Kind of Organisation

Types of Organisation

• Formal and • Informal.

Formal organisation

• Formal organisation refers to the structure • Well-defined jobs, each bearing a definite

measure of– authority, – responsibility and – accountability.

Informal organisation

• Informal organisation refers to the relationship • between people in the organisation based on – personal attitudes, – emotions and prejudices, – likes and dislikes.

Organisation Structure

• Line, • Functional, • Line and Staff, • Committee and• Matrix organisation.

Line Organisation

• In this, there is a chain of authority which flows from upward to down word.

Advantages & Disadvantages• Advantages.

– (i) Simple, – (ii) Fixed responsibility, – (iii)

Flexibility, – (iv) Prompt decision, – (v) Unified control, – (vi) Well-defined authority, – (vii) Fixed channel of

promotions.• Disadvantages

– (i) Unitary administration, – (ii) Overloading with work, – (iii) Lack of specialisation – (iv) Lack of communication – (v) Succession problem, – (vi) Absence of conceptual thinking, – (vii) Favourities, – (viii) No co-ordination.

Functional Organisation

• In this form of organisation all activities in the organisation are grouped according to the basic functions, i.e., production, finance, marketing, headed by a specialist.

Advantages & Disadvantages• Advantages– (i) Specialisation, – (ii) Large-scale production,– (iii)Improved efficiency, – (iv) Flexibility, – (v) Better industrial relations, – (vi) Separation of mental and physical functions.

• Disadvantages– (i) Multiplicity of authority, – (ii) Indiscipline, – (iii) Shifting of responsibility, – (iv) Lack of co-ordination, – (v) impracticable, – (vi) delay in decision making.

Line and Staff Organisation

• 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.

Advantages & Disadvantages

• Advantages– (i) Advantages of the line and the functional organisations, – (ii) Specialisation, – (iii) Sound decisions.

• Disadvantages – (i) Conflicts between the line and the staff executives, – (ii) Advice of the staff executives is ignored, – (iii) No demarcation of authority, – (iv) Lack of responsibility, – (v) uneconomical.

Committee/Divisional Organisation

• Committee is a group of individuals formed permanently or temporarily for a particular purpose through free interchange of ideas.

Advantages & Disadvantages• Advantages– (I) Pooling of ideas, – (2) Co-ordination, – (3) Motivation through participation, – (4) Representation of interest groups, – (5) Easy communication, – (6) No concentration of power, – (7) A tool of management for development.• Disadvantages– (I) Slow decisions, – (2) Divided responsibility, – (3) Minority tyranny, – (4) other abuses.

 

Project or Matrix Organisation

• In it authority flows vertically within functional departments.

Advantages & Disadvantages

• Advantages– It emphasises multiple inter-dependence among

various functions, horizontal relationshipsand operational flexibility.

• Disadvantages– It is of a temporary nature