Notes - Organising

Organising

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1. Organising It is the process of identifying and grouping different activities in the organisation and bringing together the physical, financial and human resources to establish most productive relations for the achievement of specific goals of an organisation.

According to Theo Haimman, "Organising is the process of defining and grouping the activities of the enterprise and establishing authority relationships among them."

Concept of Organising as a Process Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specific objectives. Concept of Organising as a Structure The organising function leads to the creation of an organisational structure which includes the designing of roles to be filled by suitably skilled people and defining the inter-relationship between these roles so that ambiguity in performance of duties can be eliminated.

2. Importance of Organising

(i) Benefits of Specialisation Organising facilitate systematic allocation of work. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialisation. Such specialisation helps to reduce workload and to enhance productivity.

(ii) Clarity in Working Relationship The establishment of working relationships clarifies lines of communication and specifies who is accountable to whom. It helps in fixing responsibility and specifying the extent of authority of each job position.

(iii) Optimum Utilisation of Resources The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. This help to prevent confusion and to minimize wastage of efforts and resources.

(iv) Adaptation to Change The process of organising allows a business enterprise to accommodate changes in the business environment.

(v) Effective Administration Organising provides a clear description of jobs and related duties. Clarity in working relationship enables proper execution of work. The authority and responsibility of each job position are clearly defined. All these leads to effective administration.

(vi) Development of Personnel Organising stimulates creativity amongst the managers. Effective delegation of authority allows managers to reduce their work load. It provides them an opportunity to innovate. Delegation also develops in the subordinate the ability to deal with challenges and enables them to realise their full potential.

(vii) Expansion and Growth Organising helps in the growth and diversification of an enterprise. It allows a business enterprise to add more job positions, departments, diversification of product lines etc.

3. Process of Organising The steps in the process of organising are as follows

(i) Identification and Division of Work In this step, organising involves identifying and dividing the work according to pre-determined plan.

(ii) Departmentalisation In this step, those activities which are similar in nature are grouped together.

(iii) Assignment of Duties In this step, work is allocated to different individuals as per the knowledge and skills acquired by them.

(iv) Establishing Reporting Relationship In this step, hierarchical structure should be followed with proper coordination.

4. Organisational Structure It can be defined as the framework within which managerial and operating tasks are performed.

Organisational structure can be of two types

(i) Functional structure (ii) Divisional structure

5. Functional Structure A functional structure is an organisational structure that groups similar or related jobs together.

6. Suitability of Functional Structure This organisational structure is suitable when the size of the organisation is large, has diversified activities and operations and requires a high degree of specialisation.

7. Advantages of Functional Structure

(i) It promotes control and coordination within a department.

(ii) It is the most logical, time proven form of organisation structure.

(iii) It leads to minimal duplication of effort, which results in economies of scale.

(iv) It ensures that different functions get due attention.

8. Disadvantages of Functional Structure

(i) It becomes difficult to hold a particular department responsible for any problem.

(ii) It may lead to inflexibility as people with same skills and knowledge may develop a narrow perspective.

(iii) A functional structure places less emphasis on overall enterprise objectives than the objectives pursued by a functional head.

9. Divisional Structure In divisional structure, the organisation structure comprises of separate business units or divisions. Divisions are created when product expansion, diversification, manufacturing and marketing are being done.

10. Suitability of Divisional Structure

This organisational structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources.

11. Advantages of Divisional Structure

(i) Decisions are taken much faster in divisional structure.

(ii) It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.

(iii) It leads to specialisation of physical facilities and human talent.

12. Disadvantages of Divisional Structure

(i) There is a duplication of physical facilities and functions.

(ii) It suffers from the under utilisation of plan capacity.

(iii) Conflict may arise between different divisions on allocation of funds and other resources.

13. Delegation It refers to the downward transfer of authority from a superior to subordinate. It is a pre-requisite for the efficient functioning of an organization because it enables a manager to use his time on high priority activities.

According to Theo Haimman, "Delegation of authority merely means the granting of authority to subordinate to operate within prescribed limits."

14. Features of Delegation

(i) It is a downward transfer of authority from a superior to subordinate.

(ii) There is a control of the officer over subordinates in delegation.

(iii) Subordinates are required to work as per the order and instructions given to him by the original officers.

(iv) Authority, responsibility and duty are clearly specified.

15. Elements of Delegation According to Louis Alien, "Delegation is the entrustment of responsibility and authority to another and the creation of accountability of performance." So, on the basis of above definition, the elements of delegation are as follows

(i) Authority It refers to the right of an individual to command his subordinates and to take action within the scope of his position. It flows downward.

(ii) Responsibility It is the obligation of a subordinate to properly perform the assigned duty. It flows upward, i.e. a subordinate will always be responsible to his superior.

(iii) Accountability It implies being answerable for the final outcome. It flows upward as subordinate will be accountable to his superior.

16. Importance of Delegation

(i) Effective Management By delegating routine work to subordinates, a manager can concentrate on important matters and explore new opportunities for business.

(ii) Employee Development Delegation provides an opportunity to subordinates to utilise their abilities and to improve career prospects. They gain experience and knowledge for higher positions.

(iii) Motivation of Employees Delegation provides a feeling of status and recognition to subordinates. It motivates them for higher performance.

(iv) Facilitates Organsiational Growth Delegation helps in the expansion of an organisation by providing a ready work force to take up leading positions in new ventures.

(v) Basis of Management Hierarchy Delegation of authority creates superior-subordinate relationships, which are the basis of management hierarchy.

(vi) Better Coordination The elements of delegation helps to define the powers, dies and responsibility related to various positions in an organisation. This results in better coordination.

17. Decentralisation It explains the manner in which decision-making responsibilities are divided among hierarchical levels. According to Louis Alien, "Decentralisation refers to systematic effort to delegate to the lowest level all authority except that which can be exercised at central points."

18. Features of Decentralisation

(i) Transparency

(ii) Responsiveness

(iii) Openness

(iv) Accountability

(v) Enhancing the flow of information

(vi) Easing political attention

19. Importance of Decentralisation

(i) Develops Initiative among Subordinates

Decentralisation helps to promote self-reliance and confidence among the subordinates.

(ii) Develops Managerial Talent for Future

Decentralisation gives lower level managers the chance to gain knowledge and experience in decision-making and leadership.

(iii) Quick Decision-making In a decentralized organisation, decisions are taken at levels which are nearest to the point of action. Therefore, decision can be taken quickly.

(iv) Relief to Top Management

Decentralisation helps to reduce the work load of top executives. They can devote their time and attention to important policy matters.

(v) Facilitates Growth The organisation can expand and grow more easily as the burden of management is shared.

(vi) Better Control Decentralisation facilities evaluation of performance at even- level. Departments can be individually held accountable for their results.

20. Differences between Delegation and Decentralisation