UNIT -III

ORGANISING
INTRODUCTION
• Organizing is the process of identifying and
grouping the activities required to attain the
objective , delegating authority , creating
responsibilities and establishing relationship for
people to work effectively.
• Koontz and O’Donnel define the organising as
“the grouping of activities necessary to attain
objective, the assignment of each grouping to a
manager with authority necessary to supervise
it and the provision for co-ordination
horizontally and vertically in the enterprise
structure”
 Nature of organising
• Characteristics of organising
1. Common objective
all efforts of the organization are directed
towards this goal.
2. Specialization or division of labor
the total work of an organization is divided
into function and sub-functions to get the
benefits of specialization.
3. Authority of structure or chain of command
arrangement of position into a graded series.
the chain of superior and subordinate
relationships is known as chain of command.
4. Group of person – basically organisation is a
group of person.
5. Co-ordination – coordinating the different
activities and parts of an organising
6. Communication- own channel of
communication. These channels are necessary
for mutual understanding and co-operation
among members of an organisation.
7. Environment – an organisation functions in
an environment comprises of economic,
social, political and legal factors. Therfore it
must be desired to work efficiently in a
changing environment.
8. Rule and regulation- the rules and regulation
may be in written term or implied form
behaviour.
 Process of organising
Steps involved in organizing:
1. Determination of activities
2. Grouping of activities
3. Assignment of duties
4. Delegation of authority
5. Establishment of structural relationship
6. Co-ordination of activities
1. Determination of activities
- identify the work to achieve the goal.
- The entire work is divided into different
activities and each activity is sub-divided into
various sub-activities which can be carried
out by a single individual
- Ensure no activity is left out and no
unnecessary activities are included.
2. Grouping of activities
- Grouping of closely related and similar
activities to form department, division, or
sections.
- Done on the basis of function, processes,
locations, products, customer.
- Departmentation
3. Assignment of duties
- The groups are assigned to different managers
such as production manager, marketing
manager, financial manager, personnel
manager
- This assignment of activities is done at all
levels of operation.
4. Delegation of authority
- It will be very difficult for a person to
perform the duties effectively if there is no
authority to do it.
- Each person has authority and responsibility
to perform the duties.
- Authority and responsibility should be
properly balanced
5. Establishment of structural relationship
- The structural relationship in the organization is
clearly shown with the help of organizational
charts and manuals.
6. Co-ordination of activities
- co-ordination is necessary for optimum
performance
- There must be separate and responsible persons
to see whether all activities are going on to
accomplish the objectives.
Purpose of organizing
 Importance of organizing
• Organization is the foundation store upon which the
whole structure of management is built.
• Backbone of management.
1. To facilitate administration
2. To increases the efficiency of management
3. To facilitate growth and diversification
4. To ensure optimum use of man and material resources.
5. To facilitate co-ordination and communication
6. To permit optimum use of technological innovations
7. To simulate creativity
8. To facilitate the development of managerial ability.
1. To facilitate administration
- Administration aims to earn the highest profit.
- A properly designed organisation facilitates
both the management and operation of
enterprise.
- Organisation is the mechanism through which
managers direct , co-ordinate and control the
business.
2. To increases the efficiency of management
- Good org will use workers ability fully and
utilize the resources effectively.
- A well designed org avoids the duplication
and confusion in performance
- So, it automatically motivates the efficiency
of management
3. To facilitate growth and diversification
- The growth of business means an increase in
the scale of operation but the diversification
means the start of production of a new type
of products.
- Sound organization helps in keeping the
various activities under control and it
increases the capacity to do more work.
4. To ensure optimum use of man and material
resources.
- Division of work and specialisation are the tools
for achieving the optimum use of man and
material resources.
- Optimum use of human resources is achieved by
providing psychological satisfication to
employee.
- Right person are placed for the right job at right
time to commensurate their knowledge and skills
5.To facilitate co-ordination and communication
- The activities of different department are
grouped together to achieve the business
objective.
6.To permit optimum use of technological
innovations
- Organisation structure is not rigid, it is flexible
and provides scope for innovative changes in
the enterprise by wake of new departments
7. To simulate creativity
- It provides an opportunity for the staff to show their
hidden talents which will help the enterprise to
achieve the business goals with higher rate of profits
8. To facilitate the development of managerial ability.
- The managerial personnel are trained to acquire a
wide and varied experience in diverse activities
through job rotation.
- This makes them responsible to accept the various
challenges to be faced by the organisation.
Formal and informal
organisation
 Formal organisation
- A formal organisation typically consists of
classical hierarchical structure in which position,
responsibility, authority, accountability, and the
line of command with prescribed pattern of
communication, co-ordination and delegation of
authority are clearly defined and established.
- According to Allen “the formal organisation is a
system of well defined jobs, each bearing a
definite measure of authority responsibility and
accountability”
 Characteristics of formal organisation
1. It is flexible and properly planned.
2. Based on the principle of division labor and efficiency in
operation.
3. Concentrate more on the performance of job and not on the
individual performing the jobs.
4. Organisation chart are usually drawn.
5. Co-ordination and control among the members are well
specified through processes, procedures rules etc.,
6. Unity of command is normally maintained.
7. The responsibility and accountability at all levels are clearly
well defined.
 Advantages of formal organisation
1. Conflict among the workers are reduced.
2. Overlapping of responsibility is avoided.
3. Ensure stable organisation, so less dependent
on one man.
4. A sense of security arises from classification
of the task.
5. Motivates the employees
 Informal organisation
• Informal organisation is an organisation which
establishes the relationship on the basis of
member’s interaction, communication, personal
likings and disliking and social contacts within as
well as outside the organisation.
• The typists working in different departments may
form an informal group due to similarity of work.
• The informal organisation relationship exists
under the formal organisation also.
 Characteristics of informal
organisation
1. It arises without any external cause. It is the outcome
at the work place.
2. Created on the basis of similarity among the members.
3. This has no place in the organisational chart.
4. One of the part of total organisation.
5. It has no structure and definiteness
6. A person may become a member of several informal
group.
7. Rules are not written but they are commonly followed.
Advantage of informal organisation
1. Since the informal organisation gives satisfaction
to workers, it motivates workers and maintains
the stability of the worker.
2. It fills up the gaps and deficiency of the formal
organisation.
3. It fills up the gaps among abilities of the
managers.
4. The presence of informal organisation
encourages the executives to plan the work
correctly and act accordingly.
5. It is one of the useful channel of communication.
Disadvantage of informal organisation
- May function as a counter- productive.
Barricade of achieving the objective of the
organisation.
- Indirectly reduces the effort of management.
- It spreads a rumor among workers regarding
the functioning of the organisation
unnecessarily.
S.No Formal organisation Informal organisation

