ORGANIZATION

INTRODUCTION

Organization refers to a particular entity, such as a company, institute etc is an inescapable part
of our life. Organizations can be large, small, formal and informal, religious, economic, social
political etc.

DEFINITION
• An organization may be defined as a formally constituted group of people who have identified
tasks and who work together to achieve a specific purpose defined by the organization.

• Organization is a form of every human association for the attainment of common purpose and
the process of relating specific duties or function in a whole
-J D Mooney
• Organization consists of the relationship of individual to individuals and groups to groups
which are related as to bring about an orderly division of labor.
- Piffiner.
• Organization is a formal structure of authority through which work subdivisions are arranged,
defined and coordinated for the defined objective.
- Luther Gullick
• Organization is a system of co-operative activities of two or more persons.
-Chester I Bernard.

INTRODUCTION TO CONCEPT

Organization is the backbone of management. Without efficient organization, no management

can perform its functions smoothly. Sound organization contributes greatly to the continuity and
success of the enterprise. Once Andrew Carnagie, an American industrialist said, "Take away
our factories, take away our trade, our avenues of transportation, our money. Leave nothing but
our organization, and in four years we shall have re-established ourselves". That shows the
significance of managerial skills and organization. However, good organization structure does
not by itself produce good performance – just as good constitution does not guarantee great
presidents or good laws a moral society. But a poor organization structure makes good
performance impossible, no matter how good the individuals may be. The right organizational
structure is the necessary foundation; without it the best performance in all other areas of
management will be ineffectual and frustrated.

In the beginning of 20th century, there was no proper system of work in organization and no
system of management was in existence. The officials use to choose the method of working at
their own. The managers had nothing to do with the efficiency of system or whether their tools
were up to the mark or not, nor they were responsible for this in any way. In such a background,
a view point known as scientific approach came into existence which was a new concept and
1
aimed at running the organization in a planned manner and increases its efficiency. Taylor
(1856-1915) introduced this concept and he was known as the father of scientific management.
According to him problems can be solved by scientific system and management is based on
specific laws, rules and theories. According to this approach, beings are treated as machine. The
scientific method should be adopted to yield maximum production at a minimum cost.

Later on in third decade of 20th century, human relation approach came into existence as a result
Hawthorne experiment of Elton Mayo.

The term 'organization' is used in two different senses. In the first sense it is used to denote the
process of organizing. In the second sense, it is used to denote the results of that process, namely,
the organizational structure. So, the nature of organization can be viewed in two ways :
(a) Organization as a process; and
(b) Organization as a structure or framework of relationship.

Organization as a process : As a process, organization is an executive function. It becomes a

managerial function involving the following activities:
i. Determining activities necessary for the accomplishment of the business objective.
ii. Grouping of interrelated activities.
iii. Assigning duties to persons with requisite competence,
iv. Delegating authority, and
v. Coordinating the efforts of different persons and groups.

When we consider organization as a process, it becomes the function of every manager.

Organizing is a continuous process and goes on throughout the life time of an enterprise.
Whenever there is a change in the circumstances or material change in situation, new type of
activities spring up. So, there is a need for constant review and reassignment of duties. Right
persons have to be recruited and necessary training has to be imparted to enable them to be
competent to handle the jobs. The process of organization thus, involves dividing the work into
rational way and interpreting the activities with work situation and personnel. It also represents
humanistic view of the enterprise since it is the people which are uppermost in the process of
integration of activities. Continuous review and adjustment makes this dynamic as well.

Organization as a structure or framework of relationships : As structure, organization is a

network of internal authority, responsibility relationships. It is the framework of relationship of
persons, operating at various levels, to accomplish common objectives. An organization structure
is a systematic combination of people, functions and physical facilities. It constitutes a formal
structure with definite authority and clear responsibility. It has to be first designed for
determining the channel of communication and flow of authority and responsibility. For this,
analysis of different types has to be done. Peter F. Drucker suggests following three types of
analysis :
(i) Activities analysis
(ii) Decision analysis, and
(iii) Relations analysis,
2
A hierarchy has to be built-up i.e., a hierarchy of positions with clearly defined authority and
responsibility. The accountability of each functionary has to be specified. Therefore, it has to be
put into practice. In a way, organization can be called a system as well. The main emphasis here
is on relationships or structure rather than on persons. The structure once built is not liable to
change so soon. This concept of organization is, thus, a static one. It is also called classical
concept. Organization charts are prepared depicting the relationship of different persons. In an
organizational structure, both formal and informal organizations take shape. The former is a per-
planned one and defined by the executive action.
The latter is a spontaneous formation, being laid down by the common sentiments, interactions
and other interrelated attributes of the people in the organization. Both formal and informal
organizations, thus, have structure.

CHARACTERISTICS: An analysis of the above definitions and concept reveals the following
characteristics of an organization:
1. It is a group of individuals which may be large or small.
2. The group in the organization works under the executive leadership.
3. It is a machine or mechanism of management.
4. It has some directing authority or power which controls the concerted efforts of the group.
The division of labour, power and responsibilities are deliberately planned.
5. It implies a structure of duties and responsibilities.
6. It is established for accomplishment of common objectives
7. It is a functional concept.

Sound organization brings about the following advantages:

1. Facilitates attainment of the objectives of the enterprise.

2. Facilitates optimum use of resources and new technological development.
3. Facilitates growth and diversification.
4. Stimulates creativity and innovation.
5. Facilities effective communication.
6. Encourages better relations between the labour and the management.
7. Increase employee satisfaction and decreases employee turnover.

NATURE OF ORGANIZATION
Four P’s are required to form the bases for organization,
• P- Purposes or a function which means the major objective or aim to be achieved or the
service to be rendered- health, defence, education etc.
• P- Process- it is a technique or primary skill, more or less of specialized kind to provide
services to public i.e. medical, nursing etc.
• P- Person/ target group/ clientele- means the body of person to be served
• P- Place setting- area or place is territorial jurisdiction-consists of population to be served e.g
PHC, Hospital.

3
 IMPORTANCE OF ORGANIZATION
 It increases managerial efficiency. It provides the structure within which the functions of
administration are performed
 It avoids delay, duplication or confusion in performance and remove, friction or
rivalry among personnel.
 Analysis of objectives of institute provides all pertinent activities.
 Activities in turn are allocated to particular individuals.
 Assignment of fixed duties helps to add certainty and promptness in their work.
 It ensures an optimum use of human efforts through specialization and also makes use of all
resources, determines needs for innovative and new technologies in terms of cost
effectiveness and accomplish objectives.
 Details job specification helps for right persons are placed in the right position on the
basis of their knowledge, skill and experience.
 It places a proportionate and balanced emphasis on various activities.
 Money and efforts can be spent proportionately with the importance of activities.
 It facilitates coordination in the enterprises.
 Different department and section, positions and jobs functions welded together by
structural relationship of the organization.
 It provides scope for training and developing managers.
 It helps to consolidate growth and expansion of the institution/enterprise.
 It invites creative and innovative ideas.
 It prevents the growth of laggards, wire pullers or other forms of corrupters

STEPS IN THE PROCESS OF ORGANISING

The managerial function of organizing may be called as the 'process of organizing'. When the
objectives have been set and policies framed, the necessary infrastructure of organization has to
be built up. The concentration goes to activities and functions. These form 'the building blocks'
of the organizational structure. There are no such rules as to which will lead to the best
organizational structure. But the following steps can be of great help in the designing a suitable
structure, which will laid in achieving enterprise objectives:

1. Clear definition of objectives: The first step in developing an organizational structure is to lay
down its objectives in very clear terms. This will help in determining the type, stability and basic
characteristics of the organization. In fact, organization activities are detailed in terms of
objective to be achieved.

