ORGANIZING AND ORGANIZATIONAL STRUCTURES

Susmit Kumar MBA(FC)-1

Organizing
In general organizing may be an activity that arranges things in an order according to some fixed patterns so as to make them relevant and meaningful. From the point of view of management if we look at organizing ‡ It is a management process that comes after planning ‡ Since every work in an organization is done by a number of persons organizing helps in deciding who will do the work, what will be the conditions for doing the work and what shall be the relationship among the various people performing the tasks.

Organization
‡ An organization is a social arrangement that pursues collective goals, controls its own performance and has a boundary separating it from its environment. From a management perspective an organization may be looked as: ‡ An Entity ‡ A group of people ‡ A Structure ‡ A Process

Nature of Organization
‡ ‡ ‡ ‡ ‡ Composition of individuals and groups Orientation towards goals Division of work or specialization Differentiated Functions Continues Process

Purpose and Importance of an Organization
‡ ‡ ‡ ‡ ‡ Helps to achieve goals Optimum utilization of resources To perform managerial functions Facilitates growth and diversification Human treatment of employees

Organizational Structure
‡ Is a basic frame work within which a manager has to take decisions ‡ Basically deals with relationships ‡ Structure of an organization is the arrangement of its various elements at a given point of time. ‡ It is abstract in nature it can be inferred from actual operations and behaviour of the organization ‡ Allows expressed allocation of responsibilities for different processes and functions to entities ‡ It does differentiate and integrate the various activities in the organization

Formal Organizations
‡ Is a structure deliberately designed to achieve some particular objectives ‡ Has well defined jobs each with definite authority, responsibility and accountability, ‡ It is mostly designed by top management and the emphasis is more on performance of jobs than individuals performing the job. ‡ It is said that formal organization is built on four pillars 1.Division of labor 2.scalar and functional processes 3.Structure 4. Span of control

INFORMAL ORGANIZATION
‡ They refer to groups of people naturally formed in the organization. ‡ It is not designed or planned ‡ It is evolved on the basis of some similarity among individuals ‡ A person can join or leave the organization according to his wish. ‡ There are no defined rules or regulations in it.

Features of a Good Organizational Structure
1. 2. 3. 4. 5. 6. 7. 8. 9. Simplicity Flexibility Clear line of Authority Application of ultimate responsibility Proper delegation of authority Minimum Possible Managerial levels Principles of unity of direction and command Proper Emphasis on staff Provision for top Management

Tall and Flat Structures
‡ An organizational structure with a narrow span of management i.e. less no of subordinates per head with more levels of management and centralized decision making is a tall structure ‡ A structure with wider span of management lesser levels of management and more decentralized decision making is a flat structure.

Various forms of Organizational Structures
‡ Every organization is different ‡ So every organization needs a different kind of Organization structure with a different purpose , design and form ‡ So an organization has to decide its structure with prudence

LINE ORGANIZATIONAL STRUCTURE
‡ Pure Line Organizational Structure Under this form similar activities are performed at each level and hence is group is self sufficient ‡ Departmental Line Organizational Structure Under this form all similar activities are placed into one department and all departments come under one head. Thus line organizational structure is a simple and straight system where there is a unity of command and the authorities and responsibilities of each person is well defined .

Line and Staff Organizational Structure
‡ It is a system where staff specialists advice the managers to perform their duty ‡ Such advice is generally given to line managers by staffs who are experts in their fields ‡ The staff positions or departments are of advisory and not enforcing nature ‡ To decide upon which departments are staff and which are line the activities of organizations have to be divided into 2 types 1. Having direct role in organisation s objectives 2.Having indirect effect on organization s objectives

Functional Structure
‡ Functional structure is created by grouping the activities on the basis of functions to achieve organizational objectives ‡ For this purpose all functions are classified into basic, secondary and supporting according to nature and importance. ‡ There is an emphasis on sub goals to be achieved by the organization ‡ There is a functional authority relationship among various departments ‡ There is a pyramidal growth of organization ‡ It is a tall structure with narrow span of Management

Design of Functional Organization Structure

Divisional Structure
‡ It is also referred as profit de centralization structure ‡ It is built around several autonomous business units ‡ The basic parameters for division are: 1.Product 2.Territory 3.Strategic Business Unit

Design of Divisional Organization Structure

Project Organization Structure
‡ It is a specific kind of organization structure that comes into existence only once for a single specified goals ‡ It is independent and unique to a great extent ‡ There is a high degree of stake involved in it as there is a time constraint for successful completion of a project ‡ It allows maximum use of available knowledge and skills

Design of Project Organization Strucuture

Matrix Organizational Structure
‡ It involves merging of project structure and functional structure ‡ It also depicts that many a times various structures may have to overlap with each other. ‡ Matrix structure comes into existence when an organization has large no of small projects ‡ Matrix Organisation=Matrix Culture+Matrix Systems+Matrix Structure + Matrix behaviour ‡ A matrix structures makes sure that all the organizational resources are well co-ordinated and directed towards the activities where they are required

Design of Matrix Organization Structure

Team
‡ ‡ ‡ ‡ ‡

Small Number of People Complimentary Skills Common Purpose and performance of goals Common Approach Mutual Accountability

Other forms of Organizational Structures
‡ Network Here the activities are mostly outsourced so as to reduce the price and get the task done effectively ‡ Boundary less This structure goes beyond its physical and Geographical boundaries ‡ Virtual It s a special form of boundary less marketing where even though a company may have small core but it may be a world leader in its niche.

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