Organizing or Organization

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BHAISN CLASSES 94531219

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ORGANIZING OR ORGANIZATION

MEANING OF ORGANIZATION:

The term 'Organization' can be used in different senses. It can be used as a group of person workingtogether to as a structure of relationships or as a process of management.

When it is used to refer to a group of person working together, it means a concern, an undertaking or asenterprise.

When it is used to refer to a structure of relationships, it means the structural relationships among thepositions and jobs and person (i.e., the framework of responsibilit and authorit! through which theenterprise functions, and it is called organization structure.

DEFINITIONS OF ORGANIZATION:

". Theo Haimann# $Organizing is the process of defining and grouping the acti%ities& of theenterprise and establishing authorit relationships among them$.

. oontz and O')onnell# $Organization in%ol%es the grouping of acti%ities necessar to accomplishgoals and plans, the assignment of these acti%ities to appropriate departments end tl"e pro%isionfor authorit, delegation and co * ordination.

+. ouis -. -llen# $Organizing is the process of identifing and grouping the work to be performed,defining and delegating responsibilit and authorit, and establishing relationship the purpose forenabling people to work most efficientl together in accomplishing objecti%es$.

NATURE & CHARACTERISTICS OF ORGANIZA TION:

The main characteristics and nature of organization are#

Organizing or organization is a management process (i.e., a managerial function! Organization is concerned with groups of peop". -n organization cannot be constituted b a

single person. It comes into e/istence onl a group of persons come together. Organization is, concerned with identification and grouping of acti%ities into logical pattern so as

to secure homogeneous groups of acti%ities. )i%ision of work of di%ision of labors the basis of organization.

Integration or*coordination of the %arious acti%ities of the enterprise is another important feature

of organization. -n organization structure has no meaning unless it can contribute to the accomplishment to the

common objecti%es, i.e., the goal or objecti%es of the enterprise. -n organization structure consists of %arious positions arranged in a hierarch with clear

definition of authorit and responsibilit associated with each of the positions. Organization process in%ol%es taking a number to steps, such as the identification of the

acti%ities to be performed to attain the objecti%e of the enterprise, the appropriate groping ofacti%ities into logical pattern, assignment to acti%ities to appropriate departments and people,delegation of authorit, creation of authorit *responsibilit relationships, etc.

PRINCIPLES OF SOUND ORGANIZATION:

There are man principle of organization. The main principles are#


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". Principe o! O"#ec$i%e:The principle of Objecti%es stresses the need for setting the objecti%esof the enterprise. The setting of the objecti%es of the enterprise is necessar, because theformulation of the organization structure s %er much influence b objecti%es of the enterprises

. Principe o! Uni$' (o! O"#ec$i%e:The 0rinciple of unit of objecti%es implies that 1 e%er part ofthe organization and the organization as a whole should be geared to the basic objecti%es of theenterprise, in other words the main objecti%es of the enterprise.

+. Principe o! )i%iion o! *or+ an) peciai,a$ion:2pecialization has become the 1 order of theda. 2o, sound and effecti%e organization must be built on the principle of specialization

3. Principe o! F-nc$iona )e!ini$ion: The principle of functional definition implies that 1 thefunctions, duties and responsibilities of the different departments and position in the organizationtheir authorities and their relationships with other departments and position must be clearldefined.

4. Principe o! "aance o! %ario- !ac$or:The principle of balance of %arious factors suggeststhat there should be popper balance in the formal structure of the organization in regard to%arious factors& 5or instance, there should be proper balance among the& different segments ordepartments' of the undertaking. That ism, the work* load should be properl distributed amongthe %arious departments to maintain balance and harmon the working of the organization.There should be balance in authorit allocation to different departments.

6. Principe o! impici$':The principle of simplicit means that the organization structure shouldbe simple with a minimum number of managerial le%els. If there are a large number ofmanagerial le%els in the organization structure, there ma raise the problem of effecti%e co*ordination and communication

7. Principe o! Span o! Con$ro or Span o! Mana.emen$: 2pan of control or span ofmanagement refers "8 'numbers of subordinates a superior can direct, guide and controleffecti%el. The span of control should be minimum, because there is a limit to the number ofsubordinates that can be effecti%el super%ise b a superior.

9. The Scaar Principe/ $he caar chain/ $he chain o! $he comman) or ine o! a-$hori$':2calar chain is the chain of superiors. the line of command or the line of authorit form the

highest rank to the lowest rank in the organization established for the purpose of communicationin both the directions, it establishes the channel through$ which communications should pass,and also states the superior* subordinate relationships in the organization.When the strict following of the line of authorit becomes detrimental, and there is a need of swiftaction, the scalar chain can be short*circuited b taking the permission of their immediatesuperiors. Through this arrangement, the scalar chain principle is safeguarded, and at the sametime, the subordinate officers are enabled to take swift action. 2uch an arrangement is known as:ang 0lank. In this conte/t, it must be noted that the short circuiting of the scalar chain ispermitted onl on routine matters. ;ut matters pertaining to decision *making should be routedthrough the usual scalar chain.

. Principe o! reponi"ii$':


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subordination. )ual subordination results in undermining of authorit, dela, confusion, disorderand indiscipline of subordinates.

". Principe o! -ni$' o! )irec$ion:The principle of unit of direction suggests that, for a group ofacti%ities ha%ing the same objecti%e, there should be one plan of action and one objecti%e. Thiswould facilitate co*ordination of acti%ities and the completion of the task as per the schedule. Ifeach person in a department is made to work under a different plan or programme of action,there will be nothing but confusion.

"+. Principe o! coor)ina$ion:-s the organization is di%ided into a number of departments, it isnecessar that there should be co*ordination between the different departments. The principle ofco*ordination emphasizes that co*ordination between the different departments is >uite essentialto bring unit of action and commonness of purpose in the organization.

"3. Principe o! comm-nica$ion:The principle of communication suggests that their should be agood communication network in the organization to achie%e the objecti%es of the enterprise.5urther, there should be effecti%e two*wa communication. i.e., downward communication andupward communication.

