Fundamentals of Management
Fundamentals of Management
Organising
Intro…
Organising refers to arranging everything in orderly
form and making the most efficient use of resources.
The aim of organising is to enable people to work
together for a common purpose.
Organising is the function of management which
follows planning.
Intro…
Organising is one of the basic and important elements
or functions of management.
To get things done through others ,a manager has to
organize their activities properly, so that objectives will
be achieved easily.
It is a goal oriented process.
Intro..
It is a function in which the synchronization and
combination of human, physical and financial
resources takes place. All the three resources are
important to get results
The dictionary meaning ‘something that is organized”
It can be a family ,school ,college or football team, or
it may be a Government, Army etc.
It may be organized unit group ,club with some
specific purpose.
Definition
‘Organising is the process of identifying and grouping
the work to be performed, defining and delegating
responsibility and authority and establishing
relationships for the purpose of enabling people to
work most effectively together in accomplishing
objectives”- Allen
According to Urwick “Organising is process of
dividing up of activities which are necessary to any
purpose and arranging them in a group which are
assigned to individuals.”
Organising is a function by which the concern is able
to define the role positions, the jobs related and the
co-ordination between authority and responsibility.
The orgainsed group of people, in a collective sense, is
known as ‘organisation’.
Nature of Organising
Common purpose
Division of labour
Chain of command
People
Communication
Co-ordination
Rules and Regulations
Environment
Common purpose : Every organisation has to achieve
certain common goals. The organisation structure
must reflect these objectives and is bound by common
purpose.
Division of labour : The total work of an organisation
is divided into functions and sub-functions. This is
necessary to avoid the waste of time, energy and
resources. Division of labour provides benefits of
specialisation.
Chain of command : The authority of every position
should be well defined. The chain of superior-
subordinate relationship is known as chain of
command.
People: An organisation is basically a group of persons.
Grouping of persons or departmentation should be
properly done in an organisation.
Communication: Every organisation should have its
own open and clear channels of communication.
Co-ordination: Co-operative effort is a basic feature of
an organisation. It is a mechanism for co-ordinating
different activities and parts of an organisation.
Rules and regulations: Every organisation has some
rules and regulations for orderly functioning of people.
Environment: An organisation functions in an
environment comprising economic, social, political
and legal factors. Therefore, the structure must be
designed to work efficiently in a changing
environment.
Steps in the process of organising
1. Identification & Division Of Work
2. Departmentalization
3. Assignment Of Duties
4. Establishing Reporting Relationships
Steps in the process of organising
Identification and Division of Work:
It involves identification and division of total work to
be done into specific activities (called jobs) in
accordance with previously determined plans.
By dividing the work, the burden of work can be
shared among the employees.
It facilitates specialization of work & skills.
Duplication of work can be avoided by dividing the
work into manageable activities.
The total work to be done should be divided into specific
jobs as according to predetermined plans. –
1. Principle of objectives
2. Principle of Division of work specialization
3. Principle of functional definition
4. Principle of scalar chain
5. Principle of Span of control
6. Principle of unity of command
7. Principle of exceptional matters
8. Principle of parity of authority and responsibility
9. Principle of balance
10. Principle of flexibility
11. Principle of coordination
12. Principle of efficiency
13. Principle of communication
14. Principle of continuity
Formal Organisation
Informal Organisation
Formal Organisation
In every enterprise, there are certain rules and
procedures that establish work relationships among
the employees. These facilitate the smooth functioning
of the enterprise. Further, they introduce a systematic
flow of interactions among the employees. Effectively,
all of this is done through a formal organization.
Notably, the management is responsible for designing
the formal organisation in such a way that it specifies a
clear boundary of authority and responsibility.
Coupled with systematic coordination among various
activities, it ensures achievement of organisational
goals.
Again, the management builds the formal
organisation. It ensures smooth functioning of the
enterprise as it defines the nature of interrelationships
among the diverse job positions. Additionally, these
ensure that the organisational goals are collectively
achieved. Also, formal organisation facilitates
coordination, interlinking and integration of the
diverse departments within an enterprise. Lastly, it
lays more emphasis on the work to be done without
stressing much on interpersonal relationships
Advantages of formal organisation
The formal organisation clearly outlines the relationships among
employees. Hence, it becomes easier to laid down responsibilities.