2. Determining activities: In order to achieve the objectives of the enterprise, certain activities are
necessary. The activities will depend upon the nature and size of the enterprise. For example, a
manufacturing concern will have production, marketing and other activities. There is no
production activity in retail establishment. Each major activity is divided into smaller parts. For
instance, production activity may be further divided into purchasing of materials, plant layout,
quality control, repairs and maintenance, production research etc.
4
3. Assigning duties: The individual groups of activities are then allotted to different individuals
according to their ability and aptitude. The responsibility of every individual should be defined
clearly to avoid duplication and overlapping of efforts. Each person is given a specific job suited
to him and he is made responsible for its execution. Right man is put in the right job.

4. Delegating authority: Every individual is given the authority necessary to perform the assigned
activity effectively. By authority we mean power to take decisions, issue instructions, guiding the
subordinates, supervise and control them. Authority delegated to a person should commensurate
with his responsibility. An individual cannot perform his job without the necessary authority or
power. Authority flows from top to bottom and responsibility from bottom to top.

5. Coordinating activities: The activities and efforts of different individuals are then
synchronized. Such coordination is necessary to ensure effective performance of specialized
functions. Interrelationship between different job and individuals are clearly defined so that
everybody knows from whom he has to take orders and to whom he is answerable.

6. Providing physical facilities and right environment: The success of an organization depends
upon the provision of proper physical facilities and right environment. Whereas it is important to
have right persons on right jobs, it is equally important to have right working environment. This
is necessary for the smooth running and the prosperity of the enterprise.

7. Establishment of structural relationship for overall control: It is very essential to establish

well defined clear-cut structural relationships among individuals and groups. This will ensure
overall control over the working of all departments and their coordinated direction towards the
achievements of predetermined goals of business. It is thus clear from the foregoing analysis that
organization provides a structural framework of duties and responsibilities. It not only
establishes authority relationship but also provides a system of communication. The various
processes of organization explained above are technically performed through (a) departmentation
(b) delegation of authority and fixation of responsibilities and (c) decentralization of authority
subject to central control through centralization of decision-making.

PRINCIPLES OF ORGANIZATION
(According to Ms. T.K.Adranvala)
• Division of labor
• Hierarchy of authority
• System for co-ordination and control
• Span of control – it depends on,
-Unity of objectives -Unity of command
-Division of work &specialization -Principle of adequate authority
-Job description -Span of supervision

According to BT Basavanthappa:- There are six principles of organization as follows:

1. Hierarchy
5
 2. Span of control
3. Integration vs. disintegration
4. Centralization vs. decentralization
5. Unity of command
6. Delegation

According to Russell C. Swansburg & Richard J. Swansburg

1. Principle of chain of command
2. Principle of unity of command
3. Principle of span of control
4. Principle of specialization

PRINCIPLES OF ORGANIZATION

Effective and efficient working of any organization depends on how the managerial function of
organization is being performed. The function of organization can be carried effectively with the
help of under mentioned principles:

(i) Division of work: While structuring organization, division of work, at the very outset, should be
considered as the basis of efficiency. It is an established fact that group of individuals can
secure better results by having division of work. Therefore, while designing the organization
we should aim at making suitable grouping of activities. This is also called the principle of
specialization.

(ii) Attention to objectives: An organization is a mechanism to accomplish certain goals or

objectives. The objectives of an organization play an important role in determining the type of
structure which should be developed. Clearly defined objectives facilitate grouping of
activities, delegation of authority and consequently effective coordination.
(iii) Span of management: Span of management also refers to span of control signifying the number
of subordinates reporting directly to any executive. It is an established fact that larger the number
of subordinates reporting directly to the executive, the more difficult it tends to be for him to
supervise and coordinate them effectively. This important principle of management should also
be kept in mind.

(iv) Unity of command: Organization structure should also be designed in such a way that there
exists unity of command in the sense that a single leader is the ultimate source of authority. This
facilitates consistency in directing, coordinating and controlling to achieve the end objectives.

(v) Flexibility: While designing the organization it should be kept in mind that organizational
structure should not be regarded as static. Every organization is a living entity in a living
environment which is fast changing. As such there must be sufficient room for changing and
modifying the structure in the light of environmental changes so that the ultimate objective of the
organization is achieved.
6
(vi) Proper balance: It is important to keep various segment or departments of an organization in
balance. The problem of balance basically arises when an activity or a department is further
divided and subdivided into smaller segments. The problems of balancing also crops up with the
growing of any organization in its size and functioning.

(vii) Management by exception: It is a fundamental principle that makes any organization effective
in its true sense. This principle signifies that problems of unusual nature only should be referred
upward and decided by higher level executives in the managerial hierarchy, whereas the routine
problems should be passed on to lower levels and resolved there. Application of this principle as
such, certainly requires adhering to the principle of delegation of authority. The principle of
exception is thus of significant practical utility and applies to all levels in the organization
structure.

(viii) Decentralization: This principles is of great significance to big organizations. Decentralization

implies selective dispersal of authority to help departments and units to run effectively and
efficiently without frequent interruptions from the top of the enterprise. It requires very careful
selection of what decisions to push down into the organization, of what to hold at or near the top
specific policy making to guide the decision-making, selection and training of people and
adequate control. Decentralization, as such, embraces all areas of management and evidently is
of overwhelming significance in organization structure.

(ix) Departmentation: Departmentation is the process of grouping activities into units for purposes
of administration. In other words, it denotes grouping of related jobs and activities without
violating the principle of homogeneity over which an executive has authority to exercise and
assert. The main advantages of departmentation are that it enables individual executive to mange
his subordinates effectively since a manageable number of persons are brought under the direct
supervision of individual executive.

(x) Efficiency: The organization should be able to attain the predetermined objectives at the
minimum cost. It is done so, it will satisfy the test of efficiency. From the point of view of an
individual, a good organization should provide the maximum work satisfaction. Similarly, from
the social point of view, an organization will be efficient when it contributes the maximum
towards the welfare of the society.

(xi) Scalar principle: Scalar chain refers to the vertical placement of superiors starting from the
chief executive at the top through the middle level to the supervisory level at the bottom. Proper
scalar chain or line of command is prerequisite for effective organization.

(xii) Unity of direction: This means that each group of activities having the same objectives should
have one plan and one head. There should be one plan or programme for each segment of work
which is to be carried under the control and supervision of one head or superior. If different plans
or policies are followed in one department by the subordinates, confusion is bound to occur.

7
(xiii) Continuity: The form of organization structure should be such which is able to serve the
enterprise to attain its objectives for a long period of time.

(xiv) Coordination: The principal of coordination underlines that there should be proper liaison and
cooperation between different departments and units of work. Unity of efforts for the
accomplishment of desired objectives is the main aim of organization. This can be achieved
through the principle of coordination.

(xv) Authority and responsibility: Authority should commensurate with responsibility. While
assigning the responsibility, authority should also be assigned. If authority is not granted, the
subordinates cannot discharge their responsibility properly.

