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Importance of Organizing Function

•organizing • Advantage of Specialization: Organizing helps in the classification of jobs systematically amongst
the workforce, which helps in the reduction of workload, as well as improved productivity. This is
because the organization will get the benefit of specialization wherein workers will perform specific
Organizing is the function of management which follows planning. It is a work on a regular basis, according to their competency.
function in which the synchronization and combination of human, physical and • Describes work relationships: The definition of work relationships describes the flow of
financial resources takes place. All the three resources are important to get results. communication and determine the superior-subordinate relationship. This removes confusion and
chaos, in getting orders and instructions.
Therefore, organizational function helps in achievement of results which in fact is
important for the functioning of a concern. • Effective utilization of resources: Organizing function ensures the best possible utilization of
resources whether it is human, material, financial or technical. This is because jobs are assigned to the
According to Chester Barnard, “Organizing is a function by which the concern is employees which avoid overlapping and duplication of work.
able to define the role positions, the jobs related and the co-ordination between •
authority and responsibility. Hence, a manager always has to organize in order to Adaptation to change: Organizing process helps the organization to survive and
get results. It involves deciding the ways and means with which the plans can be adapt the changes, by making substantial changes in the strategies, hierarchy,
implemented. relationships, etc.
Development of personnel: Organising encourages creativity in executives.
It entails defining jobs and working relationships, assigning different tasks
associated with the plans, arranging and allocating resources, design a structure Delegation of authority reduce their workload and they get time to identify new
which distinguishes duties, responsibilities and authorities, scheduling activities, methods to perform the work. It also enables them to explore new areas for their
in order to maintain smoothness and effectiveness in operations. growth and development.

Process of Organizing
Characteristics of Organizing
• Division of Labour: Work is assigned to the employee who is specialised in 1. Identification and division of work: Organizing process begins with
that work. identifying the work and dividing them as per the plans. Basically, the work is
classified into different manageable activities, to avoid redundancy, and
• Coordination: Different members of the organization are given different tasks sharing of work is encouraged.
to perform when all the tasks are put together logically and sequentially, it
results in the objectives, so coordination is required. 2. Departmentalization: After classifying the work into different activities,
the activities having a similar nature are grouped together. This process is
• Objectives: Objectives need to be specifically defined. called as departmentalization which facilitates specialization and forms the
• Authority-Responsibility Structure: For an effective authority responsibility basis for creating departments.
structure, the position of each manager and executive is specified, as per the 3. Assignment of the task: After the formation of departments, employees are
degree of the authority and responsibility assigned to them, while performing placed in different departments under a manager, called as a departmental
the duties. manager. Thereafter, employees are assigned the jobs as per their skills,
• Communication: The techniques, flow and importance of communication qualifications and competencies. For the effectiveness of the performance, the
must be known to all the members. manager must ensure that there is a proper match between the job and the
incumbent, i.e. the right person has to be placed at the right job.

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4. Establishment of organizational hierarchy: Deployment of work is

not all, the employees must be aware of whom they have to report and Principles of Organizing
who can give them orders. Hence, work relationships need to be 1. Work Specialization
established clearly, which helps in the creation of a hierarchical Also called division of labor, work specialization is the degree to which
structure of the organization. organizational tasks are divided into separate jobs. Each employee is trained to
5. Provision of resources to the members: Arrangement and perform specific tasks related to their specialized function.
deployment of resources such as money, materials, supplies, and Specialization is extensive, for example running a particular machine in a factory
machine, etc. which are important to carry out day to day operations of assembly line. The groups are structured based on similar skills. Activities or jobs
tend to be small, but workers can perform them efficiently as they are specialized
the organization. in it.
6. Coordination of efforts and scheduling of activities: The final step In spite of the obvious benefits of specialization, many organizations are moving
to this process is the coordination of efforts and scheduling the activities away from this principle as too much specialization isolates employees and
in a logical and systematic manner so that the common objectives can be narrows down their skills to perform routine tasks.
achieved effectively. Also it makes the organization people dependent. Hence organizations are creating
and expanding job processes to reduce dependency on particular skills in
employees and are facilitating job rotation among them.

