Organising Class 12
Organising Class 12
MEANING
Organising is the process of de ning and grouping the activities of the enterprise and establishing
authority relationship among them.
- It refers to arranging everything in an orderly form and making most e cient use of
resources
- It initiates the implementation of plans by clarifying jobs and working relationships and
e ectively deploying resources for the attainment of identi es and desired results.
- organising is a process by which the manager brings order out of chaos, removes con ict
among people over work or responsibility sharing and creates an environment suitable for
teamwork.
STEP 2: Departmentalisation refers to grouping of similar jobs and put under their own
departments
I) Functional departmentation: Jobs related to a common function are grouped under one
department. Preferred by organisations producing only 1 product
II) Divisional departmentation: when org is producing more than one type of product, then they
prefer this sort of departmentation. Under this jobs related to one product are under one
department
IMPORTANCE:
1) Bene ts of specialisation - due to divine of work in smaller units according to their
quali cations leads to specialisation.
2) Optimum utilisation of resources - all nancial and physical resources are e ciently used as
the jobs are clearly de ned and no overlapping of work occurs
4) E ective administration - proper rules and regulations are set down and all resources and
set
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5) Adaption to change -The process of org helps modify the structure in a way in which the
org can adapt to these changes and there is a certain stability in to help the org grow in
spite of changes
6) Development of Personnel: Org helps develop personnel as new jobs and tasks are
assigned to the work force and helps make future leaders and this also reduces load on
managers and helps the managers shift those e orts to areas requiring higher focus
7) Expansion and growth: Organising helps a business enterprise to add more job positions,
departments and even diversify their product lines
ORGANISATION STRUCTURE
-It is he framework within which the managerial and operating tasks take place
- A proper organisation structure is essential to ensure smooth ow of communication and
better control of managers over the operations of business enterprise
- An e ective structure will result in increased pro tability of the enterprise
- Peter Drucker emphasises on the importance of having an appropriate organisation structure
when he says, “organisation structure is an indispensable means; and the wrong structure will
seriously impair bus ness performance and even destroy it.”
SPAN OF MANAGEMENT: It refers to the number of subordinates that can be e ectively managed
by a superior. This determines the levels of mgmt in the structure
TYPES:
1) FUNCTIONAL STRUCTURE: if there is only 1 product, the departments are created based on
functions such as nance, marketing, HR sales
ADVANTAGES;
- creates specialisation
- Helps increase operational e ciency
- Easy coordination
- E ective training
DISADVANTAGES;
- Di culty is achieving organisational goals as each department as their own goals
- In exibility as employees getting training in a certain function get only that training and cannot
shift
- Con ict of interest between departments
- Problems in coordination between departments
2) DIVISIONAL STRUCTURE
- when a org is large in size and is producing more than one type of product then activities
related to one product are grouped together
- Suitable for org which require product specialisation rather than functional specialisation
ADVANTAGES:
-product specialisation
- expansion and growth
- Flexibility and initiative
DISADVANTAVGES:
- more usage of resources
- Con icts
- Ignorance of org interest
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TYPES OF ORGANISATIONS (FORMAL AND INFORMAL):
FORMAL ORGANISATIONS:
It is a structure which is designed by the mgmt to accomplish a particular task
It clearly states boundaries of authority and rest and there is a systematic coordination among
various activities.
Created intentionally
Creates a scalar chain of communication and hierarchy
ADVANTAGES:
-Systematic working
- coordination
- Achievement of org. Objective
DISADVANTAGES:
-Delay in action
- Emphasis on work only
- Inadequate recognition of creativity
INFORMAL ORGANISATION
Informal organisation refers to the social network involuntarily created from within the formal
organisation.
When people interact beyond their o cially de ned roles
Does not have xed lines of communication
Behaviour Isn’t guided by rules and regulations
ADVANTAGES:
- Fast communication
- Fu ls social needs
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DISADVANTAGES:
- Spread of rumours - No systematic working -may bring negative results
Caption
DELEGATION OF AUTHORITY-
Delegation of authority refers to granting of authority to subordinates to operate within
prescribed limits.
- it refers to transfuse of authority from superior to subordinate
- Helps manager to focus on higher priority tasks
Done between one superior and one subordinate
ELEMENTS OF DELEGATION:
AUTHORITY-RESPONSIBILITY-ACCOUNTABILITY
AUTHORITY (power):
When manager passes their resp they also pass some authority to their subordinates
FLOWS DOWNWARDS
Authority must be equal to responsibility
Caption
CENTRALISATION:
It refers to concentration of power in the hands of the top level management
DECENTRALISATION:
It refers to an even and systematic distribution of authority at every level of management
Decision making authority is pushed down the chain of command
IMPORTANCE OF DECENTRALISATION:
- Develops initiative among subordinates
- Develops managerial talent for the future
- Quick decision making
- Facilitates growth
- Better control over the org
- Relief to top mgmt