1. Created by frames of the Created naturally

organisation

2. It created for achieving the It is created for social and

objective psychological satisfication

3. Planned and official Unplanned and unofficial

4. Large in size Small in size

5. Stable and continuous for long Unstable in nature

period of time
6. No of groups are more Less

7. Definite structure, mechanical Structure less, impersonal and

and rational emotional

8. Authority flows from top to May flow upward to downward or

bottom horizontially

9. Communication flows through Communication flows through the

the prescribed chain of informal channel which didn’t
command have prescribed form

10. Rigid rules and regulation Groups norms and values

Organisation chart
• organisational chart shows the organisation
relationship and activities within the
organisation.
• “An organisation chart is diagrammatic
representation of the framework or structure of
an organisation”
 Contents of organisation chart
1. Basic org structure and flow of authority.
2. Authority and responsibility of various
executives.
3. Relationship between the line and staff personnel
4. Name of the components of organisation.
5. Channel of communication
6. Requirement of management development
7. Total no of person working in an organisation
8. Ways of promotion and salary particulars.
 Types of organisational charts
1. Top-down chart or vertical chart.
2. Horizontal chart or left to right chart.
3. Circular chart or concentric chart.
1.Top-down chart or vertical chart.
- It shows organisation chart in the form of
pyramid.
- The line of communication flows from top to
bottom in vertical lines.
- The highest position is placed at the top the
next highest follows the next highest one and
so on.
 Horizontal chart or left to right
chart
• The chart in which the lines of commands are
following horizontally instead of vertical is
known as horizontal chart.
• No much difference between the horizontal
and vertical chart.
• Highest position is placed at extreme left and
the lowest position at the extreme right.
 Circular chart or concentric chart
• The position of the top executive is shown in
the center of chart
• The subordinate of these top executive are in
all direction outward from the center.
 Advantage
1. It shows various position in the org and their
relationship
2. Dual reporting relationships and overlapping
positions come to light in the preparation of
org chart.
3. Individuals can identify the limits of their
authority
4. Staring point for planning org changes.
5. Helps new employee in understanding their
positions fit into the total org
6. Strength and weakness are evaluated
7. Improves both inward and outward
communication.
8. Provides good clue to the line of promotions
9. Provides a framework for classification and
evaluation of personnel.
10.For outsider quick understanding and guide as
to whom they should contact.
 Disadvantage
1. Clear picture of formal org and omits many
important informal relationships
2. Org chart is more rigid formal relationship
Updating the chart is difficult.
3. If the chart is not prepared correctly, it will
lead to misleading confusion and conflict
4. Shows relationships which are supposed to
exist rather than what they actually exist in
the organisation.
5. The words and lines in an org chart give the
different meaning to different persons.
6. It may create psychological problems among
individuals in an organisation by providing
the superior or subordinate position more
prominently.
Organisational structure
• Organization structure is the formal pattern of
interactions and coordination designed by
management to link the task of individuals and
groups in achieving the organisational goals.
 Significance of organisational
structure
1. Properly designed organisation can help to improve
the team work and productivity by providing a
frame work
2. It determines the location of decision making in
the org.
3. Stimulates creative thinking and initiative among
org members
4. Facilitates the growth of enterprise
5. Provides the pattern of communication
6. Help a member to known what his role is and how
it relates to others roles .
 Types of org structure
Based on the power flow within the org
1. Bureaucratic or mechanistic structure
2. Organic or adaptive structure.
Based on the formation of departments or groups in
the organisations
1. Functional structure
2. Divisional structure
3. Matrix structure
4. Team structure
5. Network structure
1. Bureaucratic or mechanistic structure
based on logical order and the appropriate use
of formal authority.
this features include clear-cut division of
labor ,strict hierarchy of authority, formal
rules and procedures and promotion based on
competency.
• Features of bureaucratic structure:
1. Administrative class is responsible for the
coordination of members.
2. Clearly specified tasks using division of work
principles.
3. Precise definitions of the rights and obligations of
members.
4. Clearly defined hierarchy
5. Org is governed by official written rules and
regulation .
6. Tendency towards formal communication through
out the organisation structure
7. Maintenance of proper official records of various
activities
Best example of bureaucratic structure is found
in college and university.
Drawback of bureaucratic structure
1. Only suitable for fairly stable external
environment condition.
2. Lack of flexibility
3. Too rigid rules may make organisational
objective secondary
4. Neglect informal organisation and
interpersonal difficulties
 Organic and adaptive structure
- Opposite in nature to bureaucratic structure
- Maintains high degree of openess to input
from the internal and external environment.
