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Organizing New

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6 views6 pages

Organizing New

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najaffathimak96
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ORGANIZING 2.

Principle of Specialization: - Each employee


should be allotted a function suitable to his
Organizing is a systematic arrangement of different aptitude, ability, education, training and skills.
aspects of business operations to achieve the planned 3. Principle of Co ordination: - Co ordination
objectives. It involves assembling of raw materials, should be maintained between various
tools, mobilization of capital, selection of personnel & departments.
determination of duties & responsibilities of men in 4. Principle of Authority: - There should be clear
different sections at all level of the hierarchy of the line of authority from the top to the bottom.
enterprise. 5. Principle of Responsibility: - Every executive in
Definition the organization is held responsible for the
performance of the jobs by his subordinates.
According to Koontz & O’Donnel, “organizing is the 6. Span Control: - It explains the number of
grouping of activities necessary to attain enterprise employees who can be successfully directed by
objectives & the assignment of each grouping to a a superior.
manager with authority to supervise it”. 7. Delegation of Authority: - Authority should be
delegated to lower level for doing jobs assigned
Elements of Organising
to them.
1. Division of labor: - It means pooling of efforts
Span of Control
on the basis of specialization. An organization
structure comes into existence when the total It is also called Span of Management, Span of
work is divided into activities & functions. The Supervision, Span of Authority or Span of Managerial
work may be divided according to functions like Responsibility. It refers to the number of subordinates
production, marketing, finance etc. who can be managed effectively by a superior. Most
2. Identification of the Source of the Authority: - authors are of the general opinion that at the upper
Source of authority presupposes the existence level, the span of Mgt can embrace four, five or even up
of some means of securing compliance of to eight subordinates. At the lower level, the span can
individual members of the group in contributing be larger & at the supervisor’s level, the span can go up
their efforts to the common goal. to 25 people.
3. Establishment of Relationship: - It refers to
establishing administrative & operating Factors Determining the Span of Control
relationships vertically & horizontally which is 1. Nature of the Work: - When work is simple &
necessary to plan & execute the work smoothly repetitive in nature, more subordinates can be
and effectively. Relationship within the supervised by a superior. But, if the work is not
organization means laying down rules & identical, the span has to be narrow.
procedures for team work and co operative 2. Type of Technology Used: - If mass ethnology is
endeavors. used, the span can be widened and otherwise,
Principles of Organising it should be narrow.
3. Communication Techniques: - Use of electronic
1. Principle of Unity of Objectives: - Every part of and most sophisticated communication helps to
the organization & the organization as a whole widen the span. If the organization uses
should be geared to the basic objective of the traditional methods for communication, span
enterprise. should be narrow.
4. Ability of the Manager: - Efficient managers can
manage more subordinates.
1
5. Efficiency of the Subordinates: - Trained and Managerial policy of an enterprise is usually formulated
efficient workers can perform effectively and by the Board of Directors & its implementation is
hence they require less supervision. entrusted to a chief executive. But, he alone cannot do
6. Degree of Decentralization: - If managers the entire work nor can he supervise the work of entire
clearly delegates authority, span of control may individuals. Hence, he has to pass on part of his
be wide. authority to different departmental managers & commit
7. Quality of Planning: - If there is a good them for specific tasks of supervision & operation. It is
planning, everything will be well defined. It will possible through delegation of authority.
help to supervise more subordinates
simultaneously. Elements of delegation

The process of Organisation is technically performed 1. Duty/Responsibility: - As the first step of