"4. Principe e0cep$ion or e0cep$iona ma$$er: The principle of e/ception implies that theorganization should be so designed that onl e/ceptional or comple/ matters are referred toe/ecuti%es at higher le%els for their decision and routine meters are decided b the subordinatesthemsel%es.

"6. Principe o! !e0i"ii$' or con$in-i$':-n organization is built not just for toda or tomorrow. It isbuilt to stand and ser%e for a long time. The principle of fle/ibilit means that the organizationstructure should be capable of adapting itself to the needs or changing circumstances.

"7. Principe o! e!!icienc': The principle of efficienc means that the organization structureformulated should enable the undertaking to function efficientl and achie%e the objecti%es of theenterprises with minimum cost and effort.

"9. Principe o! !acii$a$ion o! ea)erhip:the principle of facilitation of leadership implies that theorganizational structure should be so designed that there is enough opportunit for themanagement to gi%e effecti%e leadership to the undertaking.

". Principe o! !e0i"ii$':The principle of fle/ibilit suggests that the organization must be fle/ibleso that it can easil adapt itself to the changing en%ironment without changing the basicorganisation design.

FORMAL AND INFORMAL ORGANISATION

In$ro)-c$ion:

In the organizational structure of e%er enterprise, botl" formal and informal organisations e/ist. 2o, it isnecessar for us to ha%e some idea about the formal and informal organisations e/isting in e%erconcern.

FORMAL ORGANISATION

MEANING OF FORMAL ORAGANISATION:

In the words of ?hester ;arnard, $ -n organisation is formal when the acti%ities of two or morepersons are consciousl co*ordinated towards a common objecti%e$.

Fea$-re o! Forma Or.ania$ion:

The main features of formal organisation are#


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(a! In a formal organisation, the position, authorit, responsibilities, accountabilit of each le%el areclearl defined.

(b! It prescribes the relationships amongst the people working in the organisation.(c! The formal relations in the organisation arise from the pattern of responsibilities that are created

b the management.(d! The structure is consciousl designed to enable the people of the organisation to work together

for accomplishing the common objecti%es of the enterprise.(e! - formal organisation is bound b rules! regulation and procedures.(f! It is deliberatel impersonal.(g! It is base on ideal relationship arid the common"@uired b the formal organisation but arising spontaneousl as people associate withone anotherC.

Fea$-re o! In!orma Or.ania$ion:

The chief features of informal organisation are#

(a! Informal Organisation is not established b an formal authorit. It arises from the personal andsocial relations amongst the people working in the organisation.

(b! Informal Organisation arises spontaneousl, and not b deliberate or conscious efforts.(c! It is influenced b the personal attitudes, emotions, whims, likes and dislikes, etc. of the people

in the organisation.(d! It is based on rules, regulations and procedures.


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(e! The inter*relations amongst the people in an informal organisation cannot be charted (i.e.,cannot be shown in an organisation chart!.

2ene!i$ o! In!orma or.ania$ion:

Informal organisation has certain benefits. The are&

(a! It helps the formal organisation to make a workable sstem to get the work done.(b! It assists the formal organisation to become humanistic.(c! It helps the group members to attain specific personal objecti%es.(d! It pro%ides social satisfaction to group members.(e! It acts as a means b which the workers achie%e a sense of securit and belonging.(f! It is best means of emploee communication.(g! It ser%es as an agenc for social control of human beha%iour.(h! It acts as a safet %al%e for the emotional problems and the frustrations of the workers of the

enterprise.(i! It lightens the work*load of the formal managers.(j! Dan things which cannot be achie%ed through formal organisation can be achie%ed through

informal organisation.(k! The presence of informal organisation in an enterprise makes the managers plan and act more

carefull.

Dra*"ac+ o! In!orma Or.ania$ion:

Informal organisation is not free from drawbacks. It suffers from certain drawbacks. The are#

(a! The communication in informal organisation ma, son"etirnes, lead to rumours.(b! Informal organisation ma put resistance to changes and inno%ations.

(c! It ma not effecti%el contribute to the attachment of the objecti%es of the enterprise.

Conc-ion:

5ormal organisation alone is not capable of accomplishing the organizational objecti%es. It needs thehelp of informal organisation. Informal organisation supplements the formal organisation in achie%ingthe organizational objecti%es. In the words of Che$er I3 2arnar), $Informal organisation bringscohesi%encss to a formal organisation. It brings to the members of a formal organisation, a feeling ofbelonging, of status, of self*respect and of gregarious satisfaction$. In the words of eith )a%is, $-ninformal organisation is 'a powerful influence upon producti%it and job satisfaction ;oth formal andinformal sstem are necessar for group acti%it, just as two blades are essential to make a pair ofscissors workable$.

T4PES OF INTERNAL ORGANISATION

The main tpes of integral organisation are#

(I! ine, militar or scalar organisation.(II! 5unctional Organisation.(III!ine and staff organisation.(IE!?ommittee form of organisation.

53 LINE ORGANISATION/ SCALAR ORGANISATION


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OR HIERARCHICAL ORGANISA TION

In$ro)-c$ion:

ine organisation is& a direct tpe of internal organisation. It is the oldest and the simplest form ofintegral organisation.

Meanin. o! Line Or.ania$ion:

ine organisation is a tpe of internal organisation in which there are direct %ertical authoritrelationships (i.e., superior*subordinate relationships!, connecting the positions at each le%el withthose abo%e and those below in the hierarch. In other word, it is a form of organisation in which therelationships between the %arious le%els of management form a hierarch of authorit or chain ofcommand.

Char$ ho*in. $he ine or.ania$ion:

The following chart depicts the line organisation#


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4. The unification of authorit and responsibilit present in this sstem facilitates >uick and promptdecisions.

6. -s all the acti%ities relating to one department or di%ision are managed b one e/ecuti%e, therecan be effecti%e co*ordination of acti%ities.

7. Gnder this sstem, communication is eas and >uick.9. This sstem is fle/ible or elastic, in *the sense that, as each e/ecuti%e has sole responsibilit in

his own position and sphere of work, he can easil adjust the organisation to changingconditions.

