ORGANIZING

Organizing essentially
Meaning implies a process which
coordinates human efforts,
assembles resources and
integrates both into a unified
whole to be utilized for
achieving specified
objectives.
 According to Louis A. Allen, “Organizing is
the process of identifying and grouping the
work to be performed, defining and
Definitio
delegating responsibility and authority and
n
establishing relationships for the purpose of
enabling people to work most effectively
together in accomplishing objectives.”
 Steps in the Process of Organizing

Identification and division of work

Departmentalization

Assignment of duties

Establishing authority and reporting relationship

 Importance of Organizing
Benefits of specialization
Clarity in working relationships
Optimum utilization of resources
Adaption to change
Effective administration
Development of personnel
Expansion and growth
Organization structure
 Meaning of Organization structure

•It is the framework of relationship of individuals working at

various levels to accomplish the organizational objectives.

•It shows the authority and responsibility relationships

between the various positions in the organization by
showing who reports to whom.
 Functional Organization
structure
Types of Organization
structure
Divisional Organizational
structure
 Functional Organizational Structure

Managing
director

Human
Finance Marketing Purchasing
resource
Department Department department
Department
 Divisional Organizational Structure

Managing
director

Cosmetics Garments Foot ware Skin care

Functional Organization structure

It is an
It is suitable
organizational
when the size
design that
of the
groups similar
organization is
or related jobs
large
together.
 Advantages of Functional Organizational Structure

Helps in increasing
Leads to Promotes control and
managerial and
occupational coordination within
operational
specialization the department
efficiency

Ensures that different

Leads to minimal
Makes training easier functions get due
duplication of effort.
attention.
Disadvantages of Functional Organizational Structure

Less
Conflict
emphasis on May lead to
between May lead to
overall problems in
departments inflexibility.
enterprise coordination
may arise.
objective.
 Divisional Organization structure

Divisional
structure is suitable
In a divisional
for those business
structure, the
enterprises where a
organisation
large variety of
structure comprises
products are
of separate
manufactured
business units or
using different
divisions.
productive
resources.
Divisional and Functional Organizational Structure

Cosmetics

Garments
Managing
director Human resource
Foot ware
Department
Marketing
Skin care
Department

Purchasing
department
 Advantages of Divisional Organizational Structure

It provides a proper
It also helps in
Product basis for
fixation of
specialisation performance
responsibility
measurement.

It promotes It facilitates
flexibility and expansion and
initiative. growth
Disadvantages of Divisional Organizational Structure

Mangers may
It may lead to ignore
Conflict may
increase in costs organisational
arise among
since there may interests as they
different
be a duplication get complete
divisions
of activities power on
activities.
Formal organization • It refers to the organisation structure
which is designed by the
management to accomplish a
particular task.
• It specifies clearly the boundaries of
authority and responsibility and
there is a systematic coordination
among the various activities to
achieve organisational goals.
“The formal organisation is a system of well-
defined jobs, each bearing a definite measure of
authority, responsibility and accountability.”
Louis Allen
 Features of Formal Organisation
Specifies the Means to achieve the Efforts are
relationships and job objectives specified coordinated
positions in the plans effectively

Designed by top More emphasis on

management to work to be performed
facilitate smooth than interpersonal
functioning relationship
Advantages of Formal Organisation
Easy to fix the
responsibility
No ambiguity or doubt in the
role as the duties are
specified
Unity of
command is
maintained
Helps to accomplish the goals
with the help of given framework
Provides stability
to the organisation
 Disadvantages of Formal Organisation

Gives more emphasis

It does not allow any on structure and work.
May lead to procedural
deviations from rigidly It is difficult to
delays
laid down policies. understand all human
relationships.
Informal organization • Informal organisation emerges
from within the formal
organization when people
interact beyond their officially
defined roles.
• Informal organisation has no
written rules and does not have
fixed lines of communication.
“Informal organisation is a network of personal and
social relations not established or required by the
formal organisation but arising spontaneously as
people associate with one another.”
Keith Davis
 Features of Informal Organisation

Originates from Standards of

Independent channels
within the formal behaviour evolve
of communication
organisation from group norms

Emerges
spontaneously and is
It has no definite
not deliberately
structure or form
created by the
management
Advantages of Informal Organisation

Leads to faster spread of information as well as quick

feedback.

Enhances their job satisfaction since it gives them a sense

of belongingness in the organisation.

Plans and policies can be tested through the informal network

Disadvantages of Informal Organisation

Management It will be
may not be harmful to the
successful in organisation if
Chance of
implementing the norms set by
spreading
changes if the the group are
rumors
informal against
organization organisational
opposes them. interests.
DELEGATION
 Meaning

• Delegation refers to the downward transfer of authority from a superior

to a subordinate.

• It enables a manager to use his time on high priority activities.

• It also satisfies the subordinate’s need for recognition and provides

them with opportunities to develop and exercise initiative.
“Delegation of authority merely means the granting of
authority to subordinates to operate within prescribed limits.”
Theo Haimman
 Authority

Elements of
Delegation

Accountability Responsibility
• Authority refers to the right of an
individual to command his subordinates
and to take action within the scope of his
position.
• Authority also refers to the right to take
decisions inherent in a managerial
position to tell people what to do and
expect them to do it.
• Responsibility is the obligation of a
subordinate to properly perform the
assigned duty.
• It arises from a superior subordinate
relationship.
• Responsibility flows upwards, i.e., a
subordinate will always be responsible
to his superior.
• Accountability implies being answerable
for the final outcome.
• Accountability cannot be delegated and
flows upwards.
It can be stated that
Responsibility is
while Authority is
derived from
Delegated,
Authority and
Responsibility is
Accountability is
Assumed,
derived from
Accountability is
Responsibility.
Imposed.
 Importance of Delegation

Motivation Basis of
Effective
of management
management
employees hierarchy

Employee Facilitation Better

development of growth coordination
Those organisations in which
decision making authority
lies with the top management
are termed as
Centralized organisations.

Those organisations in which

decision making authority is
shared with lower levels are
Decentralized
organisations.
 Meaning

• Decentralisation refers to delegation of authority throughout all the

levels of the organisation.

• Decentralisation explains the manner in which decision making

responsibilities are divided among hierarchical levels.
“Decentralisation refers to systematic effort to delegate to the
lowest level all authority except that which can be exercised
at central points.”
Louis Allen
 Importance of Develops
Decentralization initiative
among
subordinates Develops
managerial
Better control talent for the
future

Quick
Facilitates
decision
growth
making
Relief to top
management
 Delegation and Decentralisation: A Comparative view

Basis Delegation Decentralisation

• Nature Delegation is a Decentralisation is an optional
compulsory act because policy decision. It is done at the
no individual can perform discretion or choice of the top
all tasks on his own management.

• Freedom More control by superiors Less control over executives

of action hence less freedom to take hence greater freedom of action.
own decisions.
 Delegation and Decentralisation: A Comparative view

Basis Delegation Decentralisation

• Status It is a process followed It is the result of the policy
to share tasks. decision of the top management.
• Scope It has narrow scope as it It has wide scope as it implies
is limited to superior extension of delegation to the
and his immediate lowest level of management.
subordinate.
 Delegation and Decentralisation: A Comparative view

Basis Delegation Decentralisation

• Purpose To lessen the burden of the To increase the role of the
manager. subordinates in the organisation
by giving them more autonomy.