through: - delegation, assign the duties to the
subordinates.
 Departmentation 2. Authority: - Authority is the sum total of
 Delegation of Authority powers & rights entrusted to make possible
 Decentralization performance of the work delegated.
3. Accountability: - Accountability is the obligation
Departmentation to carry out responsibility & exercise authority
Departmentation means splitting of the working of an in terms of performance standards established.
undertaking into various units. According to Koontz & Importance/Advantages of Delegation
O’Donnel, departmentation means grouping of
activities & employees into departments. 1. It enables the superiors to devote more time to
important things like planning, organizing etc.
Process of Departmrntation 2. It gives a good opportunity to the subordinates
1. Identification of tasks or duties. to grow.
2. Analysis of details of each task 3. It enables effective managerial supervision.
3. Description of the functions. 4. It boosts up the morale of the employees.
4. Entrusting the group of functions to separate 5. It instills confidence in the employees &
specialist heads & providing them with suitable consequently brings efficiency in their
staff. performance.
5. Delineation of scope of authority & Decentralization
responsibility of department heads.
Decentralization means dispersal of powers to make
Delegation of Authority decisions among the officers & administrative officers at
Delegation means passing of authority on subordinates the subordinate level.
with a view to make them perform an assigned duty. Definition: - According to Louis A Allen, decentralization
Definition: - According to Louis A Allen, delegation is the refers to the systematic effort to delegate to the lowest
entrusting of responsibility & authority to another and levels all authority except that which can only be
creation of accountability for performance. exercised at central points.

Need of delegation of Authority

2
Difference Between Delegation & Decentralization 2. Each subordinate gets instructions & directions
from his immediate superior.
Delegation Decentralization 3. Each subordinate is accountable to his
1 Managers delegate 1 Right to take decision is immediate superior.
some of their function shared by top Mgt & 4. There exists proper channel of communication.
& authority to their other levels of Mgt.
subordinates. Advantages of Line Organisation
2 It is a process. 2 It is the end result of
delegation. 1. Simplicity: - This organization is quite simple in
3 Scope is limited 3 It has wide scope. both understanding & implementation. Every
4 It is essential for Mgt 4 It is optional. person is clear about what is expected of him.
process 2. Discipline: - Since each position is subject to
5 It is a technique of Mgt. 5 It is a philosophy of Mgt. control by its immediate superior position,
6 Full responsibility & 6 Full responsibility &
often the maintenance of discipline is easy.
accountability is not accountability is
transferred. transferred. 3. Prompt Decision: - Most of the decisions in
7 Responsibility remains 7 Responsibility is also such organizations are taken by the superiors
with the transferee. transferred. concerned. This makes the decision making
8 Delegated authority 8 It is considered as a process easier & less time consuming.
can be taken back. general policy of top 4. Orderly Communication: - Line organization
Mgt. follows scalar chain method of communication.
It implies that communication going up & down
Forms of Organization will pass through the immediate superiors.
5. Easy Supervision & Control: - It provides for
On the basis of line of authority, organization structure easy supervision & control because each
can be classified as : - subordinate is controlled by a single superior.
The superior has direct & close contact with his
 Line Organisation
subordinates which facilitate supervision &
 Functional System.
control.
 Line & Staff System.
6. Economical: - The line organization is quite
 Committee.
economical because it does not use staff
Line Organisation specialists whose appointment is costly affair
especially for small organizations.
The earliest & simplest type of organization is the line 7. Overall Development of the Managers: - Since
organization. In this, line of authority is vested vertical. the line organization does not have provision
It refers to the chain of authority or command from top for staff specialists, various managers have to
mgt down to the lower levels of the organization. combine among themselves the expertise of a
staff member. Thus the functions of managers
In this, business undertaking is divided into different
are more comprehensive which leads to the
departments. The departmental heads get authority
overall development of the managers
from the top mgt. He delegates his authority to his
concerned.
subordinates who regulate the work at lower levels.
Demerits
Features
1. Lack of Specialization: - The line organization
1. Authority flows from top to bottom.
does not offer scope for specialization. A
manager has to perform a variety of functions
3
which may not necessarily be closely 5. There is high degree of control & co ordination
interrelated. of functions because all work of one kind is
2. Absence of Conceptual Thinking: - The under one manager.
managers in this system do not find time for
conceptual thinking so essential for Demerits
organizational growth & development because 1. Responsibility for ultimate performance cannot
they remain quite busy in their day to day be fixed in functional structure because no one
managerial problems. is responsible for product cost & profit.
3. Autocratic Approach: - The line authority, being 2. Functional structure essentially generates slow
direct, demands high level of obedience on the decision making process because the problem
part of the subordinates. requiring a decision has to go through various
4. Problems of Co ordination: - Co ordination departments as all of them have something to
among various activities & the departments is say on the matter.
achieved through horizontal relationships, 3. Functional structure lacks responsiveness,
whereas the line organization stresses only necessary to cop up with new & rapidly
vertical relationships. changing work requirements.
Functional/Staff Organization 4. Absence of Unity of Command.
5. Chances for indiscipline.
Functional system implies the placement of specialists
in line positions. Functional specialists are endowed Line Organization Vs Functional Organization
with authority over the subordinates. This system is also
Line Organization Staff Organization
known as functional foremanship & was conceived by
FW Taylor. 1 No specialization 1 Functions are divided on
the basis of nature.
Functional structure is created by grouping the activities 2 Unity of command is 2 No unity of command
on the basis of functions required for the achievement possible
3 Responsibility can be 3 Responsibility cannot be
of organizational objectives.
located. fixed.
Merits of Staff Organization 4 Co ordination is easy. 4 Lack of co ordination.

