module 5- organization

8/6/2019 Module 5- Organization

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ORGANIZING

Christ University, Bangalore


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Flow of Presentation

Nature and Purpose

Principles of

Organization

Types ofOrganization Authority and

Responsibility

Christ Universit , Ban alore 2


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Organization

Organization provides the structure, the frame on which rests the

management of the enterprise

Like all structures, it upholds the management functions, in their

totality and inter- relationship, aiding their movement to the appointed

goal

,

3Christ University, Bangalore


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Further, the term Organization isused as a process of management

and as a structure of relationships.

Organization

Christ University, Bangalore 4


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1. Organization as a Process

In this sense, organizationis interpreted as a process

of welding together a

framework of position

which can be used by themanagement for the

purpose of accomplishing

the enterprise goals

It involves co-

coordinating theemployees activities in an

efficient manner for the

objectives of the enterprise


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Organization is a system

of co- operative activities of

two or more persons-

Chester Barnard

Organization is the form

of every human association

for the attainments of a

common purpose- Mooney

and Reily

5Christ University, Bangalore

1. Organization as a Process


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2. Organization as Structure


Organization structure which

results from the organizing

process is the basic framework

within which the decision- making

behavior of an executive takesplace

It is an established pattern of

relationship among the

components of the organization


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Characteristics ofOrganization

Refer Page 341 of Manmohan Prasad Text Nature of Business Organization- Refer Page 342 of the same text

Essential elements of a Good Organization- Refer Page 343 of the

same text

Aims and Objects of Organization- Refer Page 344 of the sametext

Advantages of a Good Organization- Refer Page 348 of the same

text

Importance of Organization- Refer Page 349 of the same text


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Principles ofOrganization


1. Principle of Objectives2. Principle of

Specialization

3. Principles of Span of

Control4. Principles of Exception

5. The Scalar Principle

6. The Principle of

Authority

7. The Principle of Unityof Command

8. Principle of Delegation

9. Principle of

Responsibility


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10. Principle of Flexibility11. Principle of Simplicity

12. Principle of Continuity

13. Principle of Unity of Direction

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.Principle of Efficiency15.The Principle of Balance

Principles ofOrganization


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Authority


Authority is the right to give order

and the power to exact obedience-

Henry Fayol Authority is the power to command,

to act or not to act in a manner

deemed by possessor of the authority

to further enterprise or departmental

performance- Koontz andO Donnel


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1

Responsibility

Responsibility is the obligation of aperson to achieve the results mutually

determined by means of participation

by his superiors and himself- George

R. Terry


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Accountability


Answerability to the superiors regarding completion of the job inconformity with the directions is called accountability


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Power


Power is a method of operating in order to influence the behavior of

others.

Power may be defined as the ability to exert influence. If a person

has power it means that he is able to change the attitude of other

individuals


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Kinds of Power


Refer Page 380 of Manmohan

Prasad Text


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Refer Page 382 of Manmohan Prasad Text

Authority V/s Power


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Delegation ofAuthority

Delegation means assigning work to others and give them authorityto accomplish the job assigned- F.G. Moore



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Characteristics of Delegation

Refer Page 385 of ManmohanPrasad Text


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1. Line/ Scalar Organization

2. Line and staff organization3. Functional organization

4. Committee pattern

5. Product organization

6. Project organization

7. Matrix organization

Types ofOrganization


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1. Line Organization or ScalarOrganization

J. D. Mooney andA.C. Reiley

propounded the idea of Line

Organization which is based on

the scalar principle

The line of authority flows fromtop to bottom throughout the

organization

The quantum of authority is

highest at the top and reduces at

each successive level down thehierarchy

Every person in the organization

is in the direct chain of

command


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Refer the chart on Page 396 of

Manmohan Prasad Text

Merits ofLine Organization

1. Simplicity

2. Fixed Responsibilty3. Unified Control

4. Quick Decision

5. Flexibility

Refer Page 396 for the

explanation of points



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De- merits ofLine Organization

1. Concentration of authority at the top

2. Over- loading

3. No communication from bottom upwards

4. Lack of specialization Refer Page 397 for the explanation of points



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Line and StaffOrganization structure has gained popularity because

certain problems of management have become so complex that in

order to deal with them expert knowledge is necessary which can be

provided by the staff officers

For example, personnel department is established as a staffdepartment to advise the top executives and other line executives on

personal matters

Similarly, accounts, law and public relations departments may be set

up to advise on problems related to accounting, legal issues and

public relations In Line and StaffOrganization, line authority moves down in the

same manner as in the line organization

In addition, specialists are attached to line managers to advise them

on important matters

2. Line and StaffOrganization


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These specialists stand ready with their specialty to serve line men asand when their services are called for to collect information and to

give help that will enable the line officials to carry out their activities

Refer Chart on Page 399 of Manmohan Prasad Text

Merits ofLine and Staff Organization:

