chapter 3 organisation and organising
TRANSCRIPT
Chapter 3 Organisation and
Organising
Chapter Index
S. No Reference
No Particulars
Slide
From-To
1 Learning Objectives 3
2 Topic 1 Concept of Organisation 4-7
3 Topic 2 Types of Organisations 8
4 Topic 3 Organisational Theories 9
5 Topic 4 Concept of Vision, Mission and
Organisational Objectives 10-12
6 Topic 5 Organising-A Basic Function of Management 13-15
7 Topic 6 Concept of Organisational Structure 16-19
8 Topic 7 Corporate Restructuring – A Tool to Modify
Organisational Structure 20-21
Learning Objectives
Explain the concept of organisation
Describe the types of organisations
Elaborate on organisational theories
Discuss the concept of vision, mission and organisational objectives
Explain the importance of organising as a managerial function
Describe the concept and types of organisational structure
Elaborate on corporate restructuring and its importance
Concept of Organisation
An organisation refers to a structure in which people come together to attain
some common goals.
In an organisation, the individual goals are foregone for the group goals and
the group goals are compromised for organisational goals so the maximum
benefit can be derived by using limited available resources.
A system is defined as a group of independent but interrelated components. Five
independent and interrelated components of an organisation are:
Task
People
Structure Technology
Environment
Organisation as a System
Characteristics of an Organisation
Strong employee involvement
Forming alliances
Developing team culture
Mindfulness towards the change in environments
Resources
Influence
Security
Tenacity
The 7s Framework
Structure
Systems
Style
Skills Staff
Shared Value
Strategy
The 7-S Framework of an Organisation
Types of Organisation
The different types of organisations are:
Bureaucratic Organisation
Democratic Organisation
Participative Organisation
Pyramid Organisation
Simple Organisation
Matrix Organisation
Strategic Business Unit (SBU)
Virtual Organisation
Organisational Theories
Organisational theory describes the functioning and performance of an
organization as well as the behaviour of individuals working in it. The three
main organisational theories are shown in the below figure:
Types of
Organisational Theories
Classical
Theory
Neoclassical
Theory
Modern
Theory
Concept of Vision, Mission and Organisational Objectives
Vision refers to the long-term goals of
an organisation. It describes the
aspiration of the organisation for the
future but does not describe the
means to achieve it.
A vision statement refers to the clear,
concise and inspiring statement that
consists of the vision of the
organisation in a written form.
Concept of Vision
Mission is the purpose or reason for the organisation’s existence. The below figure
illustrates the process of creating a mission:
Formulating
a Mission
Defining the
Business
Analyzing
the Vision
Statement
In this step, the vision statement is analysed to define the long-
term goals of an organisation. Thus, mission is formulated
based on these long-term goals.
Concept of Mission
This step focuses on the identification of: Scope of the
business; Stakeholders of the business; Purpose of the
business; Customers of the business; Products and services of
the business; Techniques and methods employed in the
business.
This step involves preparing the mission statement based on
the: Strategies for future operations; Key values of the
business; Code of Conduct for the business operations
Organisational Objectives include the targets including vision and mission
statements; identifying activities necessary to be performed and assigning
those activities to capable individuals; and empowerment.
Concept of Organisational Objectives
Organising: A Basic Function of Management
According to Louis Allen, organising is the process of identifying
and grouping the work to be performed, defining and delegating
responsibility and authority, and establishing relationships for the
purpose of enabling people to work most effectively together in
accomplishing objectives.
Determining
Activities
Grouping
Activities
Assigning
Duties
Delegating
Authority
Coordinating
Activities
Organising Process
The steps involved in the organising process are:
Principles of Organising
Principle of unity of command
Principle of work specialisation
Principle of departmentation
Principle of span of management
Principle of a scalar chain
Principle of unity of purpose
Principle of authority and responsibility
Principle of navigation and synergy
Principle of team spirit
Following points explain the purpose of organising:
Purpose of Organising
Departmentation
Co-ordination
Work simplification and specialisation
Organisational hierarchy
Concept of Organisational Structure
Organisational structure is a hierarchy in which a group of people co-ordinate
with each other to accomplish the common goal of the organisation. The
organisational chart is shown in the below figure:
After delegating the roles and responsibilities to individuals, a relationship among
the various positions and functions in an organisational structure is graphically
illustrated in the organisational chart, which is shown in the below figure:
The different types of organisational structures are as follows:
Different Types of Organisational Structures
Line organisational structure
Line and staff organisational structure
Functional organisational structure
Divisional organisational structure
Project organisational structure
Matrix organisational structure
Elements of Organisational Structure
Centralisation
&
decentralisation
Departments
Chain of
command Span of control
Work
Specialisation
Formalisation
Corporate Restructuring – A Tool to Modify Oranisational Structure
Corporate restructuring refers to modifying the existing structure of an organisation
to increase its efficiency. Corporate restructuring is classified as
It refers to the
changes in
ownership by the
way of mergers and
acquisitions,
leveraged buy-outs,
spin offs, joint
ventures, strategic
alliances and
buying back of
shares.
It is a restructuring
in which ownership
remains unchanged;
however, the way of
carrying out business
is modified.
Ownership
restructuring
Business
restructuring Asset restructuring
It involves the sale of
assets to change the
ownership
composition of the
organisation.
Merger refers to the corporate strategy dealing with the purchasing, selling and
combining of two or more organisations. Merger can be usually classified into:
Mergers
Horizontal merger
Vertical merger
Conglomerate merger
Merger