ORGANIZING FUNCTION OF MANAGEMENT

Organisation is a process of co-coordinating employees activities in an orderly manner. It

is a managerial job. It specifies how work or duties shall be divided among the
departments in the company, the policies to be followed while accomplishing the
objectives, the scope and limits of responsibilities and the relationship of one job to
another etc. Organization defines the relationship between person to person, position to
position, job to job and so on. It specifies orderly communication between various levels
of responsibilities. It defines their authority and responsibility in a formal manner.
Definitions:
It is often define as, A collective entity of people who continuously engaged in same
activity on a sustained basis to achieve an objective or objectives. According to Oliver
Sheldon, A person of so combining the work which individuals or groups have to perform
with facilities necessary for its execution that the duties to so perform provide the best
channel for the efficient, systematic, positive & co-ordinate application of the vailable
efforts.
According to Chester Bernard, Organization is a system of consciously coordinate
activity of two or more persons.
NATURE OF ORGANIZATION
The term organization can also be defined in two ways: i.e. as dynamic process & as a
structure.
As a dynamic process it is the managerial responsibility to bring people together to
attain the objectives. It includes determining the authority & responsibility grouping of
activities & arranging various activities for accomplishment of objectives. It also includes
delegation of authority. As a structure it established the relationship between various
positions & jobs. This relationship builds to attain common goals. It is a blue print of how
management will link functions & activities to be assigned & connected.
Elements of Organization
The organization structure has under gone changes according to the changes in the
business. However business recognizes the need for best organizational structure. So
that they can function smoothly & from that the elements of organization are
established.
Three elements or primary task of organization.
1) Division of Work: - Objectives of organization are determined then total efforts &
necessary must be
classified & grouped. There should not be over lapping or duplication of work. Every one
in the organization will do a purposeful work for attainment of objectives for that
manager has to visualize the objectives. Division of total work is necessary so that these
should not be extra burden on a single person. The enterprise can be divide according to
function such as production, selling, finance, advertisement, etc.
2) Authority: -
In organization there is superior subordinate relationship. Every superior needs authority.
In absence of authority directing becomes difficult. The subordinates have several
responsibilities in organisation. There is authority and responsibility structure so that
various positions are created.
3) Establishment of Relationship: -
In every organization structure there are different types of relationships. Such
relationship may be administrative or operative, vertical, horizontal, formal & informal.
Some will be working on the same authority level but most often at different levels of
authority. This relationship is established for carrying the work smoothly. Relationship
denotes the rules for team work in orderly sequence for attainment of objectives.

PRINCIPLES OF ORGANIZING

Work Specialization: Also called division of labor, work specialization is the degree to
which organizational tasks are divided into separate jobs. Each employee is trained to
perform specific tasks related to their specialized function. Specialization is extensive, for
example running a particular machine in a factory assembly line. The groups are
structured based on similar skills. Activities or jobs tend to be small, but workers can
perform them efficiently as they are specialized in it. In spite of the obvious benefits of
specialization, many organizations are moving away from this principle as too much
specialization isolates employees and narrows down their skills to perform routine tasks.
Also it makes the organization people dependent. Hence organizations are creating and
expanding job processes to reduce dependency on particular skills in employees and are
facilitating job rotation among them.

Authority: Authority is the legitimate power assigned to a manager to make decisions,

issue orders, and allocate resources on behalf of the organization to achieve
organizational objectives.Authority is within the framework of the organization structure
and is an essential part of the managers job role. Authority follows a top-down hierarchy.
Roles or positions at the top of the hierarchy are vested with more formal authority than
are positions at the bottom.The extent and level of authority is defined by the job role of
the manager. Subordinates comply with the managers authority as it is a formal and
legitimate right to issue orders.

Chain of Command: The chain of command is an important concept to build a robust

organization structure. It is the unbroken line of authority that ultimately links each
individual with the top organizational position through a managerial position at each
successive layer in between.It is an effective business tool to maintain order and assign
accountability even in the most casual working environments. A chain of command is
established so that everyone knows whom they should report to and what
responsibilities are expected at their level. A chain of command enforces responsibility
and accountability. It is based on the two principles of Unity of command and Scalar
Principle.
Unity of command states that an employee should have one and only one manager or
supervisor or reporting authority to whom he is directly accountable to. This is done to
ensure that the employee does not receive conflicting demands or priorities from several
supervisors at once, placing him in a confused situation.
However, there are exceptions to the chain of command under special circumstances for
specific tasks if required. But for the most part organizations to a large extent should
adhere to this principle for effective outcomes.
Scalar principle states that there should exist a clear line of authority from the position of
ultimate authority at the top to every individual in the organization, linking all the
managers at all the levels. It involves a concept called a gang plank using which a
subordinate may contact a superior or his superior in case of an emergency, defying the
hierarchy of control. However, the immediate superiors must be informed about the
matter.

Delegation: Another important concept closely related to authority is delegation. It is

the practice of turning over work-related tasks and/or authority to employees or
subordinates. Without delegation, managers do all the work themselves and underutilize
their workers. The ability to delegate is crucial to managerial success.

