ORGANIZATION INTRODUCTION Organization involves division of work among people whose efforts must be coordinate to achieve specific objectives

and to implement pre-determined strategies. Organization is the foundation upon which the whole structure of management is built? It is the backbone of management. After the objectives of an enterprise are determined and the plan is Prepared, the next step in the management process is to organize the activities of the Enterprise to execute the plan and to attain the objectives of the enterprise. The term Organization is given a variety of interpretations. In any case, there are two broad ways in which the term is used. In the first sense, organization is understood as a dynamic process and a managerial activity which is necessary for bringing people together and tying them together in the pursuit of common objectives. When used in the other sense, Organization refers to the structure of relationships among positions and jobs which is Built up for the realizations of common objectives. Without organizing managers cannot function as managers. Organization is concerned with the building, developing and maintaining of a structure of working relationships in order to accomplish the objectives of the enterprise. Organization means the determination and assignment of duties to People, and also the establishment and the maintenance of authority relationships among these grouped activities. It is the structural framework within which the various efforts are coordinated and related to each other. Sound organization contributes greatly to the Continuity and success of the enterprise. The distinguished industrialist of America, Andrew Carnegie has shown his confidence in organization by stating that: "Take away our factories, take away our trade, our avenues of transportation, our money, leave nothing but our organization, and in four years we shall have reestablished ourselves." That shows the significance of managerial skills and organization. However, good organization structure does not by itself produce good performance. But a poor organization structure makes good performance impossible, no matter how good the individual may be. The term 'Organization' connotes different things to different people. Many writers have attempted to state the nature, characteristics and principles of organization in their own way. It can be used as a group of persons working together or as a structure of relationships or as a

process of management. Now, let us analyze some of the important definition of organizing or organization, and understand the meaning of organization. ACCORDING TO SHELDON "Organization is the process of so combining the work which individuals or groups have to perform with facilities necessary for its execution, that the duties so performed provide the best channels for efficient, systematic, positive and coordinated application of available effort." In the words of Chester I Bernard, "Organization is a system of co-operative activities of two or more persons." MC FERLAND HAS DEFINED Organization is, "an identifiable group of people contributing their efforts towards the attainment of goals". ACCORDING TO LOUIS A ALLEN, "Organization is the process of identifying and grouping the work to be performed defining and delegating responsibility and authority, and establishing Relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. ACCORDING TO NORTH WHITEHEAD Organization is the adjustment of diverse elements, so that their mutual relationship may exhibit more pre-determined quality. IN THE WORDS OF THEO HAIMANN Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organizing function, the manager defines, departmentalizes and assigns activities so that they can be most effectively executed. IN THE WORDS OF MOONEY AND RAILEY, "Organization is the form of every human association for the attainment of a common purpose. ACCORDING TO JOHN M PFIFFNER AND FRANK P SHERWOOD, "Organization is the pattern of ways in which large number of people, too many to have intimate face-to-face contact with all others, and engaged in a complexity of tasks, relate themselves to each other in the conscious, systematic establishment and accomplishment of mutually agreed purposes.
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A manager performs organizing function with the help of following steps:1. Identification of activities - All the activities which have to be performed in a concern have to be identified first. For example, preparation of accounts, making sales, record keeping, quality control, inventory control, etc. All these activities have to be grouped and classified into units. 2. Departmentally organizing the activities - In this step, the manager tries to combine and group similar and related activities into units or departments. This organization of dividing the whole concern into independent units and departments is called departmentation. 3. Classifying the authority - Once the departments are made, the manager likes to classify the powers and its extent to the managers. This activity of giving a rank in order to the managerial positions is called hierarchy. The top management is into formulation of policies, the middle level management into departmental supervision and lower level management into supervision of foremen. The clarification of authority helps in bringing efficiency in the running of a concern. This helps in achieving efficiency in the running of a concern. This helps in avoiding wastage of time, money, effort, in avoidance of duplication or overlapping of efforts and this helps in bringing smoothness in a concerns working. 4. Co-ordination between authority and responsibility - Relationships are established among various groups to enable smooth interaction toward the achievement of the organizational goal. Each individual is made aware of his authority and he/she knows whom they have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure is drawn and all the employees are made aware of it.

Importance of Organizing Function

1. Specialization - Organizational structure is a network of relationships in which the work is divided into units and departments. This division of work is helping in bringing specialization in various activities of concern. 2. Well defined jobs - Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their qualifications, skill and experience. This is helping in defining the jobs properly which clarifies the role of every person. 3. Clarifies authority - Organizational structure helps in clarifying the role positions to every manager (status quo). This can be done by clarifying the powers to every manager and the way he has to exercise those powers should be clarified so that misuse of powers does not take place. Well defined jobs and responsibilities attached helps in bringing efficiency into managers working. This helps in increasing productivity.

4. Co-ordination - Organization is a means of creating co- ordination among different departments of the enterprise. It creates clear cut relationships among positions and ensures mutual co- operation among individuals. Harmony of work is brought by higher level managers exercising their authority over interconnected activities of lower level manager. 5. Authority responsibility relationships can be fruitful only when there is a formal relationship between the two. For smooth running of an organization, the co- ordination between authority- responsibilities is very important. There should be co- ordination between different relationships. Clarity should be made for having an ultimate responsibility attached to every authority. There is a saying, Authority without responsibility leads to ineffective behaviour and responsibility without authority makes person ineffective. Therefore, co- ordination of authority- responsibility is very important.