OBJECTIVES OF ORGANISING

Every economic activity which is deliberately done has some purpose. When a group of people
assemble without any per-planed aim or purpose, it is not an organization but just a mob. But
when, for instance they are invited to participate in a conference, an element of purpose has been
introduced. A purpose refers to commitment to desired future. Objectives and purposes,
generally, are interchangeable terms. Why should business enterprise organize itself ? The
answer to this question brings out its objectives. Objectives of a business organization are
distinguished from the objectives of other social organizations. To put it more precisely, the
nature of an organization (i.e. political, social, religious or economic) can only be known by
studying its objectives. The following may be, generally speaking, the objectives (or purpose) of
organizing business :
1. Effective management of the enterprise : Effective management largely depends upon
effective organization. It is the effective organization which ensures proper balance between
authority and responsibility. It achieves a clear line of communication, and defines the areas of
work. It is the organization which allows the top management to concentrate on overall planning
and supervision, leaving the routine work for the lower levels of administration. It saves the
entire enterprise from adhocism, over-lappings and inefficiency.

2. Maximum production at minimum cost : The activities are allotted according to the principle
of division of labour. The efficient system of organization encourages every employee to make
his best contribution in raising output. The increase in output and control of wasteful expenditure
helps to decrease the cost of production. The profitability of the concern will also go up.

3. Sustained growth and diversification : A business enterprise should be a growing organism.

With the passage of time, an enterprise must expand its activities. It should also aim at
diversification of products and markets. A static business soon grows stale and get out of run. It
should grow from a small scale concern to a medium scale one and from a medium scale concern
to large scale one. Organization plays an important role in this respect. Execution of policies in
organized manner builds the necessary capacity and confidence in undertaking bigger activities.

8
4. Cooperation of employees : The organizational structure will succeed only if employees
cooperate in the work. The employees learn working in closer cooperation of others. The
management introduces various incentive schemes and gives monetary and other benefits to the
employees, so that they work in a team spirit.

5. Discharging social responsibility : Maximizing of profits, no doubt, is the motive of every

business. Without profit, no business can exist. But business is a part and parcel of society at
large. It cannot survive long by exploiting consumers and society. It has to serve the society by
providing it with goods of good quality at reasonable prices. It has to ensure smooth supply of
goods as per the needs to consumers. The service motto cannot be realized without a well-knit
organization structure. So, to discharge social obligation is an important objective of building up
sound organization. The purpose of sound organization is :
(i) to establish an activity-authority environment in which people can perform most
effectively.
(ii) to make group action efficient and effective by providing centres for decision making and a
system of communication
(iii) to effectively coordinate individual efforts towards group goals.
(iv) to create relationships which minimize friction, focus on the objective, closely define the
responsibilities of all parts and facilitate the attainment of the objective.
(v) to subdivide the management process by which plans are translated into actions so as to
make management most effective.

Thus, to sum up we can say that organization is a process by which the manger brings order out
of chaos, removes conflicts between people over work or responsibility, and establishes an
environment suitable for teamwork.

ADVANTAGES OF ORGANIZATION

The primary duty of management is to achieve the objectives of the enterprise. The objectives
may be social, economic, political or religious. Proper organization of men, materials, money
and equipment is necessary. Organization is the mechanism through which management directs,
coordinates and controls the business. A sound organization offers the following advantages,
which summarizes its importance :
1. Enhancement of managerial efficiency : A sound organization brings a proper coordination
among various factors of production and leads to their optimum utilization. It avoids confusion,
duplication and delays in work. It motivates the worker by proper division of work and labour. It
reduces the work load of executives by delegation of authority.

2. Growth, expansion and diversification : Organization provides the framework within which an
enterprise can expand and grow. Through organization, management can multiply its strength. In
a good organization, the money and effort spent on different activities are in proportion to their
contributions. It is through proper organization setup that many firms have grown from humble
beginning to a giant size.

9
3. Specialization : A sound organization structure provides the benefits of specialization. Various
activities are allocated between different individuals according to their qualifications, experience
and aptitude. It increases their efficiency. Systematic organization of activities helps to secure
economics and to minimize costs.

4. Adoption of new technology : A properly designed and wellbalanced organization permits

prompt adoption and optimum use of technological improvements. It has the capacity to absorb
changes in the environment of business and to provide a suitable reaction to such changes. A
good organization helps in the development of new and improved means of doing things.

5. Coordination : Organization facilitates coordination of diverse activities. Different functions are

welded together to accomplish the desired objectives. Clear lines of authority and responsibility
between various positions, ensure mutual cooperation and harmony in the enterprise. A good
organization enables people to work with team spirit.

6. Training and Development : By delegating authority to lower levels, training and development
of future executives is made possible. A good organization puts 'right man at the right job' and
provide them right training and managerial development programmes. By appointing employees
in different department assigning them different jobs, their training needs can be ascertained.

7. Creativity, initiative and innovation : A good organization encourages initiative and creative
thinking. Employees are motivated to break new grounds and try unconventional methods. A
sound organization offers the scope for recognition of merit followed by financial incentives to
the personnel showing creativity.

8. Check on corrupt practices : A weak and unsound organization is source of corruption and
inefficiencies. Well organized, welldefined, disciplined and sound organizations boost the
morale and motivation of workers. It develops a feeling of involvement, belongingness,
devotion, honesty and sincerity among employees. It prevents corruption, inefficiencies and
wastage in an enterprise.

9. Proper weightage to all activities : A sound organization divides the entire enterprise into
different departments, sections and subsections according to the functions to be performed by
them. Each function of an enterprise has got its own importance. Emphasis is given according to
their relative importance. Funds and manpower is allocated to their relative importance.

10. Better human relations : Human beings involved in an organization are only dynamic element
of organization. A dedicated and satisfied group of persons proves an asset to any establishment.
An organization, built on sound principles, helps harmony in human relations. With properly
defined authority, responsibility and accountability, different persons enjoy job-satisfaction.
Organization consists of human beings and their satisfaction helps in improving human relations.

Thus, organization is the foundation of management. Sound organization is an indispensable

mean for efficient management and better business performance. It not only facilitates efficient
10
 administration but also encourages growth and diversification. It provides for optimum use of
new technology, stimulates innovation and creativity.

TYPES OF ORGANIZATION
 Formal Organization
 Non Formal Organization
 Informal Organization
 Line Organization
 Staff Organization
 Line and Staff Organization
 Committee Organization
 Social Organization

Formal Organization: Formal organization refers to the structure of relationships deliberately

built up by the top management to realize the objectives. In this form instructions, responsibility,
authority, accountability, lines of command, and positions and authority are clearly defined and
declared. Each person is aware of his duties and authority. Every subordinate is expected to obey
his supervisor in the formal chain of command. Each individual is fitted in the organization like a
cog in the machine. It is designed after careful identification, classification and assignment of
business activities. So, it is conscious creation of relationships.

Informal organization: refers to the network of personal and social relationships which arise
spontaneously when people working together interact on personal whims, likes and prejudices.
Such relations are not created by the top management and they are not recognized formally. The
informal groups sometimes run parallel to the formal ones. Informal relations are not portrayed
on organization charts and manuals. An informal organization provides an opportunity to
workers to come close to each other, develop a feeling of cooperation and coordination among
themselves.

Difference Between Formal and Informal Organizations:- The difference between formal and
informal organizations can be enumerated briefly as below:
1. Formation : Formal organization is deliberately created by management. It is the result of a
conscious and deliberate effort involving delegation of authority. On the other hand, informal
organization arises spontaneously and no conscious efforts are made to create it. It takes place on
the basis of relationships, caste, culture, occupations and on personal interests etc. No delegation
of authority is essential in informal organization.

