ORGANISING

1 Unit – 2
Prof. Seema Prashar
 MEANING OF ORGANIZATION

08/24/2021
 In context of management, it refers to formal arrangement of
work among members of the institution with clear identification
of authority and responsibility, so that organizational goals are
achieved optimally.

2
ORGANISING:

08/24/2021
 As a structure:
Organising is a set of relationships that defines
vertical and horizontal relationship amongst people
who are assigned various tasks and duties.

3
ORGANISING:
 As a process:

08/24/2021
Organising defines relationships amongst people in such a
way that organisational goals are achieved efficiently. It
involves:
-Identification of work
-Grouping of work into smaller group
-Assigning work to each individual at every level in every
department
-Defining its authority and responsibility
-Establishing relationships amongst people to make them
work towards the organisational goal in an integrated and
coordinated manner. 4
ORGANISING:

08/24/2021
 Organising as a process consists of two processes:

 Differentiation : division of work into smaller units and

its assignment to various individuals according to their
skills and abilities.

 Integration : coordination of different activities towards

a common goal. It provides unity of action towards
organisational activities.
5
 PROCESS OF ORGANISING
 Determination of objectives : every organisation is established for some

08/24/2021
objective or goal , various tasks or activities are determined for achieving this
goal. Determining the total workload of the organisation is the first step in the
process of organising.

 Division of activities : all the activities are divided into smaller units and are
assigned to the members. Division of work leads to specialisation which
offers certain benefits like- greater output, increase in efficiency, and
facilitating the training of less skilled workers.

 Grouping of activities : after assigning the work, similar activities are

grouped in a department , eg. Finance , sales, purchase etc.. Grouping of
activities into departments is called Departmentalisation and each department
is governed by a set of rules, rules and procedures.
6
CONTD..
 Defining authority and responsibility :each dept. is headed by a person
responsible for its effective functioning. Departmental head delegates

08/24/2021
responsibility and authority to members of his dept. This creates a structure
of relationship where every individual knows his superiors and sub-
ordinates and their reporting relationships.

 Coordination of activities : handling conflicts that occur between the

different departments and defining a healthy relationship amongst various
departments and people working at different positions is the major concern
that comes under coordination.

 Reviewing and re-organising : constant appraisal and re-organising is an

integral part of organising. Changes do take place at different levels and
times, organising that is an art.
7
IMPORTANCE OF ORGANISING
 Facilitates administration

08/24/2021
 Growth and diversification

 Creates synergies

 Establishes accountability

 Optimum use of technology

 Facilitates communication

 Facilitates creativity

 Facilitates team work and coordination

 Improves interpersonal relationship

 Facilitates control

 Increase in output
8
 Optimum allocation of resources
WHAT DOES AN ORGANISATION CHART
SHOW

08/24/2021
 Division of work
 Chain of command

 People who perform the activity

 The levels of management

 The basis of division

9
ORGANISATION CHARTS

08/24/2021
To enable people have a clear understanding of the various
positions , departments, their sub-units and relationship amongst
different departments, visual maps are used.

This visual representation of organisation structure is known as

organisation chart. It clearly defines the authority, responsibility
and accountability structure in the organisation.

10
SPAN OF CONTROL
The number of workers that a manager can effectively

08/24/2021
supervise is known as span of management or span of control.
Span of control is situational in nature. Depending on the
number of employees that can be supervised by managers, there
can be two types of structures in an organisation:
 Tall structures

 Flat structures

11
ADVANTAGES OF TALL STRUCTURES

08/24/2021
 Managers can closely supervise activities of their employees.
 There can be better communication among superiors and
subordinates.
 It promotes personal relationship amongst manager and sub-
ordinates.
 Control on subordinate can be more in a narrow span.

12
LIMITATIONS OF TALL STRUCTURES
 Too many levels complicate the coordination.

08/24/2021
 More managers are required to supervise the workers that
increases the expenditure.
 Gap is more between top management and workers.

 Decision making becomes difficult due to too many levels.

 Employees work under strict control of superiors, this restricts

their creativity and innovative ability.
 Strict control leads to low morale and low job satisfaction.

