2. Meaning
Organisation is the detailed arrangement of
work and working conditions in order to
perform the assigned activities in an effective
manner.

3. Definition
• “it is the process of identifying and grouping
of the works to be performed, defining and
delegating responsibility and authority and
establishing relationships for the purpose of
enabling people to work most efficiently"
- Louis A. Allen

4. Purpose of organising
• Coordinates activities
• Cluster job into units
• It ensure optimum use of resource
• Establish relationship among individual groups
• It facilitates growth, creativity

5. CHARACTERISTICS OR FEATURES OF
ORGANIZING OR ORGANIZATION
• Organisation is a process
• Organisation is a group of individuals
• Organisation is a “means” not an “end”
• Important function of management
• Related to objectives

6. NATURE OF ORGANIZING
• Division of work
• Common objectives
• Cooperative effort
• Communication
• Rules and regulations
• Dynamic element

7. IMPORTANCE OF ORGANIZING
• Specialization.
• Role clarity.
• Clarifies authority and power.
• Avoid duplication of work.
• Coordination.
• Source of support and security.
• Adaptation.
• Promotes human relations.

8. STEPS IN THE PROCESS OF ORGANIZING
1.Division of work
2.Grouping of jobs into departmentation
3.Assigning duties
4.Establishing authority and responsibility.
5.Delegation of authority
6.Effective communication
7.Coordination of activities
Steps of
organizing

9. ORGANIZATION
STRUCTURE

10. LINE ORGANIZATION
GENERAL MANAGER
PRODUCTION
MANAGER
FINANCE
MANAGER
MARKETING
MANAGER
SUPERINTENDENT ASST.FINANCE MANAGER
ASST.MARKETING
MANAGER
FOREMAN ACCOUNTANTS
SALE
SUPERVISORS
WORKERS CLERKS SALESMAN

11. ADVANTAGES OF LINE ORGANIZATION
 Easy to establish
 Facilitates unity of command
 Clear cut identification of authority & responsibility relationship
 Ensures excellent discipline
DISADVANTAGES
 Makes the superiors too overloaded with work
 Concentration of authority at the top
 Not suitable to big organizations
 Lack of communication

12. LINE & STAFF ORGANIZATIONS
BOARD OF DIRECTORS
Executive
committee Controller of
Managing
Director
Manager
Division B
Manager
Division C
Manager Division
A
finance
Assistant to
managing director

13. Advantages of line & staff organizations
• Specialized knowledge
• Reduction of burden
• Proper weightage
• Better decisions
• Flexibility
• Unity of command

14. Disadvantages
• Conflict between the line & staff executives
• Allocation of duties
• Not accountable
• Difference between the orientation of the line & staff men

15. Line organization vs. Line & Staff organization
Line organization Line & staff organization
• Refers to those positions
which have the
responsibility for providing
advice & service to the line
in attainment of
organizational objectives
• Have experts to assist &
advice
• Always a risk of friction
between line & staff
• Loose discipline
• Based upon planned
specialization
• Refers to those positions
which have the
responsibility of achieving
the primary objectives of
the organization
• No experts to assist &
advice
• No scope of friction
between line & staff
• Strict discipline
• Not based upon planned
specialization

16. Functional organization
Advantages
 Specialization
 Executive development
 Reduction of workload
 Scope for expansion
 Better control

17. Disadvantages
• Violates the principle of unity of command
• Operation is complicated
• Los of overall perspective
• Lack of coordination

18. LINE organization VS.FUNCTIONAL organization
LINE organization
• The line of authority is
vertical as it follow the
principle of scalar chain
• Line managers are
generalists
• Unity of command is
followed
• Strict discipline
• It is suitable for small scale
operations
FUNCTIONAL organization
• Line of authority is
functional or diagonal. The
functional manager has
authority over his function
wherever it is performed
• Functional managers are
specialists
• Unity of command is not
followed
• Loose discipline
• It is suitable for large scale
operations

19. COMMITTEE structure

20. A committee structure is were a group of persons are
entrusted in a task.
Types of committee structure :
1. Standing or permanent committee.
2. Temporary or ad hoc committee.
3. Executive committee.
4. Advisory committee.
5. Formal committee.
6. Informal committee.

21. Merits of committee structure :
 Proper control and coordination among
individuals and departments.
Motivation through participation.
Check against misuse of power.

22. Demerits of committee structure :
 Expensive to constitute a committee.
 Time consuming and slow decision making.
 Compromise decision.
 Suppression of ideas.