6. Effective administration - The organization structure is helpful in defining the jobs positions. The roles to be performed by different managers are clarified. Specialization is achieved through division of work. This all leads to efficient and effective administration.
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7. Growth and diversification - A companys growth is totally dependant on how efficiently and smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the managers, co-ordination between authority and responsibility and concentrating on specialization. In addition to this, a company can diversify if its potential grows. This is possible only when the organization structure is well- defined. This is possible through a set of formal structure. 8. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every manager are clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in increasing mental satisfaction and thereby a sense of security in a concern. This is very important for job- satisfaction. 9. Scope for new changes - Where the roles and activities to be performed are clear and every person gets independence in his working, this provides enough space to a manager to develop his talents and flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or path to adoption of new techniques of production. This scope for bringing new changes into the running of an enterprise is possible only through a set of organizational structure.

Principles of Organizing The organizing process can be done efficiently if the managers have certain guidelines so that they can take decisions and can act. To organize in an effective manner, the following principles of organization can be used by a manager.

1. Principle of Specialization: According to the principle, the whole work of a concern should be divided amongst the subordinates on the basis of qualifications, abilities and skills. It is through division of work specialization can be achieved which results in effective organization.

2. Principle of Functional Definition: According to this principle, all the functions in a concern should be completely and clearly defined to the managers and subordinates. This can be done by clearly defining the duties, responsibilities, authority and relationships of
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people towards each other. Clarifications in authority- responsibility relationships help in achieving co- ordination and thereby organization can take place effectively. For example, the primary functions of production, marketing and finance and the authority responsibility relationships in these departments should be clearly defined to every person attached to that department. Clarification in the authority-responsibility relationship helps in efficient organization.

3. Principles of Span of Control/Supervision: According to this principle, span of control is a span of supervision which depicts the number of employees that can be handled and controlled effectively by a single manager. According to this principle, a manager should be able to handle what number of employees under him should be decided. This decision can be taken by choosing either from a wide or narrow span. There are two types of span of control:-

4. Wide span of control- It is one in which a manager can supervise and control effectively a large group of persons at one time. The features of this span are: Less overhead cost of supervision Prompt response from the employees Better communication Better supervision Better co-ordination Suitable for repetitive jobs

According to this span, one manager can effectively and efficiently handle a large number of subordinates at one time.

5. Narrow span of control- According to this span, the work and authority is divided amongst many subordinates and a manager doesn't supervises and control a very big

group of people under him. The manager according to a narrow span supervises a selected number of employees at one time. The features are: Work which requires tight control and supervision, for example, handicrafts, ivory work, etc. which requires craftsmanship, there narrow span is more helpful. Co-ordination is difficult to be achieved. Communication gaps can come. Messages can be distorted. Specialization work can be achieved. Factors influencing Span of Control

6. Managerial abilities- In the concerns where managers are capable qualified and experienced, wide span of control is always helpful. 7. Competence of subordinates- Where the subordinates are capable and competent and their understanding levels are proper, the subordinates tend to very frequently visit the superiors for solving their problems. In such cases, the manager can handle large number of employees. Hence wide span is suitable. 8. Nature of work- If the work is of repetitive nature, wide span of supervision is more helpful. On the other hand, if work requires mental skill or craftsmanship, tight control and supervision is required in which narrow span is more helpful. 9. Delegation of authority- When the work is delegated to lower levels in an efficient and proper way, confusions are less and congeniality of the environment can be maintained. In such cases, wide span of control is suitable and the supervisors can manage and control large number of sub- ordinates at one time. 10. Degree of decentralization- Decentralization is done in order to achieve specialization in which authority is shared by many people and managers at different levels. In such cases, a tall structure is helpful. There are certain concerns where decentralization is done in very effective way which results in direct and personal communication between superiors and sub- ordinates and there the superiors can manage large number of subordinates very easily. In such cases, wide span again helps.

11. Principle of Scalar Chain: Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of authority available, wastages of resources are minimized, communication is affected, overlapping of work is avoided and easy organization takes place. A scalar chain of command facilitates work flow in an organization which helps in achievement of effective results. As the authority flows from top to bottom, it clarifies the authority positions to managers at all level and that facilitates effective organization. 12. Principle of Unity of Command: It implies one subordinate-one superior relationship. Every subordinate is answerable and accountable to one boss at one time. This helps in avoiding communication gaps and feedback and response is prompt. Unity of command also helps in effective combination of resources, that is, physical, financial resources which helps in easy co- ordination and, therefore, effective organization. Managing Director Marketing Manager Sales/ Media Manager Salesmen According to the above diagram, the Managing Director has got the highest level of authority. This authority is shared by the Marketing Manager who shares his authority with the Sales Manager. From this chain of hierarchy, the official chain of communication becomes clear which is helpful in achievement of results and which provides stability to a concern. This scalar chain of command always flows from top to bottom and it defines the authority positions of different managers at different levels. Organizations are basically classified on the basis of relationships. There are two types of organizations formed on the basis of relationships in an organization Formal Organization - This is one which refers to a structure of well defined jobs each bearing a measure of authority and responsibility. It is a conscious determination by which people accomplish goals by adhering to the norms laid down by the structure. This kind of organization is an arbitrary set up in which each person is responsible for his performance. Formal organization has a formal set up to achieve pre- determined goals.
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Informal Organization - It refers to a network of personal and social relationships which spontaneously originates within the formal set up. Informal organizations develop relationships which are built on likes, dislikes, feelings and emotions. Therefore, the network of social groups based on friendships can be called as informal organizations. There is no conscious effort made to have informal organization. It emerges from the formal organization and it is not based on any rules and regulations as in case of formal organization. Relationship between formal and informal organizations For a concerns working both formal and informal organization are important. Formal organization originates from the set organizational structure and informal organization originates from formal organization. For an efficient organization, both formal and informal organizations are required. They are the two phase of a same concern. Formal organization can work independently. But informal organization depends totally upon the formal organization. Formal and informal organization helps in bringing efficient working organization and smoothness in a concern. Within the formal organization, the members undertake the assigned duties in co- operation with each other. They interact and communicate amongst themselves. Therefore, both formal and informal organizations are important. When several people work together for achievement of organizational goals, social tie ups tends to built and therefore informal organization helps to secure co-operation by which goals can be achieved smooth. Therefore, we can say that informal organization emerges from formal organization.