13
ADVANTAGES OF FLAT STRUCTURE

08/24/2021
 Less number of managers are required , therefore low
cost is incurred on their salaries.
 Decision making process is effective as superiors
delegate authority to sub ordinates.
 There is better system of communication as the number
of levels is less.
 It promotes innovative abilities of the top management.

14
LIMITATIONS OF FLAT STRUCTURE

08/24/2021
 Superiors cannot supervise the activities of subordinates.
 Managers may find it difficult to coordinate the activities of
their subordinates.

15
FACTORS EFFECTING SPAN OF MANAGEMENT

08/24/2021
 Competence of managers
 Nature of work

 Assistance to managers

 Education of subordinates

 Clear plans and policies

 Organisational levels

 Clearly defined authority

 System of control

 Financial factors

16
PRINCIPLES OF ORGANISING

Principles are the guidelines that promote managerial thinking

and action. Principles of organising help the managers in

08/24/2021
carrying out the function of organising effectively.

 Principle of unity of objective

 Principle of organisational efficiency

 Principle of division of labour

 Principle of authority – responsibility

 Principle of delegation

 Principle of scalar chain

 Principle of span of control

17
CONTD…

08/24/2021
 Principle of unity of command
 Principle of balance

 Principle of flexibility

 Principle of continuity

 Principle of exception

 Principle of simplicity

 Principle of departmentalisation

 Principle of decentralisation

 Principle of direction

 Principle of cooperation
18
 CASE STUDY

08/24/2021
A company has four major divisions- production, personal, finance and
marketing. Each division is headed by divisional manager designated as
general manager. Each general manager reports to managing director who,
in turn, reports to the CEO of the company. The company has spread its
offices in different geographical areas- South, East, North and West. The
managers of Southern and Eastern regions have further diversified their
operations into consumer and industrial use of its product while the other
two regions meet only industrial demand for their products.

Q1. Draw the organisation chart of this company. What is the basis of
preparing the chart?

Q2. What is the objective of organisation chart? Pg 12.9

19
FORMAL AND INFORMAL
ORGANISATIONS
Formal and Informal organisations are two forms of Organisation structure.

08/24/2021
 Formal organisation is a well- defined structure of authority and responsibility
that defines delegation of authority and relationships amongst various
organisational members. Most of the decisions in a formal organisation are based
on pre determined policies.
Formal organisation is deliberately designed structure with formal authority,
responsibility, rules, regulations and channels of communication; to avoid taking time
consuming decisions , to handle conflicting situations and exercise control over the
activities of subordinates.
 Informal organisation has always existed with formal organisations, they arise
due to inevitable need of personal and social needs. People of different levels and
departments interact with each other , discuss their common interests and form
groups to promote their goals. Informal organisation is an important means to
satiate the social needs.

20
FEATURES OF FORMAL ORGANISATION

08/24/2021
 Deliberately created structure
 Job-oriented

 Division of work

 Departmentation

 Formal authority

 Delegation

 Coordination

 Based on principle of organising

21
BENEFITS OF FORMAL ORGANISATION

08/24/2021
 Clearly defines objectives and authority of the organisation.
 Optimum utilisation of scarce resources
 Clear division of work
 Hierarchical structure helps in overlapping of activities.
 Rate of attrition is reduced therefore, rate of absentiesm and turnover
remains low.
 Attempts to integrate formal goals with the individual goals.

22
LIMITATIONS OF FORMAL
ORGANISATIONS

08/24/2021
 Loss of initiative: due to too much of emphasis on rules
and formal structure , organisation bears loss of initiative
and innovative abilities.

 Unsatisfied social needs: due to segregation the social

needs remain unquenched, as the workers are related to
each other through a formal chain of command.

23
FEATURES OF INFORMAL
ORGANISATION

08/24/2021
 Unplanned structure
 Fulfillment of social needs

 No formal structure

 Informal leaders

 Informal communication system

 No rule and regulation

 No fixed tenure

24
BENEFITS OF INFORMAL ORGANISATIONS

08/24/2021
 Promotes cultural and social values
 Relief to top managers
 Supplement to managers’ capacities
 Social satisfaction and security
 Communication
 Better relationships
 Solve work related problems
 Promotes creativity
 Self control
 Restraint on manager’s discretion
 Social satisfaction
 Quick feedback to managers
25
LIMITATIONS OF INFORMAL
ORGANISATION

08/24/2021
 Conformity
 Attitude of leaders

 Role conflict

 Rumour/gossip

 Resistance to change

 Conflicting goals

26
GROUPS

08/24/2021
A group refers to “ two or more people who interact with
one another, are psychologically aware of one another,
perceive themselves to be the member of the group, and
work towards a common goal”.