An established chain of commands maintains the unity of command.
As the duties of each member is clearly defined, there is no ambiguity
or confusion in individual roles whatsoever. Further, there is no
duplication of efforts which eliminates any wastage.
In a formal organisation, there is a clear definition of rules and
procedures. This means that behaviours and relationships among the
members are predictable. Consequently, there is stability and no chaos
existing in the enterprise.
Finally, it leads to the achievement of organisational goals and
objectives. This is because there exist systematic and well thought out
work cultures and relationships.
Disadvantages of formal organisation
Decision making is slow in a formal organisation. It is important
to realise that any organisational need has to flow through the
respective chain of commands before being addressed.
Formal organisation is very rigid in nature. This means that
there prevails perfect discipline coupled with no deviations from
the procedures. Hence, this can lead to low recognition of talent.
Lastly, the formal organisation does not take into account the
social nature of humans as it talks about only structure and
work. Interestingly, we cannot eliminate this integral part of
our nature. Hence, it does not entirely display the functioning of
the organisation.
Informal Organisation
It’s easy to understand that if we interact with certain
people regularly we tend to get more informal with
them. This is because we develop interpersonal
relationships with them which are not based solely on
work purposes. Rather, these relationships might arise
because of shared interests, like if you get to know that
your colleague likes the same football club of which
you’re a fan of.
As a matter of fact, informal organisation arises out of the
formal organisation. This is because when people
frequently contact each other we cannot force them into a
rigid and completely formal structure. Instead, they bond
over common interests and form groups, based upon
friendship and social interactions.
Unlike formal organisation, informal organisation is fluid
and there are no written or predefined rules for it.
Essentially, it is a complex web of social relationships
among members which are born spontaneously. Further,
unlike the formal organisation, it cannot be forced or
controlled by the management.
Also, the standards of behaviour evolve from group
norms and not predefined rules and norms. Lastly, as
there are no defined structures or lines of
communication, the interactions can be completely
random and independent lines of communication
tend to emerge in informal organisation.
Advantages
In this type of organisation, communication does not need to
follow the defined chain. Instead, it can flow through various
routes. This implies that communication in an informal
organisation is much faster relative to formal organisation.
Again, humans are social animals. The needs to socialize exists
deep within our existence. The informal organisation ensures
that there is socialization within the enterprise. Consequently,
members experience the sense of belongingness and job
satisfaction.
In formal organisation, getting true feedbacks and reactions is
not easy. Hence, in informal organisation, various limitations of
formal organisation is covered up.
Disadvantages
The informal organisation is random and can result in the
spread of rumours. Again, we cannot manage and control
informal organisation. Consequently, this may result in
chaos within the enterprise.
It is important to realise that it is not possible to effect
changes and grow without the support of the informal
organisation. This can work in both ways, for growth or
decline of the enterprise.
Informal organisation conforms to group standards and
behaviours. If such behaviours are against the
organisational interests, they can eventually lead to
disruption of the organisation.
Formal Organisation Informal Organisation
It is consciously and deliberately It arises spontaneously.
created.
Authority and responsibility are vital for It is only personal factors such as
its functioning. friendship, affinity, trust and
confidence that are important.
Rules and procedures are important. Personal relationships between
individuals is more important.
It can be shown on the organisation It cannot be shown.
chart.
Authority flows downwards and There is no flow of authority and
responsibility flows upwards. responsibility.
It is deliberately created only to attain It is created to fulfil the social needs of
the enterprise objectives. an individual.
Designations and official positions are Designations and official positions are
very important. unimportant
Type of Organisation
Line Organisation
Line and Staff Organisation
Functional Organisation
Committee Organisation
Project Organisation
Matrix Organisation
Line Organisation
Line Organisation, also known as the ‘Military
Organisation’, is the oldest form of organisation. In
such organisation, the superior at the top makes
decisions and communicates his decisions and assigns
certain work to his immediate subordinates.
