Organizing
Presented by :
Chetan Pathak
Definitions
• “Organization is a harmonious adjustment of
specialized parts for the accomplishment of
some common purposes.”
- Hanley
• “An identified group of people contributing their
efforts towards attaining common goals is
called organization”
- Mc Farland
Objectives
• Accomplish objectives of business
unit
• Division of labor & creation of work
group
• Delegation of authority
• Co-ordination
• Objective of preventing
disorganization
Functions
• Deciding the activities
• Grouping of activities
• Duty allotment
• Delegation of authority
• Defining relationship
Characteristics
• Division of labor
• Co-ordination
• Concerned with planning
• Authority & responsibility structure
• Communication
• Importance of human beings
Importance
• Facilitates administration
• Helps to increase the efficiency of management
• Growth & diversification
• Adoption of new technology
• Ensures optimum utilization of resources
• Encourages creativity & initiative
• Facilitates co-ordination
• Training & development
• Prevents secrets, influence & corruption
• Facilitates control
Principles
• Unity of objective • Absolute responsibility
• Efficiency • Level of authority
• Span of control • Unity of command
• Scalar chain • Simplicity
• Delegation of authority • Balance
& responsibility • Flexibility
• Exception • Continuity
• Unity of direction
List
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Classificatio
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Establishing inter-relation among
employees
Forms of organization
• Formal organization
• Informal organization
Formal organization
Features Benefits
• Consciously formed • Reduces conflict
• Delegation of authority • Avoids overlapping
• Multiple levels • Motivates &
• Presented with the recognizes
help of charts employees
• Division of labor • Creates sense of
responsibility
• Stable & consistent • Talent management
structure becomes easy
Informal organization
Features Benefits
• Arises impulsively
• Employee
• Part of social structure
satisfaction
• Can not be presented by
• Useful channel of
the charts
communication
• Framed almost at all
• Brings out latent
level
talent
• Own rules & beliefs
• Covers deficiencies
• Vital part of org
of formal
• Indefinite & ambiguous organization
Difference
Formal Informal
• Purposely created • Impulsive
• Definite structure • Ambiguous
• Bound by rules • Bound by group norms
• Official channel of • Two-way, free
communication communication
• It can be large • Small or manageable size
• Consistent & stable • Highly instable
• Rigid structure • Flexible
Factors affecting the form
• Size
• Geographical factor
• Type & quantity of commodity
• Concepts of management
• Production process
• Types of employees
Types of organizational
charts
• Vertical
• Horizontal
• Circular
Vertical
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Horizontal
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Circular
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Quality of ideal organization
• Simplicity
• Certainties
• Stability
• Flexibility
• Balance
• Co-ordination
• Specialization
• Facilities for development
• Significance of human element
Types of organizational
structures
• Line organization
• Functional organization
• Line & staff organization
• Committee organization
• Matrix organization
• Project organization
Line organization
Line organization
Advantages Disadvantages
• Easy to establish • Multiple work
• Explainable • One-way communication
• Unity of command • Favoritism
• Quick decision • Improper decision
• Discipline • Authoritarian
• Flexible
• Co-ordination
• Delegation of powers
• Less expensive
Functional organization
Functional organization
Advantages Disadvantages
• Max use of • Conflict of interest
• No unity of command
specialization
• Difficult to maintain
• High efficiency discipline
• Large-scale • Lack of control
• Difficulty for top level
production
management
• Co-operation • Costly
• Changes can be
introduced
Line & staff organization
Line & staff organization
Advantages Disadvantages
• Staff plans, line executes • Very confusing
• Very flexible • Planners & executers
• The whole organization have no connect
gets benefits • Large number of experts
• Strong & accurate needed
decision • Very costly
• Reduction in workload • Conflict between line &
• Opportunities for staff
advancement of capable
workers
Committee organization
Committee organization
Advantages Disadvantages
• Departmental heads are • Delay in decision making
members • Very expensive
• Decisions taken after all • Chances of
the viewpoints misinterpretation of
• Team spirit statements
• Awareness about the • Difficult to maintain
problems secrecy
• Less resistance in • No responsibility of taken
implementing the by members
decisions • Every time decisions are
not right
Matrix organization
Matrix organization
Advantages Disadvantages
• Diversified skills • Different skills,
• Realistic attitudes so difficult
• Duplication of functioning
work is avoided • Conflicting
• Cost saving
ideas
• Conflict for
usage of
resources
Project organization
Project organization
Advantages Disadvantages
• Separate projects, so no • Projects need support
disturbance from various departments
• Immense flexibility • Pressure of work on
• Very easy to acquire & project managers
process information • Uncertainty faced by the
• Maximum use of employees
specialized knowledge
Delegation of authority
• “It means conferring authority from
one executive to another in order to
accomplish particular assignment”
- George Terry
Elements of Delegation
Delegation
Accountability
Authority Responsibility
Principles of delegation
• Delegation of results expected
• Equal authority & responsibility
• Absoluteness of responsibility
• Creation of accountability
• Unity of command
• Limits of authority
Types of delegation
• Decentralization
• Centralization
Decentralization
Advantage Disadvantage
• Reduces burden • Difficulty of co-
• Development of ordination
responsibility • Losses in staff
• Improved motivation
service
• Boost morale
• Harmful
• Division of work
emergencies
• Development of leadership
• Effective control &
• Problems of control
supervision • Increased
• Stability & continuity administrative cost
• Flexibility • Internal limitation
Centralization
Disadvantages
Advantages • Autocracy
• Quick decisions •
Absence of
• Effective control specialization
• Preserving secret • Increased burden on
• Continuity of executives
policy • Improper decision
• Evaluation of • Instability
departmental • Neglect of human
activity
element
• Provides personal •
Non co-operation
leadership
Departmentation
• “It is the means of dividing a large &
monolithic functional organization into
smaller, flexible, administrative units”
- L.A. Allen
Need & objectives of
departmentation
• To make specialization possible
• Obtaining benefits of organization as per
work
• For easy management
• For easy control
• To make easy & speedy task
Basis of departmentation
• Departmentation on the basis of functions
• Departmentation on the basis of region
• Departmentation on the basis of product
• Departmentation on the basis of process
• Departmentation on the basis of
customers
• Departmentation on the basis of number
of persons
Departmentation on the
basis of functions
Board of directors
Managing directors
Marketing
Production Finance personnel
Market research Advertising Sales
Departmentation on the
basis of Region
Head office
Norther Eastern Central Western Souther
n Zone zone zone zone n zone
Departmentation on the
basis of product
Chief executive
Car division Truck division Bus division
Departmentation on the
basis of process
Manager (production)
Spinning Dyeing Weaving Finishing
Departmentation on the
basis of customers
Manager (marketing)
Hire
Wholesale Retail purchase
Export