- This work better in dynamic environment
where managers need to react quickly to
changes.
- It is much less formal and much more flexible
than a bureaucratic structure
• Features of organic organisation
1. Roles are not highly defined
2. Task that are continually redefined
3. Little reliance on formal authority
4. Decentralized control
5. Fast decision making
6. Informal patterns of both delegation and
communication.
 Functional structure
-most popular org structure in the business world
- It is based on similar activities, skills,
expertise and resources
- Production marketing finance R&D and
human resources are common groupings
within the functional structure
 advantage of functional structure
1. Well-defined channels of communication
2. Faster stability and efficiency
3. Improves productivity by minimizing
duplication
4. It makes employees comfortable and
simplifies training
5. High degree of coordination and control
 Disadvantage
1. It result the narrowed perspectives because of the
separateness of different department as work groups
2. Communication and collaboration between
different departments is difficult.
3. Authority is more centralized.
4. Creates more conflicts
5. It gives managers experiences in only their own
field
6. Lack of response necessary to cope up with new
and rapidly changing work requirement
 Divisional structure
- Org is divided into several fairly
autonomous division. According to the
organizational outputs.
- Each division is headed by a manager. Each
division has its own production, marketing,
R&D and finance departments.
 Advantage of divisional structure
1. It develops managerial skills and executive
skills because people in this structure are
exposed to all of the other functions.
2. It improves the ability of a company to
respond to customer issues.
3. Organizational size can be increased without
any problem.
4. Performance can be measured in the view of
contributions made by the division.
 Disadvantage of divisional structure
1. Redundant effort and resources are due to
multiple departments performing the same
tasks across the organisation.
2. Costly because of duplication of departments
in each division.
3. A complex control system is required.
 Matrix structure
Matrix structure is a hybrid organisational
form containing characteristics of both
functional and division structural.
- Developed to meet the problem of growing
size and complexity of undertakings.
- It is created by merging the two structure it
violates the principle of unity of command
• Some times matrix and divisional structure are same.
But they are different.
• In divisional structure, separate groups are created for
taking and managing projects. A complete
responsibility from top to bottom is assigned to one
project manager.
• But in matrix structure, a project manager is usually not
assigned. Instead he shares them with others in the
organisation.
• Divisional structure is suitable for small number of
major projects, where as matrix organisation is suitable
for large number of small projects.
• In matrix when one project is completed its
resources are redirected to other projects.
• In matrix organisation there is a permanent set of
functional groups.
• Temporary project groups are created to
handle infrequent short-term projects.
• Personnel are drawn from functional groups, their
activities are coordinated and controlled by the
project manager.
• When the project is completed, the personnel are
returned to their original departments
 Advantages
1. Focuses resources on a single project.
2. More flexible than the traditional functional
organisation.
3. Knowledge and experience can be transferred from
one project to another project.
4. Good motivation to the personnel in the project
5. A better balance among time, cost and performance.
6. Most of the decision are taken at lower level.
7. Responsibility for overall execution, management and
profit is with the project manager who act as a chief
executive.
 disadvantages
• Use of multiple commands, manager often end
up with conflicts.
• Org relationship becomes very complex and
there is a great confusion among personnel.
• A matrix org is created by deputing the staff
temporarily from different functional
departments. Project managers do not have any
line of authority over such persons, which
result in lack of commitment.
• Decisions are often delayed due to lack of
understanding
• Matrix structure may be expensive.
 Team structure
• The team structure organise the separate
functions into a group based on one overall
objective.
• These cross-functional teams are composed of
members from different departments
• The intention is to break down the functional
barriers among departments and create a more
effective relationship for solving ongoing
problems.
 Advantages and disadvantage
• Intradepartmental barriers break down.
• Decision-making and response time speed up.
• Employees are motivated.
• Levels of manager are eliminated.
• Administrative costs are lowered.
Disadvantage :
• Conflicting loyalties among team members.
• Time management issue.
• Increased time spend in meetings.
 Network structure
• It relies on other organisation to perform
critical functions on a contractual basis.
• A core company may give contract to
specialized company for development of
software and website on their behalf.
 Advantages
• Provides flexibility and reduces the overhead.
• Decision making and response time speed-up.
• Levels of managers are eliminated
• Administrative cost are lowered.
Disadvantage
• It result in unpredictability of supply and lack
of control because managers are relying on
contractual workers to perform important.