23. Project structure

24. A project structure is one were various
projects are undertaken.
It varies from organisation to organisation
depending on the project adopted. The time
period also depends on the project as more
time period is required for long term projects
and vice versa.
The team leader organises and coordinates all
the actions and activities.

25. Merits of project structure :
 Maximum utilisation of knowledge and skills.
 Unity of command exists.
 Fixation of individual responsibility.
 Focuses attention on specific projects.
 Ensures better coordination.

26. Demerits of project structure :
 Pressure and uncertainity due to several
opinions.
 Difficulty in decision making.
 Evaluation of performance is difficult due to
difference in performance, work, and ability.

27. Matrix structure

28. A matrix structure is suitable where there are
large number of small projects.
Also called :
- Multiple command system.
- Linking pins.

29. Merits of matrix structure :
 Best utilisation and allocation of resources.
 Benefits coordination under each projects.
 Promotes communication.
 Permits high degree of flexibility and
adaptability.

30. Demerits of matrix structure :
 Is against the unity of command.
 Quick decision making is not possible.
 Gives scope for conflicts.

31. CONCEPTS OR PRINCIPLES
OF ORGANIZING

32. Chain of command
• The order in which authority and power in
an organization is wielded and delegated
from top management to every employee at
every level of the organization.
• Instructions flow downward along the chain of
command and accountability flows upward.
• Henry Fayol is the main contributors.

34. ADVANTAGES
• Existence of clear reporting relationships
• Solve the problem of multiple masters
• Responsibility & accountability are clearly
assigned
CHALLENGES
• This is not suitable where, the organisation
needs faster decision making.
• Time consuming.

35. Work Specialization
Work specialization, refers to the degree to
which an organization divides individual tasks
into separate jobs.
Job is broken down into steps, and a different
person completes each step.
Individual employees specialize in doing part of
an activity rather than the entire activity.

36. Advantages of specialization
• Each employee can be an expert to some degree.
• Task refinement by the specialist leads to higher
levels of productivity.
• Work can be completed faster and more
efficiently due to specialization.
• Gives employees a sense of pride and job security
due to their specialized skills.
• All of the previously stated could lead to higher
profit potential.

37. AUTHORITY
“ Authority is the right to order or command and is
delegated from the superior to the subordinate his
responsibilities.”
† Right or power to command and control.
† Granted to a position for achieving objectives.
† Exercised through persuasion or sanctions.

38. SOURCES OF AUTHORITY
The Formal
Authority Theory
The Acceptance
Theory
The Competency
Theory

39.  The Formal Authority Theory :-Authority is
viewed as originating at the top of an
organization and flows downward by the
process of delegation.
The Acceptance Theory :-The authority is the
power which is accepted by others.
The Competence Theory :- An individual derives
authority because of his personal
competence.

40. DELEGATION OF AUTHORITY
Delegation means devolution of authority
on subordinates to make them perform
the assigned duties or tasks.

41. COMPONENTS OF DELEGATION
i. Entrustment of Responsibility or Duty :-
Responsibility means the work or duties assigned to a
person by virtue of his position in the organization.
ii. Granting of Authority :- Authority is the right or
power granted to an individual to make possible the
performance of work assigned.
iii. Creation of Obligation or Accountability :-
Accountability is the obligation to carry out
responsibility and exercise authority in terms of
performance standards established.

42. ADVANTAGES OF DELEGATION
• Sharing of work-load
• Quick decision-making
• Motivation
• Training
• Better performance
• Better relations

43. WEAKNESS OF DELEGATION
WEAKNESS
SUPERIOR
Lack of trust in
subordinates
Lack of Ability
to Direct
Ineffective
controls
SUBORDINATE
Lack of self
confidence
Lack of
incentives
Overburden with
duties
ORGANIZATION
Inadequate planning
Lack of effective
control mechanism
Defective organization
structure

44. PRINCIPLES OF DELEGATION
• Assignment of Duties in terms of result Expected
• Clarification of Limits of Authority
• Parity of Authority and Responsibility
• Absoluteness of Accountability
• Authority Level Principle
• Unity of Command
• Scalar Chain
• Effective Communication

45. SPAN OF MANAGEMENT
It is also called as
span of control or
span of supervision.
It refers to the
number of
employees that can
be handled and
controlled effectively
by a single manager.

