CHAPTER FOUR

THE ORGANIZING FUNCTION

4.1 Concept of organizing and organization

In planning, managers set their objectives and determine exactly what to do to attain these objectives. Of
course, no one person can implement all the plans of a modern organization or one person cannot do
everything necessary to meet the goals set forth in those plans. Planning, consequently, requires
organizing the efforts of many people. It forces us to address several basic questions:
 What specific tasks are required to implement our plans?
 How many organizational positions are needed to perform all the required tasks?
 How should these positions be grouped?
 How many layers of management (Organizational levels) are needed to coordinate them?
 How many people should a manager supervise directly?
The answers to these and other questions enable us to create an organizational arrangement, a structure,
for putting plans into action.
Organizing - is a management function that involves arranging human and non-human (physical)
resources to help attain organizational objectives. It is the management function that establishes
relationship between activity and authority. Organizing is the process of identification, classification and
grouping of tasks that are necessary to achieve objectives and assigning of work to individuals and
designing hierarchy of decision making relationship. The end result of an organizing process is an
organization.
Organization - is the total system of social and cultural relationship among peoples who are joined
together to achieve some specific common objectives. It is a whole consisting of unified parts (a system)
acting in harmony to execute tasks to achieve goals effectively and efficiently.
The main objectives of organizing are;
 Determining what kind of activities should be performed to materialize objectives
 Classifying those activities and grouping them based on certain criteria
 Assigning the work to individuals and delegating authority
 Creating hierarchy of decision making
4.2 Types of organization
Organizations can be classified into formal and informal types.

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i. Formal organization
Formal organization is an organization that is deliberately and rationally designed and approved
by management through organizing process to achieve organizational goals/ objectives. It is
planned structure of an organization which is deliberately created to attain desired objectives. It
is a system with well-defined jobs, definite authority, responsibility, and accountability.
Common characteristics of formal organization are
1. Consciously designed
Formal organization are purposefully designed and established to attain certain end results.
2. Based on delegated authority
In a formal organization each employee has delimited authority; therefore there is superior-
subordinate relationship.
3. Organizational chart is drawn: Organizational chart shows jobs & departments, and it is
the most tangible depiction/ picture of an organizational structure.
4. Deliberately impersonal
Positions in an organization are not personal properties. They are always open to some one who
fit the position. People who meet the requirements of the job can fulfill the position.
ii. Informal organization
Informal organization refers to people in-group associations, but these associations are not
specified in the structure of the formal organization. They are not included or established
deliberately/ officially in the formal organization channel but formed adjacent to the formal
organization. They always exist in the formal organization; nothing can destroy them; they
cannot be avoided. They are natural grouping of people in the work situation based on their
behavioral patterns; interests; beliefs; objectives; etc.
No conscious attempt is made to create it. Informal organization may affect formal organizations
positively or negatively. Managers should recognize that it exists in a formal organization; and
should try to use it for the benefit of the formal organization.
Reasons for the formation of informal organization are
1. Mutual benefit
Members of an organization have their own personal interests that tied them to their colleagues
so as to meet these interests. Hence the communality of people’s interest in the formal
organizations leads to the formation of informal organization.

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2. Friendship
 Members of an organization establish friendship among themselves due to different
reasons. This friendship among the members paves the way for the formation of informal
organization.
3. The need to fulfill social needs
 A need to be the member of a society put the workers in the organization together.
Therefore, one of the mechanisms through which people in the organization meet their
social needs is being the member of informal organization.
4. Physical work condition
 People working in the same unit are closely related. Hence, working in proximity or
together is one of the reasons for the formation of informal organization.
5. Administrative practice
 Some managers encourage while others suppress the formation of informal organization.
Thus the type of management entertained by managers is the result for the establishment
of informal organization.
Characteristics of informal organization
1. Group norms
This is the core behavior among the workers in the informal organization. There are
agreements/ rules and regulations which may not be written that govern the behavior of
members. The members act accordingly without showing any deviation.
2. Group cohesiveness
Members of the informal organizations basically have strong relationships. The more the
group sticks together the more they will be successful in attaining the objectives.
3. Group leadership
Members in the informal organization select someone who is most active among the others as
a leader, and such people are conventional leaders.