 Determination of organizational
structure
• Organization is not an end in itself but a means
to the end of business performance and
business result.
• Peter Drucker has pointed out three specific
ways to find out what kind of structure is
needed to attain the objective of a specific
business.
 Activities analysis
1. Discover the primary activity of the
proposed organisation for building other
activites.
2. It is important to divide the entire work into
manageable units.
 Decision analysis
1. What kind of decisions will need to be made
to carry on the work of the organisation.
2. What is even more important, he has to see
where, at what level these decision are to be
made and how each manager should be
involved in them.
3. This type of analysis is particularly important
for deciding the number of levels or layers
in org structure.
 Relation analysis
• Examination of various types of relationships
which develop within the organisation.
• The relationships are vertical, lateral and
diagonal
• Superior subordinate relationship –vertical
• Expert or specialist advising a manager at the
same level- lateral.
• Specialist exercise authority over a person in
subordinate position in another department –
diagonal relationship.
line and staff authority
 Two approaches
• Functional approach
-function of an org are classified into line and
staff function
-line function-related directly with the
attainment of the org objective
- Staff function-helps line function in attaining
the objective
• Line function may change with change in
objectives
• A line function in one org may be a staff
function in another.
• Production and sales- line function in
manufacturing
• Finance, accounting- staff function in
manufacturing.
• But in bank Finance, accounting-line function
• Authority approach
- According to this line and staff are two kinds
authority
- Line authority- direct authority which a
superior exercises over his subordinate to carry
out orders and instruction
- Staff authority- involves giving advise to line
managers to carry out the operation.
 Line authority
• Simple and earlier form of authority
• It is also known as military, traditional, scalar,
hierarchical form of authority.
• Vertical relationship.
• Between superior and his subordinate.
• Superior subordinate relationships is known as
line relationship.
 Line authority works as follows
• Chain of command: officials are in chain of
command from higher position to lower
position.
• Channel of communication: line authority
can be considered as channel of
communication. Communication flows
through the line relationship. Every member
of the org has someone to report and other
to report him.
 Advantage
1. Simple and easy to understand
2. Most economical and effective.
3. Delegation of authority is clear which
facilities prompt decision-making.
4. Unity of commands.
5. Channel of communication is clear.
6. Ensure excellent discipline. (insist
responsibility of individual)
 Limitation
1. Org is inflexible and rigid.
2. Neglects specialists.
3. Limited to small org.
4. Encourages a dictatorial way of working
which may not develop own creative thinking
of workers.
 Staff Authority
• The function of staff is to investigate the
research and give advice to managers.
• Staff personnel having specialized knowledge
and skills to reduce the burden of line
personnel.
• Staff managers have the right to command or
direct subordinate.
• The exercise of staff authority depends on the
degree of authority delegated to staff personnel.
Staff authority may be of the following
forms
• Advisory staff authority: provides advice,
assistances and information to line managers.
• Compulsory staff consultation: staff person
must be consulted by a line person before
taking action.
• Concurring authority :when control over
some operation is very important, a staff
person may be granted authority so that no
action can be taken until he agrees it.
 Benefits
1. Staff specialists may be allowed the time to think,
collect data and analyze the data when the line personnel
are busy in managing operations.
2. Improves the quality of managerial decision.
3. More complex line people requires advice of staff
personnel.
4. Coordinating various activities and ensuring uniformity
of action.
5. May be given authority to prescribe systems and
procedures.
6. Critical evaluation of existing practices and procedures
and provides innovative ideas from time to time
 Limitation
1. Danger of undermining line authority
2. Lack of staff responsibility
3. Managerial problems
• Danger of undermining line authority
- In some enterprise, the top management such as
chief executive gives too much importance and
support to the staff personnel. Therefore the
capable managers are not willing to accept
indignity or they might fire the staff managers.
• Lack of staff responsibility
- Staff is only responsible to make advice or
propose a plan and they can easily blame the
line managers for not properly implementing
the plans when it fails.
- When the plan fails, the staff will claim that it
is a good plan and it is failed because of lack
of attention of line manager.
• Thinking in vacuum.
- Sometimes the recommendation of staff are
highly impractical due to the fact that the staffs
do not have any experience in implementing
the recommendation. That situation is staff
think in vaccum.
• Managerial problems
- Sometimes, the lower level people may be
getting an advice from staff managers and at
the same time get orders from his own line
managers. It may lead to friction between
them.
 Comparison
S. No line authority Staff authority
1. Right to decide or command Right to provide advice, assistance and
information

