ORGANISING

Identifying and grouping different activities in the organisation and

bringing together the physical, financial and human resources to establish
most productive relations for the achievement of specific goal of
organisation.
ORGANISING PROCESS
1.Identification and Division of work: The first step in the organising is
Identification and Division of Work as per plan the division of work make
sure there is no duplication of work.
2.Departmentalisation: after dividing the work in the smaller job related
and similar job are grouped together in one department.
This can be done by two ways
➢ Functional departmentation: under this method jobs related to
common function are grouped under one department.
➢ Divisional departmentation: when an organisation is producing is
producing more than one type of products then they prefer divisional
departmentation. Under this job related to one product are grouped
under one department.
3.Assignment of duties: after dividing the organisation into specialised
department each individual working in different departments is
assigned a duty matching to his skill and qualifications. The work is
assigned according to the ability of individuals.
4.Establishing Reporting Relationship: After grouping the activities in
different department the employees have to perform the job and to
perform the job every individual needs some authority So, in the fourth,
step of organising process all the individuals are assigned some
authority matching to the job they have to perform.

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IMPORTANCE/SIGNIFICANCE OF ORGANISING

1. Benefits in specialisation: In organising the work is divided according

to qualification which leads to specialisation
2.Clarity in working relationship: In the organising function, it is clearly
defined that how much power and authority is enjoyed by different
individuals or managers.
3.Optimum utilisation of resources: In the organising function, there are
very few chances of duplication of work because the jobs are assigned
to different individuals by clearly defining the job in job description
document.
4.Adoption to change: Whenever the changes take place in the business
environment then with the help of organising function these changes
can be adopted systematically.
5.Effective administration: In the organising function, the similar and
related jobs are grouped under one department which leads to
unification of efforts.
6.Expansion and growth: With optimum utilisation of resources and
proper division of work and departmentation, companies can easily
expand their activities in a planned manner.
7.Development of personnel: Delegation of authority is an important
part of organising. By delegating the routine the managers can
concentrate to develop new methods and ways of performing job.

ORGANISATIONAL STRUCTURE
Organisational structure can be defined as "Network of job positions,
responsibilities , authority at different levels. It specifies the relations
between people, work and resources. Span of management gives shape
to organisational structure.
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Span of management means how many employees or subordinates can
be effectively managed by one manager or how many subordinates can
be effectively controlled by one superior.
IMPORTANCE OF ORGANISATIONAL STRUCTURE
1.better flow of communications.
2.A clear structure makes it easy to check the responsibility of each level
of business.
3.A clear idea about the working style of an enterprise can be known from
organisational structure.
4.Organisational structure allows co-ordination among human, physical
and financial resources.
5.It clearly defines the levels of management.

TYPES OF ORGANISATIONAL STRUCTURE

The organisational structure can mainly be of two types which are:
(i) Functional Structure
(ii) Divisional Structure
FUNCTIONAL STRUCTURE
When the activities or jobs are grouped keeping in mind the functions of
the job then it is called functional structure.
ADVANTAGES
1.Occupational Specialisation: functional structure emphasis on specific
functions. This makes their performance improves and they become
specialised in their task.
2.Promotes control and coordination within department: Due to similar
activities grouped in one department there is easy supervision and
better control.

3.Increases managerial and operational efficiency: Minimum cost leads

to increase in profit.
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4.It leads to minimum duplication of efforts: This results lowering of cost.
5.Easy and effective training: As training focuses only in limited skills or
one function only.
DISADVANTAGES
1. Places less importance to overall objective of organisation: Functional
structure places less emphasis on overall enterprise objectives. They
fail to give priority to organisational interest.
2. Problems of coordination: As each department is specialised in their
own function so they fail to understand the priority of other
department.

3. Inflexibility: In functional structure, employees develop, narrow

perspective as employees get training in one area or skill only. They
cannot be transferred to other departments.
4. Conflict of interest: There can be conflict of interest between different
departments.
5. Difficult to fix accountability: In case of failure of organisational
objective, the departmental head blames other departments as all
departments are inter-related and it is very difficult to find out which
department is going against the organisational goal.
Suitability
1. Division of work as per functions
2. Specialisation in every function
3. Grouping of similar nature of jobs
4. Uniproduct or single or one type of product manufacturing company
DIVISIONAL STRUCTURE
When the organisation is large in size and is producing more than one type
of product then activities related to one product are grouped under one
department. Divisional structure is suitable only to multiproduct
manufacturing large organisation.
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ADVANTAGES
1. Product specialisation: All the activities related to one type of product
are grouped under one department which brings co-ordination in the
activities.
2. Fast decision-making: The decisions are taken much faster in divisional
structure because there is no dependence on other departments for
taking decisions.
3. Accountability: In this type of structure, the performance of individual
departments can easily be assessed and you can hold the department
accountable for non-accomplishment of objectives.
4· Flexibility: Fast decision-making leads to flexibility.
5· Expansion and growth: New departments can be added without
disturbing existing departments.

