FUNDAMENTALS OF ORGANIZING

 Chain of command-The path that a directive or

answer or request should take through each level of
an organization, also called a scalar chain or the line
of authority.
 Authority-The right to take action, to make decision,
and to direct the work of others.
 Responsibility-It is an employee’s duty to perform
the assigned task.
 Accountability-It is the manager’s expectation that
the employee will accept credit or blame for his
work.
LINE MANAGER
All positions in the organization directly concerned wit
goods and services.
Typically found in areas such as-
 Production
 Sales
 Finance marketing
STAFF MANAGER
Generally can only assist and advise line managers in
specialized areas such as administration, HR
department.
DIFFERENCE
LINE POSITIONS STAFF POSITION
Directly involved in the Provide the administrative
Process used to create and support Services that
goods & services. line employees need to
achieve the firms goals.

Typically found in areas Found in areas such as:-

Such as:-  Legal counciling
 Production  Managerial
 Finance consultancy
 Marketing  Administration
 Sales  HR department

 SPAN OF CONTROL
The number of people whom report to one manager
or supervisor.
WIDE SPAN OF CONTROL
 FLAT ORGANIZATION-Large number of employees
reporting to one supervisor

Organization with wide span

 More loud on superior level of management.
 Not many levels of management.
 Dauger of superiors loss of control .
 Requires exceptional qualities of managers.
 Narrow span of control
 Tall organization-a small number of employees
report to a supervisor , necessitating a large number
of supervisors.
Organisation with narrow span
 Close control
 Superiors tend to get too involved in subordinates
work.
 Many levels of management.
 Excessive distance between lower & top level.
ORGANISATION
Organisation is a group of people contribute their efforts
towards the attainment of goals. An organization comes
into existence when there are a relationship to each
other and are willing to contribute towards a common
goal.
Characterstics-
 It shows the cooperative relationship of two or more
persons.
 It’s created to achieve a certain objectives.
 The group members are in a position to
communicate with each other.
 There are certain rules and regulations to regulate
the behavior of group members.

ORGANISATION STRUCTURE AND ITS TYPE

 Line organization-The line organization represents
the line structure in a direct vertical relationship
through which the authority flows and it is also
known as scalar or military organization .It’s
structure is like a line.
MD→ JMD →President →WN→DWN→AWM
 ADVANTAGES
 It’s very easy to establish.
 It facilitate unity of command.
 There is clear indentification of authority and
responsibility.
 It ensures excellent decipline in the organization.
 Decision making is very fast.

DISADVANTAGES
 With the growth of the company the superiors are
overloaded with work.
 There is concentration of authority at the top.
 Line organization is not suitable for big organization
because there are not experts available.
Line & staff organization
In the line & staff type of organization along with the
line authority specialized professionals are available.

MD→JMD→PRESIDENT →WN→DWN
↓ ↓ ↓
Assistant Finance Marketing
Production Head Finance
Quality control Production
ADVANTAGES
 Specialized knowledge
 Reduction of burden
 Better decision
 More flexibility
DISADVANTAGES
 There is a conflict b/w the line & staff executive. Line
manager’s feel that expert’s they don’t give the right
advice all the time and the experts feel that their
advice not properly attended.
 The allocation of duties b/w the line and staff is also
not very clear.
 Since the experts, the staff are not accountable for
the result, they may not be performing their duty
upto the mark.
FUCTIONAL ORGANISATION
This is a mid way position b/w line & staff authority in
this type structure an experts are recruited in the top
positions, throughout the enterprise.
ADVANTAGES
 Functional organization helps in achieving the
benefits of specialization of work.
 Executive development, a functional manager is
required to have expertise in one function only with
this they get the chance to develop themselves.
 Reduction of workload
 Better control.
DISADVANTAGES
 In functional organization a person is accountable to
a large number of process.
 The functional organization is very much
complicated.
 There is a lack of coorelation.
FORMAL ORGANISATION
 Formal organization is a well defined structure of
authority and responsibility that defines delegation
of authority and relationships amongst various
organizational members.
 It works along pre-defined sets of policies, plans,
procedures, schedules and programmers.
 Most of the decisions in a formal organization are
based on predetermined policies.
 Formal organization is deliberately designed
structure with formal authority ,responsibility, rules,
regulations and channels of communication.
FEATURES
 Deliberately created structure-It defines official
relationship among the people working at different
job positions.
 Job oriented
 Division of work
 Departmentation.
FORMAL AUTHORITIES
With in the authority provided by are organization or
the law to an individual enabling to carry out certain
task in accordance with its own will.
DELEGATION
Simply means allocation of job, duty, task to
employees.
CO-ORDINATION
It is a team work where all the employees work
together to achieve goals for an organization.
BENEFITS OF FORMAL ORGANISATION
 It clearly defines objectives of the organization &
authority, responsibility relationships amongst
people for attainment of those objectives.
 It results in optimum utilization of scarce
organizational resource.
 The organizational hierarchy avoid overlapping of
activity b/w two individuals or two departments.The
individuals are not aasigned for the same work.
 Career advancement & promotional are clearly
defined in a formal structure of organization.
LIMITATIONS
 Loss of initiatives
 Reduced flexibility
 Reduced information flow
 Unsatisfied social needs.