MODULE – 2

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 Concept of Organising

 Planning is only successful when organizing function is

done well by management.
 Organising as a function of management is responsible for
the successful implementation of plans, to
accomplish business objectives.
 Organising , which ensures that all physical and human
resources required to achieve objectives are
available , the enterprise is structured in a manner that it
is able to adapt to the dynamic business environment.
MEANING OF ORGANISING

 ‘Organising translates plans into action’ by deciding who

will perform a particular task, how and where it will be
performed.
 ‘Organising is the process of defining and grouping the
activities of the enterprise and establishing authority
relationship among them’. ----- THEO HAIMMAN
 ‘To organize a business is to provide it with everything
useful to its functioning: raw materials, machines and
tools, capital and personnel’.– HENRI FAYOL
 Nature of Organizing

 Common Objectives
 Division of Work
 Coordination
 Well-defined Authority and Responsibility
 Organization is a Structure of Relationship
 Organization is a Machine of Management
 Organization is a Universal Process
 Organization is a Dynamic Process
 Importance (Purpose) of
Organizing
 Benefits of specialization: Division of work into smaller units and repetitive
performance leads to specialization. Thus, organizing promotes specialization
which in turn leads to efficient & speedy performance of tasks.
 Clarity in working relationship: It helps in creating well-defined jobs and
also clarifying the limits of authority and responsibility of each job. The superior-
subordinate relationship is clearly defined in organizing.
 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 ineffective
administration.
 Optimum utilization of resources: The proper assignment of jobs avoids
overlapping/duplication of work. This helps in preventing confusion and
minimizing the wastage of resources and efforts.
 Importance (Purpose) of
Organizing
 Adoption to Change: A properly designed organizational structure is
flexible which facilitates adjustment to changes in workload caused by
changes in the external environment related to technology, products,
resources and markets.
 Development of Personnel: Sound organization encourages initiative
and relative thinking on the part of the employees. When managers
delegate their authority, it reduces their workload so they can focus on
more important issues related to growth & innovation. This also develops
the subordinates’ ability and helps them to realize their full potential.
 Expansion and growth: It helps in the growth & diversification of an
enterprise by adding more job positions, departments, product lines,
new geographical territories etc.
Process of Organizing
 Determine the activities to be performed to achieve
the objectives of the organization.
 Identify the major functions to which these activities
relate.
 Group and sub-divide the activities within each
function based on similarity or relatedness.
 Establish relationships among individuals and groups
 Formal Vs Informal organization
 Formal organisation refers to the official structure of well-
defined jobs, each being a measure of authority and
responsibility.
 The management designs this organisational structure to
accomplish a particular task.
 In formal organisation positions and authority of each level are
clearly defined.
 It is deliberately designed to enable people to work together to
achieve common objectives.
 In this kind of organisation, each person is responsible for their
performance.
 Formal Vs Informal organization
 Informal organisation refers to a network of social relations,
which emerges on its own due to formal roles and
relationships among people.
 Emerge from within the formal organisation when people
interact beyond their officially defined roles.
 Not pre-planned. It arises automatically due to frequent
contact of people with each other.
 It arises to fill the social and personal needs of an individual,
which cannot be satisfied through a formal organisation.
 No prescribed Rules and policies.
Formal Vs Informal organization
 Organizational Structure
 An organizational structure is a system that outlines how
certain activities are directed to achieve the goals of an
organization. These activities can include rules, roles, and
responsibilities.
 The organizational structure also determines how
information flows between levels within the company.
Decisions flow from the top down in a centralized structure.
Decision-making power is distributed among various levels
of the organization in a decentralized structure.
 Having an organizational structure in place allows companies
to remain efficient and focused.
Types of Organization Structures
Functional:
Types of Organization Structures
Divisional:
Types of Organization Structures
Matrix Structure
Types of Organization Structures
Bureaucratic
Types of Organization Structures
Bureaucratic
 Organizational Chart