DISADVANTAGES
1.More resources required: Each department will require all the
resources as every division will be working as an independent unit.

2.Product focus department: Each department focuses on their product

only and they fail to keep themselves as a part of one common
organisation.

3.Conflict: Conflict may arise among department on allocation of

resources.

4.Increase in cost: It may lead to increase in cost due to duplication of

activities, providing each division with separate set of similar functions
increases expenditures.

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Suitability
1. Organisations producing multi-product or different line of products.
2. Organisations which require product specialisation.
3. Organisations which require each division to be self-contained as
under divisional structure each department has production, sale
finance department.
4. Growing companies which plan to add more line of products in future.
FORMAL AND INFORMAL ORGANISATION
An organisational structure is created to achieve systematic working and
efficient utilisation of resources. This type of structure is known as formal
organisational structure. This structure is created intentionally by the
managers for achievement of organisational goal.
FEATURES OF FORMAL ORGANISATION:
1. The formal organisational structure is created intentionally by the
process of organising.
2. The purpose of formal organisation structure is achievement of
organisational goal.
3. In formal organisational structure, each individual is assigned a specific
job.
4. In formal organisation, every individual is assigned a fixed authority or
decision-making power.
5. Formal organisational structure results in creation of. superior-
subordinate relations.
6. Formal organisational structure creates a scalar chain of
communication in the organisation.
ADVANTAGES OF FORMAL ORGANISATION
1. Systematic working: Formal organisation structure results in systematic
and smooth functioning of an organisation.

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2. Achievement of organisational objectives: Formal organisational
structure is established to achieve organisational objectives.
3. No overlapping of work: In formal organisation, structure work is
systematically divided among various departments and employees. So
there is no chance of duplication or overlapping of work.
4. Coordination: Formal organ1sationa structure results in coordinating
the activities various departments.
5. Creation of chain of command: Formal organisational structure clearly
defines superior subordinate relationship, i.e., who reports to whom.

DISADVANTAGES OF FORMAL ORGANISATION

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 organisational 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 organisational structure gives
importance to work only, it ignores human relations, creativity, talents,
etc.

INFORMAL ORGANISATION
The informal organisational structure gets created automatically and the
main purpose of such structure is getting psychological satisfaction. The
existence of informal structure depends upon the formal structure.

ADVANTAGES OF INFORMAL ORGANISATION

1. Fast communication: Informal structure does not follow scalar chain so

there can be faster spread of communication.

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2. Fulfils social needs: Informal communication gives due importance to
psychological and social need of employees which motivates the
employees.
3. Correct feedback: Through informal structure the top level managers
can know the real feedback of employees on various policies and plans.

STRATEGIC USE OF INFORMAL ORGANISATION

1.The knowledge of informal group can be used to gather support of
employees and improve their performance.

2.Through grapevine important information can be transmitted quickly.

3.By cooperating with the informal groups the managers can skillfully take
the advantage of both formal and informal organisations.
DISADVANTAGES OF INFORMAL ORGANISATION
1. Spread rumours. According to a survey 70% of information spread
through informal organisational structure are rumours which may
mislead the employees.
2. No systematic working: Informal structure does not form a structure
for smooth working of an organisation.
3. May bring negative results: If informal organisation opposes the
policies and changes of management, then it becomes very difficult to
implement them in organisation.
4. More emphasis to individual interest: Informal structure gives more
importance to satisfaction of individual interest as compared to
organisational interest.

DELEGATION OF AUTHORITY
Delegation refers to downward transfer of authority from superior to
subordinate.

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Principle of Absoluteness of Accountability
Delegation is a very important process to carry on the work systematically
in the organisation.
ELEMENTS OF DELEGATION/PROCESS OF DELEGATION
There are three elements of delegation:
1. Responsibility,
2. Authority,
3. Accountability.
RESPONSIBILITY
Responsibility means the work assigned to an individual. It includes all the
Physical and mental activities to be performed by the employees at a
particular job position.
FEATURES OF RESPONSIBILITY:
1. Responsibility is the obligation of a subordinate to properly perform the
assigned duty.
2. It arises from superior subordinate relationship because subordinate is
bound to perform the duty assigned by his superior.
AUTHORITY
Authority means power to take decision. To carry on the responsibilities,
every employee need to have some authority.
FEATURES OF AUTHORITY:
1. In a formal organisation authority arise or originate from an
individual's position.
2. Authority refers to right to take decision due to your managerial
position.
3. Authority determines superior subordinate relationship. As
subordinate communicates his decisions to subordinate.
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4. Authority is restricted by law and rules and regulations of the
organisation.
5. Authority arises from the scalar chain which links various job positions.
6. Authority flows downward from superior to subordinate.
7. Authority must be equal to responsibility.