2. Authority
• Authority is the legitimate power assigned to a manager to make decisions, issue • It is an effective business tool to maintain order and assign
orders, and allocate resources on behalf of the organization to achieve accountability even in the most casual working environments. A chain
organizational objectives. of command is established so that everyone knows whom they should
• Authority is within the framework of the organization structure and is an report to and what responsibilities are expected at their level. A chain
essential part of the manager’s job role. Authority follows a top-down hierarchy. of command enforces responsibility and accountability.
Roles or positions at the top of the hierarchy are vested with more formal
authority than are positions at the bottom. • Unity of command states that an employee should have one and only
one manager or supervisor or reporting authority to whom he is directly
• The extent and level of authority is defined by the job role of the manager.
Subordinates comply with the manager’s authority as it is a formal and
accountable to. This is done to ensure that the employee does not
legitimate right to issue orders. receive conflicting demands or priorities from several supervisors at
once, placing him in a confused situation.
3. Chain of Command • However, there are exceptions to the chain of command under special
circumstances for specific tasks if required. But for the most part
• The chain of command is an important concept to build a robust organization
structure. It is the unbroken line of authority that ultimately links each individual organizations to a large extent should adhere to this principle for
with the top organizational position through a managerial position at each effective outcomes.
successive layer in between.

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Scalar principle states that there should exist a clear line of authority from Authority is said to be delegated when discretion is vested in a
the position of ultimate authority at the top to every individual in the subordinate by a superior. Delegation is the downward transfer of
organization, linking all the managers at all the levels. It involves a concept authority from a manager to a subordinate. Superiors or managers
called a gang plank using which a subordinate may contact a superior or his cannot delegate authority they do not have, however, high they may be
superior in case of an emergency, defying the hierarchy of control. in the organizational hierarchy.
However, the immediate superiors must be informed about the matter.
Delegation as a process involves establishment of expected outcomes,
4. Delegation task assignment, delegation of authority for accomplishing these tasks,
and exaction of responsibility for their accomplishment. Delegation
Another important concept closely related to authority is delegation. It is the
practice of turning over work-related tasks and/or authority to employees or leads to empowerment, as employees have the freedom to contribute
subordinates. Without delegation, managers do all the work themselves and ideas and do their jobs in the best possible ways.
underutilize their workers. The ability to delegate is crucial to managerial
success.

5. Span of Control Formal and Informal Organisation:

• Span of control (also referred to as Span of Management) refers to the FORMAL ORGANISATION
number of employees who report to one manager. It is the number of direct
reportees that a manager has and whose results he is accountable for. Span of Formal Organisation refers to the organization . structure that is designed
control is critical in understanding organizational design and the group by the management to accomplish organizational objectives. It specifies
dynamics operating within an organization. clearly the boundaries of authority & responsibility and there is a
systematic coordination among the various activities to achieve
• Span of control may change from one department to another within the same organizational goals.
organization.
INFORMAL ORGANISATION
• The span may be wide or narrow. A wide span of control exists when a
manager has a large number of employees reporting to him. Such a structure An informal organization is that organization which is not established
provides more autonomy. A narrow span of control exists when the number deliberately but comes into existence because of common interests, tastes
of direct reportees that a manager has is small. Narrow spans allow managers and religious and communal relations. The main purpose of this
to have more time with direct reports, and they tend to spark professional organization, structure is getting psychological satisfaction. For example,
growth and advancement. employees with similar interest in sports, films, religion etc. may form their
own informal groups.

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Difference between Formal and Informal Organisation: S/N FORMAL ORGANIZATION INFORMAL ORGANIZATION

S/N FORMAL ORGANIZATION INFORMAL ORGANIZATION 6. A formal organization is stable, i.e., it An informal organization is spontaneously made and is
continues for a long time not stable.
1. A formal organization is defined as an organization On the other hand, an informal organization is
that has set rules and regulations to be followed defined as an organization that focuses on building 7. Formal organization follows official An informal organization has a grapevine
by the employees. social relationships and networks. communication. communication.
2. The main aim of a formal organization is to The main purpose of the informal organization is
achieve the longterm and short-term goals of the to build social networks and create a positive work
organization. environment. 8. The employees are controlled by rules, The employees are controlled by values, morals, norms,
regulations, and protocols. and beliefs.
3. The formal organization has a hierarchical An informal organization does not have a
structure. hierarchical structure.
9. There are different levels of authority in a All the members in the informal organization are
formal organization. The employees are equal.
bounded by the hierarchical structure
4. The formal organization is created by the Informal organization is created spontaneously by
management. the members. The organization is made based on
personal interactions
10. The size of the formal organization is large The size of an informal organization is small.
5. Achievement of goal is the priority of a formal Fulfilling the psychological and social needs of the
organization. employees is the priority of the informal
organization