2. Contribute directly to attain the Assist line in attainment of objective

goal
3. Superior – subordinate relation Extension of line and supports line
4. Flows from top to down Flows in any direction
Proper channel of No proper channel of communication
communication
5. It makes the operating decision It provides idea for decision
6. Authority is unlimited Authority is relatively restricted
7. It bears the responsibility for It does not bear final responsibility.
final result
 Functional authority
or
functional organisation
• Functional authority is the right which an
individual or department has delegated to it over
specialized processes, practices, polices or other
matters relating to activities undertaken by
personnel in departments other than its own.
• It is the authority granted to staff specialist to
issue order/instruction to line executives directly
in a specific and limited area of operations
• functional authority arises because of three
factors:
- A superior delegates the authority to staff person to
transmit information, proposal and advice directly
to his subordinates for saving time.
- Skilled staff members shows the line managers
how the information should be used or how the
recommendations should be put into effect.
- Staff personnel are given the authority to
prescribe processes, procedures, methods or even
policy to be followed in various departments.
 Production manager

Plant engineer Plant superintendent Quality officer

Foreman 1 Foreman 2
• Functional authority is the part of the authority of
line personnel.
• Functional authority should satisfy the following:
1. It should be granted only when an enterprise
wants uniformity in operation.
2. Cover only minor part of the line of authority
3. Confined to areas in which line executive do not
possess expertise
4. It should be delegated to the level which is
directly below the position of line personnel.
 Advantages
1. Foreman responsible for one function, so he
perform in a better way.
2. Make use of specialist to give expert advice to
workers.
3. It relives line executives of routine, specialized
decision which are sometimes boredom.
4. Expert guideline reduces the number of
accidents and wastages materials, man and
machine hours.
5. Need to search a large number of all round
executives.
 limitation
1. Coordination is difficult
2. Functional authority violates the principle of
unity of command.
3. Maintaining the discipline is difficult.
4. Industrial relationship more complex.
5. Workers always remain confused about the
authority and activity of each foreman.
6. Workers are not given the opportunity to make
use of their ingenuity, initiative and drive.
Departmentation
• Departmentation means the process of grouping
the similar activities of the business into
departments, division or other homogeneous
units. It is used for the purpose of facilitating a
smooth administration at all levels.
• Koontz and O’Donnell defined “A
departmentation is a process of dividing the large
monolithic functional organization into small and
flexible administrative units”
 Needs and importance of
departmentation
1. Increase operating efficiency of the workers
by providing the specialization of work.
2. Helps in fixing the responsibility. It makes the
executive to be alert and efficient in his
duties.
3. Makes it possible for the enterprise to expand
and grow.
4. New ideas for completing the job effectively
5. Easier for the appraisal of managerial
performance.
6. Result in semi-autonomous unit. The feeling
of autonomy provides the job satisfaction and
motivation which in turn lead to higher
efficiency of operation.
7. Other advantages such as facilitating budget
preparation, effective control of expenditure,
attaining specialization, better co-ordination.
Departmentation by different strategies
1. Departmentation by numbers
2. Departmentation by time
3. Departmentation by enterprise function
4. Departmentation by territory or geography
5. Departmentation by customer.
6. Departmentation by equipment or process
7. Departmentation by product or service
 Departmentation by numbers
- Created on the basis of number of persons
forming the department.
- E.g army soldiers are grouped into squads,
battalions, companies, brigades and regiments
on the basis of the number prescribed for each
unit. followed lower level of hierarchy.
 Disadvantages
• Specialized persons are frequently more
efficient than those based merely on numbers.
• Useful only at lower level of the organisation.
 Departmentation by time
• On the basis of time of performance.
• E.g manufacturing working in three shifts of
eight hours each per day.
• To get advantage of people specialized to work
in a particular shift.
adv
1. Service can be rendered around- the –clock
basis
2. Expensive equipment can be used efficiently
3. Provides part time job for students.
Disadv
1. Supervising lacking during the night shift
2. Several shift, create problem in coordination
and communication.
3. Payment of overtime rate.
Departmentation by enterprise function

