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Principles and Practices of Management


Debidarshini Nayek Tapas Nandy Visagh Anshuman Singh

Organization: A social unit of
people, systematically structured and managed to meet a need or to pursue collective goals on a continuing basis.

All organizations have a management structure that determine relationships between functions and positions, and subdivides and delegates roles, responsibilities, and authority to carry out defined tasks

Types of Organization
Formal Organization
Well defined rules and regulation Determined objectives and policies Status symbol Messages are communicated through scalar chain Strict observance of the principle of co-ordination

Informal Organization

evolving constantly, dynamic and responsive excellent at motivation requires insider knowledge to be seen cohered by trust and reciprocity treats people as individuals

Virtual Organization
A flexible network of independent entities linked by information technology to share skills, knowledge and access to others' expertise in non-traditional ways
It has continuously changing partners, The arrangements are loose and goal oriented, Emphasizes the use of knowledge to create new products and

services, Its processes can change quickly by agreement of the partners.

Organization Structure
1. Hierarchical Organization: very effective in a relatively stable environment Often characterized by a bureaucracy with a role culture

Organization Structure
Advantages of Hierarchical Organisations Disadvantages of Hierarchical Organisations The organisation can be bureaucratic and respond slowly to changing customer needs and the market within which the organisation operates.

Authority and responsibility are clearly defined Clearly defined promotion path.

There are specialists managers and the Communication across various sections can be hierarchical environment encourages the effective poor especially horizontal communication. use of specialist managers.

Employees very loyal to their department within the organisation.

Departments can make decisions which benefit them rather than the business as a whole especially if there is Inter-departmental rivalry.

Organization Structure
2. Market Organization o Exists in more competitive environment o Focus of this type of organization lies primarily on results and productivity o Task culture dominates 3. Family Organization
o Idea that success is a consequence of individual development

o Teamwork and shared norms/values are paramount

o Lot of attention for the individual and a strong sense of

solidarity o Freedom of action for the individual employee is cherished

Organization Structure
4. Adhocracy
o Temporary character of the organization is the central

tenet o Consequence of the central position of innovation and fast adaptation to new situations o Focuses more on a combination of a task and personal culture

Organization Structure
5. Matrix Structure
o Groups employees by both function and product o Uses teams of employees to accomplish work

o Defined objective and tasks

o Ensure influence is based on knowledge rather than

rank o Undertake organization and team dvelopment

Based on Territory/Geography Emphasize on local markets and problems Based on Customer Encourages concentration on customer needs Based on Product Permits growth and diversity of product Places attention and effort on product line

Strategic business unit (SBU)

An autonomous division or organizational unit, small enough to be flexible and large enough to exercise control over most of the factors affecting its long-term performance.
o Have its own mission o Have definable groups of competitors o Prepares its own integrative plans

o Manage its resources in key areas

o Have a adequate size

Formal and legitimate right of a manager is to

make decisions and issue orders

Allocate resources to achieve organizationally

desired outcomes

Authority is distinguished by three characteristics

Authority is vested in organizational positions, not people Authority is accepted by subordinates Authority flows down the vertical hierarchy

The obligation to complete a task or perform a

Once held, Responsibility cannot be transferred Others may be assigned tasks oriented to the obligation, but overall Responsibility remains with person assigning the tasks Responsibility exists individually and at all levels

of an organization

Mechanism through which authority and

responsibility are brought into alignment

People are subject to reporting and justifying task

outcomes to those above them in the chain of command

Can be built into the organization structure



Relationship in which Superior exercises direct supervision over

its subordinates.

A superior line of authority over the subordinates. Contributes directly to the achievement of organizational


The clearer the line of authority, the clearer will be the

responsibility for decision making and more effective will be the organizational communication. decisions without consulting anyone.

A line manager directs the work to employees and makes certain

Advisory in nature. Functions to support, assist, advice, and generally

reduce some of the informational burdens the Line managers have.

Authorized to assist and advise line managers in

accomplishing these basic goals.

HR managers are generally staff managers.



Line managers are authorized to direct Staff managers are authorized to assist the work of subordinates. and advise line managers in accomplishing their basic goals. Individuals in management positions have the formal power to direct and control immediate subordinates. Practical in Nature. Includes the right to advise, recommend, and counsel in the staff specialists' area of expertise. Advisory in Nature.

The tendency to disperse decision making

authority in an organized structure.

There can not be absolute Decentralization. Fundamental aspect of delegation to the extent

that authority that is delegated is decentralized.

It requires careful selection of which decisions to

push down the organization structure and which to hold near the top.

The process involves:

Determining the results expected from a position. ii. Assigning tasks to position. iii. Delegation of authority for accomplishing these task. iv. Holding person in that position responsible for accomplishment of tasks v. Failure as unable to apply them.