ORGANISATION

Principle of Management
 What is Organisation..?
• After planning we need to arrangement the resources(like
land, machineries, raw materials, human resource)

SO

• Organisation is a process of bringing together the financial,

human, physical and other necessary resources and clearly,
defining the jobs and working relationship for the achievement
of desired objective.
 Organisation differs from
organizing…
Organising is a function of management where as Organisation refers to an
establishment where the functions of manangement are performed.
 Organising is a process of:
 -> Determining,grouping,and structuring the activities
 ->Creating roles for effective performance at work
 ->Allocating necessary authority and responsibility for results
 ->Determining detailed procedures and systems for different
problem areas such as coordination,decision
making,motivation…etc.
Organisation may be Formal,Informal or both.
Informal Organisation strengthens the functions of a
Formal
Organisation.
 Formal organisation
• Formal Organisation refers to the well
defined jobs in a formal organised
enterprise.These jobs are defined in
terms of authority,responsibility and
accountability
 INFORMAL ORGANISATION
The Network on social groups based on
friendship is called as Informal Organisation.
Here,human beings wish to share their feelings
and emotions.
vs
 BASIS FORMAL ORGANISATION INFORMAL ORGANISATION
FORMATION Formal relations are well defined and are Originates as a result of social interaction.
created deliberately.
PURPOSE It is created to achieve predetermined It will satisfy social and cultural needs.
objectives.
STRUCTURE Structure of well defined authority and Structure based on human emotions and
responsibility relationships. sentiments
BEHAVIOR OF MEMBERS It has prescribed pattern of behavior of Social norms are developed through mutual consent
members. of members
COMMUNICATION Formal communication through official Informal communication based on convenience.
lines.
LEADERSHIP Managers are in superior position Leaders are choosen by group members

STABILITY It is usually stable and continues even if It is short and disintegrate if members leave it.
members leave it.
FLEXIBILITY It follows a rigid structure. It is loosely structured and highly flexible.

ADHERENCE TO RULES Strict adherence to rules. No formal rules exist.

INTERDEPENDENCE It exists independently. It is dependable to formal organization.

Centralized vs. Decentralized Organizational Structures

• organizations have been structured with centralized

leadership and a defined chain of command
• The military is an organization famous for its highly
centralized structure, with a long and specific
hierarchy of superiors and subordinates. In a
centralized organizational system, there are very
clear responsibilities for each role, with subordinate
roles defaulting to the guidance of their superiors.
There has been a rise in decentralized organizations, as
is the case with many technology startups. This allows
companies to remain fast, agile, and adaptable, with
almost every employee receiving a high level of
personal agency. For example, Johnson & Johnson is
a company that's known for its decentralized structure.
 Basic concepts of
 Organisational Hierarchy:
organization
The Hierarchy in a business refers to the layers of
management from the top management or
supervisors of the lowest rank.
 Authority and Responsibility:
Authority is the power to give command and to
use discretion vested in the particular
position or job.
 Deligation of Authority:
The process of transferring authority from top to the
lower levels in the organization is called
delegation.
 Span of management:
It is also called as span of control.It refers to the number
of subordinates that can be effectively controlled by the
manager at a given point of time.
 Flat and Tall Organisations:
Tall and flat organizational structures refer to the structures
of an organization’s levels of management. A tall
organization, or vertical organization, is one in which the
CEO/Director sits at the top of the chain of command, with
various levels of management underneath. A flat organization,
or horizontal organization, involves fewer levels of
management and more employee autonomy in the decision-
 What is an
Organizational
• defines theStructure?
organization's
hierarchy of people and
departments as well as how
information flows within the
organization.
• It determines:-
– how and when information is
distributed as well as who makes
what decisions based on the
information available.
– How job tasks are formally
 Organization
• An organizational structure outlines how certain activities are directed to
al structure
achieve the goals of an organization.
• Successful organizational structures define each employee's job and how it
fits within the overall system.
• A centralized structure has a defined chain of command, while decentralized
structures give almost every employee receiving a high level of personal
agency.
• Types of organizational structures include functional, divisional, and matrix
structures.
• Senior leaders should consider a variety of factors before deciding which
type of organization is best for their business, including the business goals,
industry, and culture of the company.
 TYPES OF ORGANISATION
1.Line Organisation:
• simplest and the oldest type of organisation.
• It is also known as scalar organisation or military type of
organisation.
• In this,there is a chain of authority which flows from
upward to downward.
• All the worker performs same type of work.

Advantages: Clear reporting, fixed responsibility,

Prompt decision,well defined authority….
Disadvantages:Unitary administration, over-
loading with work,lack of specialization,lack
of Communication….
2.Functional organization:In this form of organization all activities in the organization are
grouped according to the basic functions i.e. production, finance, marketing, HR headed by
a specialist.