Line Organization
Merits of Line Organization
Line organization is the most oldest and simplest method of administrative
organization. • Simplest- It is the most simple and oldest method of administration.
According to this type of organization, the authority flows from top to bottom in a • Unity of Command- In these organizations, superior-subordinate relationship is
concern. The line of command is carried out from top to bottom. This is the reason
for calling this organization as scalar organization which means scalar chain of maintained and scalar chain of command flows from top to bottom.
command is a part and parcel of this type of administrative organization. • Better discipline- The control is unified and concentrates on one person and
In this type of organization, the line of command flows on an even basis without therefore, he can independently make decisions of his own. Unified control
any gaps in communication and co-ordination taking place. ensures better discipline.
Features of Line Organization • Fixed responsibility- In this type of organization, every line executive has got
fixed authority, power and fixed responsibility attached to every authority.
• It is the most simplest form of organization.
• It is the most simplest form top to bottom. • Flexibility- There is a co-ordination between the top most authority and bottom
line authority. Since the authority relationships are clear, line officials are
• Specialized and supportive services do not take place in these organization.
independent and can flexibly take the decision. This flexibility gives satisfaction
• Unified control by the line officers can be maintained since they can of line executives.
independently take decisions in their areas and spheres.
• This kind of organization always helps in bringing efficiency in communication • Prompt decision- Due to the factors of fixed responsibility and unity of
and bringing stability to a concern. command, the officials can take prompt decision.

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Demerits of Line Organization Line and Staff Organization

• Over reliance- The line executive’s decisions are implemented to the bottom. Line and staff organization is a modification of line organization and it is more
This results in over-relying on the line officials. complex than line organization. According to this administrative organization,
• Lack of specialization- A line organization flows in a scalar chain from top to specialized and supportive activities are attached to the line of command by
bottom and there is no scope for specialized functions. For example, expert appointing staff supervisors and staff specialists who are attached to the line
advices whatever decisions are taken by line managers are implemented in the authority. The power of command always remains with the line executives and
same way. staff supervisors guide, advice and council the line executives. Personal Secretary
to the Managing Director is a staff official.
• Inadequate communication- The policies and strategies which are framed by
the top authority are carried out in the same way. This leaves no scope for
communication from the other end. The complaints and suggestions of lower MANAGING DIRECTOR
authority are not communicated back to the top authority. So there is one way
communication. ↓ ↓ ↓
• Lack of Co-ordination- Whatever decisions are taken by the line officials, in Production Manager Marketing Manager Finance Manager
certain situations wrong decisions, are carried down and implemented in the ↓ ↓ ↓
same way. Therefore, the degree of effective co-ordination is less. Plant Supervisor Market Supervisor Chief Assisstant
• Authority leadership- The line officials have tendency to misuse their authority ↓ ↓ ↓
positions. This leads to autocratic leadership and monopoly in the concern.
Foreman Salesman Accountant

Features of Line and Staff Organization Merits of Line and Staff Organization
1.There are two types of staff : 1.Relief to line of executives- In a line and staff organization, the advice and
Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager. counseling which is provided to the line executives divides the work between the
Staff Supervisor- Operation Control Manager, Quality Controller, PRO two.
The line executive can concentrate on the execution of plans and they get relieved
2. Line and Staff Organization is a compromise of line organization. It is more of dividing their attention to many areas.
complex than line concern.
2.Expert advice- The line and staff organization facilitates expert advice to the
3. Division of work and specialization takes place in line and staff organization. line executive at the time of need.
4.The whole organization is divided into different functional areas to which staff The planning and investigation which is related to different matters can be done
specialists are attached. by the staff specialist and line officers can concentrate on execution of plans.
5. Efficiency can be achieved through the features of specialization. 3.Benefit of Specialization- Line and staff through division of whole concern into
6. There are two lines of authority which flow at one time in a concern : two types of authority divides the enterprise into parts and functional areas. This
way every officer or official can concentrate in its own area.
a. Line Authority 4.Better co-ordination- Line and staff organization through specialization is able
b. Staff Authority to provide better decision making and concentration remains in few hands. This
9.Power of command remains with the line executive and staff serves only as feature helps in bringing co-ordination in work as every official is concentrating in
their own area.
counselors.

