ORGANIZATION

INTRODUCTION
Organization involves division of work among people whose efforts must be coordinated 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 repared! the
ne"t step in the management process is to organize the activities of the #nterprise to e"ecute the
plan and to attain the objectives of the enterprise. The term Organization is given a variet$ of
interpretations. In an$ case! there are two broad wa$s in which the term is used. In the first sense!
organization is understood as a d$namic process and a managerial activit$ which is necessar$ for
bringing people together and t$ing them together in the pursuit of common objectives. %hen used
in the other sense! Organization refers to the structure of relationships among positions and jobs
which is &uilt up for the realizations of common objectives. %ithout organizing managers cannot
function as managers. Organization is concerned with the building! developing and maintaining
of a
structure of working relationships in order to accomplish the objectives of the enterprise.
Organization means the determination and assignment of duties to eople! and also the
establishment and the maintenance of authorit$ relationships among these grouped activities. It is
the structural framework within which the various efforts are coordinated and related to each
other. 'ound organization contributes greatl$ to the (ontinuit$ and success of the enterprise. The
distinguished industrialist of America! Andrew (arnegie has shown his confidence in
organization b$ stating that) *Take awa$ our factories! take awa$ our trade! our avenues of
transportation! our mone$! leave nothing but our organization! and in four $ears we shall have re-
established ourselves.* That shows the significance of managerial skills and organization.
+owever! good organization structure does not b$ itself produce good performance. &ut a poor
organization structure makes good performance impossible! no matter how good the individual
ma$ be. The term ,Organization, connotes different things to different people. -an$ writers have
attempted to state the nature! characteristics and principles of organization in their own wa$. It
can be used as a group of persons working together or as a structure of relationships or as a
process of management. .ow! let us anal$ze some of the important definition of organizing or
organization! and understand the meaning of organization.
A((O/0I.1 TO '+#20O.
*Organization is the process of so combining the work which individuals or groups
have to perform with facilities necessar$ for its e"ecution! that the duties so
performed provide the best channels for efficient! s$stematic! positive and
coordinated application of available effort.*
In the words of (hester I &ernard! *Organization is a s$stem of co-operative activities
of two or more persons.*
-( 3#/2A.0 +A' 0#3I.#0
Organisation as! *an identifiable group of people contributing their efforts towards the
attainment of goals*.
A((O/0I.1 TO 2O4I' A A22#.!
*Organisation is the process of identif$ing and grouping the work to be performed!
defining and delegating responsibilit$ and authorit$! and establishing /elationships
for the purpose of enabling people to work most effectivel$ together in accomplishing
objectives.
A((O/0I.1 TO .O/T+ %+IT#+#A0
Organisation is the adjustment of diverse elements! so that their mutual relationship
ma$ e"hibit more pre-determined 5ualit$.
I. T+# %O/0' O3 T+#O +AI-A..
Organizing is the process of defining and grouping the activities of the enterprise and
establishing the authorit$ relationships among them. In performing the organizing
function! the manager defines! departmentalizes and assigns activities so that the$ can
be most effectivel$ e"ecuted.
I. T+# %O/0' O3 -OO.#6 A.0 /AI2#6!
*Organisation is the form of ever$ human association for the attainment of a common
purpose.7
A((O/0I.1 TO 8O+. - 3I33.#/ A.0 3/A.9 '+#/%OO0!
*Organisation is the pattern of wa$s in which large number of people! too man$ to
have intimate face-to-face contact with all others! and engaged in a comple"it$ of
tasks! relate themselves to each other in the conscious! s$stematic establishment and
accomplishment of mutuall$ agreed purposes.7
'A. O3 (O.T/O2
:;< 'pan of control refers to the number of immediate subordinate who report a
manager.
:=< 0ifferent level of organization level is also called span of control.
3A(TO/' 0#T#/-I.I.1 A. #33#(TI># 'A.
There are several factors which influence the span of management.
;- T/AI.I.1 O3 '4&O/0I.AT#'
The better training of subordinates increases the necessar$ superior subordinate?s
relationship. %ell trained subordinates re5uire less time of their managers also the$
have less contact with their managers. Training programs increase in new and more
comple" industries.
=-(2A/IT6 O3 0#2#1ATIO. O3 A4T+O/IT6
Although training enables managers to reduce the fre5uenc$ of time consuming
contact but delegation of authorit$ should be clear. If a manager clearl$ delegates
authorit$ to task with a minimum of the managers time and attention. &ut if a
manager delegate?s authorit$ unclearl$ than subordinate give his ma"imum.
@-(2A/IT6 O3 2A.'
If plans are well defined if the$ are workable! if the delegation of authorit$ toward
plan is clear! if the subordinate understands what e"pected than little of a supervisor
time will be re5uired on the other hand if plan cannot be drawn accuratel$ and
subordinates do much of their own planning! the$ ma$ re5uire considerable guidance.
A- 4'# O3 O&8#(TI># 'TA.0A/0
A manager must find out! either b$ personal observation or through the use of
objective standards! whether subordinates are following plans. Obviousl$! good
objective standards enable managers to avoid man$ time consuming contact.