Line Organization: Line organization is the oldest and simplest method of administrative organization. According to this type of organization, the authority flows from top to bottom in a concern. The line of command is carried out from top to bottom. This is the reason for calling this organization as scalar organization which means scalar chain of command is a part and parcel of this type of administrative organization. In this type of organization, the line of command flows on an even basis without any gaps in communication and co- ordination taking place.

Features of Line Organization It is the simplest form of organization. Line of authority flows from top level to bottom level. Specialized and supportive services do not take place in these organizations. Unified control by the line officers can be maintained since they can independently take decisions in their areas and spheres. This kind of organization always helps in bringing efficiency in communication and bringing stability to a concern.

Advantages of Line Organization Structure Simplicity: Line Organization structure is easy to understand and follow by superiors and subordinates. It is simple and clear as regards authority and accountability. Prompt decisions: Line Organization facilitates prompt decision-making at all levels as the authority given is clear and complete. Discipline: It brings discipline in the Organization due to unity of command, delegation of authority and direct accountability. Economical: Line Organization is economical as experts are not appointed.
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Attraction to talented persons: Line Organization brings out talented workers and develops in them quality of leadership. It offers opportunities of self-development to employees. Quick communication, high efficiency, flexibility and high employee morale are some more advantages of line Organization structure.

8.1.2 Limitations of Line Organization Structure

Heavy burden on line executives: The line executives are given too many duties and responsibilities. Even the quality of the decisions of executives may suffer due to heavy burden of duties and responsibilities.

Non-availability of services of experts: There is absence of skilled experts in line organization. Expert assistance is not available promptly when needed by line executives. Favoritism: There is wide scope for favoritism and nepotism in the line organization. Leadership of departmental executive is autocratic due to heavy concentration of powers. He may favor some employees at the cost of others.

Too much dependence on limited executives: In the line organization, all powers are concentrated in the hands of a few executives. Naturally, the success and stability of the entire organization depends on their personal skill, initiative and interest. Special difficulties arise when one executive is to be transferred/replaced/promoted.

Rigidity: There is rigidity in the working of line organization. Delays in communication, limited freedom to employees and unsuitability to modern large business units are some more demerits of line Organization.

F.W.Taylor, founder of scientific management, conceived the functional Organization structure. According to him, it is unscientific to overload a foramen with the entire responsibility of running a department. He introduced a system of functional foremanship in his Organization. In his functional foremanship, there will be eight specialists' foremen who will be required to guide, direct and control the work. Workers at the plant level will have to follow the instructions of all these eight specialists called bosses.
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In the functional Organization suggested by F.W.Taylor, the job of management is divided according to specialization. As a result, functional departments are created. For example, the personnel department will look after the recruitment, selection, training, wage payment, etc. of all persons of the Organization. Similar will be the position of other departments like production, sales, etc. The scope of work of the department is limited but the area of authority is unlimited. Merits of Functional Organization Structure

Facilitates specialization: Functional Organization structure facilitates division of work and specialization. Each boss has specialized knowledge of his functional area. He is in a better position to guide and help the workers. Benefits of large-scale operations: Functional Organization offers the benefit of economy of large-scale operation. In this Organization, one administrative unit manufactures all products. The available machinery, equipment and facilities are used fully for large-scale production. Facilitates effective coordination: Functional Organization facilitates effective coordination within the function. This is possible as one boss is in-charge of a particular function and he looks after all activities, which come within that function. Operational flexibility: Functional Organization possesses operational flexibility. Necessary changes can be introduced easily to suit the needs of the situation without any adverse effect on the efficiency. Ensures effective supervision: Functional Organization facilitates effective supervision by the functional heads and foremen. Due to specialization, they concentrate on the specific functional area and also keep effective supervision on their subordinates.

8.2.4 Demerits of Functional Organization Structure Absence of unity of command: Unity of command is absent in the functional Organization as each worker gets orders and instructions from several bosses.
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Fixing responsibility is difficult: In functional Organization, responsibility is difficult to fix on a specific person. This is because the responsibility itself is divided among many. Unsuitable to non-manufacturing activities: Functional Organization can be introduced in the case of manufacturing activities. However, its application to non-manufacturing activities such as marketing, etc. has not been successful. Costly: Functional Organization is costly, as more specialists are required to be appointed. Creates confusion among workers: Functional Organization is based on specialization as function is taken as a base for dividing the work. The authority is overlapping the responsibility is divided. This confuses workers. Conflicts among foremen, delays in decision-making and limited discipline within the departments are some more demerits of functional Organization.