2. Basis : A formal organization is based upon rules and procedures, while an informal
organization is based upon attitudes and emotions of the people. It depends on informal, social
contacts between people working and associating with one another.

3. Nature : A formal organization is stable and predictable and it cannot be changed according to
the whims or fancies of people. But an informal organization is neither stable nor predictable.
11
4. Set up : A formal organization is a system of well defined relationships with a definite authority
assigned to every individual. It follows predetermined lines of communication. On the contrary,
an informal organization has no definite form and there are no definite rules as to who is to
report to whom. Even a low-placed employee may have an informal relationship with an officer
far above him in the formal hierarchy.

5. Emphasis : In a formal organization, the main emphasis is placed on authority and functions. In
an informal organization the stress is on people and their relationships.

6. Authority : Formal authority is attached to a position and it flows from top to bottom. Informal
authority is attached to a person and it flows either downwards or horizontally.

7. Existence : A formal organizations exists independently of the informal groups that are formed
within it. But an informal organization exists within the framework of a formal structure.
8. Rationality : A formal organization operates on logic rather than on sentiments or emotions. All
activities follow a predetermined course. As an association between like-minded people, an
informal organization has little rationality behind it. In an informal organization, activities are
influenced by emotions and sentiments of its members.

9. Depiction : Formal organization can be shown in an organization chart or a manual. But an

informal organization cannot be depicted in the chart or manual of the enterprise.

Non formal Organization: Existing within formal organization is non-formal organization that
permits and sometimes encourages behavior by members. This non-formal behavior is frequently
desirable and also work oriented and contributes significantly to efficiency. Behavioral factors
such as unnecessary socializing on the job, group values and cultural likes and dislikes serve as
bases for non-formal behavior in formal organizations.
Non-formal organization always exists along with formal organization. It serves as an
adjunct, is intangible, and takes on different degrees of importance depending upon the activity
and the persons involved. A manager should be aware of the presence and influence of non-
formal organization.

Line Organization: The line organization represents the structure in a direct vertical relationship
through which authority flows. It is the simplest form of organization structure and is also known
as scalar or military organization. Under this, the line of authority flows vertically downward
from top to bottom throughout the organization. The quantum of authority is highest at the top
and reduces at each successive level down the hierarchy. Every person in the organization is in
the direct chain of command
Director of nursing

Chief Nursing Officer

Deputy Nursing Officer Deputy Nursing Officer Deputy Nursing Officer

12
 Staff Nurse Staff Nurse Staff Nurse

In line organization, the line of authority consists of an uninterrupted series of authority steps and
forms a hierarchical arrangement. The line authority not only becomes the avenue of command
to operating personnel but also provides the channel of communication, coordination and
accountability in enterprise.

Advantages of Line Organization

(i) It is very easy to establish line organization and it can be easily understood by the employees.
(ii) If facilitates unity of command and thus conforms to the scalar principle of organization.
(iii) There is clear-cut identification of authority and responsibility relationship. Employees are fully
aware of the boundaries of their jobs.
(iv) It ensures excellent discipline in the enterprise because every individual knows to whom he is
responsible.
(v) It facilitates prompt decision-making because there is definite authority at every level. An
executive cannot shift his decision making to others, nor can the blame be shifted.

Disadvantages of Line Organization

(i) With growth, the line organization makes the superiors too overloaded with work. If the
executive try to keep up with every activity, they are bogged down in myriad details and are
unable to pay proper attention to each one. It will hamper their effectiveness.
(ii) There is concentration of authority at the top. If the top executives are not capable, the enterprise
will not be successful.
(iii) Line organization is not suitable to big organizations because it does not provide specialists in
the structure. Many jobs require specialized knowledge to perform them.
(iv) There is partially no communication from bottom upwards because of concentration of authority
at the higher levels. If superiors take a wrong decision, it would be carried out without anybody
having the courage to point out its deficiencies. In spite of these drawbacks, the line organization
structure is very popular particularly in small organizations where there are less number of levels
of authority and a small number of people. A modification of this structure is line and staff
organization under which specialists are attached to line executives to provide them specialized
assistance on matters of great importance to be enterprise.

Line and Staff Organization: The line executive is often described as the individual who stands
in the primary chain of command and is directly concerned with the accomplishment of primary
objectives. Line organization provides decision-making authority to the individuals at the top of
the organization structure and a channel for the flow of communication through a scalar chain of
authority. Line executives are generalists and do not possess specialized knowledge which is a
must to tackle complicated problems. With a view to give specialist aid to line executives, staff
positions are created throughout the structure. Staff elements bring expert and specialized
knowledge to provide advice to line managers so that they may discharge their responsibilities
successfully.

13
 In line and staff organization, the line authority remains the same as it does in the line
organization. Authority flows from top to bottom. The main difference is that specialists are
attached to line managers to advise them on important matters. These specialists stand ready with
their specialty to serve line men as and when their services are called for to collect information
and to give help which will enable the line officials to carry out their activities better. The staff
officers do not have any power of command in the organization as they are employed to provide
expert advice to the line officers. Staff means a supporting function intended to help the line
manager. In most organizations, the use of staff can be traced to the need for help in handling
details, gathering data for decision-making and offering advice on specific managerial problems.
Staff investigates and supplies information and recommendations to managers who make
decisions. Specialized staff positions are created to give counsel and assistance in each
specialized field of effort

Line and staff structure has gained popularity because certain problems of management have
become very complex and, in order to deal with them, expert knowledge is necessary which can
be provided by the staff officers. For instance, personnel department is established as staff
department to advise the line executives on personnel matters. Similarly, finance, law and public
relations departments may be set up to advice on problems related to finance and accounting, law
and public relations. The staff officers do not have any power of command in the organization as
they are employed to provide advice to the line officers. In most organizations, the use of staff
can be traced to the need for help in handing details, gathering data and offering advice on
specific managerial problems.

Advantages of Line and Staff Organization

(i) Specialized knowledge. Line managers get the benefit of specialized knowledge of staff
specialists at various levels.
(ii) Reduction of burden. Staff specialists relieve the line managers of the botheration of
concentrating on specialized functions like accounting, selection and training, public relations,
etc.
(iii) Proper weightage. Many problems that are ignored or poorly handled in the line organization
can be properly covered in the line and staff organization by the use of staff specialists.
14
(iv) Better decisions. Staff specialists help the line executives in taking better decisions by providing
them with adequate information of right type at the right moment and expert advice.
(v) Flexibility. Line and staff organization is more flexible as compared to the line organization.
General staff can be employed to help line managers at various levels.
(vi) Unity of command. Under this system, the experts provide special guidance without giving
orders. It is the line manager who only has got the right to give orders. The result is that the
enterprises takes advantage of functional organization while maintaining the unity of command
i.e., one subordinate receiving orders from one boss only.

Demerits of Line and Staff Organization: Line and staff organization suffers from the
following drawbacks :
(i) There is generally a conflict between the line and staff executives. There is a danger that the staff
may encroach on the line authority. Line managers feel that staff specialists do not always give
right type of advice, and staff officials generally complain that their advice is not properly
attended to.
(ii) The allocation of duties between the line and staff executives is generally not very clear. This
may hamper coordination in the organization.
(iii) Since staff men are not accountable for the results, they may not be performing their duties well.
(iv) There is a wide difference between the orientation of the line and staff men. Line executives’
deals with problems in a more practical manner. But staff officials who are specialists in their
fields tend to be more theoretical.