. This sstem is less e/pensi%e, as there are no staff specialist to ad%ise the line authorities

Dia)%an$a.e o! Line Or.ania$ion:

ine organisation is not free from defects. It suffers from se%eral drawbacks. The main drawbacksare#

". Gnder this sstem, as onl one e/ecuti%e manages all the acti%ities in his department, there isno scope for specialization.

. -s onl one e/ecuti%e is re>uired to manage all the acti%ities in his department, he is o%er*burdened, -s a result, he ma not be able to direct and control the efforts of his subordinates,properl.

+. -s all the decisions relating to a department are taken b onl one e/ecuti%e, there is unitaradministration. ?onse>uentl, the successful functioning of the department depends on theabilities of the departmental head.

3. Gnder this sstem, onl one e/ecuti%e controls all the acti%ities of department and gets undueimportance. The importance of the other people in the department is not recognised. -s a result,there ma be lack of co*operation and team*spirit.

4. 2ince onl one e/ecuti%e controls all the acti%ities in his department, there is much scope fornepotism and fa%ouritism.

6. Gnder this sstem, the subordinates should follow the orders of their superior without e/pressingtheir opinion on the orders. That means, there$ is limited communication.

7. Gnder this sstem, the lower le%el managers lose their initiati%es and interest, as the ha%e tomerel carr out the orders and instructions of their superiors.

9. When there are too man le%els of management, the process of communication ma becomedifficult under this sstem.

. There is the danger that the line authorities ma become autocratic or dictatorial."8. ine organisation is rigid and infle/ible.

S-i$a"ii$' o! Line Or.ania$ion:

It is true that line organisation suffers from man limitations. ;ut its importance has not been

reduced. It is considered suitable for#

(a! 2mall concerns, i.e., concern which carr on their operations on a small scale.(b! ?oncerns which ha%e a small number of subordinates.(c! ?oncerns which are engaged in operations which ate mainl of routine tpe.(d! ?oncerns which has straight and simple methods of machines.(e! ?oncerns where acti%ities are performed b automatic machines.(f! Industries where continuous processes are followed.

73 FUNCTIONAL ORGANISATION


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Meanin. o! F-nc$iona Or.ania$ion:

5unctional organisation is a tpe of organisation in which the work of the whole enterprise is di%idedinto a number of specialised functions like production, purchasing, marketing, office management,personnel relations, etc. and each of these spcciA""ised functions is entrusted to a functional e/pertor specialist.

Fea$-re o! F-nc$iona Or.ania$ion:

5unctional organisation has certain characteristic features. The main features of functionalorganisation are#

("! 5unctional organisation is a comple/ tpe of organisation when compared to line organisationand line and staffing organisation.

(! There is specialization in functional organisation, as the work of the concern as a whole isdi%ided into different specialised functions like production, purchasing, marketing, finance,personnel relations, etc. and each specialised function is entrusted to a functional e/pert orspecialist.

(+! In this tpe of organisation, the line e/ecuti%e recei%es instructions not onl from his line boss butalso from one or more specialists. 5or instance, a foreman in the production department marecei%e orders and instructions from the superintendent, who is his line boss, and also from thespecialists like the personnel manager, marketing managers, financial manager, etc.

(3! Gnder this sstem, the principle of unit of command is not obser%ed, as a single worker has toget instructions from more than one specialist.

(4! In this tpe of organisation, more importance is gi%en to staff specialists or functional e/perts.The functional e/perts are gi%en e%en some line authorit.

(6! In this tpe of organisation, Aere are three tpe of authorit relationships, %iz., (i! line authoritrelationship, (ii! staff authorit relationship and (iii! functional authorit relationship.

(7! Gnder this tpe, the e/ecuti%e ha%e to perform limited number of operations.

A)%an$a.e o! F-nc$iona Or.ania$ion:

5unctional organisation has certain ad%antages. The are#

". This sstem ensures ma/imum use of the principle of specialisation at e%er work point andhelps the enterprise to enjo the benefits of specialisation of functions.

. -s the workers ha%e to perform onl a limited number of functions under this tpe oforganisation, this sstem contributes to higher efficienc of the workers.

+. -s there is no scope for one*man control in this form of organisation, this sstem ensures co*operation and team*work among the workers.

3. Gnder this sstem, the line officers are freed from the worries of technical problems faced bthe workers, as instruction regarding the technical problems flow to the workers directl fromthe specialists.

4. This sstem is fle/ible, in the sense that an change in the organisation can be introducedwithout disturbing the whole organisation.

6. This sstem is >uite suitable for training oung specialists.7. This sstem ensures the separation of mental functions (i.e., planning! from manual functions

(i.e., functions at the workshop!, and thereb, simplifies managerial control.

Dia)%an$a.e o! F-nc$iona or.ania$ion:


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5unctional organisation suffers from some drawbacks. The are#

". Gnder this tpe of organisation,' there are man super%isor staff of e>ual rank. This ma lead toconflicts among them.

. -s the workers ha%e to work under man bosses under this sstem, it is difficult to maintaindiscipline among the workers.

+. -s there are se%eral functional e/perts in the organisation under this sstem, there ma be thedifficult or co*ordination.

3. The speed of action ma be hampered under this sstem, as the control is di%ided amongse%eral specialists.

4. -s there are se%eral functional e/perts under this sstem, the top management ma find itdifficult to fi/ responsibilit, when there is unsatisfactor progress.

6. -s the workers ha%e to carr out the orders of man posses or specialists, there is no unit ofcommand under this sstem.

7. -s a large number of specialists, there e/perts are re>uired to be appointed under this tpeorganisation, this sstem is %er e/pensi%e.

9. It is %er difficult to put this sstem into operation.. This sstem makes relationship more comple/.

S-i$a"ii$' o! F-nc$iona Or.ania$ion:

5unctional organisation is >uite good for di%ision of work at the top. ;ut for the di%ision in the %ariousdepartments, this sstem is not %er successful, as there is no clear line of authorit.