Advantages: Specialization, Unity in command,

Large scale production, flexibility, better
industrial relations, separation of mental and
physical functions…

Disadvantages: Narrow outlook, Indiscipline,

,
shifting of responsibility, Lack of co-ordination
among departments…
 Characteristics
• A functional organization is a vertical hierarchy.
• The company is divided into different functional departments
with employees who specialize in specific tasks.
• Functional departments usually operate in silos because each
group has its own independent vertical management structure.
• Employees report to a manager who oversees their
department.
• Employees within each department typically only
communicate with each other, rather than dealing with
workers in other departments.
• Managers typically report to another functional leadership
role.
• Managers are responsible for coordinating with other
managers of other departments.
3.Line and staff organisation:
Line manger: He is in charge of all the activities. They have authority (to take all the
important decisions for the company) and responsibility (good performance of employees.).
Staff: They have knowledge and expertise of their field. Their role is to assist their line
manager means advisory role.
I will find solutions to problems
and help line manager to achieve
objectives

1. Personal staff: namely Personal secretary, personal assistant, Personal advisor.

e.g. Booking air or rail tickets, arranging hotel accommodation, fixing appointment, preparing
guest list etc.
2. Specialized staff: They have up to date expert knowledge in specific areas. They operate at
middle level.
Organisation provide them separate office space and staff.
E.g. Chartered accountants, lawyers, engineers.
3. General Staff: They assist and advice the top management so operate at higher levels
In this form of organisation the structure is basically that of line organisation but functional
experts are appointed to advise the line authority in their respective field. Line and structure
combines the line structure where information and approvals come from top to bottom, with
staff departments for support and specialization.
The decision making process becomes slower in this type of organizational structure
because of the layers and guidelines that are typical to it, and the formality involved.

Advantages: specialization, sound decisions, use of expertise

of staff specialists, span to control can be increased,
Disadvantages:Conflicts between the line And the staff
executives may arise, Advice of the staff executives is ignored,
uneconomical…
 Better than line
A line-staff organization is more flexible than a line
structure. Instead of one professional leading the entire
company alone, they appoint qualified supervisors to
manage associates, which maintains the authority of the
leadership. They also hire industry experts to
complement the work of the line managers. Medium-
sized and large corporations often use line-staff formats
to stabilize the chain of command with large
organizational membership.
 IV GEOGRAPHIC STRUCTURE
• Organisation is divided into geographic location of business activities.
• large organizations have offices at different place E.g. there could be a north zone, south
zone, west and east zone.
• The organizational structure would then follow a zonal region structure..
• E.g. of businesses railways, banking, insurance etc.
 V. PRODUCT STRUCTURE
• Product structure – a product structure is based on organizing employees and work on
the basis of the different types of products.
• If the company produces three different types of products, they will have three
different divisions for these products.
• Each division will have different functional activities.
E.g. Production, marketing, HR, Finance
 VI. MATRIX STRUCTURES
Situation

Mr. Rajiv is working in Marketing department. He has been

selected to work in a new project.

After performing his duties he will report to the project manager

and he has to report to the marketing department head too for his
functional tasks.

What is the solution?

 Matrix Structure
• Matrix Structure
– This is a structure, which has a combination of function and
product structures. This structure is the most complex
organizational structure.
– An organizational structure that simultaneously groups people and
resources by function and product.
• Results in a complex network of superior- subordinate reporting relationships.
• The structure is very flexible and can respond rapidly to the need for change.
• Each employee has two bosses (functional manager and product manager) and
possibly cannot satisfy both.

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 Advantages of Matrix Organization

• Efficient use of resources

• Flexibility: Project manager can choose best employee for project
• Technical excellence
• Freeing top management for long-range planning
• Improving motivation and commitment
• Providing opportunities for personal development as employees are selected to work
outside own department
 Disadvantages of Matrix Organization

• Violation of unity in command

• Too many regular changes in organizational chart
• Conflict of interest: due to engagement in project and own department.
• Temporary
 VII. Committee Organisation

Situation:

In Ram and Sons co. the director is observing that their functional managers are taking long
time to take decisions in their departments at times. Moreover, there are few times when they
are confused in decision making process.

So what the director should do? And what is the solution?

• Committee is a group of people who work collectively, discuss, decide or recommend solutions
to the problem which cannot be solved by an individual.
• These can be formed permanently or temporarily for a particular purpose through free
interchange of ideas.
• These are generally used in big businesses where activities are large in number.

Advantages:Pooling of ideas,Co-ordination, Motivation

through participation, easy communication, A tool of
management for development, Committee decisions are
Better than individual decisions.

Disadvantages: Slow decisions, no individual can be

held responsible for wrong decision.
 Departments of Denim
manufacturing Textile Mill
1. R&D Department
2. Production Planning Department
3. Ball Warping Department
4. Dyeing Department
5. LCB (Long Chain Beamer) Department
6. Sizing Department
7. Weaving Department
8. Finishing & Mercerization Department
9. Fabric Inspection Department
10. Packaging & Storage Department
11. Power Generation Department
12. Effluent Treatment Plant (ETP)
13. Water Treatment Plant (WTP)
14. Boiler Department
15. Quality Control Department
16. Store & Inventory Department
17. Maintenance Department
 Different departments of knitting industry

1. Knitting Department
2.knitting Department
3.Dyeing Department
4.Dyeing Planning
5.Fabric Planning
6.Material Information & system (MIS)
7.Knitting GPQ
8.R&D
9.Central planning Department
10.Physical testing lab
11.Lab coloration
12.Product development team
13.Fabric QC
14. finishing
 Departments of a Garments washing factory

1. HR and compliance department

2. R&D Department

3. ETP and WTP department

4. Dry process department

5. Wet processing department

6. Store and chemical department

7. Quality control department

8. Maintenance Department

9. Boiler and generator section

 Organizational Design

– The process by which managers create

a specific type of organizational
structure and culture so that a
company can operate in the most
efficient and effective way

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