CHAPTER-5 ORGANISING
MEANING OF ORGANISING
Organizing 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.
According to Theo Haimman:
“Organizing is the process of defining and grouping the activities of the enterprise
and establishing
authority relationships among them ’’
Steps Involved in the Process of Organizing Identification & Division Of Work:
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The first step of organizing involves identifying and dividing the total work to be done into manageable activities called jobs according to predetermined plans to avoid duplication of efforts and resources and the burden of work can be shared among the employees.
Departmentalization/ departmentation:
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It means grouping similar and related jobs into larger units called departments, divisions or sections and placing them under a department head.
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It facilitates specialization.
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The departments are linked together and are interdependent.
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It aims at achieving co-ordination and facilitate unity of action.
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Departments can be created on the basis of:
•Functions: marketing, personnel, finance etc.
•Products: Textiles, chemical, power division etc.
•Territories: Western, northern, central, eastern etc.
Assignment Of Duties:
It is necessary to define the work of different job positions and allocate work accordingly to various employees.
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Once departments are formed, the department is placed under the charge of an individual.
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Jobs are then assigned to an individual according to their skills and competencies .
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E.g. activities of finance should be assigned to persons having qualifications and
experience in finance e.g. C.A‘s.
Establishing Reporting Relationships:
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It involves establishing clear relationships for reporting of work.
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Superior subordinate relations between different people and job positions are created, so that everybody knows from whom he has to take orders and and to whom he can issue orders.
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Creates management hierarchy a chain of command from the top manager to the individual at the lowest level. This helps in coordination.
CHAPTER-5 ORGANISING
Importance of Organizing 1. Benefits of specialization:
Organizing leads to systematic allocation of jobs amongst the workforce. This reduces the workload and ensures division of work into smaller units and repetitive performance leads to gaining experience and specialization. Thus organizing promotes specialization which in turn leads to efficient & speedy performance of tasks.
2. Clarity in working relationship:
It helps in creating well defined jobs and also clarifying the limits of authority and responsibility of each job. It helps in creating a hierarchical order. The superior-subordinate relationship is clearly defined in organizing. This removes ambiguity in transfer of information and instructions.
3. Effective Administration:
It provides a clear description of jobs and related duties which helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work which results in effective administration.
4. Optimum utilization of resources:
Organizing leads to the optimum utilization of all material, financial and human resources . The proper assignment of jobs avoids overlapping/ duplication of work. This helps in preventing confusion and minimizing the wastage of resources and efforts.
5. Adaptation to Change:
Organizing helps in adaptation to change by allowing the organizational structure to be suitably modified according to the changes in business environment
6. Development of Personnel:
Organizing helps in development of personnel by delegation of work to subordinates. Effective delegation allows the managers to reduce their workload so that they can focus on more important issues related to growth &
innovation. This also develops the subordinates’ ability, helps him to exercise initiative
and realize his full potential.
7. Expansion and growth:
Organizing helps in growth & diversification of an enterprise by adding more job positions, departments, products lines, new geographical territories etc. This will help to increase customer base, sales and profit.
Meaning of Organizational Structure
The organization structure can be defined as the framework within which managerial and operating tasks are performed.
Under the organizational structure, various posts are created to perform different activities for the attainment of the objectives of the enterprise.
Relations among persons working on different posts are determined. Thus, organization structure is an outcome of the organizing process.
The structure provides a basis or framework for managers and other employees for performing their functions.
CHAPTER-5 ORGANISING
Relation between Span of Management and Organization structure:
Span of management refers to the number of subordinates that can be effectively managed by a superior.
The Span of management to a large extent gives shape to the organization structure.
This determines the levels of management in the structure. Narrow span of management results in tall structure whereas wider span of management results in flat/short structure.
It specifies the relationship between people, work and resources
It allows correlation and coordination among human, physical & financial resources and this enables business enterprise to achieve their goals .
A proper organization structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise .
It enables the enterprise to function as an integrated unit by coordinating the responsibilities of individuals and departments. This result in increase in profitability of the enterprise. The two most commonly found structure are
Functional Structure
Divisional Structure
Functional structure
In functional Structure activities are grouped and departments are created on the basis of specific functions to be performed.
For example, all the jobs related to production are grouped under Production Department, Marketing Department, Finance Department etc.
Suitability
(1)
Large organizations producing one line of product.
(2)
Organizations which require high degree of functional specialization with diversified activities.
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Managing director
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Human Resources Manager
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Marketing Manager
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Finance Manager Advantages of Functional Structure
It
leads to Functional/ occupational Specialization
since emphasis is placed on specific functions. This promotes efficiency in utilization of manpower as employees perform similar task within the department and are able to improve performance .
Control & Coordination is established
as all the persons working within a department perform similar tasks related to an aspect.
CHAPTER-5 ORGANISING
Helps in increasing managerial and operational efficiency
which results in increased profits.
Managers of one department are performing same type of function again and again which makes them specialized and improves their efficiency.
Minimizes cost:
It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.
It
makes
training of employees easier
as the focus is on a limited range of skills
Disadvantages of Functional Structure
1.
Emphasis on departmental objective :
Each departmental head works according to his own wishes. They always give more preference to their departmental objectives. Hence overall organizational objectives suffer.
2.
Difficulty in Inter-departmental Coordination
: All departmental heads work as per their own wishes which leads to easier coordination within the department, but it makes inter-departmental coordination difficult.
3.
Difficult to fix responsibility :
It may lead to problem in coordination between departments. So it is difficult to fix responsibility for performance on a particular department .
It may lead to
inflexibility
as people with same skill and knowledge base may develop narrow perspective and may not appreciate others point of view. Functional heads do not get training for top management positions because they are unable to get the experience in diverse fields.
DIVISIONAL STRUCTURE
It is an organization structure comprising of separate business units or divisions created on the basis of different products (like metal, plastic, cosmetics etc.), geographical area, customer groups, etc.
Each division is multi- functional and self- contained.
Suitability:
This structure is suitable in organizations producing multiple products or different lines of products requiring product specialization. Also, growing companies which intend to add more lines of products, more employees or create more departments in future adopt this structure.
ADVANTAGES OF DIVISIONAL STRUCTURE 1
. As divisional head gains experience in all functions related to a particular product, it helps in the development of varied skills due to which a divisional head can prepare him for higher positions.
This leads to product specialization
.