ORGANISING

Organising refers to arranging everything in orderly Span of management refers to the number Advantages
form and making the most efficient use of of subordinates that can be effectively • Quick decision-making: Divisional manager can
resources. The aim of organizing is to enable people managed by a superior. The Span of take any decision regarding his division
to work together for a common purpose. management largely gives shape to the independently which makes decisions quick
organization structure. This determines and effective.
Organizing is the process of identifying and the levels of management in the structure.
grouping the work to be performed, defining and
delegating responsibility and authority and Types of Organisational Structure • Divisional results can be assessed: Division
establishing relationships for the purpose of results (profit/loss) can be assessed easily. On
enabling people to work most effectively together 1. Functional structure: In functional this basis any unprofitable division can be
in accomplishing objectives. structure activities are grouped and closed.
departments are created on the
Steps in The Process of Organising basis of specific functions to be
• Growth and Expansion: It facilitates growth
performed.
1. Identification and division of work: Identifying Advantages: and expansion as new divisions can be added
and dividing work to be done into smaller and • Leads to occupational without disturbing existing departments.
manageable tasks. specialisation.
2. Departmentalization: Once work is divided into Disadvantages
• Promotes control and coordination
small activities, similar and related jobs are within a department.
grouped together. • Conflicts: Conflicts may emerge between
• Increasing managerial and different divisions on the allocation of cash, and
3. Assignment of duties: Allocating work according to operational efficiency.
the skills and abilities of employees. a specific division may aim to maximize its
• The managerial and operational
4. Establishing reporting relationship: Defines the profits at the expense of other divisions.
efficiency reduces cost and results
authority, responsibility, relationship clearly • Duplication of efforts: It may result in cost
in higher profits.
stating for each employee from whom they have to increases due to duplication of efforts across
• Makes training of employees easier.
take orders and to whom they are accountable. products. Providing each division with its own
• Individuals performing similar and
smaller tasks can focus better on set of equivalent functions raises costs.
Importance of Organising
the activities they are responsible • Misuse of power: It gives managers the
It helps in growth and survival of an enterprise in for. authority to oversee all activities relating to a
a dynamic environment by providing: specific division. Over time, such a manager
Disadvantages: may develop influence and, in an attempt to
1. Benefits of specialization: Repetitive performance
Conflicts: Conflicts may emerge establish his independence, may disregard
of a particular task leads to specialization. Thus
between different divisions on the organizational interests.
organizing promotes specialization which in turn
leads to efficient & speedy performance of tasks. allocation of cash, and a specific
Formal and Informal Organizations
2. Clarity in working relationship: It removes division may aim to maximize its
ambiguity and miscommunication as working profits at the expense of other Formal Organisation: Formal organisation
relationships are clearly stated. divisions. refers to the organisation structure that is
3. Optimum utilization of resources: Organisation designed by the management to accomplish
Duplication of efforts: It may result
leads to usage of all natural resources, financial organizational goals. In a formal organisation
in cost increases due to duplication
resources and human resources. It avoids the boundaries of authority & responsibility is
of efforts across products. Providing
duplication and overlapping of work which leads to clearly defined and there is a systematic
each division with its own set of
minimum wastage of resources. coordination among the various activities to
equivalent functions raises costs.
4. Adaptation to change: The process of organising is achieve organizational objectives.
flexible which allows a business enterprise to Misuse of power: It gives managers
accommodate Advantages
the authority to oversee all
changes in the business environment. activities relating to a specific
5. Expansion and growth: It helps in growth and • Easy to fix responsibility.
division. Over time, such a manager • No ambiguity in instructions.
expansion by incorporating changes in the may develop influence and, in an
business environment. • Maintains unity of command.
attempt to establish his
6. Development of personnel: Organising • Focus on organisational goals.
independence, may disregard
encourages creativity amongst managers. This also • Provide stability.
organizational interests.
develops the subordinates’ ability and helps him to
Disadvantages
realize his full potential. 2. Divisional Structure: Dividing the
