ORGANISING

Organising refers to identifying and grouping different activities in the organisation and
bringing together human and non-human resources to achieve organisational goals.”
Organising helps in implementing of plans by clarifying jobs and working relationship and
effectively deploying resources for attainment of identified and desired goals.
It is widely used to mean –
a group of people
a structure of relationship
a process
and a function of management
Org. establishes structural relationship between various job positions of the enterprise.
As a process, organising is concerned with arranging in a logical and orderly manner the activities of
all the employees.
It specify , how the duties are to be divided among the deptt. and the employees.

It includes the process of determining what activities are to be conducted , how the activities are to
be grouped, how responsibility and authority are to be delegated, and who reports to whom.

Organising is the basic function of management. By organising manager bring together the manpower
and material resources for attainment of objectives.

ORGANISING PROCESS

1. IDENTIFICATION AND DIVISION OF ACTIVITIES

The first step in org. is to identify and define the activities to be performed.
The activities required will depend upon the nature and size of the enterprise.
For e.g - A manufacturing firm may have production , marketing , finance and other activities.
There will be no production activity in a retail store .

2. GROUPING OF ACTIVITIES (DEPARTMENTALISATION)

This work is done in the manner that all the jobs of similar nature may be combined in one
department or Section or Division.
The production Dept. may be divided into Purchase ,quality control, repairs ,stocking of goods and
maintenance section .
Activities may be grouped on the basis of functions, products, territory, customers etc.

3. ASSIGNMENT OF TASK OR ACTIVITIES TO INDIVIDUALS :

The departments are now allotted to different individuals on the basis o their ability and aptitude.
Clear definition of the duty and responsibility of each individuals becomes necessary to avoid
duplication and overlapping of efforts.

4. DELEGATION OF AUTHORITY

Only assignment of duty is not enough unless each individual is given the authority to perform the
assigned task.
An individual cannot perform his duty without getting the rights and powers to do it .
Therefore delegation of authority is an essential step of organizing.

5. COORDINATING ACTIVITIES

The activities and efforts of different individuals are then properly synchronized.
Interrelationship between different positions are clearly defined so that everybody knows, from
whom he is to take orders and to whom he can issue orders.

IMPORTANCE OF ORGANISING
1. Efficient Management :- Organising is very much necessary for the performance of
other functions of management like planning , staffing , directing and controlling.
Poor org. may result in duplication of work and efforts.
Org. ensures the maximum utilization of workers ability and production capacity of
material resources.

2. SPECIALISATION :- Specialisation is an important element of good org.

It involves allocation of work between different workers according to their
qualification , talent and aptitude.
Specialisation automatically comes when an individual is performing one job repeatedly.

3. GROWTH AND EXPANSION :- Properly designed org. structure creates

favorable conditions for expansion and diversification of enterprise.
Organising allows a business enterprise to add more job positions.

4. OPTIMUM USE OF HUMEN RESOURCES :- Sound organisation matches

the job with the individual . It ensures that every individual is placed on the job for
which he is best suited. With clarity in in jobs , individuals know in advance, what they
are supposed to do.

5. FACILITATES COORDINATION :- Organising is an important means of bringing

coordination among various departments of the enterprise.
Functions and activities of the various dept. are welded together to accomplish the ent. goals.

6. DEVELOPMENT OF PERSONNEL :- In the process of org. managerial personnel are

trained through delegation of authority. They assign routine jobs to their subordinates and
concentrates on strategic issues .
Thus it develops a sense of responsibility in the subordinates and motivates them to do more
challenging work.
Organisational Structure
Organisational Structure means network of job positions, responsibilities and authority at different
levels organisation. It determines the shape of the enterprise according to which the
administrative, organisational decisions and developments will take place.
An org. structure shows the auth. & resp. relationship between various positions in the org. and
also clarifies who reports to whom. An org structure is generally shown on the org chart. A good org.
structure should not be static but dynamic.
Organisational structure specifies the relationship between people, work and resources.
A good org structure should be dynamic so that it can change and adjust according to prevailing
conditions.
Organisation structure ensure smooth flow of communication and better control over the resources.
The need of organisational structure is felt when the firm grows in size.

AN ORGANISATIONAL STRUCTURE
IMPORTANCE :
1.) It specifies who is to report to whom & who is to direct whom.
2.) Lays down pattern of communication and coordination in the enterprise.
3.) Determines the location of center of decision making in the enterprise.

In short , existence of good organisational structure is essential for better management.

FUNCTIONAL STRUCTURE
Functional Structure : In a functional structure activities are grouped and dept. are created
on the basis of specified functions to be performed.
In other words when the activities are grouped keeping in mind the functions or the job then it is
called functional structure.
e.g all the jobs related to production are grouped in production dept. , related to sales in sales
dept. etc.
Within the dept. also grouping is done on the basis of specialised function.
e.g , the production department can be further classified as store, quality control , purchase
etc.
Functional org. Is highly suitable for an enterprise engaged in production and distribution of a
single product or small number of product .
Functional Org. is suitable where –
1. the size of the business unit is large.
2. specialization is required.
3. there is only one product.
4. decentralization of authority is needed.
 ADVANTAGES OF FUNCTIONAL STRUCTURE
1. It leads to occupational specialization.
2. Promotes control and coordination.
3 It minimizes duplication of efforts.
4 It help in increasing managerial efficiency.
5. It helps in training of specialist managers .