46. TWO TYPES OF SPAN
NARROW SPAN OF MANAGEMENT
 Tall organization.
 Manager oversees “few” subordinates.
 better communication.
 example : handicraft , ivory work , etc.

47. WIDE SPAN OF MANAGEMENT
 Flat organization .
 Manager oversees “large” number of
subordinates.
 Less overhead cost of supervision .
 less personal contact
 example: repetitive jobs.
12/9/2014

48. Narrow span wide span
of control of control

49. THEORY OF GRAICUNA’S
He was a French
management
consultant.
He followed a
different path and
distinguished three
types of relationships
between superior and
subordinates.

50. THREE TYPES OF RELATIONSHIP
Direct relationship (superior has direct link
with subordinates).
 Direct group relationship(arises between
manager and group of subordinates ).
 Gross relationship ( relationship among
subordinates).

51. DIRECT SINGLE RELATIONSHIP

52. DIRECT GROUP RELATIONSHIP

53. GROSS RELATIONSHIP

54. FACTORS DETERMING SPAN OF
MANAGEMENT
Nature of work
Type of technology
Ability of the manager
Ability of subordinates
Degree of decentralization
Quality of planning
Rate of change
Communication techniques

55. CENTRALIZATION AND
DECENTRALIZATION

56. CENTRALIZATION
According to Allen, “Centralization” is the
systematic and consistent reservation of
authority at central points in the organization”
The implication of centralization can be :-
• Reservation of decision making power at top
level.
• Reservation of operating authority with the
middle level managers.
• Reservation of operation at lower level at the
directions of the top level.

57. DECENTRALIZATION
• According to Allen “Decentralization refers to
the systematic effort to delegate to the
lowest level of authority except that which
can be controlled and exercised at central
points”
• “Everything that increasing the role of
subordinates is decentralization and that
decreases the role is centralization”

58. DEPARTMENTATION
It is a process of grouping individual
jobs into departmentation.
TYPES:
Departmentation by function.
Departmentation by products.
Departmentation by territory.
Departmentation by customers.
Departmentation by process.
Departmentation by time and
numbers.

59. 12/9/2014
Departmentation by FUNCTIONS
Deparmentation done by the functions.

60. MERITS & DEMERITS
Provides scope of specialization.
Effective control over performance.
Facilitates delegation of authority.
Interdepartmental conflicts.
Difficulty in coordination of activities

61. 12/9/2014
DEPARTMENTATION BY PRODUCTS
It is suitable for different lines of products.

62. MERITS & DEMERITS
Reduces problem of coordination.
Performance evaluation can be done easily.
It is flexible and adaptable to change .
There may be underutilization of plant capacity when
the demand of product is not adequate.

63. TERRITORIAL Departmentation
Used for large scale enterprises whose
activities are geographically spread over.

64. MERITS & DEMERITS
Better coordination of activities.
Facilitates expansion of business to various
regions
Due to geographical distance problem of
communication.
Coordination and control becomes less
effective.

65. Departmentation By Customers
Each department will serve the particular type
or class of customers.

66. MERITS & DEMERITS
Offer scope of specialization.
Enterprise gain ultimate knowledge about
needs of various categories of customers.
Lead to duplication of activities.

67. DEPARTMENTATION BY PROCESS OR
EQUIPMENT
The activities are grouped according to process or
equipment.
It is generally used in manufacturing industries.
Lead to specialization.
No confusion.
Proper utilization of manpower and machine engaged in
proper way.

68. TIME AND NUMBER
DEPARTMENTATION
TIME:
The activities or group on basis of
time
EXAMPLE: Call centers or any
factory.
NUMBER:
The activities or group on basis of
performance by certain number
of persons.

69. Formal Organization
• The Formal Organization is a system of well-defined
jobs, each bearing a definite measure of authority,
responsibility and accountability.
Louis Allen
• Formal Organization is a system of consciously
coordinated activities of two or more persons toward a
common objective.
Chester Barnard

70. Formal Organization
• The formal organization is a goal-oriented
entity that exist to accurate the efforts of
individuals and it refers to the structure of
jobs and positions with clearly defined
functions, responsibilities and
authorities

71. Formal Organization

72. Objectives of Formal Organization
• To facilitate the accomplishment of
the goals of the organization
• To facilitate the co-ordination
of various activities
• To aid the establishment of
logical authority relationship
• To aid the establishment of
division of labor
• Create group cohesiveness

73. Characteristics of Formal
Organization:
1. Well defined rules and regulation.
2. Determined objectives and policies.
3. Limitation on the activities of the individual.