Char$ ho*in. F-nc$iona Or.ania$ion

2oar) o! Direc$or

Mana.er Mana.er Mana.er Mana.er Pro)-c$ion Mar+e$in. Finance Peronne

Sec$ion Sec$ion Sec$ion Sec$ionO!!icer I O!!icer II O!!icer III O!!icer I8

93 LINE AND STAFF ORGANISATION

In$ro)-c$ion:


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". If the pattern of authorit relationship between the line officers and the staff officers is not clearlindicated, there will be considerable confusion in the organisation. 5urther, there ma be conflictsbetween the line officers and the staff officers.

. -s the staff officers do not ha%e the authorit to put their recommendations into practice, their ad%icema be ignored b line officers.

+. -s the staff officers are not 'concerned with the e/ecution of the plan, the ma not take proper carebefore the ad%ice the line officers. That means, this sstem ma encourage carelessness on thepart of the staff officers.

3. This tpe of organisation re>uires the appointment of a large number of staff officers or e/perts inaddition to the line officers. -s a result, this sstem becomes >uite e/pensi%e.

4. -s the line sstem is e/pensi%e, small concerns cannot afford


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COMPARATI8E STUD4 OF LINE ORGANIZATION/ FUNCTIONAL ORGANISATION AND LINE ANDSTAFF ORGANSIATION

". ine organisation is a simple form of organisation. ;ut functional organisation and line and stafforganisation are complicated.

. In the case of the line organisation, there is clear*cut line of authorit .m the case of functional

organisation, there is no clear*cut line of authorit .In the case of line and staff organisation, there isclear*cut di%ision of authorit for the line officers, but staff officers do not ha%e an authorit.

+. In the case of line organisation, there is clear*cut responsibilit .In the case of functional organisationand line and staff organisation, there is clear*cut responsibilit for the line officers, but staff officersdo not ha%e an responsibilit.

3. ;ecause of clear*cut line authorit, there is unit of command in the case of line organisation. Thereis no unit of command in the case of functional organisation, as a worker has to take instructionsfrom se%eral authorities. There is unit of command in the case of line and staff organisationbecause of the e/istence of the line officers.

4. In the case of line organisation, there is fle/ibilit in the sense that >uick decisions and promptactions can be taken to adjust to changing situations because of the e/istence of full authorit.5unctional organisation is rigid and infle/ible. In the case of line and staff organisation, fle/ibilit is

difficult.6. 2trict discipline is enforced in the case of line organisation. In the case of functional organisation,

enforcement of discipline is difficult because of lack of unit of command. In the case of line and stafforganisation, there is discipline enforced b line officers.

7. In the case of line organisation, there can be prompt and >uick decisions. In the case of functionalorganisation, there cannot be >uick decisions. In the case' of line and staff organisation, there canbe better decisions b the line officers with the help of staff ad%ice.

9. There is no specialisation in the case of line organisation. There is ma/imum specialisation in thecase of functional organisation. There is certain amount of specialisation in the case of line and stafforganisational because of the presence of staff officers.


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. In the case of line organisation, there is hea% work load on the e/ecuti%e or managers. There isless work load in the case of functional organisation. The work load is not hea% in the case of lineand staff organisation.

"8. There is a good communication sstem in the case of line organisation. There is o%erlapping ofcommunication in the case of functional organisation. There is a good communication sstem in thecase of line and staff organisation.

"". In the case of line organisation, there can be better co*ordination within the department, but inter*department co*ordination becomes difficult. In the case of functional organisation, there is lack ofeffecti%e co*ordination because of e/treme specialisation. In the case of line and staff organisation,there can be co*ordination through staff officers.

". Ffficienc is lacking in the case of line organisation, as one e/ecuti%e is entrusted with manacti%ities in which he is not efficient. In the case of functional organisation, there is greater efficienc,as each e/ecuti%e is entrusted with limited duties. There is ma/imum efficienc in the case of lineand staff organisation because of the clear*cut duties of the line officers and the a%ailabilit of e/pertad%ice from the staff officers.

"+. ine organisation is suitable for small enterprises, trading as well as industrial. 5unctionalorganisation is suitable for large industrial enterprises. ine and staff organisation is suitable formedium* sized industrial enterprises.

3 Commi$$ee Form o! Or.ania$ion

- number of persons ma come together to take decision, decide a course of action, ad%ise line officerson some matters, it is a committee form of organisation. It is a method of collecti%e thinking, corporate

judgement and common decision. - committee ma be assigned some managerial functions or somead%isor or e/plorator ser%ice ma be e/pected from it.

Nee) !or Commi$$ee:

The main reason for committee is to secure common judgement on administrati%e matters. Thecommittees are set up for the following reasons."! The committees pro%ide a forum for e/changing ideas among organisational members.! The e/change of ideas among members ma generate some suggestions and recommendations

which ma be useful for the organisation.+! There can be proper discussion on present problems and efforts are made to find the solutions.3! The committees ma also be needed in establishing and de%eloping organisational policies.

T'pe o! Commi$$ee;

)ifferent committees mabe formed with different ideas and purposes. 2ome committees ma be onlad%isor while some ma perform managerial functions. There ma be following tpes of committees#

"! Forma an) In!orma Commi$$ee: If a committees is formed as a part of organisation structureand is delegated some duties and authorit, it is a formal committee. -n informal committee ma beformed to tackle some problem. - manager ma call some e/perts to help him in analzing aproblem and suggesting a suitable solution.

! A)%ior' Commi$$ee:These are the committees to ad%ice line head on certain issues. ine officersma refer some problems or issues to a committee foe ad%ice.

+! Line Commi$$ee:There ma be committees with managerial powers. Instead of gi%ing work to oneperson it ma be assigned to a number of e/ecuti%es.

A)%an$a.e o! commi$$ee !orm o! or.ania$ion:


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The committee form of organisation has the following has the following ad%antage#

". Pooin. o! opinion: the members of committees come from different background and areas ore/pertise and ha%e different %iew points and %alues. When persons with %aried abilities sit togetherand discuss a problem, %arious aspects of the case are highlighted and pros and cons areassessed. The pooled opinion will help in taking a realistic %iew of the problems.

. 2e$$er co


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CENTRALISATION

Meanin. o! Cen$raia$ion:

In the words of =enr 5aol, =E%er'$hin. *hich .oe $o increae $he impor$ance o! $he-"or)ina$e( roe i )ecen$raia$ion/ e%er'$hin. *hich .oe $o re)-ce i$ i cen$raia$ion>.

