*ORGANISING AS A PROCESS

Organising is the process of defining and grouping the activities of the

*NOTE:- the points in the box are only for reading purpose . These points will
help for identification of organising function in case studies .
1. The ‘organising’ function is a means for translating plans into action. It
involves organising resources needed , optimum utilisation of resources,
translation of work into attainable tasks, empowering the workforce to
accomplish these tasks, etc.
2. The management function of organising ensures that efforts are directed
towards the attainment of goals laid down in the planning function in
such a manner that resources are used optimally and people are able to
work collectively and effectively for a common purpose.
3. 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 accomplishing objectives.
4. Organising essentially implies a process which coordinates human
efforts, assembles resources and integrates both into a unified whole to
be utilised for achieving specified objectives.
5. Organising can be defined as a process that initiates implementation of
plans by clarifying jobs and working relationships and effectively
deploying resources for attainment of identified and desired results
(goals).
6. Organising is a process by which the manager brings order out of chaos,
removes conflict among people over work or responsibility sharing and
creates an environment suitable for teamwork.
*STEPS IN THE PROCESS OF ORGANISING IDAE
1. Identification and division of work: Identifying and dividing the work into
manageable activities so that duplication can be avoided.
2. Departmentalisation: Activities of a similar nature are grouped together. It
facilitates specialisation. (Departments can be created on the basis of territory
(north, south, etc.) and products (garments, footwear etc).
3. Assignment of duties to job positions: Jobs are allocated to the members of
each department according to their skills and competencies for effective
performance.
4. Establishing reporting relationships: Authority responsibility relationships
are clearly established so that each individual knows who he has to take orders
from and to whom he is accountable. This helps in coordination amongst
various departments.
*IMPORTANCE OF ORGANISING SAD-C-GOA
1. Specialisation: A systematic allocation of jobs enhances productivity and
leads to specialisation because of the repetitive performance of a particular
task.
2. Clarity in working relationships: Authority responsibility relationships are
clearly established so that each individual knows who he has to take orders
from and to whom he is accountable.
3. Effective administration: Clarity in working relationships enables proper
execution of work. Management of an enterprise becomes easy and this
brings effectiveness in administration.
4. Optimum utilisation of resources by avoiding duplication of work and
minimising wastage of resources and efforts.
5. Growth and expansion by allowing a business enterprise to add more job
positions, departments and product lines.
6. Adaptation to change by allowing the organisation structure to be suitably
modified according to the changes in business environment.
7. Development of personnel by effective delegation of work to subordinates.
the first year.
Organisation Structure: Functional and Divisional
*ORGANISING AS A STRUCTURE
Organisation structure is the outcome of the organising process.
The organisation structure of a firm is shown in an organisation chart.
The span of management gives shape to the organisational structure.
Span of management refers to the number of subordinates that can be
effectively managed by a superior. This determines the levels of management
in the organisation structure
Organisation structure refers to the framework within which managerial and
operating tasks are performed.
It specifies the relationship between people, work and resources.
 It allows coordination among human, physical and financial resources.
 A proper organisation structure is essential to ensure a smooth flow of
communication, better control over business operations and
achievement of organisational goals.
The need for an adequate organisation structure is felt when an enterprise
grows in size or complexity because coordination then, becomes difficult due
to new functions or increase in number of products.
*FUNCTIONAL STRUCTURE
Functional structure is an organisational structure formed by grouping of jobs
of similar nature according to functions and organising these major functions
as separate departments. For example, a company manufacturing garments
may have separate departments for Production, Marketing, Finance, etc.
SUITABILITY :-
tFunctional structure is suitable for those enterprises which have only one
category of products to offer. However, the size of the organisation is large, it
has diversified activities and operations require a high degree of specialisation.

Advantages
1. It leads to occupational specialisation since emphasis is placed on specific
functions. (This promotes efficiency in utilisation of manpower as employees
perform similar tasks within a department and are able to improve
performance.)
2. It promotes control and coordination within a department because of
similarity in the tasks being performed.
3. It increases managerial and operational efficiency.
4. It lowers cost as it reduces duplication of effort.
5. It makes training of employees easier as it focuses on a limited range of
skills.
6. It ensures that different functions get due attention.
Disadvantages
1. It may lead to functional empires, i.e. pursuing own departmental interests
at the cost of organisational interests.
2. Inter-departmental conflicts: A conflict of interests may arise when the
interests of two or more departments are not compatible. (For example, the
sales department insisting on a customer friendly design may cause difficulties
in production.)
3. It may lead to problems in coordination as information has to be exchanged
across functionally differentiated departments.
4. It may lead to inflexibility as people with same skills and knowledge base
may develop a narrow perspective and may not appreciate others’ point of
view.
Functional heads do not get training for top management positions because
they are unable to gather experience in diverse areas.
*DIVISIONAL STRUCTURE
Divisional structure is an organisation structure comprising of separate
business units or divisions created on the basis of different products,
geographical area, customer groups etc.
For example, a large company may have two divisions, say Footwear and
Garments. Each division works as a profit center where the divisional
head is responsible for the profit or loss of his division. Each division is multi-
functional because within each division functions like production, marketing,
finance, etc. are performed together to achieve a common goal.
SUITABILITY
Divisional structure is suitable for those business enterprises where a large
variety of products are manufactured using different productive resources.
When an organisation grows and needs to add more employees, create more
departments and introduce new levels of management, it will decide to adopt a
divisional structure.

