Welingkar’s Distance Learning Division

CHAPTER-11
TYPES OF ORGANISATION

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Introduction
o Organisation is designed on the basic of principles of
labour and span of management. The success of the
organisation depends upon the experience and
competence of the officers of the organisation.
Nature, scale and size of the business are the normal
factors which determine forms of internal
organisation. The following common types of
organisation find a place in the structure of internal
organisation.

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Introduction

o Line, Military or scalar organisation

o Functional organisation
o Line and staff organisation
o Committee organisation
o Project organisation
o Matrix organisation
o Freeform organisation

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Line Organisation

o Line organisation is the simple and oldest type

of organisation followed in an organisation.
Under line organisation, each department is
generally a complete self-contained unit.

o A separate person will look after the activities

of the department and he has full control over
the department.
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Line Organisation
o The same level executives do not give or receive orders
amongst themselves. But they receive orders from their
immediate boss and give orders to their subordinates.
Hence, all the heads are responsible to the general
manager, the general manager, in turn, is responsible to
the shareholders who are the owners.

o This type of organisation is followed in the army on the

same pattern. So, it is called military organisation. Under
type of organisation, the line of authority flows from the
top to bottom vertically. So it is called line organisation.
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Characteristics of line organisation

o It consists of direct vertical relationships.

o Authority flows from top-level to level to
bottom level.
o Departmental heads are given full freedom to
control their departments.
o Each member knows from whom he would
get orders and to whom he should give his
orders.
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Characteristics of line organisation

o A senior member has direst command over

his subordinates.
o Operation of this system is very easy.
o Existence of direct relationship between
superiors and subordinates.
o The superior takes decisions within the scope
of his authority

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Advantages and Disadvantages of

Line Organisation
Advantages of line organisation Disadvantages of line organisation
1. Simplicity 1. Lack of specification
2. Division of authority and responsibility 2. Over loading
3. Unity of control 3. Lack of initiative
4. Speedy action 4. Scope for favoritism
5. Discipline 5. Dictatorial
6. Economical 6. Limited communication
7. Co-ordination 7. United administration
8. Direct communication 8. Subjective approach
9. Flexibility 9. Instability
10. Lack of co-ordination
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Suitability

o This type of organisation is suitable to small size

business units.
o Where the activities are of routine nature or
machine based.
o If the business activities are service mined.
o Where the number of persons working is small
o The business operation is simple in nature.
o A business unit which has straight methods of
operations.
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Functional organisation

o Under line organisation, a single person is in

charge of all the activities of the concerned
department. The person in charge finds it
difficult to supervise all the activities
efficiently.

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Functional organisation
o The reason is that the person does not have
enough capacity and required training. Under
functional organisation, various specialists are for
various functions performed in an organisation.
These specialists will attend to the work which is
common to different functions of various
departments. Workers, under functional
organisation, receive instructions from various
specialists.
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Functional organisation

o The need for functional organisation arises

out of:
o The complexity of modern and large-scale
organisation
o A desire to use the specialization in full and;
o To avoid the work-load of line managers with
complex problems and decision-making

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Characteristics of functional organisation

o The work is divided according to specified

functions.
o Authority is given to a specialist to give orders
and instructions in relation to specific
function.
o Functional authority has right and power to
give command throughout the line with
reference to his specified area.
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Characteristics of functional organisation

o The decision is taken only after making consultations with the functional
authority relating to his specialized area.

o The executives and supervisors discharge the responsibility of functional

authority.
- Route clerk
- instruction card clerk
- time and cost clerk
- Gang boss
- Speed boss
- Inspector
- Repair boss
- Disciplinarian

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Advantages and Disadvantages of

Functional Organisation
Advantages of functional
organisation
o Benefit of specialization
o Application of expert knowledge
o Reducing the work load
o Efficiency
o Adequate supervision
o Relief to line executive
o Co-operation
o Economy
o Flexibility
o Mass production
Disadvantages of functional
organisation
o Complex relationship
o Discipline
o Over specialization
o Ineffective co-ordination
o Speed of action
o Centralization
o Lack of responsibility
o Increasing the overhead expenses
o Poor administration
o Suitability of functional
organisation
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Line and staff organisation

o The line officers have authority to take

decisions and implement them to achieve the
objectives of the organisation.

o The line officers may be assisted by the staff

officers while framing the policies and plans
and taking decisions organisation.

