ORGANISING
Meaning
Organizing refers to the process of identifying and grouping various activities and bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals. The organizing function leads to the creation of the organizational structure, which includes the designing of roles (jobs) and defining inter relationship between these roles. It enables the people to work collectively and effectively for common purpose.
Definition
“Organising is the process of identifying and grouping the work to be performed, defining and delegating responsibilities and authority and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives”[Louis.A.Allen].
Steps in the process of Organizing
1. Identification and division of work
The first step in the process of organizing involves identifying and dividing the total work to be done into specific activities(called jobs) in accordance with plans .Division of work into jobs is necessary because;
a)The burden of work can be shared among the employees.
b) It facilitates specialization of work.
c) Duplication of work can be avoided.
2. Departmentalization
In this step, the work of different job positions are clearly defined and allocate work to various employees. The work must be assigned to those who are best fitted to perform it well.
In this step , clear reporting relationship are established so that each employees knows who has to take form and to whom he is accountable . Such relationship helps to create a hierarchical structure and helps in co-ordination between departments.
Importance of Organising
The following points highlights the importance of organizing
1. Benefits of specialization
Organizing facilitates systematic allocation of work. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialization. Such specialistaion helps to reduce workload and to enhance productivity.
2. Clarity in working relationship
The establishment of working relationships clarifies lines of communication and specifies who is accountable to whom. It helps in fixing responsibility and specifying the extent of authority of each job position
3. Optimum utilization of resources
The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. This help to prevent confusion and to minimize wastage of efforts and resources.
4. Adaptation to change
The process of organizing allows a business enterprise to accommodate changes in the business environment.
5. Effective administration
Organising provides a clear description of jobs and related duties. Clarity in working relationship enables proper execution of work. The authority and responsibility of each job position are clearly defined. All these leads to effective administration.
6. Development of personnel
Organizing stimulates creativity amongst the managers. Effective delegation of authority allows managers to reduce their work load. It provides them an opportunity to innovate .Delegation also develops in the subordinate the ability to deal with challenges and enables them to realize their full potential.
7. Expansion and Growth
Organising helps in the growth and diversification of an enterprise. It allows a business enterprise to add more job positions, departments, diversification of product lines etc.
Organization Structure
Organisation structure is the established pattern of relationship among various job positions of an enterprise. It can be defined as the frame work within which managerial and operating tasks are performed. It specifies the relationship between people, work and resources.
Span of Management (Span of control)
Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure.
Types of organization structures
1. Functional Structure
A functional structure is an organizational design that groups similar or related jobs together. There is a separate department for each major function.
Suitability
Functional structure is most suitable, when:
a) Size to the organization is large
b) Organization has diversified activities
c) Operations require a high degree of specialization.
Advantages
1. Specialization
A functional structure leads to occupational specialization. This promotes efficiency in ultilisation of manpower.
2. Better control and co-ordination
It promotes control and co-ordinates within a department because of similarity in tasks being performed.
3. Minimum duplication
Duplication of works is avoided and there by leading to reduction in costs.
4. Easier Training
Training of employees become easier because , every employee requires limited skills.
5. Due attention
Functional structure ensures that different functions get due attention.
Disadvantages
1. Narrow Perspective
Functional heads may focus more on functional interests than on overall objectives.
2. Problems in co-ordination
There may be lack of co-operation and co ordination between departments.
3. Conflict of interests
A conflict may arise when the interests of two or more departments are not compatible.
2. Divisional Structure
Divisional structure is an organizational design in which there is a separate division for each line of products or area of operation. In each division, functions like production, marketing, finance etc. are performed.
Suitability
1. When the organization produces a large variety of products.
2. When the organization requires high degree of product specialization
3. When an organization grows
4. When the activities are geographically spread.
Advantages
1. Product Specialization:
It brings integration and co-ordination of various activities related to a particular product line.
2. Executive development
A divisional head gain experience in all functions related to a particular product.
3. Greater accountability
Fixation of responsibility and accountability is easy
4. Flexibility and more initiative
Each division functions as an autonomous unit. This promotes quick decision, flexibility and initiative.
5. Expansion and growth
Divisional structure facilitates expansion and growth.
Disadvantages
1. Conflicts
Conflicts may arise between divisions on allocation of funds.
2. Costly
It may lead to increase in costs since there may be duplication of activities.