Impor$an$ Fea$-re o! cen$rai,a$ion:

?entralization has the following features#

"! ?oncentration and reser%ation of the decision*making power with regards to %arious managementfunctions with the top le%el management.

! F/ecution of the decisions taken b the top le%el management (i.e., performance of operati%efunctions! b with the middle and lower le%els of management.

+! 5unctioning of the lower le%els of management under the direct command, direction and control ofthe top le%el management.

DECENTRALISATION

Meanin. o! Decen$raia$ion:

-ccording to =enr 5aol, $F%erthing which goes to increase the importance of the subordinate's role'is decentralisation, e%erthing which goes to reduce it is centralisation.

A)%an$a.e or Decen$raia$ion:

)ecentralisation has se%eral ad%antages. The are#

". )ecentralisation relie%es the top e/ecuti%e from routine works, and enables them to concentrate onmore important works.

. ; gi%ing responsibilit, authorit and initiati%e to the subordinates, and thereb, widening the scopeof their acti%ities, decentralisation contributes to the de%elopment of e/ecuti%es or management mthe organisation.

+. ; gi%ing power, prestige and status to the subordinates, decentralisation increases the morale ofthe subordinates and moti%ates them to put forth their best.

3. ; gi%ing authorit for decision*making to the lower le%els where actions take place, decentralisationfacilities >uick decisions.

4. Gnder decentralisation, the performance of each unit is judged b the management on the basis ofthe profitabilit. This ensures mf.e, effecti%e control b the management o%er each unit.

6. In a decentralised enterprise, each of the different di%isions or departments is made a separate profitcentre. This contributes to health competition between the different di%isions or departments toimpro%e their performance.

7. In a decentralised enterprise, the di%ision or departments are independent of one another. This ishelpful to the management to e/periment with new ideas in one di%ision or depa""ment withoutad%ersel affecting the functioning of the other di%isions or departments.

9. In a decentralised enterprise, the emploees ha%e greater opportunit to come into close contactwith one another. This contributes to personal intimate relationship between them.

. )ecentralisation contributes to the di%ersification of acti%ities and products.

Dia)%an$a.e o! Decen$raia$ion:


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)ecentralisation is, no doubt, good .;ut it is not free from drawbacks or limitations. The %ariousdrawbacks or disad%antages of decentralisation are#

". )ecentralisation re>uires competent managers to run the %arious departments independentl. ;ut itis difficult to find competent managers.

. )ecentralisation re>uires the emploment of highl*paid managers. The emploment of highl*paidmanagers will increase the administrati%e costs of the enterprise.

+. In a decentralised enterprise, e%er unit ma tr to ma/imize its performance at cost of the otherunits. This ma lead to unhealth competition among the different units of the enterprise.

3. In a decentralised enterprise, authorit lies dispersed widel throughout the organisation. Fachdi%ision or department enjos complete freedom in the formulation of policies. This ma increase theproblem of co*ordination.

4. )ecentralisation ma result in duplication of functions and wastage of resources.6. )ecentralisation ma, sometimes, become a handicap in the case of >uick emergenc decisions.7. )ecentralisation is not suitable for the de%elopment of specialised ser%ices, .such as personnel,

accounting, statistical departments, etc.9. In a decentralised enterprise, establishment of ade>uate and effecti%e controls o%er the %arious

di%isions or departments becomes difficult.

Conc-ion:

F/cessi%e centralisation kills the initiati%e and enthusiasm of the subordinates. 2imilarl, e/cessi%edecentralisation reduces the importance of the superiors. -gainst complete centralisation isimpossibilit, as management will be impossible without some measure of delegation of authorit.2imilarl, complete decentralisation will amount to %irtual decentralisation. 2o, too munch ofcentralisation or too much of decentralisation must not be res8rted to. - proper balance must bemaintained between e/cessi%e centralisation and e/cessi%e decentralisation.

Fac$or De$erminin. $he E0$en$ or De.ree o! Decen$raia$ion:

)ecentralisation is not an absolute term. 2o, the e/tent or degree of decentralisation %aries fromconcern to concern. The degree of decentralisation in an enterprise is determined b a number offactors. The are#

". The size of the organisation determines the e/tent of decentralisation. -s the size of theorganisation increases. it becomes necessar to decentralise and di%ide the organisation into anumber of semi*autonomous units. In fact the larger is the size of the organisation! the greater is thee/tent of decentralisation.

. )ecentralisation re>uires a number of able middle le%el managers to run the %arious di%isions or

departments of the enterprise. That means, the e/tent of decentralisation is determined b thea%ailabilit of competent middle le%el managers. Where such managers are not a%ailable,decentralisation is not possible.

+. The e/tent of decentralisation is also determined b the management philosoph (i.e., the outlook ofthe top management!. If the top management belie%es in centralisation of authorit, there will not bemuch decentralisation. On the other hand, if the top management belie%es in greater .autonom andfreedom to the subordinate, the e/tent of decentralisation will be great.

3. The nature of the growth and e/pansion of the business also determines the degree ofdecentralisation. If the enterprise has growth through internal e/pansion, generall, there will becentralised control, and so, there ma not be much decentralisation. On the other hand if the


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concern has growth through amalgamation or absorption, generall there will be greaterdecentralisation.

4. The phsical dispersion of operations of the enterprise also influences the e/tent of decentralisation.When the operations of an enterprise are widel dispersed in different territories, generall, there willbe greater decentralisation for better results.

6. :o%ernment policies and regulations also determine the e/tent of decentralisation.7. The product lines of the enterprise influence the e/tent of decentralisation. Where the product lines

of the enterprise are >uite different, decentralisation is resorted to.9. Technological changes also ma create conditions fa%ourable for decentralisation.. The costliness and the significance of the decisions to be taken also influence the e/tent of

decentralisation. Where the decisions to be taken in%ol%e hea% in%estment or cost, generall,decentralisation is not thought of. Instead, centralisation is thought of.

