Faculty of Business, Hospitality,

Accounting & Finance

Principles of Management
MGT 1023

If its important to you, you will find a way. If its not, you’ll find an excuse.
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 Chapter 4

Organizing

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 Organising
What is organizing?
- “organizing in a general sense means
systematic arrangment of activities”
- Organizing follows “planning”

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 Definition
ALLEN defines

“Organizing “ is the process of identifying

and grouping the work to be performed
defining and delegating responsibility and
authority and establishing relationship for the
purposeof enabling people to work most
effectively together in accomplishing
objectives”.

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 THEO HAIMANN

“ Organising is the process

of defining and grouping the
activities of the entire
process and establishing
the authority and
relationship
among them”
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 ORGANISING IN MANAGEMENT

Organising in
management refers to
the relationship
between people,work and
resources used to
achieve the common
objectives
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 O R G AN I Z AT I O N STRUCTURE

A Design of Organization
Movement or Blueprint,

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 DEFINITION

ORGANIZATION STRUCTURE
EXPLAINS THE POSITION
AND OFFICIAL
RELATIONSHIP BETWEEN
VARIOUS INDIVIDUALS IN
THE ORGANIZATION.
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 ORGANISATION CHART

It is a diagrammatic
representation of
organization
structure
show names designation
functions of personnel in
a organization.
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 NATURE OF ORGANISING
Learning objectives
Identifying the task
Grouping the activities
Delegation of authority
Coordination

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 PURPOSE O F O R G AN I S I N G
Aids to management
It facilitates
growth,creativity It ensures
optimum use
resources
Establishes relationship
among individual groups
Clusters job into
units Coordinates.
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 F O R M AL AN D I N F O R M AL GROUPS

FORMAL GROUP- A
formal group is a
structured
group,which has a plan
and
positions each job’s
objective and functions
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 CHARACTERISTICS OF FORMAL GROUP

Formal means
something systematic.
It is in an official
structure
Itprovidesofficial
relationship between
individual.
It is objective oriented
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 ADVANTAGES:

The line of communication is

very clear
It is accuracy of the information.
systematic
It is objective oriented.
It has a heirarchial pattern

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 I N F O R M AL GROUPS
It is the outcome of personal
,social and friendly relationship
and it
develops spontaneously .
It arises naturally on the basis of
friendship or some common
ot be
interest whichmay or related may n
with work
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 DEFINITION

According to Chester
Bernard “informal
organisation is
joint personal activity with
our conscious common
purpose though contributing
to common purpose”
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 Characteristics of Informal Group
• Created by the member of the
organization for their social and
psychological satisfaction
• Informal groups are not stable
and permanent
• Greater in number compared to
formal groups, free interaction

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 It is concisiously deliberate in It arises
nature spontaneously
It is based on delegation of It arises on account of social
authority interaction or it arises from account of
personal factors like friendship

Rules responsibilities are written Just unwritten rules and

and clearly defined regulations

It shown in organization It has no place in organization

chart chart
It provides a definite It is structure less because it is
structure social
Formal authority is attaches to a Informal authority attaches to a
position person out of social interactions

It flows downwards ( top to lower It flows

level) upwards
It is permanent and It is temporaryand
stable unstable
It is deliberately
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 TYPES OF
ORGANIZATION
STRUCTURE
LINE STRUCTURE
LINE AND STAFF
STRUCTURE FUNCTIONAL
STRUCTURE
COMMITTEE
STRUCTURE PROJECT
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 LINE STRUCTURE
It flows from top to lower level .
It is the simplest and
oldest method followed
in many
organization.
It is also called as
military organization.
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 GENRAL MANAGER

PRODUCTION MANAGER

ASSISTANT

MANAGER

SUPERVISORS
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 MERITS O F LI N E
STRUCTURE
Simple and easy to establish.
Authority and responsibility is
clearly defined
Prompts decision.
Speedy action taken.
Unity of command since each will
have full control over subordinates.
Ensures Better discipline.
It is very economical since it is
less elaborate.
It provides better scope
for
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 DEMERITS OF LINE
STRUCTURE
Lacks specialization
Overburden with lots of administrative
work
It may result in autocratic control
Manager enjoys monopoly in the
matter of decision making ( he himself
take
decision)
Always downward communications
is possible
Lacks upward communication
It is suitable for small
concerns
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 LINE AND STAFF ORGANIZATION

The staff is attached to

line The staff are
experts
specialized in specific
areas
They give ideas to personnel
The staff supports the line
personnel
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 MERITS OF LI N E AN D STAFF

Relief to top
executives. Quality
decisions.
Flexible.
Specialization is not
violated.
Unity of command is
not violated.
Expert advice
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 DEMERITS OF LINE AND
STAFF

Often arises conflicts between

line and staff.
Leads to confusion since
responsibility is not well defined.
Ineffective staff .
Suitability ( in large organization).

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 FUNCTIONAL ORGANIZATION

There will be a separate

department for different
actions or activities.

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 MERITS OF FUNCTIONAL
ORGANIZATION

S pe cia liz a tion is possible

Work load is less
Be tte r control ove r subordinates
S cope for e xpa nsion Higher
efficiency

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 DEMERITS

Unity of command is violated.