Superiority of Line and Staff Organization over Line Organization: Line and staff
organization is considered better than the line organization because of the following reasons:

(i) Staff makes available expert advice to line executives. This is necessary to deal with complex
problems of management. For instance, personnel department is established as a staff
department to advise the top executives and other line executives on personnel matters.
(ii) Better decisions are ensured in line and staff organization as compared to a simple line
organization.
(iii) Line and staff structure is more suitable for large organizations as expert advice is always
available. The line managers can make use of the knowledge of staff specialists to deal with
complicated problems. Therefore, line and staff organization is certainly better than line
organization.

Staff Organization: the use of the “staff” gives rise to many misunderstanding in management.
Literally, the word means stick carried in hand for support. Hence, staff authority relationships
originally were thought of as those relationships used to support line authority relationships. This
concept exists today and is valid. Staff means a supporting role and functions; it is intended to
help the “order”. With the passing of time additional meanings of staff authority or what this
help consists of have developed and the team support, instead of staff is currently in use.
In most enterprises use of staff in organization structure can be traced to the need for help
in handling details, locating data required for decisions and offering counsel on specific
managerial problems.
15
 Most staff authority relationships are characteristically a manager-to-manager authority
relationship and exist among any managerial levels of an organization structure. The managerial
recipient of staff authority is commonly called a staff executive or staff officer. He has the
charge of this respective staff organizational unit. The concept of staff authority is quite old;
staffs were employed by government and armies.

Committee Organization: it can be defined as” A body of persons elected or appointed to meet
on an organized basis for the discussion and dealing of mattes brought before it”.
Committees are common yet controversial in most organizations. They can do exist at
any organizational level, serve in various capacities and for different purposes are known by
many different names and enjoy wide degrees of acceptance among management members.
Extremely important work is accomplished via the committee route. Typically, educational
enterprises are loaded with committee and they are common in government and in business. In
trade associations and most professional societies, the major portion of the organization structure
is made up to committees.
The committee usually has a formally recognized and permanent place in the
organization structure. It makeup duties, membership and decision-making power may be
carefully spelled out. For example, some business enterprises have at the top level, a planning
and policy committee or a general management committee made up of selected company
executives. The committee meets regularly may be weekly, make decisions, ensures that they are
enforced and participates in management affairs of the company or hospital or health care
institution. The reasons for the widespread use of committees are:
a) Expert and collective knowledge can be concentrated upon a specific problem. A wide spread
range of experience can be tapped, exchange of ideas encouraged and effective give-and-take
discussion encouraged.
b) Coordination is assisted: different views can be unified and integrated. Agreed and
prescribed courses of action established and maximum understanding among committee
participants achieved.
c) Too much authority concentrated in one person is prevented: by its very nature, a committee
members who can watch and check each other’s action.
d) Social values are provided: committee membership provide prestige, permits recognition as
an equal with each other members who have status and tends to satisfy the human desire for
long and to do something worthwhile.
e) Motivations is supplied: people like participation and committee uses encourages it.
Cooperation is enhanced in the execution of a proposed action and is reasonably assured if
the committee develops the plan. There is also knowledge acquired by the committee
members. Such characteristics have strong motivational value.
f) Education of members is prohibited: each participant’s viewpoint is broadened; he gains and
there is appreciation of the other unit’s problems as well as those of the enterprise.

Social Organization: it is apparent that in a democratic society, the ultimate authority of a

business enterprises rests with public or society. The professional privileges are derived and
controlled through laws and marketing process. Then beginning with the policies, a management
system is organized to achieve the organizational objectives. Procedures and control mechanism
16
 is introduced by the management in a systematic way. The relationship between society and an
enterprise is shown below.
Society or the public

Ownership
(private or public)

Philosophy and Ethic

Needs Needs
Policies
(Economic) (Psychologic and Social)

Resources Resources
Coordinated system
(Management)

Procedure Control

Personal

Objectives

Social Objectives Personal Objectives

THEORIES OF ORGANIZATION

Definition: Organizational theory (OT) is the study of organizations for the benefit of identifying
common themes for the purpose of solving problems, maximizing efficiency and productivity,
and meeting the needs of stakeholders
Types of organizational theories

1)Classical organization theory 2)Neoclassical theory 3)Modern theories 4)Individual processes

a)Taylor‟s scientific a)The systems a)Motivational theory
management approach approach
b)Weber‟s bureaucratic b)Socio-technical b) Role theory
approach approach
c)Administrative theory c)The contingency or c)Personality theory
Situational approach

TYPES OF ORGANIZATIONAL THEORIES

1) Classical organization theory - a) Taylor‘s scientific management approach b) Weber‘s

bureaucratic approach c) Administrative theory
2) Neoclassical theory
17
3) Modern theories- a) The systems approach b) Socio-technical approach c) The contingency or
situational approach
4) Individual processes- a) Motivational theory b) Role theory c) Personality theory

1) CLASSICAL ORGANIZATION THEORIES (Taylor, 1947; Weber, 1947; Fayol, 1949) deal
with the formal organization and concepts to increase management efficiency.

• Taylor presented scientific management concepts,

• Weber gave the bureaucratic approach, and
• Fayol developed the administrative theory of the organization.

In this theory, the theorists considered the organization as a machine and the workers as
components of that machine. It was considered that the efficiency of the organization increases if
the workers are made more efficient. Therefore the main focus was on specialization and
coordination of the activities. This theory was formed around four pillars:

1. Division of work: According to division of work, it was assumed that if the workers perform the
same work repeatedly, their efficiency will improve and hence they will be beneficial for the
organization.
2. Scalar and functional Processes: According to scalar and functional processes, there was a
growth in the chain of command, delegation of authority and unity of command. It provides a
grading system of duties and so called scalar whereas the functional processes deal with the
division of organization in specialized units.
3. Structure: According to the structure, it is the framework of formal relationships in the
organization among various tasks, activities and people. The basic structure of the theory is the
position. The classical theorists emphasized on the line and staff organization.
4. Span of control: the span of control means the number of subordinates a superior can control at
one time, it was assumed that the manager cannot exercise proper control if the number of
subordinates is beyond certain figures.

Appraisal/ Merits of Classical Approach

• The classical approach offers a convenient framework for the education and training of
managers.
• The observational method of case study is helpful in drawing common principles out of past
experience with some relevance for future application
• It focuses attention on what managers actually do.
• This approach highlights the universal nature of management.
• It provides scientific basis for management practice.
• It provides a starting point for researchers to verify the validity and to improve the applicability
of management knowledge. Such knowledge about management is effectively presented.

Limitations/ Shortcomings/ Criticism of this theory

18
• Weber’s ideal bureaucracy suggested strict adherence to rules and regulations, this lead to
redtapism in the organization.
• It offers a mechanistic framework that undermines the role of human factor. The classical writers
ignored the social, psychological and motivational aspect of human behaviour.
• The environmental dynamics and their effect on management have been discounted. Classical
theory viewed organization as closed system i.e. having no interaction with environment.
• There is positive danger in relying too much on past experiences because a principle or technique
found effective in the past may not fit a situation of the future.
• The classical principles are mostly based on the personal experience and limited observations of
the practitioners. They are not based on personal experience.
• The totality of real situation can seldom be incorporated in a case study.
 This theory only emphasized on the line and staff structures. The underlying reason for the
effectiveness of other structures was never tried.
 This theory lacked on the emphasis on decision making processes.
 Human behavior and complexity of human nature was ignored in this theory as human beings
were considered as the components of a machine.
 The assumption of this theory that organization in a closed system was unrealistic as it is
influenced by the environment.