Advantages
1. Product Specialisation helps in the development of varied skills in a
divisional head and this prepares him for higher positions.
2. Divisional heads are accountable for profits, as revenues and costs related to
different departments can be easily identified and assigned to them.
3. It promotes flexibility and initiative because each division functions as an
autonomous unit which leads to faster decision making.
4. It facilitates expansion and growth as new divisions can be added without
interrupting existing operations by merely adding another divisional head and
staff for the new product line.
Limitations
1. Conflict may arise among different divisions with reference to allocation of
funds.
2. It may lead to increase in costs since there may be a duplication of activities
across products.
3. Divisional interests may supersede organisational interests.
Formal and Informal Organisation
5. It has no definite structure or form (because it is a complex network of social
relationships among members.)

DeleT
TYPES OF ORGANISATION:-
There are two types organisation
1 formal organisation
2 Informal organisation.

Formal Organisation
*Formal organisation refers to the organisation structure which is designed by
the management to accomplish its objectives. (The structure in a formal
organisation can be functional or divisional.)
* The formal organisation is a system of well-defined jobs, each bearing a
definite measure of authority, responsibility and accountability.
*Formal organisation is a system of consciously coordinated activities of two
or more person towards a common objective.
Features of formal organisation
1. It is deliberately designed by the top management to facilitate smooth
functioning of the organisation.
2. It specifies the relationships among various job positions. This clarifies who
has to report to whom.
3. It places more emphasis on work rather than interpersonal relationships.
4. It is a means to achieve the objectives as it lays down rules and procedures
for their achievement.
5. It coordinates the efforts of various departments.
Advantages of formal organisation
1. It is easier to fix responsibility since mutual relationships are clearly defined.
2. It avoids duplication of effort since there is no ambiguity in the role that
each member has to play.
3. It maintains unity of command through an established chain of command
4. It leads to accomplishment of goals by providing a framework for the
operations to be performed.
5. It provides stability to the organisation because there are specific rules to
guide behaviour of employees.
Limitations of formal organisation
1. Procedural delays—delay in decision-making because communication flows
through scalar chain.
2. Fails to recognise creative talent of employees since it does not allow any
deviations from rigidly laid down policies.
3. Non-fulfilment of social needs of employees because it places more
emphasis on structure and work. And
Meaning of Informal Organisation
*Informal organisation is a network of personal and social relations within the
formal organisation arising spontaneously as people associate with one
another, e.g., managers and subordinates taking part in cricket matches.
*Informal organisation is a network of personal and social relations not
established by the formal organisation but arising spontaneously as people
associate with one another.
* An informal organisation is an aggregate of inter-personal relationships
without any conscious purpose by which may contribute to joint results.
Features of informal organisation
1. It originates from within the formal organisation (as a result of personal
interaction among employees.)
2. It emerges spontaneously and is not deliberately created by the
management.
3. The standards of behaviour evolve from group norms.
4. Independent channels of communication are developed by group members.
(It does not have fixed lines of communication. It has no written rules, is fluid
in form and scope.)
5. It has no definite structure or form (because it is a complex network of social
relationships among members.)
Advantages of informal organisation
1. It leads to faster spread of information as well a quick feedback (since fixed
lines of communication are not followed.)
2. It fulfills the social needs of the members. (This enhances their job
satisfaction since it gives them a sense of belongingness in the organisation.)
3. It contributes towards fulfilment of organisational objectives by
compensating for inadequacies in the formal organisation. (For example,
employees reactions towards plans and policies can be tested through the
informal network.)
Limitations of informal organisation
1. It may spread rumours which may work against the interest of the formal
organization. (Thus, it becomes a destructive force.)
2. It may lead to resistance to change which may delay or restrict growth.
3. It pressurizes members to conform to group norms or expectations which
may be against organisational interest
Informal organisation cannot be altogether eliminated.
It would be in the best interest of the organisation if the existence of such
groups is recognised and the roles that their members play are identified.
The knowledge of such groups can be used to gather their support and
consequently lead to improved organisational performance. Such groups can
also provide useful communication channels (i.e. grapevine).
Instead of confronting them, the management should skillfully take advantage
of both the formal and informal organisation so that work continues smoothly.
CONCEPT OF DELEGATION
Delegation is the transfer of authority from superior to subordinate,
entrustment of responsibility and creation of accountability for performance
which helps a manager to extend his area of operations.
Delegation is the process a manager follows in dividing the work assigned to
him so that he performs that part which only he because of his unique
organisational placement, can perform effectively and so that he can get others
to help with what remains.
Elements of Delegation
1. Authority:
Meaning– It refers to the right of an individual to command his
subordinates and to take action within the scope of his position.
Origin–It arises from formal position.