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5.Benefits of Research and Development- Through the advice of Demerits of Line and Staff Organization
specialized staff, the line executives, the line executives get time to execute 1. Lack of understanding- In a line and staff organization, there are two authority
plans by taking productive decisions which are helpful for a concern. This flowing at one time. This results in the confusion between the two. As a result, the workers
are not able to understand as to who is their commanding authority. Hence the problem of
gives a wide scope to the line executive to bring innovations and go for understanding can be a hurdle in effective running.
research work in those areas. This is possible due to the presence of staff 2. Lack of sound advice- The line official get used to the expertise advice of the staff.
specialists. At times the staff specialist also provide wrong decisions which the line executive have to
6.Training- Due to the presence of staff specialists and their expert advice consider. This can affect the efficient running of the enterprise.
serves as ground for training to line officials. 3. Line and staff conflicts- Line and staff are two authorities which are flowing at the
same time. The factors of designations, status influence sentiments which are related to
Line executives can give due concentration to their decision making. This in their relation, can pose a distress on the minds of the employees. This leads to minimizing
itself is a training ground for them. of co-ordination which hampers a concern’s working.
4. Costly- In line and staff concern, the concerns have to maintain the high remuneration
7.Balanced decisions- The factor of specialization which is achieved by line of staff specialist. This proves to be costly for a concern with limited finance.
staff helps in bringing co-ordination. This relationship automatically ends up 5. Assumption of authority- The power of concern is with the line official but the staff
the line official to take better and balanced decision. dislikes it as they are the one more in mental work.
8.Unity of action- Unity of action is a result of unified control. Control and 6.Staff steals the show- In a line and staff concern, the higher returns are considered to be
its effectivity take place when co-ordination is present in the concern. In the a product of staff advice and counseling. The line officials feel dissatisfied and a feeling of
distress enters a concern. The satisfaction of line officials is very important for effective
line and staff authority all the officials have got independence to make results.
decisions. This serves as effective control in the whole enterprise.

Functional Organization Merits of Functional Organization

Functional organization has been divided to put the specialists in the top position throughout the enterprise. • Specialization- Better division of labour takes place which results in specialization of function and it’s
This is an organization in which we can define as a system in which functional department are created to consequent benefit.
deal with the problems of business at various levels. • Effective Control- Management control is simplified as the mental functions are separated from manual
functions. Checks and balances keep the authority within certain limits. Specialists may be asked to judge
Functional authority remains confined to functional guidance to different departments. This helps in the performance of various sections.
maintaining quality and uniformity of performance of different functions throughout the enterprise. • Efficiency- Greater efficiency is achieved because of every function performing a limited number of
functions.
The concept of Functional organization was suggested by F.W. Taylor who recommended the
appointment of specialists at important positions. • Economy- Specialization compiled with standardization facilitates maximum production and economical
costs.
For example, the functional head and Marketing Director directs the subordinates throughout the • Expansion- Expert knowledge of functional manager facilitates better control and supervision
organization in his particular area. This means that subordinates receives orders from several specialists,
managers working above them.
Demerits of Functional Organization
Features of Functional Organization 1.Confusion- The functional system is quite complicated to put into operation, especially
• The entire organizational activities are divided into specific functions such as operations, finance, marketing and when it is carried out at low levels. Therefore, co-ordination becomes difficult.
personal relations. 2.Lack of Co-ordination- Disciplinary control becomes weak as a worker is commanded not
by one person but a large number of people. Thus, there is no unity of command.
• Complex form of administrative organization compared to the other two.
3.Difficulty in fixing responsibility- Because of multiple authority, it is difficult to fix
• Three authorities exist- Line, staff and function. responsibility.
• Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions 4.Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not
agree on certain issues.
regarding the function whenever the function is performed throughout the enterprise.
5.Costly- Maintenance of specialist’s staff of the highest order is expensive for a concern
• Principle of unity of command does not apply to such organization as it is present in line organization