27
FEATURES OF A GROUP

08/24/2021
 Interaction
 Influence

 Mutuality

 Informal leadership

 Role structure

 Group norms

 Group cohesiveness

28
TYPES OF GROUPS

08/24/2021
 Formal groups : deliberately created

 Informal groups : spontaneously grow out of interest.

29
STAGES OF GROUP FORMATION

08/24/2021
 Forming
 Storming

 Norming

 Performing

30
GROUP COHESIVENESS

08/24/2021
 Attraction of group members towards each other in terms
of their loyalty and commitment to group goals.

 It is the degree to which members are attracted to a

group, are motivated to remain in a group, and are
mutually influenced by one another”.

31
TYPES OF ORGANISATIONS

08/24/2021
“organisation structure is the formal pattern of interactions
and coordination designed by management to link the tasks of
individuals and groups in achieving organisational goals”.

Major two types of organisational structures are:

1. Mechanistic /classical organistaion structure
2. Organic/ Behavioral organisation structure

32
 Narrow
NarrowSpan
SpanDrawbacks:
Drawbacks:
• •Expense
Expenseof ofadditional
additional
layers of management.
layers of management.
Concept:
Concept: • •Increased
Increasedcomplexity
complexityof of
Wider
Widerspans
spansof vertical
management
of verticalcommunication.
communication.
managementincrease
increase • •Encouragement
organizational
organizationalefficiency.
efficiency. Encouragementof ofoverly
overly
The tight
tightsupervision
supervisionandand
Thewider
wideror
orlarger
largerthethe discouragement
span, the more efficient
span, the more efficient discouragementof of
the employee autonomy.
employee autonomy.
theorganization.
organization.

drsharma111280@gmail.com 15–33
drsharma111280@gmail.com 15–34
WHY DO STRUCTURES DIFFER?

08/24/2021
WHY DO STRUCTURES DIFFER?

08/24/2021
MECHANISTIC VERSUS ORGANIC MODELS

08/24/2021
 DIFFERENTIATION BETWEEN MECHANISTIC AND ORGANIC
ORGANISATIONAL STRUCTURE
Mechanistic O.S.
 Its pyramid shaped, with authority
centralised at the top.
 It follows hierarchy of command.
 It emphases on narrow span of control.
 There is intense division of labour and
work is divided into specialised tasks.
 Individuals consider their goals as different
from organisational goals.
 Tasks are performed according to people’s
position in the hierarchy. People at lower
level perform simpler tasks.
 Tasks are performed according to
discretions and desires of managers at the
top.
Organic O.S.
 Its flat shaped, with authority decentralised
to lower levels of management.
 It does not follow hierarchy of command.
 It empasises on wide span of control.
 The work is divided into general tasks and
there is little or no specialisation.
 There is synchronisation of individual goals
with organisational goals.
 Tasks are assigned to people according to
their capabilities and skills and not
hierachical positions.
 Tasks are flexible;they keep changing
according to changes in situations. They are
performed through constant interaction of
38
people.
CONTD…
Mechanistic O.S.
 Communication is hierarchical :
orders, instructions and command
flow from top to bottom.
 It expects subordinates to obey
and be loyal to superiors and the
organisation.
 Control is exercised from the top.
 It is an appriopriate form of
structure for organisations
operating in a stable environment.
Organic O.S
08/24/2021
 Communication is a network. It
flows in all directions. It takes the
form of suggestions , advises and
information rather than orders.
 It expects commitment to the
organisational goals and not
obedience from subordinates.
 There is self control.
 It is more suitable for
organisations operating in a
dynamic environment.
39
 FACTORS EFFECTING ORGANISATIONAL
STRUCTURE
Factors Mechanistic O.S.
 Strategy: stable , do not diversify in new directions.
 Technology: mass production technology.
 People : working people are less skilled and less
experienced in terms of different tasks.
 Tasks : low task characteristics.
 Decisions : centralised decision making.
 Informal groups: informal relationships are not
recognised.
 Size: large.
 Environment: stable environment.
 Managerial perception: managers have low
opinion about subordinates.
Organic O.S.
08/24/2021
 Dynamic, diversify their operations.
 Continuous/unit production technology.
 People are skilled and experienced.
 High task characteristics.
 De-centralised decision making.
 Informal relations are recognised.
 Small.
 Changing and dynamic environment.
 Managers have high opinion about
subordinates.
40
 Organization
Strategy
Size

