ORGANISING
Organising is the next important function of management after the planning. You know that
in case of planning a manager decides what is to be done in future. In case of organising,
he decides on ways and means through which it will be easier to achieve what has been
planned. Suppose, it is planned to start a new plant for soft drinks within six months. The
immediate task for the manager then is to identify and assign the various tasks involved,
and devise structure of duties and responsibilities so that things move smoothly and the
objective is achieved. All these tasks form part of organising function. Thus, organising
refers to the process of :
• Identifying and grouping the work to be performed.
• Defining and determining responsibility and authority for each job position.
• Establishing relationship among various job positions.
• Determining detailed rules and regulations of working for individuals and groups in
organisation.
IMPORTANCE OF ORGANISING
Organising is essential because it facilitates administration as well as operation of enterprise.
By grouping work and people properly, production increases, overload of work is checked,
wastage is reduced, duplication of work is restricted and effective delegation becomes
possible. Secondly, organising facilitates growth and diversification of activities through
clear division of work. It helps in developing a proper organisation structure and the extent
and nature of decentralisation can be determined. In addition to the above, organising also
provides for the optimum use of technical and human resources. It also encourages creativity
and enhances interaction among different levels of management which leads to unification
of efforts of all.
PROCESS OF ORGANISING
The process of organising consists of the following steps –
1. Identification of activities: Every enterprise is created with a specific purpose.
Based on this, the activities involved can be identified. For example, in a manufacturing
firm, producing goods and selling them are the major activities in addition to routine
activities like, paying salary to employees, raising loans from outside, paying taxes to
the government etc. And these activities vary when the organisation is a service concern
or a trading firm. Therefore, it is essential to identify various activities of an enterprise.
2. Grouping of activities: Once activities are identified, then they need to be grouped.
They are grouped in different ways. The activities which are similar in nature can be
grouped as one and a separate department can be created. For example – activities
undertaken before sale of a product, during the sale of the product and after the sale
of the product can be grouped under the functions of a marketing department. Normally,
all activities of a manufacturing unit can be grouped into major functions like purchasing,
production, marketing, accounting and finance, etc. and each function can be subdivided
into various specific jobs.
3. Assignment of Responsibilities: Having completed the exercise of identifying,
grouping and classifying all activities into specific jobs, they can be assigned to individuals
to take care of.
4. Granting authority: On the basis of responsibilities given to specific individuals, they
are also to be given the necessary authority to ensure effective performance.
5. Establishing relationship: This is a very important job of management as everybody
in the organisation should know as to whom he/she is to report, thereby establishing a
structure of relationships. By doing so, relationships become clear and delegation is
facilitated.
ORGANISATION STRUCTURE
The process of organisation culminates into an organisation structure which constitutes a
network of job positions and the authority relationships among the various positions. The
various factors that are usually taken into consideration for designing a good organisation
structure are job specifications, departmentation, authority-responsibility relationships, etc.
The whole structure takes the shape of a pyramid (look at the type of structure that follow)
and broadly indicates the tasks assigned, the hierarchical relationships and the patterns of
communication and coordination. Based on the arrangement of activities, two most
commonly used forms of organisation structure are (1) functional structure, and (2) divisional
structure. These are discussed hereunder.
1. Functional Structure
An organisation structure formed by grouping together all activities into functional
departments and putting each department under one coordinating head is called functional
structure. Thus, in any industrial enterprise the functions like manufacturing, marketing,
finance, personnel may constitute the major separate units (departments) of the enterprise;
and in case of a large retail store purchasing, sales and warehousing may be the major
units. It may be noted that the major units use are further divided into sub-units. For
example, the manufacturing department may be sub-divided into stores, repairs,
maintenance, production, etc.
This form organisation structure helps in developing functional specialisation in each unit
duly headed by an expert in that functional area. This facilitates the coordination within the
department since all are fully familiar with the various activities involved. However, this
type of structure is considered suitable for small and medium size organisations. In case of
large organisations, the units become too unwieldy and difficult to manage.