Authority is said to be delegated when discretion is vested in a subordinate by a superior.

Delegation is the downward transfer of authority from a manager to a subordinate.
Superiors or managers cannot delegate authority they do not have, however, high they
may be in the organizational hierarchy.
Delegation as a process involves establishment of expected outcomes, task assignment,
delegation of authority for accomplishing these tasks, and exaction of responsibility for
their accomplishment. Delegation leads to empowerment, as employees have the
freedom to contribute ideas and do their jobs in the best possible ways.

Span of Control: Span of control

alsoreferredtoasSpanofManagementalsoreferredtoasSpanofManagement refers to the
number of employees who report to one manager. It is the number of direct reportees
that a manager has and whose results he is accountable for.
Span of control is critical in understanding organizational design and the group dynamics
operating within an organization. Span of control may change from one department to
another within the same organization.
The span may be wide or narrow. A wide span of control exists when a manager has a
large number of employees reporting to him. Such a structure provides more autonomy.
A narrow span of control exists when the number of direct reportees that a manager has
is small. Narrow spans allow managers to have more time with direct reports, and they
tend to spark professional growth and advancement.

SPAN OF MANAGEMENT
There is a limit to the number of persons or activities that a manager can effectively
manage. Span of management indicates the number of people who can be effectively
managed by one executive.
Span of management refers to the number of subordinates for whose activitiesan
executive should be held responsible.
Definitions:
Managers span of control is a statement or expression or the limitation of the number of
subordinates or activities that he can manage properly.
Factors influencing the span of management:
1. time devoted to supervision
2. variety and importance of activities
3. repetitiveness of activities
4. capacity and experience of manager
5. ability of subordinates
6. centralization
It is clear that there is a limit to the number of persons that can be supervised by one
boss. The span of control should be minimum as far as possible. The number of
subordinates depends upon managers ability, his job, the complexity of the duties of
subordinates, the nature and importance of the work to be supervised etc.

DELEGATION OF AUTHORITY
Meaning: -
Delegation of Authority means assigning the work to other & giving them authority.
In simple word delegation of authority is the process of dividing the job & trust on others.
Within the organisation delegation of authority become simple with the help of
departmentation & grouping of similar activities.
Definition: -
According to Luis Allen delegation is the instrument of responsibility & authority to
another and creation of accountability for performance.
Importance: -
As a business enterprise grows, a manager has to delegate part of his work to others in
the process of delegation. It helps the manager to free from routine work. It helps to
develop the ability of subordinate when the volume of work to be done increases beyond
the capacity of an individual with the help of delegation, duties are assigned to
individuals and authority can be passed forward.
Without delegation existence of organisation can not have any sense. It is a key to
organisation. A manager after delegation can not remain silent person. He still ultimately
is liable to supervise the performance. That is why he delegates authority along with
duty but not whole responsibility.
 CENTRALIZATION AND DECENTRALIZATION
Centralization and decentralization are the terms concerned with the authority or degree
of power withhold.
Centralization and decentralization refer to the degree of delegation of authority to lower
level of management.

Centralization:Centralization indicates minimum delegation. It indicates limited

delegation and leads to narrow span of control and tall structure of organization. It may
be described as the tendency to withhold the decision making power at higher levels of
management. In the centralization, decision making authority is concentrated in a few
hands at the top which results in better integration and co-ordination. More
centralization is desirable when top management wishes to exercise more direct control
over
organizational activities.
In this, communication channels are longer and are suitable when organization is small.
Decentralization: Decentralization means extensive delegation. It means the
delegation and distribution of authority from the superior to lower levels. There is a
dispersal of decision making authority. It indicates flat organization structure.
Decentralization is the systematic effort to delegate to the lower levels, all authority
except that which can be exercises at central points. In decentralization, communication
lines are shorter and span of control is wider. As management levels are few, top
executives are less burdened and so employees morale is high. When an organization is
large and complex and where the work is not standardized or routine decentralization is
suitable. Complete decentralization is not possible because a manager cannot delegate
all his authority without surrendering his position as a manager whereas, complete
centralization is also not possible except in one man enterprise.

FORMS OF ORGANIZATIONAL STRUCTURE

Introduction
Any operating organization should have its own structure in order to operate efficiently. For an
organization, the organizational structure is a hierarchy of people and its functions.
The organizational structure of an organization tells you the character of an organization and the
values it believes in. Therefore, when you do business with an organization or getting into a new
job in an organization, it is always a great idea to get to know and understand their
organizational structure.
Depending on the organizational values and the nature of the business, organizations tend to
adopt one of the following structures for management purposes.
Although the organization follows a particular structure, there can be departments and teams
following some other organizational structure in exceptional cases.
Sometimes, some organizations may follow a combination of the following organizational
structures as well.