Interdepartmental conflicts.
Delay in decision making.

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 COMMITTEE
ORGANIZATION
A group of persons entrustedin a
task
Types:
Standard or permanent
committee. Temporary committee.
or ad
hoc
Executive
committee. Advisory
committee.
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 MERITS
Scope of group judgment .
Proper coordination and
control among individuals and
departments.
Motivation through participation
is possible.
Various interest groups.
Check against misuse of powers.
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 DEMERITS

Expensive affair to constitute

a committee
Time consuming or slow
decision
Compromise
decision
Suppression of ideas
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 PROJECT ORGANIZATION
It varies from one organization to
organization.
Any organization execute a
large project for a long period of
time
adopt this project organization.
Usually some company have
large number of small projects.
Theterm leader organize the
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 MERITS

Maximum use of specialized

knowledge and skills.
Unity of command exist in this
organization
Flexibility of operation.
Fixation of individual responsibility
for results.
Focuses attention onthe
specific projects.
Provides better coordination.
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 DEMERITS

Difficulty in decision making.

Pressure and uncertainty
due to some several specialist.
Difficulty in coordination.
Evaluation of performance
of various specialist is
difficult.

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 MATRIX ORGANIZATION
STRUCTURE

It is suitable where there is

large number of small
projects.
It is also called as
multiple command system.
It is also called as linking
pins.
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 MERITS

BEST UTILISATION OF
ORGANIZATIONAL RESOURCES.
BENEFIT TO BOTH
FUNCTIONAL AND TECHNICAL
SPECIALIST .
IT PROMOTES
COMMUNICATION PERMITS
HIGHER DEGREE OF
FLEXIBLITY AND ADAPTABILITY.
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 DEMERITS

•Its against principle of unity of

command.
•Quick decision may not be possible It
gives scope for conflicts.

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 SPAN OF MANAGEMENT
It is also called
as span of
control or
span of
supervision.

It refers to
the number
of
subordinates that
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 TWO TYPES OF SPAN
NARROW SPAN OF MANAGEMENT
Tall organization.
Manager oversees “ few”
subordinates. better communication.
example : handicraft , ivory work ,
etc.

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 WIDE SPAN OF MANAGEMENT
Flat organization .
Manager oversees “large” number of
subordinates.
Less overhead cost.
example: large firms .

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 narrow
wide span
span of
control ofcontrol

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 THEORY OF GRAICUNA’S

He was a
French
management
consultant.
He developed
a formula
for
analyzing
superior
subordinate
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 THREE TYPES OF
RELATI ONSHI P
D ire ct re la tionship (superior
has direct link with subordinates).
Direct group relationship (arises
between manager and group of
subordinates ).

Grossrelationship ( relationship
among subordinates).

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 D I R E C T S I N G LE
REL ATIONSHIP

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 DIRECT GROUP
RELATIONSHIP

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 GROSS RELATIONSHIP

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 FACTORS DET ERMING SPAN OF
MANAGEMENT

Nature of work
Type of technology
Ability of the
manager
Capacity of subordinates
Degree of decentralization
Quality of planning
Staff assistant
Communication
techniques
Time available for
supervision Geographical
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 DEPARTMENTATION
It is a process of
grouping individual jobs
into
departmentation.

TYPES:
Departme nta tion by
function.
Departme nta tion
by products.
Departmentation

by
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 Departmentation by
FUNCTIONS
Deparmentation done by the functions.

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 MERITS & DEMERITS
Provides scope of
specialization. Eliminates
cost of duplication of
work.
Effective control over performance.
Facilitates delegation of authority.

Interdepartmental conflicts.
Difficulty in coordination of activities.
Increases responsibility of departmental
heads.
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 D E P AR T M E N T AT I O N BY PRODUCTS

It is suitable for different lines of products.

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 MERITS &
DEMERITS
Reduces problem of coordination.
It leads to specialization.
Performance evaluation can be done
easily.
It is flexible and adaptable to
change .
Chance of duplication is more.
There may be underutilization of plant
capacity when the demand of product
is not adequate.
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 T E R R I T O R I AL DEPARTMENTATION

activities are geographically spread

over.

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 MERITS & DEMERITS
It helps in achieving benefits of
local operation.
Better coordination of activities.
Provides effective span of
control. Opportunity to train
managers.
Facilitates expansionof business
to various regions

Due to geographical distance problem

of communication.
Coordinationand control becomes
less effective.
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 Departmentation By Customers
Each department will serve the
particular type or classof customers.

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 MERITS &
DEMERITS
Offer scope of specialization.
Enterprise gain ultimate
knowledge about needs of
various categories of
customers.

Lead to duplication of
activities.
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 DEPARTMENTATION BY PROCESS
OR EQUIPMENT
The activities are grouped according
to process or equipment.
It is generally used in
manufacturing industries.
Lead to specialization.
No confusion.
Properutilization of manpower
and machine engaged in
proper way.

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 TIME AND NUMBER
DEPARTMENTATION

TIME:
The activities or group on
basis of time
EXAMPLE: Call centers
or any factory.

NUMBER:
The activities or group
on
basis of performance by
certain
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