Line and Staff Organization Structure

In the line and staff Organization, line executives and staff (specialists) are combined together. The line executives are 'doers' whereas staff refers to experts and act as 'thinkers'. The following chart shows line and staff Organization structure:

The line executives are concerned with the execution of plans and Policies. They do their best to achieve the organizational objectives. The staff concentrates their attention on research and planning activities. They are experts and conduct advisory functions.
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Staff specialists are regarded as 'thinkers" while execution function is given to line executives who are "doers". The staff is supportive to line. The staff specialists offer guidance and cooperation to line executives for achieving organizational objectives According to Louis Allen, "Line refers to those positions and elements of the Organization, which have the responsibility and authority and are accountable for accomplishment of primary objectives. Staff elements are those which have responsibility and authority for providing advice and service to the line in attainment of objectives".

9.1 Characteristics of Line and Staff Organization Planning and execution: There are two aspects of administration in this Organization, viz., planning and execution. Combining line and staff: Planning function is entrusted to staff specialists who are 'thinkers' while execution function is given to line executives who are 'doers'. The staff is supportive to line. Role of authority: The line managers have authority to take decisions as they are concerned with actual production. The staff officers lack such authority. Guidance from staff: The staff provides guidance and advice to line executives when asked for. Moreover, line executives may or may not act as per the guidance offered. Exercising control: The staff manager has authority over subordinates working in his department. Scope for specialization: There is wide scope for specialization in this Organization as planning work is given to staff and execution work is given to line executives. Possibility of conflicts: Conflicts between line and staff executives are quite common in this Organization but can be minimized through special measures. Suitability: Line and staff Organization structure is suitable to large-scale business activities.

Merits of Line and Staff Organization

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Fewer burdens on executives: Line executives get the assistance of staff specialists. This reduces the burden of tine executives. This raises overall efficiency and facilitates the growth and expansion of an enterprise.

Services of experts available: The benefits of services of experts are provided to line managers. Highly qualified experts are appointed and they offer guidance to line executives.

Sound decision-making: Line and staff Organization facilitates sound management decisions because of the services of experts and specialists. The decisions are also taken in a democratic method i.e. in consultation with the experts.

Limited tension on line managers: The pressure of work of line bosses is brought down as they are concerned only with production management. Benefits of specialization: There is division of work and specialization in this Organization. Naturally, the benefits of division of work and specialization are easily available.

Training opportunities to employees: Better opportunities of advancement are provided to workers. The scope for learning and training for promotions are available.

Demerits of Line and Staff Organization

Delay in decision-making: The process of decision-making is delayed, as line executives have to consult staff experts before finalizing the decisions. The decisions of line managers are likely to be delayed due to this lengthy procedure.

Buck passing among executives: The line bosses are concerned with actual execution of work. However, they depend on staff experts for guidance. If something goes wrong, the attempt is made to pass on the blame by one party to the other. Thus, there is shifting of responsibility or buck-passing.

Conflicts between line and staff executives: In this Organization, quarrels and conflicts between line managers and staff specialists are quite common. The line managers are generally not interested in the advice offered by experts. Secondly, specialists feel that the line bosses lack knowledge of new ideas. Such conflicts lead to bitterness.

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Costly Organization: Line and staff Organization is a costly Organization as the line executives are supported by highly paid staff executives who are experts. All this adds to the overhead expenses and the cost of production increases.

Complicated operation: This Organization is too complicated in actual operation because of dual authority, division of functions and too much dependence on staff. The unity of command principle is violated.

Internal discipline is affected adversely: The internal discipline is likely to be affected adversely due to decentralization and division of loyalty of subordinates.

Delegation of Authority A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should delegate authority. Delegation of Authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.

According to F.C. Moore, "Delegation means assigning work to the others and giving them authority to do so."

According to O. S. Miner, "Delegation takes place when one person gives another the right to perform work on his behalf and in his name and the second person accepts a corresponding duty or obligation to do that is required of him."

According to Louis Allen, "Delegation is the dynamics of management, it is the process a manager follows in dividing the work assigned to him so that he performs that part which only

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he, because of his unique organizational placement, can perform effectively, and so that he can get others to help him with what remains." For achieving delegation, a manager has to work in a system and has to perform following steps : Assignment of tasks and duties Granting of authority Creating responsibility and accountability

Delegation of authority is the base of superior-subordinate relationship, it involves following steps:Assignment of Duties - The delegator first tries to define the task and duties to the subordinate. He also has to define the result expected from the subordinates. Clarity of duty as well as result expected has to be the first step in delegation.

Granting of authority - Subdivision of authority takes place when a superior divides and shares his authority with the subordinate. It is for this reason; every subordinate should be given enough independence to carry the task given to him by his superiors. The managers at all levels delegate authority and power which is attached to their job positions. The subdivision of powers is very important to get effective results.