Flow–Authority flows from top to bottom, i.e. the superior has authority
over the subordinate.
Delegation– Can be delegated.
2. Responsibility:
Meaning–It is the obligation of a subordinate to perform the assigned
duty.
Origin–It arises from delegated authority.
Flow–It flows upwards, i.e. a subordinate will always be responsible to
his superior.
Delegation– Cannot be entirely delegated.
3. Accountability:
Meaning–It implies being answerable for the final outcome. It cannot
be delegated.
Origin–It arises from responsibility.
Flow–It flows upwards, i.e. a subordinate will be accountable to a
superior for satisfactory performance of work.
Delegation– Cannot be delegated at all.
DELEGATION DOES NOT MEAN ABDICATION
Delegation helps a manager to extend his area of operation as without it his
activities would be restricted to only what he himself can do. However,
delegation does not mean abdication; the manger shall still be accountable
for the assigned task. Accountability cannot be delegated at all.
Moreover, the authority granted to a subordinate can be taken back and
redelegated to another person.
Example: Suppose the directors of a company manufacturing computers have
asked their marketing manager to achieve a target sale of 100 computers per
day. The marketing manager has delegated the task to his deputy sales
managers working under him. The deputy sales managers could not achieve
the target. In this case, the marketing manager shall still be accountable
to the directors. The process of delegation does not relieve the marketing
manager of his own accountability. Accountability cannnot be delegated at all.
CONCEPT OF DECENTRALISATION
Decentralisation refers to systematic delegation of authority through all the
levels of management and in all the departments except that which can be
exercised only at central points. Decentralisation implies selective dispersal of
authority.
and believes that people are competent, capable and resourceful. It recognises
the decision-maker’s need for autonomy. The management, however, needs to
carefully select those decisions which will be pushed down to lower levels
(operational decisions) and those that will be retained for higher levels (major
policy decisions). It can lead to organisational disintegration if the departments
start to operate on their own guidelines which may be contrary to the interest
of the organisation.
Decentralisation has wide scope. “When we delegate authority, we multiply
it by two. When we decentralise authority, we multiply it by many.”
For example, consider an organisation where all leave applications are
processed by the General Manager. He feels over-burdened and transfers this
authority of leave processing to the Production Manager. This is an example of
Delegation of Authority. If the Production Manager also feels over-burdened
and requests the General Manager to give him some relief, he may disperse
this authority to various heads throughout the organisation and instruct them
to process the leave applications of their respective departments. This is how
delegated authority may be extended to decentralised authority.
Centralisation and Decentralisation:
The concentration of decision-making authority by the top management is
called centralisation whereas its dispersal among more than one person is
known as decentralisation. Complete centralisation and complete
decentralisation–both the scenarios are unrealistic. An organisation can never
be completely centralised or decentralised. As it grows in size and complexity,
there is a tendency to move towards decentralised decision-making. This is
because in large organisations those employees who are directly and
closely involved with certain operations tend to have more knowledge about
them than the top management which may only be indirectly associated with
individual operations.
Importance of Delegation GEM – EMC
Delegation is a pre-requisite to the efficient functioning of an organisation
because of the following reasons:
1. Effective management: It helps in effective management as the managers
get more time to concentrate on important matters.
2. Employee development: It helps in development of employees as the
employees get more opportunities to utilize their talent.
3. Motivation of employees: It helps to motivate employees as the employees
feel encouraged and try to improve their performance further. (Delegation
involves entrustment of responsibility. It is not merely the sharing of task
but involves trust on the superior’s part and commitment on the part of the
subordinate. Responsibility for work builds his self esteem and improves his
confidence.)
4. Facilitation of growth: It facilitates growth by providing a ready workforce
to take up leading positions in new ventures.
5. Basis of management hierarchy: It establishes a management hierarchy
through clear superior subordinate relationships.
6. Better coordination: It helps in better coordination by avoiding overlapping
of duties.
IMPORTANCE OF DECENTRALISATION TC–RIGD
1. It gives relief to the top management who can now concentrate on
important policy decisions, e.g. develop new strategies, coordination and
control, etc.
Application, HOTS, Evaluation and Multi-Disciplinary Questions
2. It develops initiative amongst subordinates by promoting self-reliance and
confidence in them. This is because when lower managerial levels are given
freedom to take their own decisions, they learn to depend on their own
judgement.
3. It develops managerial talent for the future by creating a reservoir of
qualified manpower to fill up challenging positions in future.
4. It facilitates growth by fostering competition amongst the departments
leading to increase in productivity. Consequently, the organisation is able to
generate more profits which can be used for growth and expansion purposes.
5. It helps in quick decision-making has there is no requirement for approval
from many levels. There are also less chances of information getting distorted
because it does not have to go through long channels.
6. It leads to better control by evaluating performance at each level of
management. The departments/divisions can be individually held accountable
for their results.