B- /AT# O3 (+A.1#
(ertain enter rises change much more rapidl$ than others. The rate of change is ver$
important in formulating and maintaining policies. It ma$ e"plain the organization
structure of compan$?s railroad! banking and public utilit$ companies.
C- (O--4.I(ATIO. T#(.ID4#'
(ommunication techni5ues also influence the span of management. If ever$ plan!
instruction! order or direction has to be communicated b$ personal contact than
managers time will be heavil$ burdened. An abilit$ to communicate plans and
instructions clearl$ and concisel$ also tends to increase a managers span.
E- A-O4.T O3 #/'O.A2 (O.TA(T .##0#0
-an$ instances! face to face meetings are necessar$. -an$ situations cannot be
completel$ polic$ statements planning documents or other communications that do
not involves personal contact. An e"ecutive ma$ and valuable information?s b$
meeting to subordinates and b$ discuss problems with them. 'ome problems can be
handled onl$ in face to face meeting so the best wa$ of communicating problems!
instructor! and subordinates is to spend time in personal contact.
F- >A/IATIO. &6 O/1A.IGATIO. 2#>#2
'everal research projects have found that the size of the most effective span differs b$
organizational level. 3or e"ample! 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.
H- (O-#T#.(6 O3 -A.A1#/'
A manager who is competent and well trained can effectivel$ supervise more people
than who is not.
;I- -AT4/IT6 A.0 -OTI>ATIO. O3 '4&O/0I.AT#'
The more mature subordinates ma$ delegate more authorit$! thus widening the span.

TA&2#) - 3A(TO/' I.324(I.1 T+# 'A. O3 (O.T/O2
.A//O 'A. /#2AT#0 TO) %I0# 'A. /#2AT#0 TO)
;-little or no training.
=-unclear authorit$! delegation.
@-nonverefi$able objectives J standard.
A-fast changes in e"ternal and internal
environment.
B-use of communication techni5ues.
C-ineffectiv interrogation of superior and
subordinate
E-greater number of specialization at lower and
-iddle level.
F-Infactive meetings.
H-Incompletent J untrained managers.
;I-(omple" task.
;;-Imature subordinate.

;-through training of subordinate.
=-(lear delegation of authorit$.
@-%ill define plans.
A-'low changes in e"ternal and eternal
#nvironment
.B-use of appropriate techni5ues such as written!
oral communication.
Ceffetive interaction between superior J
superior
E-.umber of specialist at upper levels.
F-#ffective meetings.
H-(ompetent J train managers.
;I-'imple task.
;;-mature subordinates.

0#A/T#-#.TATIO.)
0epartmentation is process of grouping activities and people onto department make it
possible to e"pend organization. After reviewing the plan! usuall$ the first step in the
organization process is departmentalization. Once job have been classified through
work specialization! the$ are grouped so those common tasks can be
coordinated.0epartmentlization is the biases on which work or individuals are
grouped into manageable units. There are five traditional methods for grouping work
activities.
Thus workflow anal$sis can be used tighten the connection between emplo$ees? work
and customers needs. Also it can help to make major performance breakthroughs
throughout business process reengineering :&/<.A functional rethinking and
radical redesign of business process to achieve dramatic improvements in costs!
5ualit$! service! and speed.&/ use workflow anal$sis to identif$ jobs that can be
eliminated or recombined to improve compan$.
T6# O3 0#A/T-#.TATIO.)
;-0#A/T-#.TATIO. &6 .4-&#/')
0partmentation b$ 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 the$ work? Or what the$ work with! it is that the success of the