74. cntd…
4. Strict observance of the principle of
coordination.
5. Messages are communicated through vertical
chain.
6. Status symbol.

75. Functions of Formal
Organization:
• Set specific Goals for organization
• Establishing working relationship
• Create group cohesiveness
• Organizational Development
• Discipline
• Human Resource Development

76. Advantages of Formal Organisation
• Systematic Working
• Achievement of Organisational Objectives
• No Overlapping of Work
• Co-ordination
• Creation of Chain of Command
• More Emphasis on Work

77. Limitations of Formal
Organization:
• Limited Flexibility
• Slowness of processing
• Communication Barrier
• Quality of decision
• Slowness in Problem
detection & processing

78. Types Of Formal Organisation
coercive organization
• which maintains control through
force.
• Once you enter a coercive
organization, you cannot leave
without permission.
• The culture is one of strict
obedience and order, and members
are typically stripped of individuality
and forced to conform.
• Eg. Prison and military

79. Utilitarian Organizations
• which maintains control through bartering.
• People join utilitarian organizations because
they have something to gain.
• The culture is one of productivity and
purpose.
• Members are compensated for their
contributions.
• Colleges and universities are also examples of
utilitarian organizations.

80. Normative Organizations
• which maintains control through shared moral
commitment.
• Membership in normative organizations is
purely voluntary.
• People join because they want to or because
of a strong, positive sense of obligation.
• Members work together to promote an
important social cause.
• Churches, political parties, and fraternities
are examples of normative organizations.

81.  An Informal organization is an aggregate of interpersonal
relationships without any conscious purpose but which may
contribute to joint results.
Chester Barnard
 Informal organization is a network of interpersonal
relationship that arise when people associate with one
another .
Keith Davis

82. • The informal organization is the interlocking
social structure that governs how people work
together in practice. It is the aggregate of
behaviors, interactions, norms, personal and
professional connections through which work
gets done and relationships are built among
people who share a common organizational
affiliation or cluster of affiliations.

84. Informal Leader-
• The leader of an informal
organization is elected by the
members of the groups for
different reasons such as age,
seniority, technical, competence,
work location, and responsive
personality, etc. depending upon
the work situation.
Role of Informal Leader:
a) To help the group reach its goals, and
b) To maintain and enhance group life.

85. Characteristics of Informal
Organization:
• Evolving constantly
• Excellent at motivation
• Treats people as individuals
• Flexibility
• Difficult to pin down
• Essential for situations that change quickly or
are not yet fully understood

86. Functions of Informal
Organization:
• Perpetuate the cultural and
social values.
• Provide social status and
satisfaction.

87. Functions of Informal
Organization:
• Provide social control
• Promote communication among members

88. Benefits of Informal
Organization:
• Better Total System
• Lighter workload for management
• Work group satisfaction
• A safety valve for emotions
• Cohesiveness
• Channel of employee communication
• To plan and act more carefully
• Encourage Cooperation
• Encourage improved management practice

89. Problems Associated with
Informal Organization:
1) Resistance to change
2) Role conflict
3) Rumor
4) Conformity
5) Undermine discipline
6) Power politics
7) Interpersonal and
intergroup conflicts

90. Difference between.....
BASIS FORMAL INFORMAL
Definition •has its own rules and
regulation that must be
followed by the members
(employees and managers)
• has a system of co-ordination
and authority.
•does not have its own rules
and regulation.
•has no system of co-ordination
and authority
doesn't have any superior-subordinate
relationship.
•communication is done
through the grapevine
Formed by formed by the top level
management
formed by social forces within
the formal organization
Rules and regulations The members have to follow
certain rules and regulations.
These rules are available in
writing . They are made by a
formal authority (superiors).
do not have to follow any
rules and regulations

91. Cntd...
BASIS FORMAL INFORMAL
Duties and responsibilities the duties, responsibilities,
authority and accountability of
each member is well-defined
there are no fixed duties,
responsibilities, authority,
accountability, etc. for the
members
Goals or objectives The objectives or goals are
specific and well-defined
The main objectives include
productivity, growth, and
expansion
The objectives are not specific
and well-defined
They want to achieve
friendship, security, common
interest, individual and group
satisfaction, etc
Benefits The members get financial
benefits and perks like wages
or salaries, bonus, travelling
allowances, health insurance,
etc.
The members get social and
personal benefits like friend
circle, community, groups, etc.

92. THANK YOU