4. Communication network
It is also called grapevine. It is the network outside the formal communication channel
established by the organization;.

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5. Lifespan and purpose
Informal organizations have short life span in comparison with formal organization.
Therefore they cease to exist when the members meet their interests and re-established when
another need arises.
6. Existence of a number of informal organizations in a formal organization
The divergent nature of people’s interest, their feeling, tradition, attitude, etc, lead to the
formation of different informal organizations in a big formal organization
7. Informal organizations gradually can develop into formal organization
Informal organizations gradually can be emerged as formal organization.
Advantages and disadvantages of informal organizations
Advantages
1. They are additional assets for the formal organization.
If informal organizations are properly associated to the formal organization, they are
additional assets for the formal organization because they may come up with
innovative ideas to promote the work of the organizations.
2. They could be useful channels of communication.
In the informal organization, information can be easily and rapidly reach the members
of the organization through their informal ways of communication.
3. They provide satisfaction and stability in the organization
When workers are given opportunity to establish the informal organizations, they
entertain their idea that leads them to be satisfied and stable in the organization.
4. Their existence alerts managers to plan and act accordingly than otherwise.
A manager becomes watchful more than any other time when there are informal
organizations to check whether they are out of line or not. And if the activities seem
against the interest of the formal organization, necessary measures are taken to
normalize or reverse the condition.
5. They inform managers sensitive issues that would be embarrassing if formally
released.
Some information may destruct the normal organizational climate if formally
released. In such cases, informal organizations informally disseminate the

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 information to the group’s endurance and then the manager also becomes aware of
the consequences if formally communicated.
Disadvantages
1. Resistance to change
There is often a tendency to resist changes.
2. Role conflict
Bothe types of organizations have their own objectives. These objectives will not be
the same and this may arise role conflict in the organization.
3. Rumor
Managers may not equally release information to the members of the organization.
When there is too much secrecy or ambiguous situations informal organizations
disseminate distorted information.
4. Conformity
Some leaders of informal organizations may have hidden agenda or promote
destructive actions, hence such leaders may use the members as an instrumental to
create challenge to the leaders of formal organization.

4.3. Organization chart

The organizing process leads to the creation of organization structure, which defines how tasks
are divided and resources deployed. Organization structure is defined as (1) the set of formal
tasks assigned to individuals and departments; (2) formal reporting relationships, including lines
of authority, decision responsibility, number of hierarchical levels, and span of managers’
control; and (3) the design of systems to ensure effective coordination of employees across
departments.
The set of formal tasks and formal reporting relationships provides a framework for vertical
control of the organization. The characteristics of vertical structure are portrayed in the
organization chart, which is the visual representation of an organization’s structure.

Example: Organization chart for a soda Bottling Plant

President

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Vice Director Vice Director
4.4 Departmentalization: Meaning and Bases
Departmentalization is the process of grouping/ combining jobs into groups or manageable
units. A manager must have basis for combining jobs. The main bases for departmentalization
are function; location or Geography; product; customer and process.
Hence the types of departmentalization are
1. Functional departmentalization
2. Geographic departmentalization

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 3. Product departmentalization
4. Customer departmentalization
5. Process departmentalization and
6. Matrix departmentalization
Functional departmentalization
The common form where activities are grouped based on similarity in function or content. It is
grouping jobs according to the functions of an organization. It is common for business firms.
Within each department individuals perform specialized jobs.

General Manager

Marketing Production Finance Personnel R&D

Fig: Functional departmentalization for business firm

 Advantages
o It promotes specialization and organizational efficiency.
o Avoid overlap performing basic businesses
o It provides unity of direction. Among members of the department, there is job
interrelation.
o It facilitates staffing and training. If there are highly qualified staffs in a
department, other workers will be initiated or encouraged to fill the position.
o It promotes communication within departments.
o Create strong team sprit among people working in one department.
 Disadvantages
o It has problems of horizontal coordination, i.e. Lack of understanding of
interrelationship and dependency between all functions
o The tendency of “empire building”. Unhealthy competition will occur between/
among departments.