understanding depends onl$ on the number of persons include in it. This method is
rapidl$ appl$ing in arm$.
0I'A0>A.TA1#' O/ 0#(2I.#' /#A'O.'K
There are man$ reason of decline of departmentation b$ numbers.
;-It has declined due to advance technolog$ and demand of specialized and different
skills.
=-A second reason is groups composed of specialized personnel are more efficient
then those based on number.
@-0epartmentation b$ number is useful onl$ at the lowest level of the organization.
A-0epartation b$ number fails to produce good results
=-0#A/T-#.TATIO. &6 TI-#
It is grouping activities on the basis of time. It is oldest form of departmentation and
it is generall$ used in low level of departmentation. It is particularl$ applied in
hospitals and steel manufacturing enterprise where continue process of service and
manufacturing is used.
A0>A.TA1#'
;- It is process of working and services throughout =A hours.
=- It is continuing service process.
@- #"pensive machiner$ is used in shifts.
A- 'tudents can work evening or at night.
0I'A0>A.TA1#'
;- There is lacking supervision at night.
=- #"haustion factor.
@- 0#A/T-#.TATIO. &6 34.(TIO.
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 b$ function to be
performed. The function reflects the nature of the business. The advantage of this
t$pe of grouping is obtaining efficiencies from consoliding similar specialties and
people with common skills! knowledge and orientations together in common units.

A0>A.TA1#'
;- It is logical reflection of function.
=- -aintains power of major functions.
@- 'implifies training.
0I'A0>A.TA1#'
;- 0e-emphasis of overall compan$ objectives.
=- /educes coordination between function.
@- 'low adoption to change in environment.
A- 0#A/T-#.TATIO. &6 1#O1/A+6
0epartmentation b$ geograph$ is followed where geographic marked appear to offer
advantages. 1eographic department most often use in sales and production! it is not
use in finance. 0epartmentalization b$ geographical regions groups jobs on the basis
of territor$ or geograph$. 3or e"ample merek! a major pharmaceutical compan$! have
its domestic sales departmentalized b$ regions such as .ortheast! 'outheast! J
.orthwest
O/1A.IGI.1 (+A/T
resident
-anager southern
region
-anager central region -anager north region
A0>A.TA1#'
;- It emphasis on local markets and problems.
=- Improves coordination in a region.
@- &etter face to face communication.
0I'A0>A.TA1#'
;- Increases problem of top management control.
=- /e5uires more persons with general manager abilities.
B. 0#A/T-#.TATIO. &6 (4'TO-#/
0epartmentalization b$ customer groups jobs on the basis of a common set of needs
or problems of specific customers. 3or instance! a plumbing firm ma$ group its work
according to whether it is serving private sector! public sector! government! or notfor-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 interdependentl$
create new products or services. 3or e"ample! a cross-functional team consisting of
managers from accounting! finance and marketing is created to prepare a technolog$
plan.
O/1A.IGI.1 (+A/T
#"ecutive -anger
-anager &usiness loans -anager students loans
-anager
ersonal loans
-anager
Arm$ loans
There is different difficult decision to be made in separating some t$pe of customer
departments from product departments. &usiness owners and managers arrange
activities on the basis of customer re5uirements. 0epartmentation b$ customer can be
defined b$ figure
A0>A.TA1#'
;- 0epartmentation b$ customer emphasis on customer needs.
=- It develops e"perience in customer area.
0I'A0>A.TA1#'
;- It ma$ be difficult to anal$sis customer demands.
=- It re5uires managers and staff e"pert in customer problems.
@- (ustomer groups ma$ not alwa$s be clearl$ defined.
C- 0#A/T-#.TATIO. &6 /O(#''
This t$pe of departmentation is found in production and operative levels. 'uch t$pe of
departmentation can be found in paint or electroplating process. 0epartmentalization
b$ process groups jobs on the basis of product or customer flow. #ach process
re5uires particular skills and offers a basis for homogeneous categorizing of work
activities. A patient preparing for an operation would first engage in preliminar$
diagnostic tests! and then go through the admitting process! undergo a procedure in
surger$! receiver post operative care! be discharged and perhaps receive out-patient
attention. These services are each administered b$ different departments.
/#'I0#.T
-anager urchases -anager 3inance -anager roduction -anager 'ales
0ept b$ process +eat treatment welding section Assembling section finishing
section
A0>A.TA1#'
;- It simplifies training.
=- Achieve economic advantage.
@- 4ses specialized technolog$.
0I'A0>A.TA1#'
;- (oordination of departments is difficult.
=- /esponsibilit$ for profit is at the top.
E- 0#A/T-#.TATIO. &6 /O04(T
This t$pe of departmentation used in organization where more than one product is
producing. In this department all the sources and authorit$ are placed under the
control of one manager.0epartmentlization b$ product assembles all functions needed
to make and market a particular product are placed under one e"ecutive. 3or instance!
major department stores are structured around product groups such as home
accessories! appliances woman?s clothing! men?s clothing and children clothing.