 An organizational chart, also called organigram,

organogram, or organizational breakdown structure, is a
diagram that shows the structure of an organization and
the relationships and relative ranks of its parts and
positions/jobs.
Organogram
 Departmentalization
 Departmentalization, also referred to as
departmentation, is the process of grouping teams or
activities into departments or functions with specific
objectives, goals, and outcomes to be achieved.
 It is a way of dividing an organization into separate parts
(departments), each with its functions and
responsibilities, but all geared towards achieving the
organization’s overall goals. It’s a key part of the
organizational design process.
 Departmentalization – Why?
 At its core, departmentation is dividing an organization
into smaller, manageable parts. It helps managers run
the organization more effectively and efficiently.
Objectives are:
 Grouping specialized activities
 Improving communication and coordination
 Establishing decision-making authority within the
organization
 Improving efficiency and productivity
Delegation of Authority
 Delegation- granting authority to subordinates
to operate within the prescribed limits.
 The manager who delegates authority holds his
subordinates responsible for proper performance of
the assigned tasks.
 To make sure that his subordinates perform all the
works effectively and efficiently in expected manner
the manager creates accountability.
Elements of Delegation
 Authority: The power of taking decisions in order
to guide the activities of others. Authority is that
power which influences the conduct of others.
 Responsibility: Obligation to perform the assigned
duty. When a superior issues orders, it becomes the
responsibility of the subordinate to carry it out.
 Accountability: Subordinate is answerable to his
superior for its success or failure.
 Centralization vs Decentralisation
 Centralization = authority retained at top level
and Decentralization = Systematic delegation of
authority at all levels and in all departments of a firm.
 In case of a decentralized firm, Top level retains authority
for:
 Policies and decisions w.r.t the whole firm
 Overall control and coordination
 Middle and lower levels have authority to take decisions
w.r.t tasks allocated to them
 Decentralization
 Decentralisation of authority means dispersal of
authority to take decisions throughout the
organization, upto the lower levels.
 It implies reservation of some authority with the top
level management and transferring rest of the
authority to the lower levels of the organization.
 This empowers lower levels to take decisions
regarding problems faced by them without having to go to
the upper levels.
 According to Allen, “Decentralisation refers to systematic
efforts to delegate to the lowest level, all authority except
the one which can be exercised at central points”.
Centralization and
Decentralization
 Centralization and Decentralization-represents the
pattern of authority among managers at different levels.
 Centralization of authority means concentration of
power of decision making in a few hands. In such
an organization very little authority is delegated to
managers at middle and lower levels.
 No organization can be completely centralized or
decentralized.
 They exist together and there is a need for a balance
between the two. As the organization grows in size,
there is tendency to move towards decentralization.
 Thus, every organization is characterized by both.
 Importance of Decentralization
 Develops initiative amongst subordinates:
 Quick and better decisions:
 Relieves the top executives from excess
workload:
 Managerial Development:
 Better Control: It makes it possible to evaluate
performance at each level which results in complete
control over all the activities.
 Delegation Vs Decentralization
Basis Delegation Decentralization

1. Nature It is a compulsory act. It is an optional policy.

Less freedom to take More freedom of action

2. Freedom of
decisions due to more due to less control by the
action
control by the superiors. top management.

It is the result of policy

It is a process of sharing
3. Status decisions taken by top
tasks and authority.
management.

Wide- It includes
Narrow- as it is confined to
extension of delegation
4. Scope a superior and his
to all the levels of
immediate and subordinate.
management.

To increase the role and

To reduce the burden of
5. Purpose the autonomy of lower
manager.
level of management.
 Job Design
 Job design is a process that organizations use to create
a new job or add duties to an existing job.
 This allows an organization to easily reach its goals by
having more employees perform more tasks within
the organization.
 It is concerned with the "content and organization of
one's work tasks, activities, relationships, and
responsibilities"
 Head of PGDM……Head of MBA…..Head of BBA
 Head of program Vis-à-vis Director
Job Characteristics Model
 Hackman & Oldham's (1976) job characteristics model
is considered to be the dominant motivational theory
of work design.
 The model identifies five core job characteristics that
affect five work-related outcomes (i.e. motivation,
satisfaction, performance, and absenteeism and
turnover).
 Skill variety, task identity, task significance, autonomy
and feedback.
 Job Design
 The organization of activities to achieve the optimum
level of performance.
 Integrates the work content, rewards and the
qualifications required for each job in a way that
meets the needs of the organization and employees
 Process by which managers decide individual job
tasks and authority.
Strategies to Job Design
 Job Simplification: Job simplification is when
managers remove tasks rather than add them.
While this may seem like the opposite of job
design, it can actually help narrow a role to a
specific task or set of tasks. Professionals often
use this approach when a position has become too
enlarged and is unmanageable.
 Job rotation: Job rotation is when a company
moves employees between jobs.
Strategies to Job Design
 Job Enlargement: Expanding the scope of an employee’s job
by adding more tasks or activities of a similar nature. It aims to
reduce monotony and boredom by providing a greater variety of
tasks to perform within the same job role.
 Rather than deepening the job vertically (as in job enrichment),
job enlargement expands the job horizontally. It aims to increase
the variety of tasks within the same level of skill and
responsibility.
 Job Enrichment: Enhancing the depth and complexity
of a job by adding tasks that require higher-level skills,
creativity, decision-making authority, and autonomy.