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Line and staff organisation

o The authority flows from top level to the lower

level of the organisation through the line officers
while the staff officers attached to the various
departments advise the departments. The staff
officers are not in a position to compel the line
officers to follow the advice by them. Each
department is headed by a line officer who
exercises full authority regarding the planning.

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Types of staff

o Personal staff

o Specialized staff

o General staff assistant

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Functions of staff officers

o The staff officers assist the line officers in the
planning of business activity.

o The board of directors frames the policies of the

business on the basis of recommendations given by
the staff officers.

o The managers can get the advice from the staff

officers regarding the selection. ‘training’ placement
and remuneration fixation the personnel
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Functions of staff officers

o The staff officers give regarding the method of improving
the product, the technique of reducing the cost of
production, increasing the profits of the concern.
o The staff officers prescribe the procedures to be followed
by the line officers in the execution of policies and
programs.
o Staff officers of a department help the manager in the
preparation of budget of the department.
o the staff officers may be called to solve the
administrative problems encountered by the line officers
in general.
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Arguments of staff officers against line

officers
o The staff officers have only theoretical academic
knowledge but not practical knowledge.
o The staff officers go beyond their sphere of activity
and assume that they have line officer’s authority.
o Much of the advice given by the staff officers is
impractical
o Since the staff officers unnecessary increases the
paperwork of the line officers.

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Arguments of staff officers against line

officers
o The staffs give advice without considering the
nature of business as a whole.

o Staff officers are very much interested in

becoming line officers of the organisation
rather than impairing advice to them.

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Solution to the conflict between line officers

and staff officers
o Both line officers and staff officers should clearly
understand the nature of relationship prevailing between
them.
o A separate staff member should be appointed to bring
about co-operation between the line officers and staff
officers.
o The line officers should be encouraged to use the advice
of staff officers.
o Only qualified persons should be selected and placed as
staff officers.
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Solution to the conflict between line officers

and staff officers

o The staff officers should be convinced by the line

officers if their advice is not accepted
o The responsibility for results could be fixed on both
line officers and staff officers
o Only experienced persons alone should be promoted
as line executives..
o Remove the fear of the line officers and staff officers
whether the new ideas of advice would be properly
put into use or not.
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Advantages of line and staff organisation
Facilitates to work faster and better
Specialization is attained
Enables to utilize experience and advice
Officers can take sound advice
New technology or procedure can be
introduced without any dislocation
Promotes efficient functioning of line officers
Very good opportunity is made available to
young person to get training
Disadvantages of line and staff organisation
If powers are not defined then get confusion
Line officers may reject advice without any
reason for their action
Staff officers are not responsible if favorable
results are not obtained.
Difference between line and staff officers will
defeat the very purpose of specialization
Line officers blame staff officers for
unfavorable results and want to get rewards for
favorable results
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Project organisation

o The project organisation idea was developed

after the second war.

o A project organisation can also be the

beginning of an organisation cycle. The
project may become a long term or
permanent effort that eventually becomes a
program or branch organisation
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Features of project organisation

o The Success of the project organisation

depends upon the co-ordination of activities

o There is a grouping of a activities for each

project. It leads to the introduction of a new
line of a authority.

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Drawbacks of Project Organisation

o The professionals are deputed for the project. But there
is an assurance of continuous work for the professional
in a project organisation.

o The decision is taken in the project organisation under

pressure of the top controls the staff in an organisation.

o The top management does not extend its full co-

operation for the effective functioning of the project
organisation. Some hindrance may be caused by the top
management.
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