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 o It frustrates the development of managerial talents from the organization as a
whole to top managerial position. There is a tendency for the manager who comes
to the position of organization’s to favor the workers in his department.
o focuses on departmental problems and objectives; and ignores organizational
issues and objectives, i.e. Narrows the understanding of employees about the
organization at large
o Create communication barrier among people with different specialization
o Department managers can not develop general managerial skills to take up higher
managerial position
o Lack of generalize and internal destructive competition among different
departments reduces the success of the entire organization
Geographic departmentalization
It is also called location departmentalization or departmentalization by territory. It is grouping of
jobs on the bases of geographic areas. It is established when a company has different branches
that are geographically dispersed. The operations are similar from region to region

General Manager

Region one Region two Region three

 Advantages
o It helps in exploiting local advantages.
o It provides a training ground for new managers, i.e. to place managers out of
territory and then asses their progress.
o It enables the firm to develop local market areas and adjust quickly to local
customers’ needs
o It helps the company to reach close to raw materials.
o It saves a substantial amount of transport costs.
o It provides chance to local people employment opportunity.
o Create customers goodwill and awareness of local feeling and desire.

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 o Facilitate decision making
o It can provide a high level of service as employees know the local culture and
language.
 Disadvantage
o Difficulties in maintaining consistent adherence to company policy and practices
o Duplication of effort
o The necessity of having a relatively large number of managers
o It poses serious problems of coordination and control.
o It may create gaps between head offices and branch offices.
o It is costly to host many geographically dispersed departments.
A company uses territory as basis for departmentalization often needs a large head quarter’s
staffs to control dispersed operation.
Product based departmentalization
It is grouping on the bases of products (goods/ services). Such kind of departmentalization is best
to large and multiple product organizations.

General Manager

Shoe Dep’t Clothing Dep’t Cosmetic Dep’t

 Advantages
o Allows workers to identify with a particular product and develop team sprit.
o It results in high product visibility.
o It facilitates innovation; and also enhances specialization of production.
o Stem from the need to create relatively independent division
o Each division has its appropriate personnel
 Disadvantages
o Employees’ insecurity during time of turmoil.
o Pressure for highly qualified managerial resources.
o It results in poor coordination across the product lines.

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 o Duplication of efforts among divisions
Customer based departmentalization
It is grouping of tasks based on the type of customers served. Customers are the key to the way
activities are grouped. Such forms of departmentalization are more common in banking, book
publishing and food industry.

General Manager

Women shoe Men shoe Kids shoe

 Advantages
o Customers’ interest and priority is respected;
o Helps to meet customers’ special needs by setting up separate departments
o Indicate the willingness to understand the business of its clients
o Workers are identified with a particular group of customers that create team sprit
 Disadvantages
o It is almost impossible to consider all the customers, their interests, habits and
customs.
o In the period of no or little demand for goods and services of an organization,
some sections may not be profitable.
o There is a problem of duplication of resources
o Creates difficulty in coordination between departments
o High competition among departments may deter the overall organizational
performance
o Requires manager and staff specialists similar with the customers’ situation
o Differentiation among the various customer groups might be difficult
Departmentalization by process
It is appropriate when departmentalization by production is inflow. Under it activities are
grouped on the basis of various manufacturing process.