- Most commonly followed

- The activities are grouped on the basis of
functions which are to be performed.
- E.g all problems in the marketing of the product
are responsibility of marketing manager who has
under him are specialist in this area. Since the
people have similar background and similar
interest, it gives rise to specialization which
makes man power utilization more efficient.
 Advantages
1. Provides specialization
2. Performance control
3. Reduces the burden of top executives.
4. Coordination
5. Eliminates duplication of efforts
6. Ensure the performance of all activities
necessary to achieve the goal
 Disadvantages
1. Over specialization they may not able to
understand other department problems.
2. Increases the work load and responsibility of
department heads.
3. Discourages communication.
4. It does not offer any scope for training for the
overall development of manager.
 Departmentation by territory or
geography
When an org operates in different geographical
areas each with distinct needs, it is desirable to
create the department along geographical lines.

Increase the sales,

It is much useful for large scale enterprise which
is geographically spread out such as banking,
insurance, transport companies (train), which
is nationally distributed.
 Departmentation by customer
- It is preferred when the needs of the customer are
different in nature.
- E.g a large cloth store may be divided into
wholesale, retail and export divisions.
Advantages
1. Concentration on customer needs and
satisfaction.
2. Develops specialization
3. It helps the org to get the correct feel of the
market dynamics
Disadvantages
1. Staff should be expert in customer needs and
satisfaction
2. May be duplication of activities
3. Underutilization of facilities and manpower
particularly during the periods of low
demands.
 Departmentation by equipment or
process
- Under this activities are grouped on the basis
of production or equipment involved.
- This type is used in textile, oil, production
industries to achieve efficiency and economy
in operation.
Span of control
• Span of control means the number of people
managed effectively by a single superior in an
organisation
• Span of management
• Span of authority
• Span of responsibility
• Span of supervision
 Determination of span of control
• Direct single relationship
Supervisor has direct relationship with his
subordinate individually.
• Direct group relationship
Supervisor has direct relationship with his
subordinates jointly.
• Cross relationship
subordinate has relationship with another
subordinate mutually.
Factors determining an effective span
1. Capacity of superior
each manager has different capacity with
respect to the factors such as communication,
leadership, decision making, control etc.
managers with more capacity may supervise
more subordinate s than those who are with
less capacity.
2. Capacity of subordinate
subordinate who are trained, developed and
experienced need little supervision, so more
number of subordinates can be effectively
supervised.
if there is no frequent changes in
subordinates, span can be wider.
3. Nature of work
subordinate involved in simple and repetitive
activities then it is possible for the manager to
supervise more subordinate.
if the work is not similar then the span is
narrow.
4. Type of technology
firms using mass production and assembly
line technology can have a wider span than
employing batch or process production
systems
5. Delegation of authority
if a manager clearly delegates authority to
undertake a well defined task, a well trained
subordinate can get it done with the minimum
of managers time and attention.
6. Clarity of plans
7. Communication technique
face to face communication more time and
energy. If electronic and modern device, it
will save time
8. Using of objective standard
9. Geographical closeness of employee
10.Direction and coordination
Delegation of authority
• Delegation of authority is a process which
enables a person to assign works to others and
delegate them with adequate authorities to do
it
 Features of delegation
1. Delegation is authorization to a manager to
act in a certain manner. This degree of
delegation defines the limits of subordinate.
2. Delegation has dual characteristics.
Subordinate receives authority from his
superior but still his superior retains all his
original authority.
3. Cannot delegate entire authority
4. Delegation does not imply the reduction in the
authority of a manager.
5. Authority once delegated can be enhanced,
reduced and withdrawn at any time depending
upon the situation and requirement.
6. Manager does not delegate the authority which
he himself does not posses.
7. Extend of authority depends on several factors.
8. Delegation may be of different types such as
specific, general, written or implied, formal
or informal.
9. Delegation of authority is always to the
position. An individual may exercise his
authority till he holds the position.
 Importance of delegation
1. Reviles the managers from the heavy work
load.
2. Better and quick decision
3. Enables the manager to obtain the specialized
knowledge and expertise of subordinate.
4. Helps in maintaining healthy relationship,
job satisfaction, motivation.
Types of delegation
1. Over delegation
burden to subordinate, poor time management
2. Under delegation
false assumption by managers due to lack of
ability and due to the lack of trust
 Process of delegation
1. Determination of result expected
2. Assignment of duties
3. Delegation of authority
4. Creation of obligation or accountability
