ORGANIZING

ORGANIZATION
An organization is a collection
of people who work together
and coordinate their actions to
achieve a wide variety of goals.
Organizations are set up in specific
ways to accomplish different goals, and
the structure of an organization can
help or hinder its progress toward
accomplishing these goals.
Organizations large and small can
achieve higher sales and other profit by
properly matching their needs with the
structure they use to operate. There are
three main types of organizational
structure: functional, divisional and
matrix structure
Functional Structure

The functional structure works very

well for small businesses in which
each department can rely on the
talent and knowledge of its workers
and support itself.
However, one of the drawbacks to a
functional structure is that the
coordination and communication
between departments can be
restricted by the organizational
boundaries of having the various
departments working separately.
Divisional Structure
Divisional structure typically is used in
larger companies that operate in a wide
geographic area or that have separate
smaller organizations within the umbrella
group to cover different types of products
or market areas. The benefit of this
structure is that needs can be met more
rapidly and more specifically; however,
communication is inhibited because
employees in different divisions are not
working together.
.Divisional structure is costly because of its
size and scope. Small businesses can use a
divisional structure on a smaller scale,
having different offices in different parts of
the city, for example, or assigning different
sales teams to handle different geographic
areas.
Matrix

The third main type of organizational

structure, called the matrix structure, is a
hybrid of divisional and functional
structure. Typically used in large
multinational companies, the matrix
structure allows for the benefits of
functional and divisional structures to
exist in one organization.
 This can create power struggles
because most areas of the company
will have a dual management--a
functional manager and a product or
divisional manager working at the
same level and covering some of the
same managerial territory.
Delegation
is an administrative process of
getting things done by others by
giving them responsibility. All
important decisions are taken at top
level by Board of Directors. The
execution is entrusted to Chief
Executive.
The Chief Executive assigns the work to
departmental managers who in turn
delegate the authority to their
subordinates. Every superior delegates
the authority to subordinates for getting
a particular work done. The process goes
to the level where actual work is
executed. The person who is made
responsible for a particular work is given
the requisite authority for getting it
done.
ELEMENTS OF DELEGATION

1. Assignment of Responsibility
The first step in delegation is the
assignment of work or duty to the
subordinate i.e. delegation of authority. The
superior asks his subordinate to perform a
particular task in a given period of time. It is
the description of the role assigned to the
subordinate. Duties in terms of functions or
tasks to be performed constitute the basis of
delegation process.
 
2. Grant of Authority

The grant of authority is the second

element of delegation. The delegator grants
authority to the subordinates so that the
assigned task is accomplished. The delegation
of responsibility with authority is
meaningless. The subordinate can only
accomplish the work when he has the
authority required for completing that task.
 
3. Creation of Accountability
 
Accountability is the obligation of a
subordinate to perform the duties assigned to
him. The delegation creates an obligation on
the subordinate to accomplish the task
assigned to him by the superior. When a work
is assigned and authority is delegated then
the accountability is the by-product of this
process.
 
Formal Organization is characterized by
intentional structure of roles and
responsibilities coordinated towards
achievement of common goals.

Informal Organization is characterized by

group of people within the organization
having common values , interest and
desires . e.g. the various clubs in
organization, employees meeting together
during tea & lunch time.
difference between formal and informal
organization can be drawn clearly on the
following grounds:

1. Formal Organization is an organization in

which job of each member is clearly defined,
whose authority, responsibility and
accountability are fixed. Informal Organization
is formed within the formal organization as a
network of interpersonal relationship when
people interact with each other.
 
 
 
2. Formal organization is created deliberately by
top management. Conversely, informal
organization is formed spontaneously by
members.

3. Formal organization is aimed at fulfilling

organization’s objectives. As opposed to an
informal organization is created to satisfy their
social and psychological needs.

4. Formal organization is permanent in nature; it

continues for a long time. On the other hand,
informal organization is temporary in nature.
5. The formal organization follows official
communication. Unlike informal
organization, the communication flows in any
direction.

6. In the formal organization, the rules and

regulations are supposed to be followed by
every member. In contrast to informal
organization, there are norms, values, and
beliefs, that work as a control mechanism.
7. In the formal organization, the focus is on
the performance of work while in the case of
an informal organization, interpersonal
communication is given more emphasis.

8. The size of a formal organization keeps on

increasing, whereas the size of the informal
organization is small.

9. In a formal organization, all the members

are bound by the hierarchical structure, but all
the members of an informal organization are
equal.
0RGANIZATION THEORIES
There are several theories which explain the
organization and its structure. Classical
organization theory includes the scientific
management approach, Weber’s bureaucratic
approach, and administrative theory.

CLASSICAL ORGANIZATION THEORY

∙Scientific Management approach
∙Weber’s Bureaucratic approach
∙Administrative theory
∙The scientific management approach- is based on the
concept of planning of work to achieve efficiency,
standardization, specialization and simplification. The
approach to increased productivity.

∙Weber’s bureaucratic approach- considers the

organization as a part of broader society.

∙Administrative theory- was propounded by Henry Fayol

and is based on several principles of management. In
addition, management is considered as a set of planning ,
organizing , training , commanding and coordinating
function.
SAMPLE OF
ORGANIZATIONAL
STRUCTURE
 Chairman

Vice Chairman

Human Legal Financial Marketing

Quality Construction
Resources Affairs Affairs Sales & PR
Department Department
Department Department Department Department

Sales &
Recruitment Evaluation Marketing Customer
Service

Electro-
Quality Quality Civil Metal
Mechanical
Control Assurance Engineering Engineering
Engineering