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 General Manager

Drilling Grinding Welding Assembling Finishing

Fig: departmentalization by process

Advantages
o It is appropriate for organizing certain types of work.
o It helps to group production facilities.
o It puts full responsibility of completing each stage of the job.
Disadvantages
o Failure in one of the process may adversely affect the whole job.
o Due to sub specialization a worker has, he cannot be shifted to another
department, i.e. it restricts flexibility.
Multiple bases for departmentalization
It is the combination of two or more departments discussed above. It helps to divide work
exhaustively. It is also a way of combining jobs into departments. E.g. matrix organizations
Matrix organization
They are also called grid organizations or project/ product management. They are combining
functional and project or product patterns of departmentalization in the same organization. They
are common in engineering and R& D, and also in product-marketing organization.
Typical problems of matrix organizations are
 Conflict exists between functional and project managers due to competition for limited
resources
 Role conflict, role ambiguity and role overload may result
 Imbalance of authority and power, and may result inefficiencies
 Managers protect themselves against blame by putting everything in writing which
increases administration cost because of potential conflicts
 Requires many time-consuming meetings

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Guidelines to make matrix management effective are
1. Define the objectives of the task/ project clearly
2. Clarify the roles, responsibilities and authority of managers and team members
3. Ensure influence based on knowledge and information rather than rank
4. Balance the power of functional and project managers
5. Select experienced manager who can provide leadership
6. Undertake organization and team development
7. Install appropriate cost, time and quality control that report deviations from standards in
timely manner
8. Reward project managers and team members fairly

4.5 Span of management

Manager cannot supervise unlimited number of employees. There should be a limited capacity to
control the work of different subordinates.
The manager’s ability to supervise a large number of subordinates is constrained by knowledge,
experience, tine, energy, etc.. To overcome this limitation, every manager has to delegate work
to subordinates.
Span of management/ control refers to the number of subordinates that single manager can
effectively supervise or should have to direct. There is no correct number for the span of control
or there is no exact formula to determine the span of control. It varies from one situation to
another.
As a general rule
 The more complex a subordinate’s job, the fewer will be the manager’s number of
subordinates.
 The more routine the work of subordinates, the greater will be the number of
subordinates that can be effectively directed and controlled.
Because of these general rule organizations have a narrow span of control at the top and wider
span at the lower levels. I.e. as one goes up the hierarchy, the fewer will be the number of
subordinates. A well trained person/ subordinate follows directions and routines; master tasks;
requires less supervisory of time and energy.
Factors those influence spans of control of a manager are

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 1. The ability & the experience of a manager;
2. the complexity & variety of the subordinates’ work
3. the qualification of the manager and subordinates;
4. growth in competence and experience in personnel
5. The company’s philosophy towards centralization or decentralization in decision making
If the manager has
 Too many people to supervise, the subordinates will be frustrated by their ability to get
immediate assistance from their boss; time & other resources could be wasted; plans,
decisions& actions be delayed or made without proper control or safeguard.
 Too few people to supervise, the subordinates could become overloaded or over
supervised; and frustrated & dissatisfied.
 The more capable & experienced the subordinates, the more that can be effectively
supervised by one competent manager; the less time is needed to train & acclimate; the
more there is to devote to producing output.

4.6. Authority and power: Source of power

Authority
All managers in an organization have authority. They have different authorities based on the
management position they occupy. Authority is described as institutional power. It is the right to
act, or to give order/ command, or deploy resources in an organization. It is the power derived
from the rights that comes with position. Authority represents legitimate exercise of power in the
organization structure. Without authority a manager cannot perform tasks with confidence and
show results.
Essential features of authority
 It is the relationship between two individuals - one superior and the other subordinate.
 It is the right to act.
 It is the power to make decisions and seeing that they are carried out.
 It is used to achieve organizational goals.
Power
Power is the ability to affect the behavior of others or power is the ability to exert influence on
others, or the ability to do something.