)ifference between )elegation and )ecentralisation#

)elegation and )ecentralisation seem to be identical terms. ;ut the are not identical terms. The differfrom each other in man respects. The main differences between them are#

". )elegation is a process or act whereas decentralisation is the end result of delegation.. )elegation refers to the relati6nship between two indi%iduals, %iz., a superior and his immediate

subordinate. ;ut decentralisation refers to the relationship between the top management and the%arious di%isions departments of the organisation.

+. )elegation is >uite essential in the management process, as no manager can get things donethrough his subordinates unless he delegates to them the re>uisite authorit for the performance ofthe work assigned. ;ut decentralisation is optional (i.e., it maor not be resorted to b themanagement!.

3. In the case of delegation, onl authorit is delegated, and responsibilit is not delegated. ;ut in thecase of decentralisation, e%en the responsibilit is delegated (i.e., the superior is relie%ed of his

responsibilit for the work decentralised.4. In the delegation, the control o%er the subordinate's performance of the job rests entirel with the

delegator (i.e., the superior who has delegated the authorit!. On the other hand, in the case ofdecentralisation, the top management ma e/ercise the minimum control in a broad wa anddelegate e%en the power to control to the di%isions or the departments concerned.

Or.ania$ion Char$

Organisation charts is a diagrammatical presentation of relationships in an enterprise. The functions andtheir relationships, the channels of authorit and relati%e authorit of different managers etc. aredepicted in an organisational chart.

T'pe o! Or.ania$ion char$

There are three was in which organisation charts can be shown# (i! Eertical (ii! =orizontal (iii! ?ircular.

I. 8er$ica or Top "o$$om: In this chart major functions are shown at the top and subordinatefunctions in successi%e lower positions. In this chart scalar le%els run horizontall and functions run%erticall. The supreme authorit is shown at the top while lowest authorit at the bottom.


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III. Circ-ar: In circ-ar char$the centre of the circle represents the position of supreme authoritand the functions radiate in all directions from the centre. The higher the positions of authorit the

nearer the are to the centre and the lesser the positions of authorit. more distant the are fromthe centre. The positions of relati%e e>ual importance are located at the same distance from thecentre.

Principe o! Or.ania$ion Char$:

The top management should faithfull follow the line of authorit while dealing with subordinates.

-n attempt to be pass the organisation chart will make it meaningless.


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The chart should define lines of position. The lines of different indi%iduals should be so defined so

that there is no o%erlapping and no two persons should gi%en the same position. The undue concentration of dut at an point should be a%oided.

The organisation chart should not be influenced b personalities. ;alance of organisation should begi%en more importance than the indi%iduals.

The organisation chart should be simple and fle/ible.

A)%an$a.e o! Or.ania$ion Char$:

-n organisation chart is a managerial tool. It helps in specifing authorit and responsibilit of

e%er .position. The relationships among different persons are also established for smooth workingof the organisation.

-s organisation chart specificall defines authorit and responsibilit of people in the enterprise

there will be no duplication and o%erlapping of duties etc. The organisation chart will help in pointing out the faults, deficiencies, dual command etc. in the

organisation. The organisation chart acts as an information centre to the new entrants and the can easil

understand different le%els of authorit and responsibilit. The charts are also helpful in decision making process. The ct as a guide to the decision makers.

Limi$a$ion o! Or.ania$ion Char$:

The organisation charts suffer from the following drawbacks.

The organisation charts show the relationship of different positions and not the degree of authorit

and responsibilit. The size of bo/es or circles in the chart cannot show the le%el of authorit etc. - chart onl depicts formal organisational relationship whereas informal organisation is ignored.

0racticall informal organisation is an useful as formal organisation. Informal organisation greatlhelps management in knowing the reactions of the people and is an important channel ofcommunication.

- chart shows organisational position and status at different le%els. It gi%es rise to superior*inferior

feeling among people and it retards the feeling of team work.

Dee.a$ion

)elegation is an administrati%e process of getting things done b others b gi%ing them

responsibilit. -ll important decisions are taken at top le%el b ;oard of )irectors.

The e/ecution is entrusted to ?hief F/ecuti%e.

The ?hief F/ecuti%e assigns to the work to departmental managers who in turn delegate the

authorit to their subordinates. F%er superior delegates the authorit to subordinates for getting a particular work done.

The process goes to the le%el*Ahere actual work is e/ecuted.

The person who is made responsible for a particular work is gi%en the re>uisite authorit for getting it

done. There is a limit up to which a person can super%ise the subordinates. When the number of

subordinates increases beond it then he will ha%e to delegate his powers to others who performsuper%ision for him. - manager is not judged b the work he actuall performs on his own but thework he gets done through others.


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De!ini$ion:

-llen. $The entrustment or a part of the work, or responsibilit and authorit to another, and the creationof accountabilit for performances$.

Charac$eri$ic o! Dee.a$ion:

)elegation has following ?haracteristics#

"! )elegation takes place when a manager grants some of his powers to subordinates.! )elegation occurs onl when the person delegating the authorit himself as that authorit i.e. a

manager must possess what he wants to delegate.+! Onl a part of authorit is delegated to subordinates.3! - manager delegating authorit can reduce, enhance or take it back. =e e/ercises full control o%er

the acti%ities of the subordinates e%en after delegation.4! It is onl the authorit which is delegated and not the responsibilit. - manager cannot abdicate

responsibilit b delegating authorit to subordinates.

Eemen$ o! Dee.a$ion

)elegation in%ol%es three elements#

"! Ai.nmen$ o! reponi"ii$':the first step in delegation is the assignment of work or dut to thesubordinate i.e. delegation of authorit.

! Gran$ o! A-$hori$':the grant authorit is the second element of delegation. The delegator grantsauthorit to the subordinates so that the assigned tack is accomplished. The delegation ofresponsibilit with authorit is meaningless# The subordinates can onl accomplish the work whenhe has the authorit re>uired for completing that task. -uthorit is deri%ed from responsibilit.

+! ?reation of -ccountabilit# -ccountabilit is the obligation of a subordinate to perform the dutiesassigned to accomplish the task assigned to him b the superior. When a work is assigned andauthorit is delegated then accountabilit is the b*product of this process. The authorit istransferred so that a particular work is completed as desired. The subordinate should be madeaccountable to onl one superior.