Why Do

drsharma111280@gmail.com
Structures
Differ?
Technology Environment

15–
41
ORGANIZATION STRUCTURE: ITS
DETERMINANTS AND OUTCOMES

08/24/2021
WHY DO STRUCTURES DIFFER? –
STRATEGY

08/24/2021
THE STRATEGY-STRUCTURE
RELATIONSHIP

08/24/2021
WHY DO STRUCTURES DIFFER? – TECHNOLOGY

Characteristics
Characteristicsof ofroutineness
routineness(standardized
(standardizedoror
customized)
customized)ininactivities:
activities:
• •Routine technologies are associated with tall,
Routine technologies are associated with tall,
departmentalized
departmentalizedstructures
structuresand
andformalization
formalizationinin
organizations.
organizations.
• •Routine technologies lead to centralization when
Routine technologies lead to centralization when
formalization
formalizationisislow.
low.
• •Nonroutine technologies are associated with delegated
Nonroutine technologies are associated with delegated15–
decision
decisionauthority.
authority. 45
WHY DO STRUCTURES DIFFER? –
ENVIRONMENT

08/24/2021
Key
KeyDimensions:
Dimensions:
• • Capacity: the degree
Capacity: the degree
to
towhich
whichan
an
environment
environmentcan
can
support
supportgrowth.
growth.
• • Volatility: the degree
Volatility: the degree
of
ofinstability
instabilityininthe
the
environment.
environment.
• • Complexity: the
Complexity: the
degree
degreeof
of
heterogeneity
heterogeneityand
and
concentration
concentrationamong
among
environmental
environmental
elements.
elements.
 ORGANISATION THEORIES
Ever since people started working in groups, they faced the problem of
organisation. Organising has become more complex in modern society.

08/24/2021
The theories of of organisation can be classified into two broad categories:- the
classical theory that defines relationship between different job activities and the
modern theory that emphasises on job structure along with human relationships.
1. Classical theory
 Line organisation

 Line and staff organisation

 Functional organisation
2. Modern theory
 Project organisation

 Matrix organisation
 Committee organisation
 Networking organisation 47
POWER , AUTHORITY AND
RESPONSIBILITY
 The right of a person to give instructions to subordinates is
known as authority . Authority is, thus the power enjoyed

08/24/2021
by a person to influence his subordinates, to direct them to
work. It is derived by the virtue of position he holds in the
organisation.
 Power is the capacity of A to influence the behaviour of B ,
so that B behaves as desired by A.
 Responsibility is the task entrusted by the manager to his
subordinates. Which means moral commitment to do the
work assigned. Its an obligation of an individual to carry out
assigned activities to the best of his or her ability.

48
 DEPARTMENTALISATION
 Departmentalisation is the grouping of jobs, processes and resources into logical

08/24/2021
units and sub-units to perform some organisational tasks. There are two basis od
departmentalisation :
 1. Functional departmentation : where departments are created along activities
and functions. The grouping of jobs and resources within the company in such a
way that employees who perform the same or similar activities are in same
department. Simplest, logical and most widely accepted.

 2. Divisional departmentation : are created on the basis of smaller divisions

where each division has its own functional activities.

49
 DELEGATION, DECENTRALISATION AND CO
ORDINATION
 Delegation is a process that a manager uses in distributing

08/24/2021
work to the sub ordinates.
 Centralisation and Decentralisation refer to the extent to
which authority and responsibility are passed to people at
lower level. Centralisation is when authority is retained at the
top where as opposite to it decentralisation is passing the
authority to make decisions to the lowest possible level in the
organisational hierarchy.
 Coordination is the process of integrating the objectives and
activities of the separate units(departments or functional
areas)of an organisation in order to achieve organisational
goals efficiently.
50