Line Organisation
Merits
The staff experts provide support to the line personnel.
The suggestions given by the staff experts, enable the
line executives to take better decisions.
The sharing of work by the staff experts also helps to
avoid delay in performing the entire work.
Demerits
Conflicts often arise between the line and staff
executives
The staff experts do not have the authority to make
decisions. They can only advise. Such a position
without authority makes them ineffective.
The line and staff pattern of organisation would
enhance the cost of operation.
Merits
It promotes specialisation.
Better control.
Specialisation and standardisation will result in mass
production.
Merits
A committee provides scope for group judgement.
The committee also secures proper coordination among the
individuals and departments.
The committee members feel motivated when they
participate in the discussions.
Demerits
Constituting a committee is an expensive affair.
The committee members take more time on discussions
and deliberations and as a result the decision get delayed.
Project Organisation
Departmentation by Functions
Departmentation by Products
Departmentation by Territory
Departmentation by Customers
Departmentation by Functions: The most popular basis of
departmentation is the one, done according to the major
functions of an enterprise. In a manufacturing concern,
production, marketing, finance and personnel are the
major functions. Separate departments will be established
to perform these functions.
Departmentation by Products: This approach is suitable for
those concerns that market different lines of products.
There may be separate division to look after the
production, finance, personnel and marketing needs of
each product line of the enterprise.
Departmentation by Territory: This approach is
suitable for such organisations as banks, insurance
companies, transport companies etc. whose activities
are spread over the different parts of the state or
country. Under territorial departmentation, division of
activities is done region-wise, zone-wise or branch-
wise.
Departmentation by Customers: The division of
activities is done based on the needs of the customers
Span of Management
Span of Management refers to the number of
subordinates a manager can effectively manage. Span
of management is also known by certain other names
like span of control, Span of supervision etc.
A manager will be able to perform his basic work of
guiding his subordinates and making them work only
if he has the right number of such subordinates under
him.
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 provides
more autonomy. A narrow span of control exists when
the number of direct reporters that a manager has is
small. Narrow spans allow managers to have more time
with direct reports, and they tend to spark professional
growth and advancement.
What if too many subordinates are placed under a
manager?
It may result in loss of control.
It may affect the communication relationship between
the manager and his subordinates.
The number of subjects to which the manager can give
his attention is limited.
Managing too many subordinates may also affect the
mental and physical health of the manger.
What if the number of subordinates is too low?
The manager’s potential cannot be fully utilised.
The goal of the organisation cannot be effectively
accomplished.
More assistant or deputy managers may have to be
employed, in the case of a narrow span, if the
organisation has a number of subordinate staff. This
will result in increase in administration expenses.
Factors influencing Span of
Management
Ability of the manager
Capabilities of the subordinates
Nature of work
Facilities available
Extent of delegation
Quality of plans
Ability of the manager: If the superior is capable, he
can manage more number of subordinates. The
capabilities of the manager is determined by such
qualities as his ability to command and communicate,
solve problems, make decisions and guide his
subordinates.
Capabilities of the subordinates: If the subordinates
are all capable, they may not require much help from
their superior.
Nature of work: If the nature of work done by the
subordinates is simple and repetitive, they may not
require much help from their superior. But if the work
is unique each time or non-repetitive, the subordinate
may have to depend on his/her superior.
Facilities available: If the organisation can provide
such facilities to the staff as fax, computer, cell phone,
internet etc., it becomes easy to send or receive any
kind of information at any time. This avoids delay in
the execution of work. In such case, the superior may
be able to handle many subordinates.
Extent of delegation: If the authority given to a subordinate
is not sufficient, he may have to contact the superior often
to get the latter’s consent for certain decisions. It, therefore,
becomes clear that if the subordinates are given the
required authority to make decisions, they may not depend
on their superior. In such a case the superior can mange
many subordinates.
Quality of plans: If the organisation has definite
objectives, policies, procedures and rules, it becomes easy
for the subordinate to carry out his tasks. This allows the
superior to supervise many subordinates.