3. Misuse of autonomy
High degree of autonomy may results in giving priority to divisional interest rather than organisational interest.
Formal Organisation
Formal organization refers to the organization structure which is designed by the management to accomplish a particular objective. In this structure, authority, responsibility, accountability, line of communication etc will be clearly specified.
Features
1. It is deliberately designed by top management
2. It specifies the relationship among various job positions
3. It is a means to achieve organizational objective
4. It gives importance to position than persons
5. It specifies the official line of communication
6. Behavior of members is directed by formal rules and procedures
Advantages
1. Fixation of responsibility is easier
2. Clarity of jobs to be performed by each person
3. Helps in avoiding duplication of work
4. Unity of command is maintained through an established chain of command
5. It leads to effective accomplishment of goals.
6. It provides stability to the organization
Limitations
1. Communication through scalar chain may lead to delay in decision making
2. It may create rigidity
3. The focus is on structure and work rather than on human relationship
Informal Organisation
Informal organization is a network of personal and social relations, not established by the management, but arising spontaneously on the basis of friendship and common interest. It originates from within the formal organization to meet the cultural and social needs of members of the organization.
Features
1. It emerges spontaneously and is not created by management
2. It has no definite structure
3. The membership is voluntary
4. It originates from within the formal organization
5. It has no written rules and regulations.
6. It does not have fixed line of communication.
7. Its purpose is to satisfy social and cultural needs of the members
Advantages
1. Speed
There is no prescribed line of communication. It helps in faster spread of information and feedback.
2. Fulfillment of social needs
It helps to fulfill the social needs of its members. This enhances their job satisfaction since it gives them a sense of belongingness in the organization.
3. Contribute towards achievements of organizational objectives
It helps to achieve organizations objectives by compensating for inadequacies in the formal organization.
Disadvantages
1. Resistance to change
The management may not be successful in implementing changes, if the informal organization opposes them.
2. Priority to group interests
Informal organization may focus on needs and interest of their members rather than organizational objectives.
3. Disruptive Force
Informal organization may become a disruptive force when it spreads rumour
Delegation of Authority
Definition
According to Theo Haimm an, ”Delegation of authority means the granting of authority to subordinate to operate within prescribed limits”.
Delegation of authority is a process by which a superior assigns a part of his work to subordinates and gives them authority to perform the work so assigned. It enables the manager to distribute his work load so that he can concentrate more on important functions.
Elements of Delegation
1. Authority
It means the right to issue orders and the power to get them executed. It implies the right of an individual to take decisions and to command on his subordinates.
2. Responsibility
Responsibility is the obligation of subordinates to properly perform the assigned duty.
3. Accountability
Accountability implies being answerable for the final outcome.
Importance of Delegation
1. Effective Management.
By delegating routine work to subordinates, a manager can concentrate on important matters and explore new opportunities for business.
2. Employee development
Delegation provides an opportunity to subordinates to utilize their abilities and to improve career prospects. They gain experience and knowledge for higher positions.
3. Motivation of employees
Delegation provides a feeling of status and recognition to subordinates. It motivates them for higher performance.
4. Facilitates organizational growth
Delegation helps in the expansion of an organization by providing a ready work force to take up leading positions in new ventures.
5. Basis of management hierarchy
Delegation of authority creates superior-subordinate relationships, which are the basis of management hierarchy.
6. Better coordination
The elements of delegation helps to define the powers, duties and responsibility related to various positions in an organization. This results in better co ordination.
Decentralization
Decentralization refers to systematic delegation of authority through all the levels of management and all departments of the organization.
Definition
Decentralisation refers to systematic efforts to delegate to the lowest level, all authority except that which can be exercised at central points.”
Importance
1. Develops initiative among subordinates.
Decentralisation helps to promote self-reliance and confidence among the subordinates.
2. Develops managerial talent for the future.
Decentralisation gives lower level managers the chance to gain knowledge and experience in decision making and leadership.
3. Quick decision making
In a decentralized organization, decision are taken at levels which are nearest to the point of action. Therefore, decision can be taken quickly.
4. Relief to top management
Decentralisation helps to reduce the work load of top executives .They can devote their time and attention to important policy matters.
5. Facilitates Growth
The organization can expand and grow more easily as the burden of management is shared
6. Better control
Decentralisation facilities evaluation of performance at every level. Departments can be individually held accountable for their results.
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