Creating Responsibility - The delegation process does not end once powers are granted to the subordinates. They at the same time have to be obligatory towards the duties assigned to them. Responsibility is said to be the factor or obligation of an individual to carry out his duties in best of his ability as per the directions of superior. Responsibility is very important. Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is absolute and cannot be shifted. Accountability: Accountability, on the others hand, is the obligation of the individual to carry out his duties as per the standards of performance. Therefore, it is said that authority is delegated, responsibility is created and accountability is imposed. Accountability arises out of responsibility and responsibility arises out of authority. Therefore, it becomes important that with every authority position an equal and opposite responsibility should be attached.

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Advantages / Importance of Delegation of Authority

Relieves manager for more challenging jobs : Delegation makes it possible for the managers to distribute their workload to others. Thus, managers are relieved of routine work and they can concentrate on higher functions of management like planning, organizing, controlling, etc.

Leads to motivation of subordinates: Subordinates are encouraged to give their best at work when they have authority with responsibility. They take more initiative and interest in the work and are also careful and cautious in their work. Delegation leads to motivation of employees and manpower development.

Facilitates efficiency and quick actions : Delegation saves time enabling tile subordinates to deal with the problems promptly. They can take the decisions quickly within their authority. It is not necessary to go to the superiors for routine matters. This raises the overall efficiency in an Organization and offers better results in terms of production, turnover and profit.

Improves employee morale : Delegation raises the morale of subordinates as they are given duties and supporting authority. They feel that they are responsible employees. The attitude and outlook of subordinates towards work assigned becomes more constructive.

Develops team spirit : Due to delegation, effective communication develops between the superiors and subordinates. The subordinates are answerable to superiors and the superiors are responsible for the performance of subordinates. This brings better relations and team spirit among the superiors and subordinates

Maintains cordial relationships : The superiors trust subordinates and give them necessary authority. The subordinates accept their accountability and this develops cordial superior-subordinate relationships.

Facilitates management development : Delegation acts as a training ground for management development. It gives opportunity to subordinates to learn, to grow and to develop new qualities and skills. It builds up a reservoir of executives, which can be used as and when required. Delegation creates managers and not mere messengers.
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Principles of Effective Delegation of Authority

1. Knowledge of Objectives : Before delegating authority, the subordinates should be made to understand their duties and responsibilities. In addition, knowledge of objectives and policies of the enterprise should be provided to them. This will enable them to discharge their roles purposefully in the process of delegation. 2. Parity of Authority and Responsibility : This principle of delegation suggests that when authority is delegated, it should be commensurate with the responsibility of the subordinate. In fact, the authority and responsibility should be made clear to the subordinate so that he will know what he is expected to do within the powers assigned to them. There should be proper balance/parity or co-existence between the authority and responsibility. A subordinate will not function efficiently, if authority given to him is inadequate. On the other hand, if the excess authority is given, he may misuse the same. For avoiding this, the subordinates who are assigned duties should be given necessary/ adequate authority enables them to carry out their duties. 3. Unity of Command : This principle of delegation suggests that everyone should have only one boss. A subordinate should get orders and instructions from one superior and should be made accountable to one superior only. This means 'no subordinate should be held accountable to more than one superior'. When a subordinate is asked to report to more than one boss, it leads to confusion and conflict. Unity of command also removes overlapping and duplication of work. In the absence of unity of command, there will be confusion and difficulty in fixing accountability. 4. The Scalar Principle : The scalar principle of delegation maintains that there should be clear and direct lines of authority in the Organization, running from the top to the bottom. The subordinate should know who delegates authority to him and to whom he should contact for matters beyond his authority. They (subordinates) should also know what is expected from them. This principle justifies establishment of the hierarchical structure within the Organization.

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5. Clarity of Delegation : The principle of clarity of delegation suggests that while delegating authority to subordinates, they should be made to understand the limits of authority so that they know the area of their operation and the extent of freedom of action available to them. Such clarity guides subordinates while performing their jobs. 6. Absoluteness of Responsibility : This principle of delegation suggests that it is only the authority which is delegated and not the responsibility. The responsibility is absolute and remains with the superior. He cannot run away from the same even after delegation. Even when the manager delegates authority to his subordinate, he remains fully accountable to his superiors because responsibility cannot be divided between a superior and his subordinate. No superior can delegate responsibilities for the acts of his subordinates. He is responsible for the acts and omissions of his subordinates. 7. Use of Exception Principle : This principle of delegation indicates that when authority is delegated, it is expected that the subordinate will exercise his own judgment and take decisions within the purview of his authority. He is to be given adequate freedom to operate within his authority even at the cost of mistakes. He should refer the problems to the top level management only when he is unable to take decisions. Unnecessary interference in the work of delegates should be avoided. This normal rule can be given up under exceptional circumstances. Here, the superior can interfere in the work of his subordinate and even withdraw the delegated duties and authority. The superior takes this decision under exceptional circumstances. 8. Completeness of Delegation : This principle of delegation suggests that there should be completeness in the process of delegation. The process of delegation should be taken to its logical end. Otherwise, there will be confusion of authority and accountability. 9. Effective Communication Support System : This principle suggests that there should be continuous flow of information between the superior and the subordinates with a view to furnishing relevant information to subordinate for decision-making . This helps him to take proper decisions and also to interpret properly the authority delegated to him. Delegation system may not work smoothly in the absence of effective communication between the superior and subordinates.

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10. Reward for Effective Delegation : This principle suggests that effective delegation and successful assumption of authority should be rewarded. This will facilitate fuller delegation and effective assumption of authority within the Organization. Reward for effective delegation will provide favorable environmental climate for its fair introduction.

