Organizing

By- Shubhi Agarwal

Assistant professor
GLA University, Mathura

ORGANISING
ORGANISING involves identification and
grouping the activities to be performed and
dividing them among the individuals and creating
authority and responsibility relationships among
them for the accomplishment of organizational
objectives

Significance of organising

It reduces the workload of superiors permitting

them to concentrate on key areas.

It provides an opportunity to subordinate to grow

and develop.

It results in prompt decision-making.

An effective organization integrats and co-

ordinates the efforts of individuals and

departments.

Increasing the efficiency by making the best

possible use of resources.

Elements of organizing
Departmentation
Linking Departments
Defining Authority & responsibility
Prescribing Authority Relationships

Departmentation
The process of grouping the activities known as

departmentation
Departmentation means the process by which similar
activities of the business are grouped into units for the
purpose of facilitating smooth administration at all
levels
According koontz & O,Donnell a departmentation is
process of dividing the large functional organization
into small & flexible & administrative unit.

Choosing basis for departmentation

Specialization
Coordination
Control
Economy
Recognition of local condition
Adequate attention
Human consideration

Types of departmentation/ways to

structure the business

1. Departmentation by product
2. Departmentation by function
3. Departmentation by region or territory
4. Departmentation by customer
5. Departmentation by process

1. Departmentation by Product
Product structure based on organizing employees and work

on the basis of the different types of products.

if a company produce three different types of products,

they will have three different division for these products.

Each division has its own internal departments & operates

like a mini business

Each product line has its own functional orgenisation with

production ,sales ,R& D & accounting

Product departmentation

Chief Executive

Car Division

productio
n

Truck Division

Marketing

Bus division

finance

Long vehicle

HR

Advantages
Clear focus on market segment helps meet customers needs
Positive competition between divisions
Better control as each division can act as separate profit

centre
Improve coordination of functional activities.
Places responsibility for profit at division level.
Places attention & effort on product line.

Disadvantages
Duplication of functions (e.g. different sales force for each

division)
Negative effects of competition
Lack of central control over each separate division.
Require more personal with general manager abilities .
Trend to make maintained of economical central services
difficult

2.Functional departmentation
The grouping of common & homogeneous activities to

form an organizational unit is known as functional

orgenisation
Function are two types basic function & secondary
function
basic function can be divided into sub-function
Each department have a head with the title
departmental manager
Board of Directorwill include both line
The functional departmentation
function as well as staff function
Managing Director

Production

Marketing

Accounts

Personnel

IT

Advantages
Specialisation each department focuses on its own
work
Accountability someone is responsible for the
section
Clarity know your and others roles
Simplifies training
Disadvantages
Closed communication could lead to lack of focus
Departments can become resistant to change
Reduce Coordination between function
Gap between top and bottom

3.Territorial /geographical departmentation

Territorial Orgenisation is especially attractive to

large scale firms or rather enterprises whose

activities are physically or geographically dispersed.
All the activities of given area of operation are

grouped into zone ,division ,branches

This structure is suitable for large scale orgenisation

or whose activities are physically or geographically

spread.
This structure is most often used in sales & in

production

Territorial /geographical departmentation

Head Office
Mumbai

Eastern Zone
Kolkata

jalandh
ar

branch

Central Zone
Kolhapur

Northern zone
Delhi

chandigar
h

New
delhi

branch

branc
h

Southern zone
Chennai

Western zone
Mumbai

ajmer

branc
h

 Advantage

Place responsibility at lower level

Place emphasis on local market & problem
Take advantage of economic of local operations
Better face to face communication with local

interest
Improve coordination in a region
Serve local needs better

Disadvantage
Require more person wit general manager
abilities .
increases problem of top management control
Require good caliber managers
Increase problems of control

4. Departmentation by customer

Customer based departmentation is basically

market oriented in which department are created

around the market served or around marketing
channel
CUSTOMERS ARE THE KEY TO THE WAY ACTIVITIES
ARE GROUPED
Marketing Manager

wholesale

Retail

Hire purchase

export

Advantage
It fulfills the expectation & needs of customer
Better service to customer
Fully focus on customer

Disadvantage
Their may be duplication of activities
Co-ordination is difficult
Conflict

5. Departmentation by process
When production activities involve the use

of several distinctive process ,these can be

used as the base for grouping of activities

Production Manager

spinning

dyeing

Weaving

Packaging

Advantage
Machine can be used effectively
Economy in operation
No duplication of activities
Principle of specialization & division of labor is

followed
Disadvantages
Heavy cost of operation
More specialist are essential

ORGANISATION structure
Organization structure determines how the roles,
power and responsibilities are assigned , controlled,
and coordinated, and howinformation flowsbetween
the differentlevels of management.
Typicallyhierarchicalarrangementoflinesof
authority,communications,
rightsanddutiesof an organization.
Organizational structure is the pattern of
relationship among various
components or parts
of the organization.
Organization structure refers to the differentiation
& integration of activities & authorities ,role &
relationship in the organization

Factors affecting organization

structure
Size
Life cycle
Business strategy
Environment

Features of good organization

structure
Clear line of authority.
Adequate delegation of authority.
Application of ultimate responsibility.
Minimum managerial levels.
Unity of direction.
Proper emphasis on staff activities.
Simplicity.
Flexibility.

