subordinates.

9.4 Conflict between Line and Staff Managers

One serious problem in the line and staff Organisation is the possible conflict between the line
executives and staff specialists.

Line executives have complaints against staff officers and staff officers have complaints against line
executives.

9.5 Conflict between Line and Staff Executives.

9.6 Arguments of Line Executives against Staff Managers / Officers

1. Dilution of authority: Line executives argue that the introduction of staff managers dilutes their
authority and also leads to interference in their work. They feel that their jobs become less
important.

2. Stealing show: Line managers feel that the staff executives tend to steal show for the work that
turns out to be successful. On the other hand, when things go wrong, they alone have to face
the blame and criticism.

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 3. Lacks practical knowledge: Line executives argue that staff executives are not familiar with the
situation where actual work is carried out. The services offered by the staff executives are rather
theoretical and not practical.

4. Lacks human skills: Line executives argue that staff managers with human relations skills are
rarely available. Staff presents matters mechanically.

5. Domination of staff managers: Line executives argue that staff managers always feel that they
are superior as regards education and skills. They dominate line executives. This is treated as
unwanted interference.

6. Easy access to top management: The staff managers work at the head office and have easy
access to top level management. They try to show their superiority to top level management by
making new plans and suggestions which may not be acceptable to line executives. The top
management feels that the line executives are incompetent due to which the services of staff
officers are required. This is a source of agony for line managers.

7. Stress on paper work: The staff executives are engaged in the paper work. In addition, they need
information and various details from the line executives. As a result, there is increase in the
paper work of line executives, which they resent.

9.7 Arguments of Staff Managers against Line Executives

1. Resistance to new plans and ideas: According to staff managers, the line managers usually
oppose/resist new plans/ideas. They treat this as interference in their routine work. A staff
manager is a professional critic. He suggests modifications, which are useful, but the suggestions
are opposed as unnecessary interference. This leads to conflicts.

2. Inadequate support from line executives: Staff managers argue that line Managers do not take
benefit of their services. Their services are used only as a measure of last resort.

3. Inadequate scope for the use of authority: Staff managers argue that line managers do not give
importance to suggestions given by them. This reduces the scope of activities of staff managers.
Moreover, the suggestions of staff managers are not binding on line executives and this affects
their importance and contribution.

4. Lack of support from top management: Staff managers also feel that they do not get full support
from the top management. The top management is more concerned with regular production. As
a result, it gives better treatment to line bosses.

5. Limited cooperation from line executives: Staff managers argue that line executives adopt
negative approach towards them even when both are working in the same Organisation with
identical objectives. Line executives do not take the advice/suggestions of staff managers in the
right spirit. They reject suggestions on the ground that they are not practicable even without
giving fair trail. This indicates limited co-operation from line executives.

6. Supply of inadequate information: Staff managers argue that line executives do not approach
them well in advance with all necessary details of the problems faced by them. They do not
supply relevant information but want the solution quickly. If solution is suggested within the
time limit, it is again rejected on the ground that it is not workable. This leads to dissatisfaction
and conflicts.

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 7. Absence of authority: Staff managers feel frustrated as they offer suggestions for solving the
problem through hard work and also by using their skills and experience. However, they do not
have commanding authority to execute their suggestions.

10. Organisation Chart

Organisation structure of a company can be shown in a chart. Such chart indicates how different
departments are interlinked on the basis of authority and responsibility. It is a simple diagrammatic
method of describing an Organisation structure. It indicates how the departments are linked together on
the basis of authority and responsibility. Such Organisation chart provides information of the
Organisation structure at a glance. Organisation chart is like a blue print of a building. It indicates the
number and types of departments, superior-subordinate relationship, chain of command and
communication.

10.1 Definition of Organisation Chart.

According to George Terry, Organisation chart is "a diagrammatical form which shows important
aspects of an Organisation, including the major functions and their respective relationships, the channels
of supervision and the relative authority of each employee who is in-charge of each respective function".

10.2 Features of Organisation Chart

The definition noted above indicates the following features of Organisation charts:

1. Organisation chart is a diagrammatical presentation.

2. It represents the formal Organisation structure.

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 3. It shows the lines of authority in the Organisation.

4. It indicates the channel of communication.

5. It indicates who supervises whom and how various units are inter-related.

10.3 Advantages of Organisational Chart.

1. Brings clarity to the Organisation: The very process of preparing a chart makes the executive
think more clearly about the Organisation relationships.

2. Provides dear picture of the Organisation: Once the charts are prepared, they provide lot of
information about the Organisation, both to the members of the Organisation as well as to the
outsiders. This information relates to number and types of departments, superior subordinate
relationships, chain of command and communication and job titles of each employee.

3. Facilitates training of employees: Organisation charts are useful in familiarizing and training new
employees.

4. Ensures organizational changes: Organisation charts provide a starting point for planning
organizational changes after having discovered the weaknesses of the existing structure.

5. Provides quick understanding: A chart serves as a better method of visualizing an Organisation

than a lengthy written description of it.

10.4 Limitations of Organisational Chart

1. Details are not provided: The Organisation chart does not provide all the details of Organisation
structure created. For example, the chart will show the line of authority but not the extent of
authority.

2. Informal relationship is not shown: The chart fails to give details of informal relationship
available in a firm. In fact, human relationships cannot be shown on a chart.

3. Updated position is not available: The chart shows the position of Organisation structure when it
was formed. It gives a static picture of the Organisation. Changes made thereafter may not be
available in such charts.

4. Fosters buck-passing: The charts tend to foster 'buck-passing' and emphasize only formal
channels of communication.

5. Lacks flexibility: Organisation chart lacks an element of flexibility. Such chart also brings an
element of rigidity in the working of an Organisation.

6. Creates rank consciousness: An Organisation chart leads to rank consciousness among the staff.
It destroys team spirit and collective approach on the part of the staff.

10.5 Types of Organisation Chart

1. Vertical chart: One of the most popular methods is the vertical chart in which the highest job is
shown at the top with other jobs shown in a descending order, connected by lines to show the
authority and the line of communication.

2. Horizontal chart: This chart shows the Organisation structure in the form of a pyramid.

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 3. Circular chart: The top management is shown at the centre of the circle and other management
levels are shown in concentric circles.

4. Departmental chart: This chart is devoted exclusively to particular department and gives details
of relationships, authority, responsibility, etc. within the department.

10.6 Uses of Organisation Chart

1. An Organisation chart facilitates ready reference. It enables the management to find out
different positions of authority and their relationships in the Organisation structure.

2. It provides proper guidance to managers in executing, their assignments and helps them to
avoid overlapping and duplication of work.

3. It provides complete information to understand the character of an Organisation.

4. An Organisation chart indicates ways to better utilisation of available manpower.

5. An organisation chart points out the consistencies and deficiencies of an Organisation and
enables the management to correct them.

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