A) Taylor's scientific management approach

Introduction:- the first coherent theory of organization is referred to as Scientific management.

This concept was first used by Louis Brands. Later on it began to be used by F.Taylor, that he
pointed out, management is true science, resting upon clearly fixed laws, rules and principles as a
foundation. He made two assumptions related to scientific management namely:

 The application of methods of science to organization’s problems leads to higher industrial

efficiency; observation, measurement and experimental comparison are these methods.

 The incentive of high wages will promote the mutuality of interest between workers and
mangers which in its turn will lead to higher productivity.

Basically this theory is based on the concept of planning of work to achieve efficiency,
standardization, specialization and simplification.
Taylor suggested that, to increase productivity was through mutual trust between management
and workers,

Taylor developed the following four principles of scientific management for improving
productivity:
1. Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach to
each element of a person's work.
2. Scientific selection of the worker Organizational members should be selected based on some
analysis, and then trained, taught and developed.

19
3. Management and labor cooperation rather than conflict Management should collaborate with
all organizational members so that all work can be done in conformity with the scientific
principles developed.
4. Scientific training of the worker Workers should be trained by experts, using scientific
methods.
Elements and Tools of Scientific Management: The features of various experiments conducted
by Taylor are as follows:
• Separation of Planning and doing: Taylor emphasized the separation of planning aspects
from actual doing of the work. The planning should be left to the supervisor and the workers
should emphasize on operational work.
• Functional Foremanship: Separation of planning from doing resulted into development of
supervision system that could take planning work adequately besides keeping supervision on
workers. Thus, Taylor evolved the concept of functional foremanship based on specialization
of functions.
• Job Analysis: It is undertaken to find out the best way of doing things. The best way of doing
a job is one which requires the least movement consequently less time and cost.
• Standardization: Standardization should be maintained in respect of instruments and tools,
period of work, amount of work, working conditions, cost of production etc.
• Scientific Selection and Training of Workers: Taylor has suggested that the workers should
be selected on scientific basis taking into account their education, work experience, aptitudes,
physical strength etc.
• Financial Incentives: Financial incentives can motivate workers to put in their maximum
efforts. Thus, monetary (bonus, compensation) incentives and non monetary (promotion,
upgradation) incentives should be provided to employees.

Criticism of Scientific Management: The main grounds of criticism are given below:
• Taylor advocated the concept of functional foremanship to bring about specialization in the
organization. But this is not feasible in practice as a worker can’t carry out instructions from
eight foremen.
• Workers were hired on a first-come, first-hired basis without due concern for workers ability
or skills.
• Scientific management is production oriented as it concentrates too much on the technical
aspects of work and undermines the human factors in industry. It resulted in monotony of
job, loss of initiative, over speeding workers, wage reductions etc.
• Training was haphazard at best, with only minimal use of basic apprentice system.
• Tasks were accomplished by general rule of thumb without standard times, methods or
motion.
• Managers worked side-by-side with the workers, often ignoring such basic managerial
function of planning and organizing.

B) Weber's bureaucratic approach

Introduction:- The word “Bureaucracy” was first coined by Vincet de Gournay (1712-1759),
now the term lends itself to two usages; it refers to the tasks and procedures of administration, as
20
well as a collective word for a body administrative officials. Frequently, it also stands for
inefficiency and an improper exercise of power on the part of officials and then has become a
term of abuse. In 1978, French Academy accepted the word and defined it as ‘Power” influence
of the heads and staff of government bureau.
The characteristics of bureaucracy such as precision, continuity, discipline, strictness,
reliability are technically most satisfactory form of organization. The other features of
bureaucracy as given by Max Weber are:
 The staff members are personally free, observing only the impersonal duties of their offices.
 There is a clear hierarchy of offices
 The functions of offices are clearly specified
 Officials are appointed on the basis of a contract
 They are selected on the basis of professional qualifications
 They have a money salary and usually pension rights
 The official’s post is his sole or major occupation.
 There is career structure and promotion
 The official may appropriate neither the post nor the resources which go with it.
 It is subjected to unified control and disciplinary system.

Max Weber (1864-1920): He was a German sociologist. Writing in the early 1900s, Weber
developed a theory of authority structures and described organizational activities on the basis of
authority relations. He described an ideal type of organization that he called a bureaucracy, a
form of organization characterized by division of labour, a clearly defined hierarchy, detailed
rules and regulations, and impersonal relationships. Weber recognized that this ideal bureaucracy
didn’t exist in reality. He used it as a basis for theorizing about work and the way that work
could be done in large groups. His theory became the model structural design for many of
today’s large organizations. The features of Weber’s ideal bureaucratic structure are outlined in
Figure-2.3:

21
 The Elements of Bureaucracy are:
• Labour is divided with clear definition of authority and responsibility that are legitimatized as
official duties.
• Positions are organized in a hierarchy of authority, with each position under the authority of a
higher one.
• All personnel are selected and promoted based on technical qualifications, which are assessed by
examination or according to training and experience.
• Administrative acts and decisions are recorded in writing. Recordkeeping provides
organizational memory and continuity over time.
• Management is separate from the ownership of the organization.
• Management is subject to rules and procedures that will insure reliable, predictable behaviour.
Rules are impersonal and uniformly applied to all employees.

Weber (1947) based the concept of the formal organization on the following principles:
1. Structure: In the organization, positions should be arranged in a hierarchy, each with a
particular, established amount of responsibility and authority.
2. Specialization: Tasks should be distinguished on a functional basis, and then separated
according to specialization, each having a separate chain of command.
3. Predictability and stability The organization should operate according to a system of
procedures consisting of formal rules and regulations.
4. Rationality: Recruitment and selection of personnel should be impartial.
5. Democracy: Responsibility and authority should be recognized by designations and not by
persons.

22
 C) Administrative theory:-

Administrative Approach to Management

The advocates of this school perceive management as a process involving certain functions such
as planning, organizing, directing and controlling. That’s why it is called as ‘functional
approach’ or ‘management process’ approach. Fayol’s contributions were first published in book
form titled ‘Administration Industrielle at Generale’ in French Language, in 1916. He defined
management in terms of certain functions and then laid down fourteen principles of management
which according to him have universal applicability. Thus, he was a pioneer in the field of
management education. In brief, Fayol’s views on management command acceptability even
today because they are much in tune with the requirements of management in the present day
world.

The elements of administrative theory (Henri Fayol, 1949) relate to accomplishment of tasks,
and include
 Principles of management,
 The concept of line and staff,
 Committees and
 Functions of management.

i) Principles of management
• Division of work • Centralization
• Authority and responsibility • Scalar chain
• Discipline • Order
• Unity of command • Equity
• Unity of direction: • Stability of tenure of personnel
•Subordination of individual interest to general • Initiative
interest • Esprit de corps
• Remuneration of personnel

b) The concept of line and staff :

• The concept of line and staff is relevant in organizations which are large and require
specialization of skill to achieve organizational goals.
• Line personnel are those who work directly to achieve organizational goals.
• Staff personnel include those whose basic function is to support and help line personnel.

c) Committees :
• Committees are part of the organization.
• Members from the same or different hierarchical levels from different departments can form
committees around a common goal.
• They can be given different functions, such as managerial, decision making, recommending or
policy formulation.