Organizational Structure Types

Following are the types of organizational structures that can be observed in the modern business
organizations.
Bureaucratic Structures
Bureaucratic structures maintain strict hierarchies when it comes to people management. There
are three types of bureaucratic structures:

1 - Pre-bureaucratic structures
This type of organizations lacks the standards. Usually this type of structure can be observed in
small scale, start-up companies. Usually the structure is centralized and there is only one key
decision maker.
The communication is done in one-on-one conversations. This type of structures is quite helpful
for small organizations due to the fact that the founder has the full control over all the decisions
and operations.
2 - Bureaucratic structures
These structures have a certain degree of standardization. When the organizations grow complex
and large, bureaucratic structures are required for management. These structures are quite
suitable for tall organizations.
3 - Post-bureaucratic Structures
The organizations that follow post-bureaucratic structures still inherit the strict hierarchies, but
open to more modern ideas and methodologies. They follow techniques such as total quality
management (TQM), culture management, etc.

Functional Structure
The organization is divided into segments based on the functions when managing. This allows
the organization to enhance the efficiencies of these functional groups. As an example, take a
software company.
Software engineers will only staff the entire software development department. This way,
management of this functional group becomes easy and effective.
Functional structures appear to be successful in large organization that produces high volumes of
products at low costs. The low cost can be achieved by such companies due to the efficiencies
within functional groups.

In addition to such advantages, there can be disadvantage from an organizational perspective if

the communication between the functional groups is not effective. In this case, organization may
find it difficult to achieve some organizational objectives at the end.

Divisional Structure
These types of organizations divide the functional areas of the organization to divisions. Each
division is equipped with its own resources in order to function independently. There can be many
bases to define divisions.
Divisions can be defined based on the geographical basis, products/services basis, or any other
measurement.
As an example, take a company such as General Electrics. It can have microwave division,
turbine division, etc., and these divisions have their own marketing teams, finance teams, etc. In
that sense, each division can be considered as a micro-company with the main organization.

Matrix Structure
When it comes to matrix structure, the organization places the employees based on the function
and the product.
The matrix structure gives the best of the both worlds of functional and divisional structures.
In this type of an organization, the company uses teams to complete tasks. The teams are
formed based on the functions they belong to (ex: software engineers) and product they are
involved in (ex: Project A).
This way, there are many teams in this organization such as software engineers of project A,
software engineers of project B, QA engineers of project A, etc.

Conclusion
Every organization needs a structure in order to operate systematically. The organizational
structures can be used by any organization if the structure fits into the nature and the maturity
of the organization.
In most cases, organizations evolve through structures when they progress through and enhance
their processes and manpower. One company may start as a pre-bureaucratic company and may
evolve up to a matrix organization.

LINE AND STAFF AUTHORITY

LINE AUTHORITY: It is that authority which a superior exercises over his subordinates to
accomplish primary objectives of the organization. The superior issues orders and instructions to
his sub ordinates to complete the tasks.
This authority is delegated to those positions or elements of the organization which have direct
responsibility for accomplishing the primary enterprise objectives.
The flow of authority is always in the downward direction from the superior to the subordinate
and such relationship is called LINE RELATIONSHIP that exists in all departments of an
organization.

ROLES OF THE LINE RELATIONSHIP:

1. As a Chain of Command: Line officials are in the chain of command from the highest position
to the lowest position in the organization. Each successive manager exercises command over his
subordinates.
2. As a career of accountability: Each executive in the line is accountable for the proper
performance of the tasks assigned to him and every subordinate is answerable to his superior.
3. As a Channel of communication: Since the line relationship involves issue of instructions from
the authorities and reporting from subordinates, it facilitates and serves as an effective channel
of communication.

Line relationship helps the organization to work properly by

Providing the decisions required for functioning
Furnishing reference points for the approval of proposals
Serving as a means of control by setting the limits of authority
Establishing authentic communication channels to make leadership process effective
line and staff authority
STAFF AUTHORITY: Literally staff implies a stick carried in the hand for support. In the context of
management, it implies to those elements that help the line authorities to function effectively in
accomplishing the primary objectives of the enterprise.

Staff provides

advice
assistance and
information to line managers and they are distinguished into three categories namely,
personal, specialized and general staff.
They reduce the burden of line authorities and they too have the right to command and extract
work from their subordinates.
According to Henri Fayol staff is an adjunct, reinforcement and a sort of extension of line
managers personality.

LINE AND STAFF CONFLICTS:

As always, functional and decisional conflicts arise between line and staff members. The causes
may be attributed to the following reasons.
1. Line managers grudge against the staff personnel:
a) The staff authorities try to encroach upon the line managers and tell them how to do their
work
b) Lack of well balanced advice from the staff managers
c) Staff managers are not directly accountable and sport a jealous attitude towards line
authorities
d) Staff managers fail to see the big picture objectively and their interests are confined to
specified situations
e) Staff often tend to impose their superiority on line managers
2. Staff personnel complaints against the line managers
a) Line managers dont want to listen to the suggestions of the staff and make it a point to resist
new ideas.

b) Lack of authority on the part of staff managers to implement their innovative ideas and hence
the dependence on line authorities.
c) Line managers do not utilize the services of staff personnel properly and effectively.
3. The workers attitude
a) The authority relationships between line and staff specialists are not clearly defined most of
the time
b) The basic difference in attitude and perception of the line and staff managers create
difficulties for the work force in carrying out orders and instructions.