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In an organizational setting, there are different sources of power. Some of them are
1. Legitimate power
Legitimate power is Power granted through organizational hierarchy. i.e. power due to
position. All managers have legitimate power over their subordinates. A manager can assign
subordinates tasks, and subordinate who refuses to do them can be reprimanded or even fired.
Such outcomes stem from the manager’s legitimate power as defined and vested in her or
him by the organization. Legitimate power then is authority. All managers have legitimate
power over their subordinates. The mere possession of legitimate power, however, does not
by itself make someone a leader. Some subordinates only follow orders that are strictly
within the letter of organizational rules and policies. If asked to do something not in their job
description, they refuse or do a poor job. So, the manager of such employees is exercising
authority but not leadership.
2. Reward power
Reward power is the Power to give /withhold rewards. Rewards that a manager may control
include salary increases, bonuses, praise, recognition, and interesting job assignments. In
general, the greater the number of rewards a manager controls and the more important the
rewards are to subordinates, the greater is the manager’s reward power. If the subordinate
sees as valuable only the formally organizational rewards provided by the manager, then the
manager is not a leader. But if the subordinate wants and appreciates the manager’s informal
rewards, then the manager is exercising leadership
3. Coercive Power
Coercive Power is a Power to force compliance via psychological, emotional or physical
threat. In the past physical coercion in organizations was relatively common. In most
organizations today, however, coercion is limited to verbal reprimands, written reprimands,
disciplinary layoffs, demotion and termination. The more punitive the elements under a
manager’s control and the more important they are to subordinates, the more coercive power
the manager possesses. On the other hand, the more a manager uses coercive power, the more
likely he is to provoke resentment and hostility and the less likely he is to be seen as a leader.
4. Reference power
Reference power is the power based on identification, imitation or charisma i.e. followers may
react favorably because they identify in some way with a leader, who may be like them in

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 personality, background, or attitudes. In other situations, followers might choose to imitate a
leader with referent power by wearing the same clothes, working the same hours, or espousing
the same management philosophy. Thus, a manager might have referent power, but it is more
likely to be associated with leadership.
5. Expert power
Expert power is the power derived from information & expertise. It is the power resulting from
a leader’s special knowledge or skill regarding the tasks performed by followers. When the
leader is a true expert, subordinates go along with recommendations because of his/her
superior knowledge. Leaders at supervisory levels often have experience in the production
process that gains them promotion. At top management levels, however, leaders may lack
expert power because subordinates know more about technical details than they do.
The relationship between power and authority
Authority is the power that has been legitimized by the organization, whereas power is ability to
exert influence on others, or the ability to do something. Like authority, power is
institutionalized and impersonal.
In organizations, it is necessary to keep a balance between power and authority. In some cases a
manager may have the authority (the right to do something), but may lack the power (ability to
do something) and vice versa. Failure to associate power and authority at all organization levels
may lead to disastrous consequence.
‘Power without authority may be abused and authority without power is totally meaningless.’

4.7. Line and staff authority

The process of accomplishing organizational objectives through people entails the establishment
of relationship among the members of the organization and different hierarchies of the
management. This results the presence of the two distinct types of authority in business
organization.
Line authority
Line authority is the relationship between superior and subordinates. It is directed supervisory
relationship. It enables the manager to tell subordinates what to do. It is represented by the chain
of command. It flows downward in an organization. A manager supervising employees or other
managers has line authority.

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Staff authority
Staff authority is the right to give advice. It is advisory in nature. Thus the people in the staff
position assist and advise the line manager. People in these positions have the authority to offer
advice and recommendations. e.g. legal service; public Relation service. It is an advisory
authority for manager. Advisory authority doesn’t provide any basis for direct control over
subordinates or activities of other departments.

4.8. Delegation, centralization and decentralization

Delegation
Every manager must delegate duties to subordinates since management means getting work done
through others. Effective managers normally delegate as many operation tasks as possible to
subordinates and concentrate their efforts on core managerial tasks.
Delegation is authorizing subordinates to act in a certain manner independently. It is a concept
describing the passing of formal authority to another person or passing authority downward to
subordinates. It helps to facilitate work being accomplished. It is delivering to another the right
to act; to make decision; to requisition resources; and to perform other tasks in order to fulfill
jobs responsibility. Delegation is a two side relationship, i.e. the assigner and assignee. It is an
act of trust; an expression of confidence; requires necessary skills & strength, and requisite
application and dedication to duties.
Delegation occurs for two purposes
1. When managers are absent from their jobs - Subordinates act on behalf and exercise
authority.
2. To develop subordinates and facilitate decision making process
Process of delegation
Steps for delegation are
1. Assignments of tasks - Kinds of tasks to be performed by subordinate are identified and
assigned to the subordinate
2. Delegation of authority - A subordinate to carry out the activity, the necessary authority
should be given by the manager. A guideline for authority is that “no more no less”. i.e.
It has to be adequate to complete the task.