2. Divisional Structure
In large organisations dealing in multiple products and serving a number of distinctive
markets, the divisional structure is considered more suitable. Under such structure the organisation is divided into units entrusted with all activities related to different products on
different territories (markets). Each divisional head is required to look after all functions
related to the product or market territory.Under divisional structure, most activities associated with a product or product group can be well coordinated and its profitability easily ascertained. Moreover, it provides opportunity to divisional managers to take prompt decisions and resolve all sorts of problems without
much difficulty. However, this structure is expensive and gives rise to duplication of efforts.
FORMAL AND INFORMAL ORGANISATION
Formal organisation refers to the officially established pattern of relationship among
departments, divisions and individuals to achieve well-defined goals and is a consciously designed structure of roles. In other words, formal organisation clearly spells what a person
has to do, from who he has to take orders and what rules, policies and work procedures
are to be followed. Thus, it is a system of well defined jobs, each bearing a definitive
measure of authority, responsibility and accountability. This promotes order and facilitates
planning and controlling functions.
Informal organisations on the other hand, refers to relationship between individuals in the
organisation based on personal attitudes, likes and dislikes and originates to meet their
social and emotional needs and develops spontaneously. It represents natural grouping of
people in work situation and is supplementary to formal organisation as it serves the needs
not satisfied by formal organisation. The formal organisation does not provide opportunity
to members to exchange personal views and experiences and so they interact informally to
fulfill such interest and needs. In fact, informal organisation comes into being because of
the limitations of the formal structure and both are interlinked. However, they differ in
respect of their origin, purpose, structure, authority, channels of communication and
behaviour of members.
DELEGATION
In organisations, it is difficult on the part of a manager to complete all the jobs assigned to
him. He thus, can take help from others by asking them to do some of the work in a formal
way. It means, he can assign some of the work to his subordinate and give them authority
to carry on the work and at the same time make them accountable. For example, a
production manager may have the target to produce 1000 units in a weeks time. He can
distribute his work to three of his subordinates to produce 250 units each and keep 250 units for self to produce. And then he must also give them enough authority to use
organisational resources to produce. By doing so he also makes his subordinates answerable
to him for non-performance.
This active process of entrustment of a part of work or responsibility and authority to
another and the creation of accountability for performance is known as delegation. Thus,
there are three elements of delegation as follows.
1. Assignment of Responsibility: This is also known as entrustment of duties. Duties
can be divided into two parts: one part, that the individual can perform himself and the
other part, that he can assign to his subordinates to perform.
2. Granting Authority: Authority here simply refers to the official powers and position
required to carry on any task. When duties are assigned to subordinates then the
required authority must also be conferred on him. For example, when a manager asks
his subordinate to receive a guest of the company on his behalf then he must also grant
him some authority like carry the company vehicle, booking the company guest house
for accommodation etc.
3. Creating Accountability: This refers to the obligation on the part of the subordinates,
to whom responsibility and authority are granted to see to it that the work is done. In
other words, the delegatee is fully answerable to his superior for performance of the
task assigned to him. Thus, the superior ensures performance through accountability
by his subordinate.
IMPORTANCE OF DELEGATION
Delegation is considered as one of the most important elements in the process of organisation
because, it reduces the load on managers as work is successfully shared by the subordinates.
This improves the managerial effectiveness because by delegating a good part of work to
the subordinate the managers are able to concentrate on important matters which require
them personal attention. Not only that, the organisations now-a-day are usually large in
size and complex in character, and no manager can claim to have all the skills and expertise
to handle all kinds of jobs himself. Moreover, the business activities are spread over a
larger area with several branches and units, which makes it difficult for him to look after
the supervise activities personally at all places. The delegation of responsibility with
commensurate authority offers a good workable solution. This also provides an opportunity
for subordinates to develop, and motivates and prepares them for taking up higher
responsibilities in future. It leads to creating a healthy work environment and harmony
among the employees. Thus, delegation facilitates organisational growth and prosperity.
DECENTRALISATION
Decentralisation refers to a systematic effort to delegate authority at all levels of management
and in all departments. This shifts the power of decision making to lower level under a well
considered plan. Take the case of traffic police controlling movement of vehicles on road. He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.