23
• Committees can take diverse forms, such as boards, commissions, task groups or ad hoc
committees.
• Committees can be further divided according to their functions.
• For e.g. In agricultural research organizations, committees are formed for research, staff
evaluation or even allocation of land for experiments

d) Functions of management
• Fayol (1949) considered management as a set of-Planning, Organizing, Training, Commanding
and Coordinating functions.
• Gulick and Urwick (1937) also considered organization in terms of management functions such
as- Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting.

Criticism: Fayol’s work has been criticized on the following grounds:

• His theory is said to be too formal. There is no single classification of managerial functions
acceptable to all the functional theorists. There is also lack of unanimity about the various terms
such as management, administration etc.
• He did not pay adequate attention to workers.
• The fundamentalists considered their principles to be universal in nature. But many of the
principles have failed to deliver the desired results in certain situations.
• There is a vagueness and superficiality about some of his terms and definition.

2) NEOCLASSICAL THEORY
 Classical theorists recognized the importance of individual or group behavior and emphasized
human relations.
 Based on Hawthorne experiments, the neoclassical approach emphasized social or human
relationships among the operators, researchers and supervisors.
 It believes that productivity increases as a result of high morale, which was influenced by the
amount of individual, personal and intimate attention workers received.
 Here two points were emphasized i.e the organization situation should be viewed in social,
economical and technical terms. The other point emphazied on the importance of formal and
informal forms of the organization. The pillars on which this theory was laid were:-
 division of work
 departmentation
 coordination
 human behavior
This theory offers modification over the classical theory in some aspects such as the neo classical
theory provides a flat structure which facilitate communication between the superior and
subordinates better than the tall structure of classical theory. Neo-classical theory focuses on
decentralized organization as it is having wider span of control than the centralized organization.
The neo-classical theory supports the need for both formal and informal organization at the same
time. Both forms are interdependent on each other and help the workers to feel better.

24
The Neo-classical theory anticipated some of the recent trends of evident in behavioral
approaches. The essence of behavioral is integration between the needs of employees and goals
of the organization. Behavioral science movement is regarded as a further refinement of human
relations movement. It covers much wider aspects in interpersonal roles and relationships. Some
of the important aspects of behavioral science approach are:
 Employees motivation
 Organization as a social system
 Leadership
 Communication
 Employees development

Principles of the neoclassical approach

• The individual :An individual is not a mechanical tool but a distinct social being, with
aspirations beyond mere fulfillment of a few economic and security works. Individuals differ
from each other in pursuing these desires. Thus, an individual should be recognized as
interacting with social and economic factors.

• The work group: The neoclassical approach highlighted the social facets of work groups or
informal organizations that operate within a formal organization. The concept of 'group' and its
synergistic benefits were considered important.

• Participative management :Participative management or decision making permits workers to

participate in the decision making process. This was a new form of management to ensure
increases in productivity.

Hawthorne effect- when workers are motivated to produce by other than purely economic
rewards
Theory X-it reflects the belief on the part of managers that their role was to direct and control
activities of workers
Theory X is more consistent with the assumptions of scientific management and traditional
paradigms thinking
Theory Y- these assumptions reflected the belief that their role was one of creating supportive
relationships in which organizational members could exercise their inherent tendencies to grow
develop, and learn for their own benefit of that of the organization.
Theory Y is more assumptions with the dimensions of the alternative paradigms.
Theory X assumptions are:
1. The average human being has an inherent dislike for work and will avoid it if he(she) can.
2. Because of this human characteristic of dislike for work, most people must be coerced,
controlled, directed, or threatened with punishment to get them to put forth adequate effort
toward the achievement of organizational objectives.
3. The average human being prefers to be directed, wishes to avoid responsibility, and has
relatively little ambition, wants security above all. {Pugh, Hickson, and Hinings 1985:167}

25
 Theory Y assumptions follow:
1. The expenditure of physical and mental effort in work is as natural as play or rest. The
ordinary person does not inherently dislike work.
2. Humans will exercise self-direction and self-control in the service of objectives to which they
are committed.

Limitations of theory
Limitations of this theory were incompetency, a short sighted perspective and lack of integration
among many facts of human behavior. It lacks unified approach of the organization. Various
organization formats given by neo-classists do not fit in all the organizational structures.
The criticism of the Scientific and Administrative Management as advocated by Taylor and
Fayol, respectively, gave birth to Human Relation Approach. The behavioural scientists
criticized the early management approaches for their insensitiveness to the human side of
organization. The behavioural scientists did not view the employees mechanically in work
situation, but tried to show that the employees not only have economic needs but also social and
psychological needs like need for recognition, achievement, social contact, freedom, and respect.
Human relations school regards business organization as a psycho-social system. Elton Mayo of
Harvard and his associates conducted a famous study on human behaviour at the Hawthorne
plant of the Western Electric Company and this study formed the foundation of this school of
management thoughts. The basic hypotheses of this study as well as the basic propositions of the
Human Relation
Approach are the following:
• The business organization is a social system.
• The employees not only have economic needs but also psychological needs and social needs,
which are required to be served properly to motivate them.
• Employees prefer self-control and self-direction.
• Employee oriented democratic participative style of management is more effective than
mechanistic task oriented management style.
• The informal group should be recognized and officially supported.
The human relations approach is concerned with recognition of the importance of human
element in organizations. It revealed the importance of social and psychological factors in
determining worker’s productivity and satisfaction. It is instrumental in creating a new image of
man and the work place. However, this approach also did not go without criticism. It was
criticized that the approach laid heavy emphasis on the human side as against the organizational
needs. However, the contribution of this approach lies in the fact that it advises managers to
attach importance to the human side of an organization.

3) MODERN THEORIES
• It is based on the concept that the organization is a system which has to adapt to changes in its
environment. The modern theory emphasis on the conceptual analytical base, its reliance on
empirical research data and integrating nature. This theory has two approaches i.e. System
Approach, Socio-technical approach And Contingency Approach.
• Notable characteristics of the modern approaches to the organization are:
1. A systems viewpoint 2. A dynamic process of interaction
26
3. Multileveled and Multidimensional
4. Multi motivated
5. Probabilistic
6. Multidisciplinary
7. Descriptive
8. Multivariable
9. Adaptive

27
 a) The Systems Approach:

Introduction:- The system approach is based on the generalization that an organization is a

system and its components are inter-related and inter-dependent. “A system is composed of
related and dependent elements which, when in interactions, form a unitary whole. On other
words, a system may be defined as an organized and purposeful entity of inter-related, inter-
dependent and inter-acting elements. It is a goal oriented organism that is composed of parts
interrelated in such a way that the total system is greater than the sum of its parts. The elements
of each system may themselves be sub systems. These sub-systems are functionally related to
each other and to the total system. The basic postulates of the system approach are as follows:

• An organization is a system consisting of several subsystems. For example, in a business

enterprise production, sales and other departments are the subsystem
• The position and function of each subsystem can be analyzed only in relation to other subsystem
and to the organization as a whole rather than in isolation.
• An organization is a dynamic system because it is responsive or sensitive to its environment. It is
vulnerable to changes in its environment.
• Each sub-system may be identified by certain processes, roles, structures and norms of conduct.
• A Sub-system is a single predefined operating task. Sub-systems can have their own sub-sub-
systems. These are:-
 External Interface Sub-system:- this consists of the broad environment context in which the
organization operates. Issues like public relations, image, employer branding, advertising etc
would fall here.
 Structural Sub-system:- This could include work rules, work flow, authority structures,
processes for communication, performance management, training, career planning, decision-
making etc.
 Technology Sub-system:- this sub-system includes tools, machines, physical resources, technical
know-how and technology used to perform work.
 People Sub-system:- This consists of people in the organization, working relationships, authority
style, managerial styles, informal communication structures etc.
 Tasks Sub-system:- a subset of the goals sub-system, this is about sub-division of work among
members of the organization.
 Goals Sub-system:- inter-related goals and objectives that constitute an organization’s mission
statement.