1. Benefits of specialized knowledge

2. Problems of line organization are properly covered

3. It relieves the line managers from botheration of concentrating

on the specialized functions

4. It helps in providing better decisions5. It is more flexible as compared to the line organization

6. It increases efficiency

7. In this productivity and profitability both increases



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De- merits ofLine and Staff

Organization:

All de- merits ofLine Organization

Lack of responsibility

Possibility of dispute

Encroachment of authority

Allocation of duties not very clear

Difference between orientations of the

line and staff men


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3. Functional Organization

Functional Organization was propounded by F.W.Taylor who evolvedthis organization for planning and controlling manufacturing

operations on the basis of specialization

But, in practice, functionalization is restricted to the top levels of the

organization structure and is not carried down to the lowest level in

the organization as recommended by Taylor

Functional Organization occupies a midway position between line and

staff authority

It is a means of putting the staff specialists in top positions for the

entire enterprise and it confers upon the holders a limited power tocommand over the people of their departments concerning their

functions

Refer the chart on Page 404 of Manmohan Prasad Text


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Functional Organization

Merits of Functional Organization:1. Specialization

2. Division ofLabor and Specialization

3. Executive Development

4. Reduction of work load

5. Large- scale production

6. Scope for expansion

7. Better control

8. Elastic in nature

9. A better industrial relation and mutual co- operation


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4. Committee Form of Organization

In modern business houses, there is a widespread use ofcommittee for performing certain administrative task

According to Hicks, A committee is a group of people who meet

by plan to discuss or make a decision for a particular subject

Further, Louis A. Allen has defined a Committee as a body of

persons appointed or elected to meet on an organized basis for the

consideration of matters brought before it

Objectives of Committee- Refer Page 410 of Manmohan Prasad

Text

Types or Kinds of Committees- Refer Page 410 of ManmohanPrasad Text


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4. Committee Form of Organization

Advantages of Committees1. It facilitates co- ordination

2. It helps in the transmission of information

3. It helps in the solution of intricate problems

4. It is helpful in the consolidation of authority

5. It participates in decision- making process and in motivation

6. It escapes responsibility and avoids action

7. It is check against misuse of powers


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5. Product organization

Product organization is also known as product departmentation or divisional structure by product.

It always calls for decision of organization work on product basis.

Each product line has separate organization of its own having its

own functional structure for various activities essential for the

product.

It is expensive as a great deal of capital is required for each

product

(Refer the chart on page 417 of Manmohan Prasad textbook)


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Characteristics of Product organization

Refer page 417 of Dr. Manmohan Prasad textbook


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Advantages of product organization

It has the merit of accountability.

Better integration among different specialties

Training and development of managers

It increases emphasis on product development, market

exploitation etc.

It focuses vision and effort of managers


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Limitations of product organization

1. Overhead cost increases2. Conflicts between various units

3. Limited autonomy to divisional managers


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6. Project Structure Organization

The Project Organization is a device for bringing specializedpeople together in flexible group as a long as a particular need

exists

Under project organization, a separate division or project unit is

created for each project

Project organization is created when the project is subject to high

standards of performance as in case of aircraft companies


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7. Matrix Organization

Matrix organization is created by merging two complementarystructures, namely:

1. Pure project organization, and

2. Functional organization

It is known as grid structure

It has been evolved as an answer to the growing size and

complexity of business undertakings which require an

organization structure more flexible and technically oriented than

the traditional line and staff and functional structure

According to David and Lawrence, Matrix Organization is anyorganization that employs a multiple command system that

includes not only the multiple command structure but also related

support mechanism and an associated organizational culture and

behavior pattern


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7. Matrix Organization

Characteristics of Matrix Organization- Refer Page 422 ofManmohan Prasad Text

Refer the chart on Page 422 of Manmohan Prasad Text

Distinction between Project Organization and Matrix

Organization- Refer Page 423 of Manmohan Prasad Text

Merits of Matrix Organization

1. Concentrated attention on a single project

2. Timely completion of the work

3. More flexible in nature

4. It gives motivation to the personnel engaged5. Helpful in communication and co- ordination

6. In this, the services of professionals are better utilized


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THANK YOU!!!!!!!!!!!

module 5- organization

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