3. Meaning
Organizing is the establishment of an effective authority relationship that is created
among the selected group of persons who are assigned in doing a specified work.
Organizing is the process of dividing the workers into sections and departments.
While the scope of the organization is present in every hemisphere of life.
Organizing is a process of structuring the essential relationships among the people,
tasks, and other activities. This is done in a way that the organization’s resources
are integrated and are coordinated to accomplish the objectives efficiently and
effectively.
4. Importance
It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the
resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals.
Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in
management. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and
avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.
Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum
output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in
cost reduction.
Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational
structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes
effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors
& who are subordinates.
Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing
environment.
Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the
welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource.
5. Steps in the Process of Organisation
Identifying the Work
Grouping of Work
Establish Hierarchy
Delegation of Authority
Coordination.
6. Identifying the Work
The obvious first step in the process of organizing is to identify the work that has
to be done by the organization. This is the ground level from which we will begin.
So the manager needs to identify the work and the tasks to be done to achieve the
goals of the organization.
Identification of the work helps avoid miscommunication, overlapping of
responsibilities and wastage of time and effort.
7. Grouping of Work
For the sake of a smooth flow of work and smooth functioning of the organization,
similar tasks and activities should be grouped together. Hence we create
departments within the company and divisions within each department. Such an
organization makes the functioning of the company way more systematic.
Depending on the size of the organization and the volume of work, an organization
can have several department and divisions. And every department has a manager
representing them at the top-level of the management.
In smaller organizations sometimes these departments are clubbed together under
one manager.
8. Establish Hierarchy
The next step in the process of organizing is to establish the reporting relationships
for all the individual employees of the company. So a manager establishes the
vertical and horizontal relationships of the company.
This enables the evaluation and control over the performances of all the employees
in a timely manner. So if rectifications need to be made, they can be made
immediately.
9. Delegation of Authority
Authority is basically the right an individual has to act according to his wishes and
extract obedience from the others. So when a manager is assigned certain duties
and responsibilities, he must also be delegated authority to carry out such duties
effectively.
If we only assign the duties, but no authority he will not be able to perform the
tasks and activities that are necessary. So we must always assign authority and
clearly specify the boundaries of the duties and the authority which has been
delegated.
10. Coordination
Finally, the manager must ensure that all activities carried out by various
employees and groups are well coordinated. Otherwise, it may lead to conflicts
between employees, duplication of work and wastage of time and efforts. He must
ensure all the departments are carrying out their specialized tasks and there is
harmony in these activities. The ultimate aim is to ensure that the goal of the
organization is fulfilled.
11. Formal Organisation
Formal organization refers to the organization structure which is designed by the
management to accomplish a particular task. It specifies clearly the boundaries of
authority and responsibility and there is a systematic coordination among the
various activities to achieve organizational goals.
Example:
Churches
Schools
Hospitals
Companies
12. Informal Organisation
An informal organization exists in the sense that it has no legal existence, no legal
boundaries, no membership roster, no tangible assets, no formal structure, and no
official leadership. The distinguishing feature of an informal organization is the
social fabric that binds its members together with a common identity.
Example:
Members of the sales team join every day for lunch with the human resource team.
Another example of such informal groups is that sales team personnel help tech
development employees to figure out the requirements of the product.
13. Line Organisation
Line organization structure is the oldest and simplest form of organization. In these
organizations, a supervisor exercises direct supervision over a subordinate. Also,
authority flows from the top-most person in the organization to the person in the
lowest rung. This type of an organization is also called a military organization or a
scalar-type organization.
Examples:
Small businesses in which the top manager, often the owner, is positioned at the
top of the organizational structure and has clear "lines" of distinction between him
and his subordinates.
15. Line & Staff Organisation
As an organization grows in scope, complexity increases, they need to be flexible with
the control. The principle of line-staff organization introduces this flexibility into
hierarchical lines of authority, in a try to maintain a unified command structure. Line
groups are engaged in tasks that focus on the technical core of the firm. They are
involved in achieving the primary objective of the enterprise.
Staff groups are in tasks that provide support to the line groups. Their work is like that
of advisory, or service groups. Staff groups support those who are engaged in the
central productive activity of the enterprise. They back up their work. Staff groups help
the organization in analyzing, researching, counseling, monitoring, and evaluating
activities.
Example:
A human resources employee is ranked within the staff classification, as is an internal
auditor, an accountant, a public relations person, and a risk manager.
17. Difference between Line and Line & Staff
Organisation (Line)
Meaning - The organization in which the authority and responsibility moves
downward, and accountability flows upward, is called line organization.
Authority - Command
Discipline - Strict
Executives - Line executives are generalist
Degree of centralization - Absolute centralization
Appropriate for - Small organization with less number of employees
18. Difference between Line and Line & Staff
Organisation (Line & Staff)
Meaning - The organization structure, in which specialist are added to the line
managers to provide guidance and support, is called line and staff organization.
Authority - Command and Advise
Discipline - Loose
Executives - Line executives are generalist and staff executives are specialist.
Degree of centralization - Partly centralized and partly decentralized
Appropriate for - Large organization with a large number of employees.
19. Functional Structure
In a functional organization structure, the entire organization is divided into smaller
groups or departments based on specialized functions. Since the work is divided
into smaller sectors, so is the management. The management is also sub-divided
according to the type of work being done. So every department has their own head
or executive. And the reporting structure can also differ from department to
department.
So for example in such an arrangement there will be a finance department, an IT
department, marketing department etc. This allows for greater cohesiveness and
efficiency in the work of the employees.
20. Divisional Structure
Divisional Organisation structure in which various departments are created on the
basis of products, territory or region, is called a divisional structure. Each unit has a
divisional manager, who is responsible for performance and has authority over
their division. Each division is further divided into functional units like production,
sales, finance, etc.
22. Centralisation of Authority
Centralization of authority denotes the concentration of authority in a few hands,
generally at the top of the organizational hierarchy.
Decisions are taken at the top by a few, and communicated down to the lower few
of the management. That means that all operational and policy directions are given
by a few at the top management level while those below have to carry out the
instructions.
Example:
A person running a departmental store appoints a manager, a cleaning staff, a
salesperson and a helper. The owner delegates the work among the staff according
to their skills and positions.
23. Decentralization of Authority
Decentralization of authority may be defined as a situation in which ultimate
authority to command and ultimate responsibility for results is localized as far
down in the organization as efficient management of the organization, permits. It is
carried out by creating; under a central organization, a number of autonomous
units with mandates to operate as independent units.
Example:
The decentralization of government, gives more power to the individual states,
rather than concentrating it at the federal level.
A hotel owner cannot control a 100 branches at the same time, so he appoints
managers
