Unit-I

The Organization and its environment

Vinita Rai Singh

Assistant Professor, FMS SSTC
Definition of Organization
An organization is collection of people working together
in a coordinated and structure fashion to achieve one or
more goals
Organization role in society
 Organizations exist to allow accomplishment of work that
could not be achieved by people alone.
 As long as the goals of an organization are appropriate ,
society will allow them to exist and they can contribute to
society
Types of Organization and Structure

Types of
Organization

Formal Informal
Formal
 It means intentional structure of roles in a formally
organized enterprise.
 Formal organized structure means the structure of well
define jobs, each bearing a definite measure of authority ,
responsibility and accountability.
 In formal structure each and every person is assign the
duties, responsibility and relationship as prescribed by the
top management.
Informal
 Informal organization means a network of interpersonal
relationships that arise when people associate with each
other.
 Informal group means natural grouping of people in the
work situation.
 Informal Organization is network of personal and social
relations not established or required by the formal
organization but arising spontaneously as people
associated with one another.
Why do we need an Organizational
Structure

 All organization have a management structure that

determine the relationship between function and
positions and subdivides and delegate roles,
responsibility and authority to carry out defined task.
Organizational Structure
It is a Framework within which an Organization arranges
its lines of authorities and communications and allocates
rights and duties.
Types of organization structure
 Line organization structure
 Line and staff organization structure
 Functional organization structure
 Committee organization structure
 Matrix organization structure
 Line organization structure

 Line organization structure: Its also known as scalar,

military or vertical organization and perhaps it’s a older
form.

Pure line Organization

Departmental line organization
 Pure line Organization

Product Manager

Foreman-1 Foreman-2 Foreman-3

Workers Workers
Workers
 Departmental line organization

Product Manager

Foreman-1 Foreman-2 ( Foreman-3

( Finance) Marketing) (IT)

Workers Workers Workers

 Line organization structure
 Line authority and instruction are vertical, they flow from
top to bottom.
 The unity of command maintained in a straight line
 All person at the same level of organization are
independent of each other.
 This structure specify responsibility and authority for all
the position limiting the area of action
 Functional organization structure
 Functional structure is created by grouping the activities on the
basis of functional required for the achievement of
organizational objective.

 The whole activities of an organization are divided into various

functions.

 Each functional are is put under the charge of one executive

 For any decision, one has to consult the functional specialist

 Limited span of control is there.

 Merits
 High specialization
 Clarity in functioning
 No duplication
 Satisfactions
 Control and coordinate
Line and staff organization structure
 It refers to a pattern in which staff specialists advice line
managers to perform their duties.
 Line people will give advices
 The staff people have the right to recommend, but have no
authority to enforce their preference on other departments.
 Features
 This origin structure clearly distinguishes between two
aspects of administration viz, planning and execution
 Staff officer provides advice only to the line officers;
 The staff supplements the line members.
 Advantage
 It adds functional specialists to the pure line organization
and thus aims at combining the merits of the two.
 It bring expert knowledge to bear upon Management.
 Functional specialist provides expert advice to the
management
 It provides for the better placement and utilization of
personnel and leads to more skill development.
Conflict between line and staff
 More frequently line and staff relations become potent
source of friction, inefficiency and organizational ill
health.
 Rivalry between them very often takes the form of
animosity.
 Both line and staff have their own view points to offer
relating to this problem.
Line Point of View:
1. Staff undermine line authority
2. Staff think in vacuum
3. Staff steal credit
4. Staff fail to keep the line informed
5. Staff fail to give strong advice to line
Staff Point of View:
1. Lack of authority to command line subodinate.
2. Resistance to change by the line
3. Inability to make proper use of staff
 How to minimize
 Line and staff should understand the proper position in the
organization.
 Line should be educated and encourage to use staff
effectively
 Staff should render complete advice on the problem
concerned staff should consistently strive to acquire and
increase its proficiency.
Effectiveness and Efficiency
 Effectiveness: The extent to which organization achieve
its goals or goal

 Efficiency :Level of resource used to achieve the goal.

Doing things right.
 Organizational Effectiveness

Organizational effectiveness is the concept of how effective

an organization is an achieving the outcomes the
organization intend to produce .
Approaches to organizational
effectiveness
Goal Attainment Approach
System Approach
Strategic Constituencies Approach
Competing Value Manager
 Criteria
 Return on Investment
 Market Share
 New product innovation
 Job Security