LIMITATIONS OF FUNCTIONAL STRUCTURE

1. It gives more emphasis on functional objectives rather than on overall enterprise objectives.
2. It may lead to coordination problem among various departments.
3. Inflexibility ,as employees get training of one function only, so they cannot be shifted to
other departments.
4. Decisions are delayed where decision-making involves two or more departments.

FUNCTIONAL STRUCTURE

DIVISIONAL STRUCTURE
When the org. is large in size & is producing more than one type of product then activities
related to one product are grouped under one division.
e.g if an org. is producing soap , textile , medicine , cosmetics etc then all the activities related to
medicine will be grouped under medicine division.
Div. Structure is suitable
a) only to multi-product manufacturing large org.
B) Org. which require product specialisation.
c) Growing companies , planning to add more line of products in future.

ADVANTAGES OF DIVISIONAL STRUCTURE :

1. It helps to concentrate on each product line . Thus brings efficiency and economy in operation.
2. Give sufficient autonomy of action to each division.
3. It is easier to access the performance of each division .
4. It facilitates expansion, diversification and growth because new divisions can be added without
interrupting the existing operation.

DISADVANTAGES OF DIVISIONAL STRUCTURE :

1. Increase in cost due to duplication of activities.

2. It gives excessive authority to div. managers which can become harmful for the org.

3. Not suitable for small and medium size companies.

4. Each department will require all the resources as every division will be working as an
independent unit.

DIFFERENCE BETWEEN
FUNCTIONAL STRUCTURE AND DIVISIONAL STRUCTURE

Functional structure : Formed on the basis of functi ons

Divisional Structure : Formed on the basis of products

Functional Structure : leads to functional specialisation

Divisional Structure : Leads to product specialisation

Functional Structure : Difficult to fix responsibility

Divisional Structure : Easy to fix responsibility

Functional Structure : Economical as no duplication of work

Divisional Structure : Costly as all resources are required
 Functional Structure : Less because specialisation in one function only
Divisional Structure : More as managers performs multifunctions.

Functional Structure : Less autonomy of actions

Divisional Structure : More autonomy

DELEGATION OF AUTHORITY
Delegation is a process by which a manager shares some of his work & authority with his
subordinate.
Delegation takes place when a manager passes on to his subordinates, some of his task or
functions together with necessary auth to perform the task.

So delegation can be defined as, “A process of entrusting responsibility and authority to the
subordinate and creating accountability on those employees who are entrusted responsibility and
authority.
A manager has to resort to delegation because it is not possible for him to perform his job
without the help of others.

ELEMENTS OF DELEGATION

1. The process of defining the work of the subordinate by

his superior is called assignment of duties.
It also involves defining of the results expected from the subordinates
This implies a prior division of work.
After assigning task to subordinate , it becomes necessary to give
them the necessary authority.
Subordinate must have the power to make commitments and use resources.
The limit of authority should also be clearly specified..
Once auth. Is delegated, subordinate becomes accountable
for the performance of their duties.
It involves the moral compulsion on the subordinate to
perform satisfactorily the duties assigned to him.

CENTRALIZATION & DECENTRALIZATION

Centralization of authority means concentration of power

of decision making at one point or in a few hands.
In such an org. , very little authority is delegated to managers at middle and lower levels

Decentralisation of authority means dispersal of decision making

power to the lower levels of the org.
Decentralisation can be defined as even & systematic distribution of authority at every level
of management.
Under decentralization every employee working at different levels gets some share in the
authority.
sometime company follows a mixed policy of centralization and decentralization .
They keep the important matters ( financial decisions, structural decisions ) with the top level
and share the common decisions with the people working at different levels.
 DIFFERENCE BETWEEN DELEGATION & DECENTRALIZATION

It refers to the entrustment of resp & auth. From a superior to his

subordinate. Thus it is individualistic.
: It refers to the systamatic delegation of authority to a lower level in the
org. Thus it is totalistic.

Scope of delegation is limited.

It takes place between superior and subordinate.
Has a wider scope .
It involves dispersal of decision making power at all levels.

In delegation , the final control for decisions lies with the superior.
Here the top management may delegate the power to control to the
dept. heads.

Delegation is necessary for all the org.

No org. Can do without delegation.
Decentralisation depends upon the decisions of the ent.
An enterprise can do even without decentralisation.

Del. Is compulsory. A manager cannot look after all the activities.

Dec. is optional.
Management may not find it necessary to decentralize authority.

Delegation establishes sup-sub relationship.

Decentralization is a step towards creation of semi- autonomous unit.

IMPORTANCE OF DELEGATION & DECENTRALIZATION

Del./Dec. reduces the burden of top executives so that they

can concentrate upon important managerial functions and
problems.Without Del./Dec. Managers will be overburdened with the
work.

Del. /Dec. Is a sort of training to managerial personnel to take

the important decisions and to solve the problems of their ent.
It improves their ability and efficiency.

The sub has sufficient auth. to take quick decisions without consulting
Sr. executives.

Through Del./Dec. An executive can assign jobs to his subordinate

according to their abilities and experiences .
In this way he can obtain the benefits of div. of work.

Del./Dec. provides an opportunity to the subordinates to share the

resp. with their superiors . It increases their efficiency as they develop
the feeling of belongingness and trust.
Some employees can be motivated by such kind of non –financial incentives.
 In Del./Dec. All managers and employees are given some
kind of autonomy or freedom of action. This sharing of decision and
freedom of action integrate the employees as one team and develop team spirit.