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 3. Acceptance of responsibility - When subordinates are assigned with duties and delegated
authority, then they will be responsible or obliged to perform the tasks to the maximum
ability they can perform.
4. Creation of accountability - When subordinates are assigned for certain tasks and are
delegated a certain authority, and then they will be accountable for the actions taken.
Accountability
Accountability is just having an answer to somebody; answer for the actions taken with regard to
the tasks assigned and authority delegated. Accountability means taking the consequence - either
credit or blame. If one accepts assignments and authority, s/he is answerable for the actions
taken. A manager is accountable for the use of his/her authority and performance, and the
performances and actions of subordinates.
The process of delegation produces clear understanding on the part of manager and of the
subordinates.
 The manager should take time to think thoroughly what is being assigned and to confer
authority necessary to achieve results.
 The subordinate accepting the assignment, obliged (responsible) to perform and is
accountable for the results.
To delegate a manager must be able to consider the following issues.
1. Analyze how the manager spends his/ her time.
 This enables to list out the duties that the manager undertakes.
2. Determine the tasks that can be assigned.
 All duties of the manager cannot be delegated. The manager should identify which of
the duties should be delegated while doing so, and the manager should consider the
ability of the subordinates.
3. Decide which task can be handled by whom among the subordinates.
4. Delegate the authority and create the responsibility.
5. Control whether the delegated subordinates are performing the tasks to the expected
standard or not.
In delegation, managers are required to think the principle of parity that states “authority and
responsibility must coincide”; i.e. responsibility created should be equivalent to the authority
granted.

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  If employees are assigned tasks without authority, they cannot perform tasks as
expected because the necessary authority is not granted for them. Therefore, this
creates frustration and anxiety.
 If employees are delegated more authority than the expected responsibility they
discharge, they will interfere on the job of others and hinder others job.
Both centralization and decentralization refers to the nature of authority within an organization
structure. Centralization and decentralization are merely the results of circumstances. Absolute
centralization or absolute decentralization is impossible in practice; it is a matter of the degree
along a con
Centralization
Centralization is a systematic and consistent reservation of authority at central point within the
organization. It is the concentration of authority for decision making within the hands of one or
few.
In centralization
 There is little delegation of authority
 Rules, power & discretion are concentrated at the top level
 Control & decision making reside at the top level of management
The more highly centralized the organization, the more control and decision making will be
exercised at the top.
Centralization is essential in case of small organizations to survive in a highly competitive world.
The larger the size of the organization, the more consent is the need for decentralization.
Special circumstances forcing managers to reserve/ keep authority and centralize decision
making power are
1. To facilitate personal leadership
Centralization generally works well in the early stages of organizational growth. Dynamic and
talented leader can derive advantages in a small firm in the form of quick decisions, enterprising
& imaginative action, and highly flexible.
2. To provide for integration
Under centralization the organization moves as a unit. It keeps all parts of the organization
moving together harmoniously toward a common goal. It assures uniformity of standards and

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policies among organizational units. The manager acts like a unifying force and provides
direction to the activities. Duplication of effort and activity are also avoided.
3. To handle emergencies
Centralization is highly suitable in the time of emergency because it helps to mobilize resources
and information quickly. Centralization of decision making ensures prompt action necessary to
meet the emergencies.
Disadvantages of Centralization
 difficult for managers to process the bundles of data in time and take decision in an
appropriate manner
 the manager burdened with a great amount of detailed & exhaustive work
 managers to work painfully long hours
 forces top management to possess a broad view they may have beyond their capacity
 the vast amount of power given to a few people may be abused
 the organization is highly vulnerable to what happens to its dynamic and talented top
management people
Centralization floods communication lines to a few individuals at the top of the organization. As
a result the speed of communication upward and decision processes are slow. Centralization kills
the initiative; self reliance and judgment of lower level personnel.