(A) Obstacles / Barriers on the Part of Manager / Superior / Delegator Unwillingness of the manager to delegate authority : Some superiors/managers tend to think that they can do the job better when they themselves handle the job. The attitude that 'I can do it better myself' on the part of superior acts as an obstacle to delegation. Some managers (superiors) who are autocratic and power worshippers feel that delegation will lead to reduction of their influence in the Organization. A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him (manager) and may be promoted. Fear of competition : A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him. Fear of subordinate's excellence may come in the way of delegation. Lack of confidence in subordinates : A manager may hesitate to delegate authority, if he feels that his subordinate is not competent to deal with the problem and take decisions. Even fear of losing control over the subordinates acts as an obstacle to delegation. In addition, fear of being exposed due to personal shortcomings may act as an obstacle in the process of delegation. Lack of ability to direct : Sometimes, a manager may experience difficulty in directing the efforts of his subordinates because of his inability to identify and communicate the essential features of his long-range plans and programmes. Absence of controls that warn of coming troubles : An Organization might not have developed the controlling techniques to know in advance the serious problems lying ahead. It may happen due to concentration of power in the hands of few people. As a result, manager may resist delegation. Conservative and cautious temperament of the manager : If a manager has a conservative and over-cautious approach, there will be psychological barrier in the way of delegation.
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A manager avoids delegation as he feels that something may go wrong even when the instructions given are clear and the subordinates are reliable. Desire to dominate subordinates : Managers (Superiors) normally, have a desire to dominate the subordinates functioning under their control. They feel that their domination will reduce if the powers are delegated to subordinates. They also feel that due to delegation, the subordinates will know their managerial deficiencies. In order to maintain their superior status and in order to dominate the subordinates, they avoid delegation itself.

(B) Obstacles / Barriers on the Part of Subordinates Too much dependence on the manager for decisions : Some subordinates avoid responsibility even when the superior/manager is prepared to delegate authority. They want the manager to tackle problems and take decisions. A subordinate who is not confident about his performance/ability will certainly try to shirk responsibility even though his superior is prepared to delegate functions and authority. Fear of criticism : Subordinates express unwillingness to accept delegated authority because of the fear of criticism in the case of mistakes. They fear that they may be criticized by others if they commit mistakes. Such subordinates have the following feeling in their mind, "Why should I stick my neck out for my boss?" Lack of information : A subordinate may hesitate to accept a new assignment, when he knows that necessary information to perform the job is not likely to be made available to him. He is reluctant to accept delegated functions and authority as he feels that he will not be able to perform well due to inadequate information available. Absence of positive incentives : Positive incentives like recognition of work and rewards go a long way in building up the morale of subordinates. In the absence of such incentives in the form of recognition, appreciation or monetary benefit, a subordinate may not be prepared to accept delegation of authority. Absence of self-confidence : A subordinate may lack self-confidence about his ability to take quick and correct decisions. He may not like to accept new challenging functions as

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he lacks self-confidence. Thus, lack of self-confidence on the part of subordinates is one obstacle which comes in the way of delegation of authority. Difficulty in decision-making : A subordinate may not have the skill and the expertise to take quick and correct decisions. He prefers to go to his superior (boss) and ask for his guidance or opinion. Such psychology acts as a cause for non-acceptance of delegation. A subordinate avoids delegation due to such mental tension or inferiority complex. Poor superior-subordinate relations : Absence of cordial relations in between the superior and the subordinates hampers the process of delegation of authority . The attitude of the superior towards subordinate may not be friendly but hostile. There may be undue interference in the work assigned to the subordinate. Even the good work of subordinate may not be appreciated by the superior. Such situation creates unfavorable attitude of subordinate towards delegation. He avoids delegation as and when offered. Undue interference by superior : A superior should not interfere in the duties delegated to the subordinate. He may offer guidance as and when asked for. Some superiors interfere in the work of his subordinate and try to control him often and again. In the absence of legitimate freedom, the subordinate becomes uneasy and prefers to remain away from the process of delegation. Fear of being exposed : Some subordinates may have inferiority complex. They feel that they have limited capacity to accept the challenges which are bound to come out to delegation. They feel that their inability to deal with new problems will be exposed due to delegation. This fear acts as an obstacle to delegation.

Responsibility indicates the duty assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility. The term responsibility is often referred to as an obligation to perform a particular task assigned to a subordinate. In an organization, responsibility is the duty as per the guidelines issued. Definitions of Responsibility

According to Davis, "Responsibility is an obligation of individual to perform assigned duties to the best of his ability under the direction of his executive leader." In the words of Theo Haimann,
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"Responsibility is the obligation of a subordinate to perform the duty as required by his superior".

McFarland defines responsibility as "the duties and activities assigned to a position or an executive".

Characteristics of Responsibility

The essence of responsibility is the obligation of a subordinate to perform the duty assigned. It always originates from the superior-subordinate relationship. Normally, responsibility moves upwards, whereas authority flows downwards. Responsibility is in the form of a continuing obligation. Responsibility cannot be delegated. The person accepting responsibility is accountable for the performance of assigned duties. It is hard to conceive responsibility without authority.

Authority Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives. A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. It is an essential accompaniment of the job of management. Without authority, a manager ceases to be a manager, because he cannot get his policies carried out through others. Authority is one of the founding stones of formal and informal organizations. An Organization cannot survive without authority. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards.