• Delegation fails due to unable and unwilling of
manager to apply them.
Personal attitudes towards delegation:
1. Lack of receptiveness.
2. Willingness to let go
3. Willingness to let others make mistake
4. Willingness to trust subordinate
5. Willingness to establish and use broad control-
feedback
 Making delegation effective
1. Establishment of definite goals
2. Right person for the right job
3. Establishment of definite responsibility
4. Motivate subordinate
5. Appropriate environment
6. Free flow of information
7. Proper training to subordinate
8. Establish adequate controls
Centralisation and
Decentralisation
• Centralisation and decentralisation refers the
location of decision making authority in an
orgnisation.
• Louis A. Allen has defined both the terms as
“centralisation is the systematic and consistent
reservation of authority at central points within
an organisation. Decentralisation applies to the
systematic delegation of authority in an
organisation wide context”
 Types of centralization
• Departmental centralization- Ex HR
• Centralization of performance- Location
• Centralization as an aspect of management –
restrict decision making
 Advantages of decentralisation
1. Reduces the burden of management
2. Encourages decision making
3. Facilities growth and diversification
4. Enables the department staff members
5. Encourages the development of superiors by
providing them opportunities to take more
responsibility
6. Increases motivation
7. Emphasis on horizontal growth of the
organisation thereby reducing the number of mgt
levels and increasing the span
 Disadvantages of decentralisation
1. Difficult to have uniform policy and procedure
2. Complexity in coordination
3. Will create disorder
4. Possibility of duplication of work
5. Increase the cost of operation
6. Requires the high degree of self-motivation
and self-control
Job analysis
• Job analysis is a systematic process of
collecting all information about the job for
preparing of job description and job
specification. Through this process the duties
and responsibilities, nature of the jobs are
determined and also qualification, skills,
knowledge required for an employee to
perform the particular job is decided.
• Attempt to match job and job holder
• job description
it is written stmt showing job title, tasks
duties and responsibilities involved in a job.
Clarify employee responsible for what ? And
what is expected
also describe required qualifications,
minimum requirement, working conditions,
desirable qualification.
• job description
Job title
Required qualification
Job activities
Working condition
Social environment
job specification
employee specification
minimum acceptable qualities necessary to
perform a job properly.
Personal characteristics
Physical characteristics
Mental characteristics
Social and psychological characteristics
 Process of job analysis
1. Planning the job analysis
2. Preparing and communicating the job analysis
3. Conducting the job analysis – sufficient time
4. Developing job description and job
specification
5. Maintaining and updating job description and
job specification
 Use of job analysis
Discipline
Promotion
Training
Wage and salary
Induction
Health and safety
Job design
 Important goals
• To meet the organizational requirement such as
higher productivity, operational efficiency,
quality of product or service
• To satisfy the needs of the individual employee
 Techniques for Designing jobs
1. Job enlargement
Horizontal expansion of job at the same level of skills
and responsibility.
Doing different task and not just the same thing all
the time
Adv
1. Helps org to improve and increase skills
2. Improves earning capacity of the employee
Disadv
1. Increases the work burden of the employee
2. Creates misunderstanding with the union member
2. Job rotation
movement of employee from one job to another
Adv
1. Helps to avoid monopoly of job
2. Helps to broaden one’s knowledge
Disadv
1. Frequent interruption of work
2. Reduces uniformity in quality
3. Increased stress and creates misunderstanding
with union member
3. Job enrichment
attempt to motivate employee by giving them
increased responsibility
vertical loading
Adv
1. Interesting and challenging
2. Improves decision making ability.
Disadv
1. May cause problem if the employee do not have
right attitude
2. ego problems
HR Management
or
Staffing
• Organisation requires the service of a large
number of human resources.
• Occupies varies position
• Each position requires specific knowledge and
skills
• HR management is also known as staffing
• Staffing basically matching the jobs on
individuals
HR mgt is the process of
recruitment,
Selection of employee
Providing proper orientation and induction
Proper training and development
Proper compensation and benefits
Proper relation with labour
Maintaining employee’s safety,
Welfare, health by complying with labour laws
of concern state
Importance of HR
1. Increase in number of employee
2. Technological innovations which requires
more skilled and experienced staff.
3. Increasing the % of woman employee.
4. Widening the function of the mgt
 Need of HR mgt
• It helps company to achieve its objective from
time to time by creating a positive attitude
among workers.
• Helps the org to maintain co-ordinal relationship
• Effective utilization of skills and potential.
• Teach team work and adjustment which
improve productivity
• Right people for right job
 Activities (scope) comes under HR
mgt
1. HR planning – jobs vacant, excess staff or
shortage of staff
2. Job analysis and design- detailed
explanation about each and every job in the
company