Forms of organization structure

1. Line organization structure
a) Pure line organization structure
b) Departmental line organization structure
2. Line & staff organization structure
3. Functional organization structure
4. Divisional organization structure
5. Project organization structure
6. Matrix organization structure

A. Pure line organization structure

1.Line organization structure

Similar activities are performed at a

particular level
Each group activities is self contained unit &
able to perform the assigned activities
without assistance of others
Lines of authority & instruction are vertical
The unity of command is maintained in
straight & unbroken line
All person at the same level of organization
are independent of each other

Production Manager

Foramen A

Foramen B

Foramen C

workers

workers

workers

Foramen D

workers

B. Departmental line organization structure

Entire activities are divided into different department
on the basis of similarity of activities
All department are controlled by departmental head
Production Manager

Foramen A
Spinning

workers

Foramen B
weaving

Foramen C
Dyeing

workers

workers

Foramen D
finishing

workers

Characteristics of line organization structure

Advantage
1.
2.
3.
4.
5.
6.

Simplicity
Discipline
Prompt decision
Orderly communication
Easy supervision & control
Economical

. Disadvantage
1.
2.
3.
4.

Lack of specialization
Autocratic approach
Problems of co-ordination
Not suitable for large scale organization

2.Line & staff organization structure

t structures refers to a pattern in which staff

specialist advice managers to perform their duties
Secretary

Public relation

General Manager

Manager finance

Manager HR

Manager Production

Manager Marketing

Production eng

Sales officer

foreman

Sales supervisor

worker

salesman

Advantage
Planned specialization
Quality decision
Prospect for personnel growth

Disadvantage
lack of well defined authority
Line & staff conflict

3.Functional organization structure

Function organization is created by grouping the

activities on the basis of function required to

achievement of organizational objective

Board of Director

Managing Director

Production

Marketing

Accounts

Personnel

IT

Advantages
Specialisation each department focuses on its
own work
Accountability someone is responsible for the
section
Clarity know your and others roles
Simplifies training
Disadvantages
Closed communication could lead to lack of focus
Departments can become resistant to change
Reduce Coordination between function
Gap between top and bottom

4.Divisional organization structure

Organization is divided into several fairly autonomous units
Each unit is relatively self contained in that it has the resource

to operate independently
It is dividing an organization in to smaller organization is not
completely independent
Product divisionalisation
Territorial divisionalisation

Advantages
Division focuses its attention on a particular product or service
Higher level of managerial motivation
Each product or customer is able to get specialized service

Disadvantages
Expensive
Control problem
Co-ordination problem

Managing
Director

Corporate
planning

Legal
service

Consumer
product
design

R&D

Chemicals
division

Finance

Electronics
division

Mfg

Mfg

Mfg

Mktg

Mktg

Mktg

Personnel

Personnel

Personnel

purchase

purchase

purchase

Accounting

Accounting

Accounting

5.Project organisation structure

General
manager

Project A

Qualit
y
contr
ol

R& D

Project B

admin

schedulin
g

Qualit
y
contr
ol

R& D

admin

schedulin
g

6.MATRIX ORGANISATION
COMMONLY CALLED THE GRID ORG.
Matrix orgenisation structure is the realization of two

dimensional structure

Matrix structure applied when the orgenisation has large

number of smaller projects so that when one project is

completed it resources are directed to other project

Project manager is appointed to coordinate the activities of the

Personal are drawn from their respective functional

departments

Employee should receive instruction from two boss

Application:-insurance & retailing , manufacturing electronics

equipment ,industrial product

DIRECTOR-ENGG. **

Line authority
Project
authority

MANAG Product Marketin Finance

ER
ion
g

personnel

PROJEC
TA

prod

Mktg

Finance

pers

PROJEC
TB

prod

Mktg

Finance

pers

PROJEC
TC

prod

Mktg

Finance

pers

PROJEC
TD

prod

Mktg

Finance

pers

Advantage
Matrix structure focuses resources on single project

, permitting better planning & control

Flexible structure compared to traditional
hierarchical structure
It improves motivation because people can focus
more on completion of one project than they can in
the traditional functional structure
Disadvantage
People have to work under multiple command
Delay in decision making process

Centralization & decentralization

Centralization

means concentration of authority

decentralization means dispersion of authority
Centralization
is the systematic & consistence
reservation of authority at central point within an
orgenisation
Physical or geographical decentralization refers
dispersion of an orgenisation operations throughout the
country.
Factors deterring degree of decentralization
1. Size of the organization
2. Availability of manager
3. Control technique
4. Rate of change in organization
5. Environmental influence

Benefits of centralization
1.
2.
3.
4.
5.

Facilitating personal leadership

Providing integration
Uniformity of action
Handling emergencies
Effective control

Benefits of decentralization
Reducing burden of top executives
7. Facilitating diversification
8. Motivation to managers
9. Better coordination activity
6.