Unit-I
The Organization and its environment
Vinita Rai Singh
Assistant Professor, FMS SSTC
Definition of Organization
An organization is collection of people working together
in a coordinated and structure fashion to achieve one or
more goals
Organization role in society
Organizations exist to allow accomplishment of work that
could not be achieved by people alone.
As long as the goals of an organization are appropriate ,
society will allow them to exist and they can contribute to
society
Types of Organization and Structure
Types of
Organization
Formal Informal
Formal
It means intentional structure of roles in a formally
organized enterprise.
Formal organized structure means the structure of well
define jobs, each bearing a definite measure of authority ,
responsibility and accountability.
In formal structure each and every person is assign the
duties, responsibility and relationship as prescribed by the
top management.
Informal
Informal organization means a network of interpersonal
relationships that arise when people associate with each
other.
Informal group means natural grouping of people in the
work situation.
Informal Organization is network of personal and social
relations not established or required by the formal
organization but arising spontaneously as people
associated with one another.
Why do we need an Organizational
Structure
All organization have a management structure that
determine the relationship between function and
positions and subdivides and delegate roles,
responsibility and authority to carry out defined task.
Organizational Structure
It is a Framework within which an Organization arranges
its lines of authorities and communications and allocates
rights and duties.
Types of organization structure
Line organization structure
Line and staff organization structure
Functional organization structure
Committee organization structure
Matrix organization structure
Line organization structure
Line organization structure: Its also known as scalar,
military or vertical organization and perhaps it’s a older
form.
Pure line Organization
Departmental line organization
Pure line Organization
Product Manager
Foreman-1 Foreman-2 Foreman-3
Workers Workers
Workers
Departmental line organization
Product Manager
Foreman-1 Foreman-2 ( Foreman-3
( Finance) Marketing) (IT)
Workers Workers Workers
Line organization structure
Line authority and instruction are vertical, they flow from
top to bottom.
The unity of command maintained in a straight line
All person at the same level of organization are
independent of each other.
This structure specify responsibility and authority for all
the position limiting the area of action
Functional organization structure
Functional structure is created by grouping the activities on the
basis of functional required for the achievement of
organizational objective.
The whole activities of an organization are divided into various
functions.
Each functional are is put under the charge of one executive
For any decision, one has to consult the functional specialist
Limited span of control is there.
Merits
High specialization
Clarity in functioning
No duplication
Satisfactions
Control and coordinate
Line and staff organization structure
It refers to a pattern in which staff specialists advice line
managers to perform their duties.
Line people will give advices
The staff people have the right to recommend, but have no
authority to enforce their preference on other departments.
Features
This origin structure clearly distinguishes between two
aspects of administration viz, planning and execution
Staff officer provides advice only to the line officers;
The staff supplements the line members.
Advantage
It adds functional specialists to the pure line organization
and thus aims at combining the merits of the two.
It bring expert knowledge to bear upon Management.
Functional specialist provides expert advice to the
management
It provides for the better placement and utilization of
personnel and leads to more skill development.
Conflict between line and staff
More frequently line and staff relations become potent
source of friction, inefficiency and organizational ill
health.
Rivalry between them very often takes the form of
animosity.
Both line and staff have their own view points to offer
relating to this problem.
Line Point of View:
1. Staff undermine line authority
2. Staff think in vacuum
3. Staff steal credit
4. Staff fail to keep the line informed
5. Staff fail to give strong advice to line
Staff Point of View:
1. Lack of authority to command line subodinate.
2. Resistance to change by the line
3. Inability to make proper use of staff
How to minimize
Line and staff should understand the proper position in the
organization.
Line should be educated and encourage to use staff
effectively
Staff should render complete advice on the problem
concerned staff should consistently strive to acquire and
increase its proficiency.
Effectiveness and Efficiency
Effectiveness: The extent to which organization achieve
its goals or goal
Efficiency :Level of resource used to achieve the goal.
Doing things right.
Organizational Effectiveness
Organizational effectiveness is the concept of how effective
an organization is an achieving the outcomes the
organization intend to produce .
Approaches to organizational
effectiveness
Goal Attainment Approach
System Approach
Strategic Constituencies Approach
Competing Value Manager
Criteria
Return on Investment
Market Share
New product innovation
Job Security