ACCOUNTABILITY
Accountability means subordinates will be answerable for the non-
completion of the task; creating accountability is the third and final step
of delegation process. The accountability cannot be passed or delegated.
FEATURES OF ACCOUNTABILITY:
1. Accountability refers to answerable for the final output.
2. It cannot be delegated or passed.
3. It enforced through regular feedback on the extent of work
accomplished.
4. If flows upward, i.e., subordinate will be accountable to his superior.

RELATION BETWEEN AUTHORITY, RESPONSIBILITY AND

ACCOUNTABILITY:
1. Authority is delegated, Responsibility is assumed and Accountability is
imposed.
2. Responsibility is derived from authority and accountability is derived
from responsibility.
IMPORTANCE OF DELEGATION
1. Effective management: In the delegation process managers pass
routine work to the subordinates. So they are free to concentrate on
other important matters. The main job of managers is to get the work
done effectively and by delegating the authorities and responsibilities
managers can get the work done effectively and efficiently from the
subordinates.
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2. Employees' development: As a result of delegation employees get
more opportunities to utilise their talents. It allows them to develop
those skills which help them to perform complex task. Delegation help
in making better future managers by giving them chance to use their
skills, gain experience of work related to higher job position.
3. Motivation of employees: In the delegation when the manager is
sharing his responsibilities and authority with the subordinates it
motivates the subordinates as they develop the feeling of
belongingness and trust which is shown to them by their superiors.
Some employees can be motivated by such kind of non-financial
incentives.

4. Facilitates organisational growth: In the process of delegation when

the managers are passing their responsibility and authority to the
subordinates they keep in mind the qualification and capability of all
the subordinates.

5. Basis of management hierarchy: Delegation establishes superior-

subordinate relationship which is the base for hierarchy of managers.
The extent of power delegated to subordinates decides who will report
to whom, and the power at each job position forms the Management
Hierarchy.

6. Better coordination: In delegation systematically responsibility and

authority is divided and employees are made answerable for non-
completion of task. This systematic division of work gives clear pictures
of work to every one and there is no duplication of work clarity in
duties assigned and reporting relationship brings effective
coordination in the organisation.

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7. Reduces the work load of managers: In the process of delegation, the
managers are allowed to share their responsibilities and work with the
subordinates which help the managers to reduce their work load. With
the process of delegation the managers can pass all their routine work
to the subordinates and concentrate on important work. Without
delegation managers will be overburdened with the work.
CENTRALISATION AND DECENTRALISATION
Centralisation refers to concentration of power or authority in few
hands, i.e., top level. An organisation is centralised when the decision-
making authority is in the hands of top level management only.
Decentralisation can be defined as even and systematic distribution of
authority at every level of management
FEATURES OF DECENTRALISATION
1. Decentralisation is much more than a mere transfer of authority to
lower level.
2. It implies selective dispersal of authority.
3. It shows the belief that people are competent, capable and
resourceful.
4. Decentralisation recognises the need of authority for decision-
makers.
5. The top management carefully selects those decisions which will be
pushed down to lower level and those that will be retained at higher
level.
IMPORTANCE OF DECENTRALISATION
1. Develop initiative among subordinates: Passing of authority at middle
and lower level shows the trust and faith of top level in their
subordinates.

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2. Develop managerial talent for future: In the decentralisation
managers working at lower and middle level also learn the art of
making decisions. They get the experience of performing activities of
top executives and learn to manage the authority given to them.
3. Quick decision-making: In the decentralisation process, decision-
making is not restricted in few hands only but decision-making power
is entrusted to all the managers who are taking actions or performing
the activities.
4. Relief to top level management: In the process of decentralisation, top
level managers are not overburdened with the responsibilities and
authority as they systematically pass the authority and responsibilities
at different levels.
5. Facilitates growth: Decentralisation grants more autonomy or
freedom to lower level. 'Ibis helps the subordinates to do the work in
the manner best suited for their department.
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6. Better control: In decentralisation, employees working at different

levels take their own decisions and they are personally accountable for
their decisions, they cannot pass the blame to their superiors.

RELATION BETWEEN DELEGATION AND DECENTRALISATION

1. Decentralisation is extension of delegation: In delegation, we multiply

the authority with two, whereas in decentralisation the authority is
multiplied by many because systematic delegation taking place at
every level.If delegation is restricted to certain levels only then there
will be no complete decentralisation also.

2. Delegation is Necessary in Every Organisation but Decentralisation is

Optional: Delegation is an essential part of every organisation. No
organisation can work without using the concept of delegation as there
is no individual who can do all the work himself only. Delegation is a
tool to get the work done effectively and efficiently through others
whereas decentralisation is required when an organisation grows and
expands and only to level cannot manage it.

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