• A system can be perceived as composed of some components, functions and processes (Albrecht,
1983).
The organization consists of the following three basic elements (Bakke, 1959):

(i) Components :
28
 • the individual
• the formal and informal organization
• patterns of behavior emerging from role demands of the organization
• role comprehension of the individual
• the physical environment in which individuals work.

(ii) Linking processes-

• Communication: Is a means for eliciting action, exerting control and effecting coordination to
link decision centers in the system in a composite form.

• Balance: Is the equilibrium between different parts of the system so that they keep a
harmoniously structured relationship with one another.

• Decision analysis:
 Decisions may be to produce or participate in the system.
 Decision to produce depends upon the attitude of the individual and the demands of the
organization.
 Decision to participate refers to the individual's decisions to engross themselves in the
organization process. That depends on what they get and what they are expected to do in
participative decision making.

(iii) Goals of organization: The goals of an organization may be growth, stability and interaction.

Interaction implies how best the members of an organization can interact with one another to their
mutual advantage.

The peculiarity of systems is that they interact with other systems outside of themselves. This
interaction has two components: input, that what enters the system from the outside, output, that
what leaves the system for the environment and throughput . In order to speak about the inside and
the outside of a system, there is a need to be able to distinguish between the system itself and its
environment. System and environment are in general separated by a boundary. For example, for
living systems the skin plays the role of the boundary. The output of a system is in general a direct
or indirect result from the input. The transformation of input into output by the system is usually
called throughput. This has given us all the basic components of a system as it is understood in
systems theory

29
 A system in interaction with its environment
For example, if we consider a city, we can measure the total amount of fuel consumed in that city
(input), and the total amount of pollution generated (output), without knowing which person was
responsible for which part of the pollution. This point of view considers the system as a "black
box", something that takes in input, and produces output, without us being able to see what
happens in between.

b) Socio-technical approach
Introduction:- It is developed during social science era, is closely related to Human Relation
Approach. It includes those researchers who look upon management as a social system. Chester
I. Barnard is called as the spiritual father of this approach. According to this approach, an
organization is essentially a cultural system composed of people who work in cooperation.

• The socio-technical systems approach is based on the premise that every organization consists of
the people, the technical system and the environment (Pasmore, 1988).
• People (the social system) use tools, techniques and knowledge (the technical system) to produce
goods or services valued by consumers or users (who are part of the organization's external
environment).
• Therefore, an equilibrium among the social system, the technical system and the environment is
necessary to make the organization more effective.

The major features of this approach are as follows:

• Organization is a social system, a system of cultural relationships.
• Relationships exist among the external as well as internal environment of the organization.
• Cooperation among group members is necessary for the achievement of organizational
objectives.
• For effective management, efforts should be made for establishing harmony between the goals of
the organization and the various groups therein.

c) The contingency or situational approach

The situational approach is based on the belief that there cannot be universal guidelines which
are suitable for all situations. Organizational systems are inter-related with the environment. The
contingency approach suggests that different environments require different organizational
30
 relationships for optimum effectiveness, taking into consideration various social, legal, political,
technical and economic factors. It is based on the notion that the proper management technique
in a given situation depends upon the nature and conditions of that situation. The contingency
view of management is highlighted in Figure contend that an organizational phenomenon exists
in logical patterns which managers can come to understand. Along with this organizational
understanding comes the development of unique behaviours that have proven successful in
particular situations. However, there are no universal solution techniques because every problem
situation is unique in itself.

The Contingency View Of Management

4) INDIVIDUAL PROCESSES

a) Motivational Theory
• Motivation drives behavior; it is the force behind an individual‘s decision to commit or not
commit to certain acts or behaviors.
• An individual calculates an ―"E" (energy, enthusiasm, effort) the product of need, and
prediction for likelihood of achieving the desired results.
• When a person enters into a contract with an organization some calculation will be made in
regards to the individual‘s ―"E" put forth.
• Organizations also put forth an ―"E", either by resources alone (salary), or by other items such
as prestige and stature. This exchange sets the limits of a physical and ―psychological contract"
between the organization and the person
• Management must carefully consider how to maintain or adjust the psychological contract in
order to keep the person a productive member of the team.

c) Role Theory
• In an organization roles can help to clearly define boundaries between individuals.
• Organizations need to acknowledge that its employees manage many roles and that problems or
conflicts can arise and create tensions that can change the ability of the individual to reach their
goals.

31
• Organizations should be sure to support their team members in meeting new roles by giving time
for transition, or offering training and support.
• When role conflict arises the organization can nurture employee‘s ability to relieve tension by
allowing time to devote to caring for roles outside the office.
d) Personality Theory

• Personality is the unique and enduring traits, behaviors and emotional characteristics in an
individual.
• Personality can either aid or hinder meeting work goals dependent on fit.
• For e.g. Personality types are Type a vs. Type B
• Type A personalities are competitive, impatient, seekers of efficiency and always seem to be in a
hurry.
• Type B personalities are laid back and possess more patience and emotional stability, but tend to
be less competitive.
• In a work environment Type A‘s tend to be more productive in the short term and pursue more
challenging work. However, they also have a greater tendency towards health risks and are less
likely than Type B‘s to be in top executive positions.
• Organizations can play a role in developing their staff for success. Workshops, seminars, even
book clubs that focus on developing EQ an strengthen organizational success.
• Allowing for a diverse set of experiences, with appropriate support can maximize and expand the
capabilities of each employee.

MINIMUM REQUIREMENTS FOR ORGANIZATION

CRUCIAL REQUIREMENTS:
1. Mission: A mission describes the long-term purpose of the organization, the range of services
offered, the markets to be served and the social needs served by the organizations existence.
2. Vision: The vision is comprised of two crucial elements:
 The relatively stable core ideology that describes the organizations core values and purpose.
 An envisioned future with bold goals and vivid description of the desired future state that
reflects the specific change under consideration.

OTHER REQUIREMENTS
Clarity: Workers need to know
-Where they belong
-Where they stand in relation to the quality and quantity of their performances
-Where to go for assistance.

Economy:
• Workers need as much self-control of their work as they can possibly be given.
• They need to be self motivating.

32
• There should be the smallest possible number of overhead personnel necessary to keep the
division and units operating and well maintained.

Direction of vision-
• Managers must direct their vision and that of their employees
- toward performance
- toward the future
- toward strength.
Decision making-
• Workers should be organized to make decisions on the right issues and at the right levels.
• They should be organized to convert their decisions into work and accomplishments.
Stability and Accountability-
• Workers should be organized to feel community belongingness.
• They can adapt to show objectives requiring changes in their functions and productivity.

Perception and Self renewal-

• Services should be organized to produce future leaders.
• The organizational structure should produce continuous learning for the job each worker
holds and for promotion.

33