1. Functional structure can result in high degree of


Line and Staff Organization
specialization because a unit or department is
concerned only with one aspect of total This system is a synthesis of benevolent attributes of
activities. line & functional type. It is prominently prevalent today.
2. Functional structure brings order & clarity in the This system implies the combined role of line & staff
organization by prescribing what one is officers in attaining the objective of the business. It
expected to do. consists of line officers who have authority to take
3. It promotes professional achievement as a decisions. Line officers are assisted by the staff officers
person is restricted to his own area of in framing & executing business policies & plans.
specialization.
4. There is economy in the use of organizational Advantages of Line & Staff organization
resources because various units of the
1. Operational efficiency is enhanced through
organization use the centralized resources of a
expertise of the staff officers.
kind.
2. Discipline & unified control are ensured through
line officers.
4
3. Each line officer is held accountable for the end 2. It does not take into consideration sentiments
results of activities connected with his & values.
department. 3. It is mechanical.
4. Line officers are not put under heavy pressure. 4. In it, co ordination is a problem.
5. Staff officers’ talent can be utilized.

Disadvantages
Informal Organization
1. Conflict of interest between line & staff officers.
2. Staff officers become ineffective since they do The term informal organization refers to those personal
not possess any authority. & social relations which arise spontaneously.
3. Since staff officers are not held responsible for According to Prof. Keith Davis, informal organization is
results, they may become passive. that network of personal & social relations which is not
4. Line officers are prone to blame the staff established or required by formal organization.
officers for the failures of the policy.
Characteristics of Informal Organization
On the basis of formation, there are two types of
organizations – Formal Organisation & Informal 1. It arises spontaneously.
Organisation. 2. It is a social structure framed to meet personal
needs.
Formal Organization 3. It acts as an agency of social control.
A formal organization is one in which position, 4. It is indefinite & structureless.
responsibility, authority & accountability of each level is Advantages of Informal Organization
clearly defined.
1. It fills the deficiencies in the formal
According to Barnard, an organization is formal when organization.
the activities of two or more persons are consciously co 2. It gives satisfaction & stability to work group.
ordinate towards a given objective. 3. It is a useful channel of communication in
Characteristics of Formal Organisation certain circumstances.
4. It fills gaps in a manager’s abilities.
1. It is consciously planned.
2. It is based on delegated authority. Disadvantages
3. Position, responsibility & accountability of each 1. It acts according to mob psychology.
level is clearly defined. 2. It tends to nullify the efforts of Mgt. to promote
4. Unity of command is usually maintained. greater productivity.
5. It provides for division of labor. 3. It spreads rumour.
Advantages Formal Organization & Informal Organization
1. Definite boundaries will reduce conflicts.
2. Overlapping of responsibility is avoided. Formal Organization Informal Organization
3. A sense of security arises from clarification of 1 It arises on account of 1 It arises on account of
task. delegation of authority. social interaction of
people.
Demerits 2 The emphasis is on 2 The emphasis is on
terms of authority & people & their
1. It acts as a damper on the spirit of initiative. functions. relationships.
5
3 It is created 3 It is spontaneous &
deliberately. natural.
4 Roles, duties & 4 No written rules &
responsibilities are well regulations.
defined.
5 Authority flows from 5 There is no such
the top to bottom. definite channel.
6 It is permanent & more 6 It is less permanent &
stable. less stable.

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