ORGANISING

CONCEPT
Backbone of management

Sociologists organization means a study of the

interactions of the people

Functional components in the best possible

combination so that an enterprise can achieve its
goals
 Definition
"It is grouping of activities necessary to attain enterprise

objectives and the assignment of each grouping to a manager

with authority necessary to supervise it". Koontz and O'Donnel

"The structure and process by which a cooperative group of

human beings allocates its tasks among its members, identifies

relationship, and integrates its activities towards common
objectives". Joseph Massive
 Definition
"The process of identifying and grouping the work to be

performed, defining and delegating responsibility and

authority and establishing relationship for the purpose of
enabling people to work more effectively together in
accomplishing objects". Louis A. Allen
 Characteristics

It is a group of individuals which may be large or small.

The group in the organization works under the executive leadership.

It is a machine or mechanism of management.

It has some directing authority or power which controls the

concerted efforts of the group.

 Characteristics
The division of labour, power and responsibilities are
deliberately planned.
It implies a structure of duties and responsibilities.

It is established for accomplishment of common objectives

It is a functional concept.

 Advantages
 Facilitates attainment of the objectives of the enterprise.

 Facilitates optimum use of resources and new technological development.

 Facilitates growth and diversification.

 Stimulates creativity and innovation.

 Facilities effective communication.

 Encourages better relations between the labour and the management.

 Increase employee satisfaction and decreases employee turnover.

 STEPS IN THE PROCESS OF
ORGANISING
Clear definition of objectives

Determining activities

Assigning duties

Delegating authority

Coordinating activities

Providing physical facilities and right environment

Establishment of structural relationship for overall control

 PRINCIPLES OF
ORGANISATION
Division of work

Attention to objectives

Unity of command

Flexibility

Proper balance

Management by exception

Decentralization
 PRINCIPLES OF
ORGANISATION
Departmentation

Efficiency

Unity of direction

Continuity

Coordination

Authority and responsibility

FORMAL AND INFORMATION ORGANISATION

 Formal organization:-

 It refers to the structure of relationships deliberately built up by the top

management to realize the objectives.

 In this form instructions, responsibility, authority, accountability, lines of

command and positions and authority are clearly defined and declared.
 Each person is aware of his duties and authority.

 Every subordinate is expected to obey his supervisor in the formal chain of

command.
 It is designed after careful identification, classification and assignment of

business activities.
 Informal organization:-

 It refers to the network of personal and social relationships which arise

spontaneously when people working together interact on personal whims,

likes and prejudices.

 Such relations are not created by the top management and they are not

recognized formally.
 The informal groups sometimes run parallel to the formal ones.

 An informal organization provides an opportunity to workers to come

close to each other, develop a feeling of cooperation and coordination

among themselves.
 FORMAL AND INFORMATION ORGANISATION
Concept Formal organization
Formation Formal organization is deliberately
created by management. It is the result
of a conscious and deliberate effort
involving delegation of authority.
Basis A formal organization is based upon
rules and procedures.
Nature A formal organization is stable and
predictable and it cannot be changed
according to the whims or fancies of
people.
Set up A formal organization is a system of
well defined relationships with a definite
authority assigned to every individual. It
follows predetermined lines of
communication.
Informal organization
Informal organization arises spontaneously and
no conscious efforts are made to create it. It
takes place on the basis of relationships, caste,
culture,
Informal organization is based upon attitudes
and emotions of the people.
informal organization is neither stable nor
predictable.
Informal organization has no definite form and
there are no definite rules as to who is to report
to whom. Even a low-placed employee may
have an informal relationship with an officer
far above him in the formal hierarchy.
FORMAL AND INFORMATION ORGANISATION
Concept Formal organization
Emphasis In a formal organization, the main
emphasis is placed on authority and
functions.
Authority Formal authority is attached to a
position and it flows from top to bottom.
Existence A formal organizations exists
independently of the informal groups
that are formed within it.
Rationality A formal organization operates on logic
rather than on sentiments or emotions.
All activities follow a predetermined
course.
Depiction Formal organization can be shown in an
organization chart or a manual.
Informal organization
In an informal organization the stress is on
people and their relationships.
Informal authority is attached to a person and it
flows either downwards or horizontally.
Informal organization exists within the
framework of a formal structure.
Informal organization has little rationality
behind it. In an informal organization,
activities are influenced by emotions and
sentiments of its members.
Informal organization cannot be depicted in the
chart or manual of the enterprise.
FORMS OF ORGANISATION STRUCTURE
Line Organization
 Line Organization
Advantages of Line Organization

(i) It is very easy to establish line organization and it can be

easily understood by the employees.

(ii) If facilitates unity of command and thus conforms to the

scalar principle of organization.

(iii) There is clear-cut identification of authority and

responsibility relationship. Employees are fully aware of the
boundaries of their jobs.
Advantages of Line Organization

(iv) It ensures excellent discipline in the enterprise because every

individual knows to whom he is responsible.

(v) It facilitates prompt decision-making because there is definite

authority at every level. An executive cannot shift his decision
making to others, nor can the blame be shifted.
Disadvantages of Line Organization

(i) Makes the superiors too overloaded with work.

(ii) The executive unable to pay proper attention to each one.

(iii) It will hamper their effectiveness.

(iv) There is concentration of authority at the top.

(v) If the top executives are not capable, the enterprise will not be successful.

(vi) Line organization is not suitable to big organizations because it does not

provide specialists in the structure.

(vii) There is partially no communication from bottom upwards because of

concentration of authority at the higher levels.

(viii) If superiors take a wrong decision, it would be carried out without

anybody having the courage to point out its deficiencies.

Line and Staff Organization
Advantages of Line and Staff Organization

(i) Specialized knowledge.

(ii) Reduction of burden.

(iii) Proper weightage

(iv) Better decisions.

(v) Flexibility

(vi) Unity of command.

Demerits of Line and Staff Organization

(i) There is generally a conflict between the line and staff executives.

(ii) The allocation of duties between the line and staff executives is generally

not very clear.

(iii) Since staff men are not accountable for the results, they may not be

performing their duties well.

(iv) There is a wide difference between the orientation of the line and staff

men.

(v) Line executives’ deals with problems in a more practical manner. But staff

officials who are specialists in their fields tend to be more theoretical.

Product-Based Divisional Structure
Matrix Organizational Structure