He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.
Organising is the next important function of management after the planning. You know that
in case of planning a manager decides what is to be done in future. In case of organising,
he decides on ways and means through which it will be easier to achieve what has been
planned. Suppose, it is planned to start a new plant for soft drinks within six months. The
immediate task for the manager then is to identify and assign the various tasks involved,
and devise structure of duties and responsibilities so that things move smoothly and the
objective is achieved. All these tasks form part of organising function. Thus, organising
refers to the process of :
• Identifying and grouping the work to be performed.
• Defining and determining responsibility and authority for each job position.
• Establishing relationship among various job positions.
• Determining detailed rules and regulations of working for individuals and groups in
organisation.
IMPORTANCE OF ORGANISING
Organising is essential because it facilitates administration as well as operation of enterprise.
By grouping work and people properly, production increases, overload of work is checked,
wastage is reduced, duplication of work is restricted and effective delegation becomes
possible. Secondly, organising facilitates growth and diversification of activities through
clear division of work. It helps in developing a proper organisation structure and the extent
and nature of decentralisation can be determined. In addition to the above, organising also
provides for the optimum use of technical and human resources. It also encourages creativity
and enhances interaction among different levels of management which leads to unification
of efforts of all.
PROCESS OF ORGANISING
The process of organising consists of the following steps –
1. Identification of activities: Every enterprise is created with a specific purpose.
Based on this, the activities involved can be identified. For example, in a manufacturing
firm, producing goods and selling them are the major activities in addition to routine
activities like, paying salary to employees, raising loans from outside, paying taxes to
the government etc. And these activities vary when the organisation is a service concern
or a trading firm. Therefore, it is essential to identify various activities of an enterprise.
2. Grouping of activities: Once activities are identified, then they need to be grouped.
They are grouped in different ways. The activities which are similar in nature can be
grouped as one and a separate department can be created. For example – activities
undertaken before sale of a product, during the sale of the product and after the sale
of the product can be grouped under the functions of a marketing department. Normally,
all activities of a manufacturing unit can be grouped into major functions like purchasing,
production, marketing, accounting and finance, etc. and each function can be subdivided
into various specific jobs.
3. Assignment of Responsibilities: Having completed the exercise of identifying,
grouping and classifying all activities into specific jobs, they can be assigned to individuals
to take care of.
4. Granting authority: On the basis of responsibilities given to specific individuals, they
are also to be given the necessary authority to ensure effective performance.
5. Establishing relationship: This is a very important job of management as everybody
in the organisation should know as to whom he/she is to report, thereby establishing a
structure of relationships. By doing so, relationships become clear and delegation is
facilitated.
ORGANISATION STRUCTURE
The process of organisation culminates into an organisation structure which constitutes a
network of job positions and the authority relationships among the various positions. The
various factors that are usually taken into consideration for designing a good organisation
structure are job specifications, departmentation, authority-responsibility relationships, etc.
The whole structure takes the shape of a pyramid (look at the type of structure that follow)
and broadly indicates the tasks assigned, the hierarchical relationships and the patterns of
communication and coordination. Based on the arrangement of activities, two most
commonly used forms of organisation structure are (1) functional structure, and (2) divisional
structure. These are discussed hereunder.
1. Functional Structure
An organisation structure formed by grouping together all activities into functional
departments and putting each department under one coordinating head is called functional
structure. Thus, in any industrial enterprise the functions like manufacturing, marketing,
finance, personnel may constitute the major separate units (departments) of the enterprise;
and in case of a large retail store purchasing, sales and warehousing may be the major
units. It may be noted that the major units use are further divided into sub-units. For
example, the manufacturing department may be sub-divided into stores, repairs,
maintenance, production, etc.
This form organisation structure helps in developing functional specialisation in each unit
duly headed by an expert in that functional area. This facilitates the coordination within the
department since all are fully familiar with the various activities involved. However, this
type of structure is considered suitable for small and medium size organisations. In case of
large organisations, the units become too unwieldy and difficult to manage.