Principe o! Dee.a$ion:

The following are the principles of delegation#

"! Principe o! F-nc$iona De!ini$ion:The related or similar acti%ities should be grouped togetheraccording to enterprise function. When the definition of a position is clear then delegation of

authorit becomes simple.! Principe o! Uni$' o! Comman):the basic management principle is that of unit of command. This

principle states that a subordinate should report onl single superior. This will gi%e a sense ofpersonal responsibilit.

+! Principe o! Dee.a$ion "' Re-$ E0pec$e):The delegation of authorit should be based on thebasis of results e/pected. The .authorit should be sufficient to achie%e the desired results.

3! Principe o! A"o-$ene o! Reponi"ii$':The responsibilit of subordinates, once he hasaccepted the work, is absolute to his superior. The responsibilit of the superiors does not decreaseonce he has delegated authorit. - person can delegate authorit and not responsibilit .=e willremain accountable for the work e%en if it is delegated to the subordinate. 2o the responsibilit ofsuperior and subordinate remains absolute.


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4! A-$hori$' Le%e Principe: The managers delegate authorit to subordinates but ha%e thetemptation to make decisions for them. The should allow the subordinates to take their owndecisions as per the authorit delegated to them.

T'pe o! )ee.a$ion:

)elegation ma be of the following tpes#

Genera or Speci!ic Dee.a$ion:when authorit is gi%en to perform general managerial functions

like planning. Organising, directing, etc., the subordinate managers perform these functions andenjo the authorit re>uired to carr out these responsibilit. The chief e/ecuti%e e/ercises o%erallcontrol and guides the subordinates from time to time. The specific delegation ma relate to aparticular functions or an assigned task. The authorit delegated to the productions manager forcarring out these functions will be specific delegation.

Forma or In!orma Dee.a$ion: 5ormal delegation of authorit is the part of organisational

structure. Whene%er a task is assigned to a person then the re>uired authorit is also gi%en to him.Informal delegation does not arise due to position but according to circumstances. - person maundertake a pa""icular task not because he has been assigned$ it but it is necessar to do hisnormal work.

La$era Dee.a$ion:When a person is delegated an authorit to accomplish a task, he ma need

the assistance of a number of persons. It ma take time to formall get assistance from thesepersons. =e ma indirectl contact the persons to get their help for taking up the work b cuttingshort time of formal delegation. When the authorit is delegated informall it is called lateraldelegation.

Reer%e) A-$hori$' an) Dee.a$e) A-$hori$':- delegator ma not like to delegate e%er authorit

to the subordinates. The authorit which he keeps with him is called reser%ed authorit and theauthorit which is assigned to the subordinates is delegated authorit.

PREualitiesof subordinates and do not want to take risks.

3. Fear o! S-per%ior:There is often a fear among superiors that their subordinates ma not o%er

take them, once the are gi%en higher responsibilit. This is a case of interiorit comple/. Thesuper%isors ma gi%e man logics for delegating authorit but this fear is one of the importantcauses.

DIFFICULTIES IN8OL8ED IN DELEGATION OF3AUTHORIT4

There ma be certain defects in organisational structure which hamper proper delegation of authorit.2ome of the difficulties in%ol%ed in delegation are as such#

". O%er Con!i)ence o! S-perior:The feeling in a superior that onl he can do certain work effecti%elthan others is the main difficult in delegation. When a manager is of the opinion that his


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Danagement b objecti%es is a process in which the manager and his subordinates jointl agree upon aset of acti%ities, targets and goal, keeping in %iew the o%erall objecti%es of the organisation. and usethese as the criteria for e%aluating the performance of the subordinates.

Fea$-re o! mana.emen$ "' O"#ec$i%e:

". Danagement b objecti%es is an approach and philosoph to*management, and is not just atechni>ue of management.

. The basic emphasis of management b objecti%es is on setting of objecti%es or goals of anorganisation.

+. Danagement b objecti%es focuses on the integration of goals It relates the long*range goals of theorganisation with the short*range goals, o%erall sstems goals of the enterprise with the goals of thesociet.

3. D;O 0laces emphasis not onl on the settings of goals but also on their achie%ement (i.e., effecti%eperformance and tangible results!.

4. The techni>ue of D;O recognises the fact that the goals setting and achie%ement process is a co*operati%e and participati%e endea%our of the superiors and subordinates.

6. The objecti%es enshrined in management b objecti%es pro%ide guidelines for appropriate sstems,procedures, delegation of authorit, allocation of resources, etc.

7. Danagement b objecti%es pro%ides for substantial transfer of authorit from a small group of topmanagers to the large group of subordinate managers.

9. 0eriodic re%iew of performance is an essential feature of management b objecti%es. The re%iew ofperformance is done regularl, generall, once in a ear.

. The philosoph of D;O %iews organisation as a dnamic entit."8. Gnder the techni>ue of D;O, consultation replaces e/ercise of authorit, interaction and

communication replaces isolation, and self*control b subordinates replaces imposed control bsuperiors.

Objecti%es of Danagement b objecti%es#

To relate indi%idual goals to organisational goals.

To clarif the jobs to be done aI"d the results e/pected to be accomplished.

To e%aluate the performance 'of the subordinates.

To enhance the communication between the superiors and the subordinates.

To stimulate the subordinates moti%ation.

To ser%e as a de%ice for integration.

To ser%e as a de%ice for organisational control.

S$ep in%o%e) in Mana.emen$ "' o"#ec$i%e:

". )efining the o%erall specific corporate objecti%es.. 2etting of sub*goals for each unit.+. 2etting performance targets for each indi%idual manager.3. Datching of goals and resources.4. F%aluation or appraisal of performance, and re*appraisal

2ene!i$ o! Mana.emen$ "' o"#ec$i%e:

". It increases the participation and in%ol%ement of the subordinates in decision*making.. It pro%ides the subordinates with an opportunit to be self*moti%ating b setting their objecti%es.


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+. -s the managers at all le%els are in%ol%ed in setting their objecti%es, the are more committed to thegoals fi/es. That means, the chance of accomplishment of objecti%es are much brighter.