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Definitions of Authority According to Henri Fayol, "Authority is the right to give orders and the power to exact obedience." According to Mooney and Reily, "Authority is the principle at the root of Organization and so important that it is impossible to conceive of an Organization at all unless some person or persons are in a position to require action of others."

SPAN OF CONTROL (1) Span of control refers to the number of immediate subordinate who report a manager. (2) Different level of organization level is also called span of control. FACTORS DETERMINING AN EFFECTIVE SPAN There are several factors which influence the span of management. 1- TRAINING OF SUBORDINATES The better training of subordinates increases the necessary superior subordinates relationship. Well trained subordinates require less time of their managers also they have less contact with their managers. Training programs increase in new and more complex industries. 2-CLARITY OF DELEGATION OF AUTHORITY Although training enables managers to reduce the frequency of time consuming contact but delegation of authority should be clear. If a manager clearly delegates authority to task with a minimum of the managers time and attention. But if a manager delegates authority unclearly than subordinate give his maximum. 3-CLARITY OF PLANS If plans are well defined if they are workable, if the delegation of authority toward plan is clear, if the subordinate understands what expected than little of a supervisor time will be required on the other hand if plan cannot be drawn accurately and subordinates do much of their own planning, they may require considerable guidance. 4- USE OF OBJECTIVE STANDARD A manager must find out, either by personal observation or through the use of objective standards, whether subordinates are following plans. Obviously, good objective standards enable managers to avoid many time consuming contact.
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5- RATE OF CHANGE Certain enter rises change much more rapidly than others. The rate of change is very important in formulating and maintaining policies. It may explain the organization structure of companys railroad, banking and public utility companies. 6- COMMUNICATION TECNIQUES Communication techniques also influence the span of management. If every plan, instruction, order or direction has to be communicated by personal contact than managers time will be heavily burdened. An ability to communicate plans and instructions clearly and concisely also tends to increase a managers span. 7- AMOUNT OF PERSONAL CONTACT NEEDED Many instances, face to face meetings are necessary. Many situations cannot be completely policy statements planning documents or other communications that do not involves personal contact. An executive may and valuable informations by meeting to subordinates and by discuss problems with them. Some problems can be handled only in face to face meeting so the best way of communicating problems, instructor, and subordinates is to spend time in personal contact. 8- VARIATION BY ORGANIZATION LEVEL Several research projects have found that the size of the most effective span differs by organizational level. For example, it was studied that when a greater number of specialties were supervised, effective spans were narrower at lower and middle levels of organization but were increased at upper levels. 9- COMPETENCY OF MANAGERS A manager who is competent and well trained can effectively supervise more people than who is not. 10- MATURITY AND MOTIVATION OF SUBORDINATES The more mature subordinates may delegate more authority, thus widening the span DEPARTEMENTATION: Departmentation is process of grouping activities and people onto department make it possible to expend organization. After reviewing the plan, usually the first step in the organization process is departmentalization. Once job have been classified through work specialization, they are grouped so those common tasks can be coordinated. Departmentalization is the biases on which
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work or individuals are grouped into manageable units. There are five traditional methods for grouping work activities. Thus workflow analysis can be used tighten the connection between employees work and customers needs. Also it can help to make major performance breakthroughs throughout business process reengineering (BPR).A functional rethinking and radical redesign of business process to achieve dramatic improvements in costs, quality, service, and speed.BPR use workflow analysis to identify jobs that can be eliminated or recombined to improve company.

Departmentation or Departmentalization

Introduction: Organization involves the identification of individual activities to be undertaken for the attainment of the objectives of the enterprise and the grouping of individual activities into administrative units on some logical basis for the purpose of efficient administration. This has led to the necessity for departmentation. It is the departmentation that helps the grouping of activities into administrative units, such as divisions, departments, units, branches, sections, etc., for the purpose of efficient administration.

Meaning / Definition: In the words of L.A. Allen defines Departmentation as a means of dividing a large and monolithic functional organization into smaller flexible administrative units. Importance and Advantages of Departmentation:

The main advantages of Departmentation are: 1. 2. 3. 4. It contributes to systematic distribution of work among individuals. It contributes to the attainment of specialization It simplifies managerial tasks. By defining the duties and responsibilities of the executives clearly, Departmentation

fixes accountability for the results. This makes the executive alert and efficient. 5. Departmentation increases the operating efficiency of the organization.
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6.

By bringing about division of functions and responsibilities, Departmentation provides

sufficient scope for growth and expansion. 7. By giving sufficient powers to the managers in charge of different departments and

allowing them to take their own decisions within the powers given to them, Departmentation increases the prestige of the managers. 8. Departmentation is helpful to the management to evaluate the performance of the various

departments and find out the departments which are not managed properly. 9. Departmentation facilities proper supervision, as the authority for making decisions is

diffused to the managers of the departments. 10. As the authority for making decisions is diffused to the managers of the departments

under departmentation, departmentation frees the top management from routine matters and helps them concentrate on important matters. 11. 12. Departmentation makes budget preparation easy. Departmentation contributes to performance appraisal. It helps not only in fixing

responsibility but also in evaluation of work carried out by the individuals. 13. Departmentation facilities effective control by grouping activities and personnel within

well-defined areas, setting standards of performance and by preparing budget. 14. Departmentation contributes to the development of managerial personnel.