A0>A.0TA1#'
;- laces attention on production.
=- Increase growth of product.
@- laces responsibilit$ for profit at division level.
0I'A0>A.TA1#'
;- /e5uires more persons with general manager abilities.
=- resents problems of top management control.

Formal and Informal Organization
FORMAL ORGANIZATION
3ormal organization means the intentional structure of rods informall$ organized enterprise.
3ormal organization must be fle"ible. 3ormal organization does not mean that there is an$thing
infle"ible. If a manager is to organize well! the structure must furnish an environment in which
individual performance! both present and future contributes most effectivel$ to group goals.
INFORMAL ORGANIZATION
Informal organizational is define b$ different authors one sa$s! Informal organization is an$ joint
personal activit$ without conscious joint purpose! even though
contributing to joint results. Thus informal relation ships established in the group of people
pla$ing chess during lunch time ma$ aid in the achievement of organization
goals. It is much easier to ask for help on an organization problem from someone $ou know
personall$! even if he or she ma$ be in different departments than from some
one $ou know onl$ as a name on an organization chart. Another author describes informal
organization as a network of personal and social relationships not re5uired
b$ the formal organization but arising spontaneousl$ as people but associate with one another.
AUTHORITY & PO!R
ower is much broader concept than authorit$ power is the abilit$ of individuals or groups to
informal the actions of other persons or groups.
AUTHORITY
Authorit$ is the legal right to command actions b$ others and to enforce compliance. Authorit$
ma$ also be defined as the degree of discretion in organizational position conferring on persons
occup$ing these positions the right to use their judgment in decision making.
TO TO 0O%. A4T+O/IT6
'hare holder
&oard of director
(hief #"ecutive
-anagers
'upervisors
%orker
PO!R
ower is border concept then authorit$. I ma$ be defined as a strong influence on direction on
individuals is behaviors power ma$ also define as the abilit$ of
individuals or groups to influence the action of other persons. There are five bases L sources or
kind of power.
"# L!GITIMAT! PO!R
The official position of a person is an organization is known as legitimate power . for e"ample! a
major in arm$ has power over (aptain and subordinate.
$# CO!RCI%! PO!R
A person?s abilit$ to create fear in other individuals and is based on subordinates e"pectation that
punishment will be received for not completing work. It is closel$ related to reward power and
normall$ arising from legitimate.
&# R!ARD PO!R
ower arises from abilit$ of some people to grant reward reward is known as reward power.
4niversit$ rofessors have considerable reward. power the$ made high grade.
'# !(P!RT PO!R
ower ma$ also come from the e"pertness of a person or a group. This power of knowledge.
h$sician lowers! Juniversit$ professors ma$ have considerable influence for their special
knowledge.
)# R!F!R!NT PO!R
This is the power of admiring high esteemed leader b$ individuals.
*# D!C!+ION MA,ING PO!R
This power arises from the power of positions. %hen people speak pf authorit$ in managerial
setting! the$ are usuall$ referring to the decision making power.