7. Effective administration: It provides a clear whole enterprise according to the • Procedural delays due to long formal chains of
description of jobs and related duties which helps major products to be manufactured communication.
to avoid confusion and duplication. (like metal, plastic, cosmetics etc.) is • No recognition for creativity, as everyone has to
Organisational Structure known as divisional organization follow a certain specified structure.
structure. Each division is • No understanding of human relationships.
Meaning: Organisational structure refers to the accountable for its own job and
structure or a framework within which various must consider its own profit and Informal organisation
operational and managerial tasks are performed. It loss. Each division has its own
aids in the proper coordination of human, physical divisional manager who oversees Informal organisation is a structure
and financial resources in the organization to formed as a result of a network of social
and has power over the entire unit.
successfully achieve the organisational objectives. relationships among employees. It
 allows employees to interact beyond opportunity to display their efficiency 6. Better Control: Evaluation of
officially defined roles. It originates and capacity. performance is possible at each level,
within the formal organisation as which results in complete control over all
frequent interaction among employees 5. Better coordination: The the other activities.
in formal organisation creates informal elements of delegation –
organisation. authority, responsibility and
accountability help to define the
Advantages powers, duties and answer ability
related to various job positions
• Quick communication and faster feedback due which results in developing and
to informal communications. maintaining effective
• Fulfills social needs of friendship and affinity. coordination.
• Makes up for inadequacies of formal Decentralisation
organization.
Disadvantages Decentralisation means
delegation of authority
• Disrupts the formal setups. throughout all the levels of the
• Resistance to change. organisation. This empowers
• Group interest may supersede organisational lower levels to take decisions
interest. regarding problems faced by them
• Difference in opinion of people in an informal without having to go to the upper
group may lead to conflicts and clashes. levels. In other words decision
making authority is given to all the
Delegation: employees at all levels depending
on the job each one of them are
Delegation refers to the downward transfer of
handling. An organisation is
authority from a superior to a subordinate to
centralized when the decision
enable subordinates to perform their
making authority is retained by
responsibilities effectively and efficiently.
the top level management.
Elements of Delegation:
IMPORTANCE OF
• Authority: Authority refers to the right to take DECENTRALISATION
decisions in order to guide the activities of 1. Develops initiative among
others. Authority determines the superior subordinates: It helps to
subordinate relationship. Laws and the rules promote confidence and self
and regulations of the organisation restrict reliance in the subordinates
authority. Authority flows downward. as they are given freedom to
• Responsibility: Responsibility is the obligation take their own decisions.
of a subordinate to perform properly the 2. Develops managerial talent
assigned duty. If the subordinate has the for future: Training given by
responsibility for a job, he/ she must be given the organisation and the
necessary authority to carry out that task. experience gained from
• Accountability: Accountability implies being handling the projects
accountable for the final outcome. When a increases the talent of the
superior assigns a work to a subordinate, managers and employees.
he/she is answerable to the superior for its 3. Quick decision making: Since
outcome. the managerial decisions are
taken at all levels nearest to
Importance of Delegation
the point of action helps
1. Reduction of Executives’ work load: It them to take better and quick
reduces the work load of officers. They can decisions.
thus utilize their time in more important and 4. Relieves the top
creative works instead of works of daily management: By the
routine. delegation of work, the daily
managerial jobs are assigned
2. Employee development: Employees get to the subordinates, which
more opportunities to utilize their talent which leaves enough time with the
allows them to develop those skills which will superiors to look into priority
enable them to perform complex tasks. areas.
5. Facilitates growth: It allows the
3. Quick and better decision are possible: The departmental heads and employees to
subordinate are granted sufficient authority so perform in the best possible manner
they need not to go to their superiors for taking considering all the aspects of their
decisions concerning the routine matters. department, which in turn increases
4. High Morale of subordinates: productivity, efficiency and facilitates
Because of delegation of authority to growth.
the subordinates they get an
Difference between Functional Structure
and Divisional Structure:

Difference between Formal and Informal

Difference between Authority,