3. Gnder the D;O approach, the managers at all le%els become more aware of the o%erall objecti%es.This helps them in understanding their role in the total organisation.

4. D;O implies that the objecti%es of each department and each indi%idual are consistent with theo%erall objecti%es of the organisation. This ensures the integration of indi%idual goals with the goalsof the organisation.

Limi$a$ion o! Mana.emen$ "' o"#ec$i%e:

". The D;O approach is too pressure*oriented and time consuming.. 0articipation of the subordinates in goal*setting is the corner*stone of D;O. ;ut this ma not be

feasible in e%er organisation.+. D;O re>uires the setting of %erifiable goals. ;ut it is difficult to set %erifiable goals.3. D;O will be successful onl if the objecti%es are set in measurable and %erifiable terms. If the

objecti%es cannot be set in >uantitati%e terms, it will be difficult to judge the performance of theindi%iduals.

4. The "%I;O approach o%er*emphasises >uantification. Therefore, it is likel to o%erlook the >ualitati%easpects of the performance of the organisation.

Conc-ion:

It is true that D;O is subject to certain limitations. ;ut if it is implemented sincerel and seriousl, it willield good di%idends.

S-per%ior' Mana.emen$

". 2uper%isor management le%el is abo%e the operati%es and below the middle management in an

organization.. This le%el can be classified into three categories, particularl in a larged*sized organization# senior

super%isor, intermediate super%isors, and front line super%isors.+. 2uper%isor Danagement is concerned with efficienc in using resources of the organization.3. It is an e/ecutor of policies and procedures making a series of decisions with well*defined and

specified premises.4. :enerall a super%isor is .called a marginal man is the organization. =e concerned with e/plaining

the %iews of management to workers and the %iews of workers to management.6. ;ecause of this reason, the job of a super%isor becomes more comple/ than other le%els of

management. Danagement treats him the man of workers which workers treat him the man ofmanagement.

A -per%ior peci!ica' per!orm $he !oo*in. !-nc$ion3

". 0lanning the acti%ities of his section, classifing and assigning jobs to workers.. :uiding workers about work procedure+. Danaging and arranging necessar materials, toots, etc., for the workers3. Fnsuring maintenance of machineries, etc.4. 0ro%iding on the# job training to workers6. 2uper%ision and control of functioning of workers7. 2ol%ing problems of workers relating to jobs9. ?ommunicating the problems of workers, which are not sol%ed at his le%el. 0ro%iding feedback., to management about the nature of work en%ironment in his section


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"8. Daintaining discipline among workers, de%eloping in them right tpe of approach, and maintaininggood human relations.

Earious functions performed b different le%els of management suggest that managers at e%er le%elha%e to perform all fi%e functions. =owe%er, the relati%e importance of a function ma differ from le%el tole%el. 5or e/ample! planning is the most crucial function at the top le%el while routine and direct controlbecomes most important at super%isor le%el.

E!!ec$i%e S-per%iion

". Lea)erhip:eadership is a process of influencing the acti%ities of an indi%idual or group for goal*achie%ement in a gi%en situation. Through this process, indi%idual or group contributes willingl tothe goal *achie%ement. Fffecti%e super%isors perform functions related to leadership instead of doingthe same work as the subordinates do. This stle of super%ision leads to higher morale and moreproducti%it. The leadership process will be described later in detail.

. Coene o! S-per%iion:The degree of closeness of super%ision ma %ar from highl close*super%ision to highl free*.super%ision. 2uccessful super%isors follow the stle of less closesuper%ision. - closed super%ision is defined as fre>uentl checking up on .subordination, pro%idingthem fre>uent and detailed instruction, and limiting their freedom to perform the work in their ownwa. Hormall close super%isor causes low morale and moti%ation because it blocks the gratificationof some strongl felt needs of subordinates. ess close super%ision, on the other hand producesmoti%ation and morale, which are essential for high producti%it.

+. Empo'ee


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. A%aia"ii$' o! Capa"e Peron: The element of delegation is linked to the a%ailabilit ofsubordinate managers. If sufficient persons are a%ailable who can take responsibilit then delegationcan easil be done. :enerall, managers complain that sufficient subordinate managers are nota%ailable who can be assigned important, duties. Gnless subordinates are delegated the powersthe win not learn the art of management.

+. Impor$ance an) Co$ine o! Deciion: The importance and costliness of decisions greatlinfluences the degree of delegation. :enerall speaking, the costlier and more important thedecision, the greater the probabilit of its being made at the upper le%el of the managerial hierarch.)ecision*making also re>uires %arious facts and figures about the issue. - manager will ensure thathe gets all re>uired information for deciding the issue. This tpe of information is easil a%ailable athigher le%els of management.

3. Si,e o! $he En$erprie:The e/*tent of delegation is linked to the size of the enterprise. In a largeunit more decision making is needed at %arious le%els of management. The problems ofcommunication and co*ordination often arise in such units. If decision making is closer to the placeof action it will sa%e time, paper work is reduced, misunderstandings in con*"InGllication can largelbe eliminated.

4. A%aia"e con$ro:- manager delegating authorit want to be sure that it is used in accordancewith his intentions and the general objecti%es of the@ organization. In order to achie%e this there mustbe control de%ices. :enerall, managers hesitate to delegate due to the reason that the do notknow how to control.

6. T'pe o! en$erprie:The degree of delegation of authorit ma also be influenced b the tpe ofenterprise. If the enterprise is in an industr which is rapidl e/panding, as in the electronic field, top.management will ha%e to delegate otherwise it will be o%er burdened with man decisions

If the enterprise operates in a static industr then all decision*making is done at the central le%el Incage, of banking and insurance the growth is slow and decision*making remains at the top.

7. En%ironmen$a !ac$or: In addition to internal factors delegation ma be influenced b internalfactors too. These factors ma be natural unions, go%ernment control o%er business and ta/ policies.

2ome large concerns ha%e to deal with workers unions at national le%el. -ll the negotiations aredone and decisions are taken at national le%el. In such a situation the things are decided at head>uarter le%el and are applicable at all le%els.

Documents

Organizing or Organization