2. Divisional Structure
In large organisations dealing in multiple products and serving a number of distinctive
markets, the divisional structure is considered more suitable. Under such structure the organisation is divided into units entrusted with all activities related to different products on
different territories (markets). Each divisional head is required to look after all functions
related to the product or market territory.Under divisional structure, most activities associated with a product or product group can be well coordinated and its profitability easily ascertained. Moreover, it provides opportunity to divisional managers to take prompt decisions and resolve all sorts of problems without
much difficulty. However, this structure is expensive and gives rise to duplication of efforts.
FORMAL AND INFORMAL ORGANISATION
Formal organisation refers to the officially established pattern of relationship among
departments, divisions and individuals to achieve well-defined goals and is a consciously designed structure of roles. In other words, formal organisation clearly spells what a person
has to do, from who he has to take orders and what rules, policies and work procedures
are to be followed. Thus, it is a system of well defined jobs, each bearing a definitive
measure of authority, responsibility and accountability. This promotes order and facilitates
planning and controlling functions.
Informal organisations on the other hand, refers to relationship between individuals in the
organisation based on personal attitudes, likes and dislikes and originates to meet their
social and emotional needs and develops spontaneously. It represents natural grouping of
people in work situation and is supplementary to formal organisation as it serves the needs
not satisfied by formal organisation. The formal organisation does not provide opportunity
to members to exchange personal views and experiences and so they interact informally to
fulfill such interest and needs. In fact, informal organisation comes into being because of
the limitations of the formal structure and both are interlinked. However, they differ in
respect of their origin, purpose, structure, authority, channels of communication and
behaviour of members.
DELEGATION
In organisations, it is difficult on the part of a manager to complete all the jobs assigned to
him. He thus, can take help from others by asking them to do some of the work in a formal
way. It means, he can assign some of the work to his subordinate and give them authority
to carry on the work and at the same time make them accountable. For example, a
production manager may have the target to produce 1000 units in a weeks time. He can
distribute his work to three of his subordinates to produce 250 units each and keep 250 units for self to produce. And then he must also give them enough authority to use
organisational resources to produce. By doing so he also makes his subordinates answerable
to him for non-performance.
This active process of entrustment of a part of work or responsibility and authority to
another and the creation of accountability for performance is known as delegation. Thus,
there are three elements of delegation as follows.
1. Assignment of Responsibility: This is also known as entrustment of duties. Duties
can be divided into two parts: one part, that the individual can perform himself and the
other part, that he can assign to his subordinates to perform.
2. Granting Authority: Authority here simply refers to the official powers and position
required to carry on any task. When duties are assigned to subordinates then the
required authority must also be conferred on him. For example, when a manager asks
his subordinate to receive a guest of the company on his behalf then he must also grant
him some authority like carry the company vehicle, booking the company guest house
for accommodation etc.
3. Creating Accountability: This refers to the obligation on the part of the subordinates,
to whom responsibility and authority are granted to see to it that the work is done. In
other words, the delegatee is fully answerable to his superior for performance of the
task assigned to him. Thus, the superior ensures performance through accountability
by his subordinate.
IMPORTANCE OF DELEGATION
Delegation is considered as one of the most important elements in the process of organisation
because, it reduces the load on managers as work is successfully shared by the subordinates.
This improves the managerial effectiveness because by delegating a good part of work to
the subordinate the managers are able to concentrate on important matters which require
them personal attention. Not only that, the organisations now-a-day are usually large in
size and complex in character, and no manager can claim to have all the skills and expertise
to handle all kinds of jobs himself. Moreover, the business activities are spread over a
larger area with several branches and units, which makes it difficult for him to look after
the supervise activities personally at all places. The delegation of responsibility with
commensurate authority offers a good workable solution. This also provides an opportunity
for subordinates to develop, and motivates and prepares them for taking up higher
responsibilities in future. It leads to creating a healthy work environment and harmony
among the employees. Thus, delegation facilitates organisational growth and prosperity.
DECENTRALISATION
Decentralisation refers to a systematic effort to delegate authority at all levels of management
and in all departments. This shifts the power of decision making to lower level under a well
considered plan. Take the case of traffic police controlling movement of vehicles on road. He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.
He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.
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