Decentralization
Decentralization is a systematic effort to delegate all authority to the lowest levels except that
which can be exercised at central point. It is pushing down of authority and power of decision
making to the lower levels of organization. The essence of decentralization is the transfer of
authority from a higher level to the lower level. Nowadays decentralization has become to be the
fundamental principle of democratic management.
Some guidelines to identify the degree of decentralization in a company
1. The greater the number of decisions made at the lower level of management, the more the
company is decentralized.
2. The more important decisions are made at the lower level, the greater is the
decentralization.

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 3. The more flexible the interpretation of the company policy at the lower levels, the greater
the degree of decentralization.
4. The more widely dispersed the operations of the company geographically, the greater the
degree of decentralization.
5. The less the subordinate has to refer to his/her manager prior to decision, the greater the
decentralization.
Advantages and disadvantages of decentralization
Decentralization is extremely beneficial but also dangerous unless it is carefully constructed and
constantly monitored.
Advantages
 It reduces the work load on overburdened manager.
 It brings the decision making process closer to the scene of the action.
 It facilitates product diversification. i.e. treats each product lines as separate and
important.
 It gives individuals an opportunity to learn by doing.
 It facilitates effective control. i.e. often results in improved controls & performance
measurements.
 It ensures participative management.
Disadvantages
 Conflict
o Decentralization puts increased pressure on each heads to realize profit at any cost. To
meet this each deviate or veer away from corporate objective. i.e. leads to competition
that may ultimately result in bitter individual rivalries.
 Cost or duplication
o Decentralization results in duplication of staff effort. To be independent each division
should have access to purchasing, personnel, etc. hence each carry a large group of
specialists at numerous cost.

4.9 Groups and committees

Groups

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A group is any numbers of people who (1) interact with one another, (2) are
psychologically aware of one another, and (3) perceive themselves to be a group.
Kinds of groups in organization
Groups that exist in organizations typically are divided into two basic types: Formal and
informal.
 Formal group is a group that exists in an organization by virtue of management
decree to perform tasks that enhance the attainment of organizational objectives.
Organizations actually are made up of a number of formal groups that exist at
various organizational levels.
Formal groups commonly are divided in to command groups and task groups.
Command groups are formal groups that are outlined on the chain of command on an
organization chart. They typically handle the more routine organizational activities.
Task groups are formal groups of organization members who interact with one another to
accomplish most of the organization’s non routine tasks. Although task groups commonly
are considered to be made up of members on the same organizational level, they can
consist of people from different levels of the organizational hierarchy.
Committees
A committee is a group of individuals that has been charged with performing some type of
activity.. Committees are a more traditional formal group that can be established in
organizations. It usually is classified as a task group. From managerial viewpoint, the major
reasons for establishing committees are (1) to allow organization members to exchange
ideas, (2) to generate suggestions and recommendations that can be offered to other
organizational units, (3) to develop new ideas for solving existing organizational problems,
and (4) to assist in the development of organizational policies. Committees typically exist
within all organizations and at all organizational levels. However, the larger the
organization is,
The greater the probability that committees will be used within that organization on a
regular basis.
Informal groups
Informal groups, the second major kind of group that can exist within an organization, are
groups that develop naturally as people interact. An informal is defined as a collection of

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 individuals whose common work experiences result in the development of a system of
interpersonal relations that extend beyond those established by management.
Informal groups generally are divided into two types: interest groups and friendship
groups.
Interest groups are informal groups that gain and maintain membership primarily because
of a special concern each member possesses about a specific issue. An example is a group
of workers pressing management for better pay or working conditions. Once the interest or
concern that causes an informal group to form has been eliminated, the group needs to
disband.
Friendship groups are informal groups that form in organizations because of the personal
affiliation members have with one another. Personal factors such as personal interests, race,
gender, and religion serve as foundations for friendship groups. As with interest groups, the
membership of friendship groups tends to change over time. Here, however, group membership
changes as friendships dissolve or new friendships are made.

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