Limitations of departmentation:

It is true that departmentation is helpful to the enterprise in many ways. But it is not free from limitations. Its main limitations are: 1. There is the problem of co-ordination. The greater the number of departments, the more

difficult will be the task of co-ordination. In this connection, it may be noted that the lack of proper co-ordination would impair the managerial efficiency and the overall results of the enterprise. 2. There is also the problem of communication. The work of communication becomes more

difficult. 3. Under departmentation, there is also the problem of supervision and control.
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4.

Departmentation is expensive in terms of money and efforts. In other words, it increases

the cost of managing the concern. 5. Under departmentation, because of the layering of executives, the operative personnel are

far removed from the top management.

TYPE OF DEPARTMENTATION: 1-DEPARTMENTATION BY NUMBERS: Departmentation by number is telling off persons who are to perform the same duties and putting them under the superior of a manager the essential fact is not what these people do, where they work? Or what they work with, it is that the success of the

DISADVANTAGES OR DECLINES REASONS; There are many reason of decline of departmentation by numbers. 1-It has declined due to advance technology and demand of specialized and different skills. 2-A second reason is groups composed of specialized personnel are more efficient then those based on number. 3-Departmentation by number is useful only at the lowest level of the organization. 4-Departation by number fails to produce good results

2-DEPARTMENTATION BY TIME It is grouping activities on the basis of time. It is oldest form of departmentation and it is generally used in low level of departmentation. It is particularly applied in hospitals and steel manufacturing enterprise where continue process of service and manufacturing is used. ADVANTAGES 1- It is process of working and services throughout 24 hours. 2- It is continuing service process. 3- Expensive machinery is used in shifts. 4- Students can work evening or at night. DISADVANTAGES 1- There is lacking supervision at night.
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2- Exhaustion factor.

3- DEPARTMENTATION BY FUNCTION

It is grouping activities on the basis on function of an enterprise. The basic enterprise functions are production, selling, and financing functional departmentation is bases for organizing activities and in organizational structure. It organizes by function to be performed. The function reflects the nature of the business. The advantage of this type of grouping is obtaining efficiencies from consolidating similar specialties and people with common skills, knowledge and orientations together in common units.

ADVANTAGES 1- It is logical reflection of function. 2- Maintains power of major functions. 3- Simplifies training. DISADVANTAGES 1- De-emphasis of overall company objectives. 2- Reduces coordination between function. 3- Slow adoption to change in environment.

4- DEPARTMENTATION BY GEOGRAPHY

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Departmentation by geography is followed where geographic marked appear to offer advantages. Geographic department most often use in sales and production, it is not use in finance. Departmentalization by geographical regions groups jobs on the basis of territory or geography. For example merek, a major pharmaceutical company, have its domestic sales departmentalized by regions such as Northeast, Southeast, & Northwest ADVANTAGES 1- It emphasis on local markets and problems. 2- Improves coordination in a region. 3- Better face to face communication. DISADVANTAGES 1- Increases problem of top management control. 2- Requires more persons with general manager abilities.

5. DEPARTMENTATION BY CUSTOMER

Departmentalization by customer groups jobs on the basis of a common set of needs or problems of specific customers. For instance, a plumbing firm may group its work according to whether it is serving private sector, public sector, government, or not- for-profit organizations. A current departmentalization trend is to structure work according to customer, using cross-functional teams. This group is chosen from different functions to work together across various departments to interdependently create new products or services. For example, a cross-functional team

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consisting of managers from accounting, finance and marketing is created to prepare a technology plan There is different difficult decision to be made in separating some type of customer departments from product departments. Business owners and managers arrange activities on the basis of customer requirements. ADVANTAGES 1- Departmentation by customer emphasis on customer needs. 2- It develops experience in customer area. DISADVANTAGES 1- It may be difficult to analysis customer demands. 2- It requires managers and staff expert in customer problems. 3- Customer groups may not always be clearly defined.

6- DEPARTMENTATION BY PROCESS

This type of departmentation is found in production and operative levels. Such type of departmentation can be found in paint or electroplating process. Departmentalization by process groups jobs on the basis of product or customer flow. Each process requires particular skills and offers a basis for homogeneous categorizing of work activities. A patient preparing for an operation would first engage in preliminary diagnostic tests, and then go through the admitting process, undergo a procedure in surgery, receiver post operative care, be discharged and perhaps receive out-patient attention. These services are each administered by different departments. ADVANTAGES 1- It simplifies training. 2- Achieve economic advantage. 3- Uses specialized technology. DISADVANTAGES
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1- Coordination of departments is difficult. 2- Responsibility for profit is at the top.

7- DEPARTMENTATION BY PRODUCT

This type of departmentation used in organization where more than one product is producing. In this department all the sources and authority are placed under the control of one manager. Departmentlization by product assembles all functions needed to make and market a particular product are placed under one executive. For instance, major department stores are structured around product groups such as home accessories, appliances womans clothing, mens clothing and children clothing. ADVANDTAGES 1- Places attention on production. 2- Increase growth of product. 3- Places responsibility for profit at division level. DISADVANTAGES 1- Requires more persons with general manager abilities. 2- Presents problems of top management control. 8- MARKET When a need exists to provide better service to different types of markets, departmentalization by market may be the appropriate form. An example of a business serving nonprofit markets, which uses the market form of departmentalization

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