3. Recruitment and selection
4. Orientation and induction- to give
information about the company and org
culture work ethics
5. Training and development
6. Performance appraisal – future promotions,
increments, incentives.
7. Compensation and remuneration
8. Motivation, welfare, health and safety
9. Industrial relations- maintains Co-ordinal
relationships, to prevent strikes, lockouts and
ensure smooth working in the company.
 Factors affecting HR mgt
I external factors
1. Political factors
2. Economic factors
3. Social factors - caste, religion and culture
4. Legal factors
5. Customers
II internal factors
1. Size of organisation
2. Organisational image
3. Technological factors
4. Changes in employee roles.
5. Education – well educated empoyees is a
problem to the organisation though the make
valuable contributions.
 Function of HR management
Managerial function
1. Planning- number and type of employees
needed to achieve the org goals
2. Organizing – assignment of duties
3. Directing –supervising and guiding
4. Controlling – measuring employee’s
performance and taking corrective action
 Operative function
• Employment
• Development
• Compensation
• Relations – these are to be performed in
conjunction with managerial function
 Employment
• It is concerned with procuring and employing the
people possessing necessary skills, knowledge,
attitude. This covers the following function
1. Job analysis
2. HR planning
3. Recruitment
4. Selection
5. Placement
6. Induction and orientation
 Development
• Process of improving, changing, developing the
skills, knowledge, creativity, attitude based on the
present and future job and org requirements
• This covers the following function
1. Performance appraisal
2. Training and development
3. Org development
 Compensation
• Process of providing equitable and fair
remuneration to employee.
• This covers the following function
1. Wage and salary
2. Social security, incentives
 Human Relations
• Integrating people into work situation
• Motivates them to work together cooperatively
with economic, social satisfaction
HR PLANNING
 Definition
• The process of identifying the number of
people required by an organisation in terms of
quantity and quality.
• Through HR process, the management ensures
the right person who are capable of
completing tasks that help the organisation to
reach its objectives.
 Features of HR planning
1. Assess the future requirement of manpower
2. Continuous process due to change in
environment
3. Focuses on optimum utilization of resources
4. Determining the demand and supply of HR
5. Determines right number and right kind of
people at right time
6. Internal part of overall corporate plan of the
organization.
 Need for HR
• Large number of employees got retire, die,
leave organisations and need to be replaced.
• Technological changes and globalisation leads
to change in production methods
• To meet the need of expansion and
diversification of programmes of an
organisation
 Process
1. Assessing the current HR capacity
knowledge skills and abilities of current staff
need to be identified
2. Forecasting HR requirements
future needs based on the strategic goals of the
org, involves demand and supply
3. Gap analysis
determine the gap between where the org desires
to be in the future and where it is now
4. Developing HR strategies to support org
strategies
 Recruitment
• A process to discover the sources of manpower
to meet the requirements of the staffing
schedule and to employ the effective measures
for attracting that manpower in adequate
numbers to facilitate effective selection of an
efficient work force
 Sources of recruitment
1. Internal
• Present employee
• Former employee
• Employee referrals
• Previous applicants
2. External
• Employment exchange,
• Advertisement
• Trade union
• Employment agencies
• Educational and training institutes
 Selection
• Pick up the candidates with the required
qualifications, training, skills for the job after
careful screening and rejecting the undesirable at
each step
• Selection process – no standard process
1. screening of application
2. selection tests
3. preliminary interview – eliminating the
undesirable things and unsuitable candidates
4. reference check - application form are
contacted to cross check the candidate’s character,
performance and behavior
5. Medical examination
6. Final interview
7. Approved by appropriate authority
8. Placement- placed on their jobs initially on
probation basis
 Interview
• According to scott and others “ an interview is
a purposeful exchange of ideas, the answering
of questions and communication between two
or more persons”
 Types of interview
1. Preliminary interview
• Informal – gather information about vacancies, salary, nature
etc.
• Unstructured – freedom to talk about themselves and previous
experience
2. Core interview
• Background information interview – family, hobbies, dislikes etc
• Formal and structured- formal procedure like timings,
interviewer names and questions
• Stress interview
• Group interview – like GD
• Panel interview- panel of experts and weightage of each
• Depth interview- knowledge and skill of candidate
3. Decision making interview – inform about top management
policies like salary range, promotions
 Test
1. Aptitude test
2. Intelligence test- verbal and non-verbal
3. Psychomotor test – physical strength
4. Personality test –leadership patience and self
confidence.
5. Vocational test – candidate interest and
occupation
 Training and development
• Training is the act of increasing the knowledge and
skills of an employee for doing a particular job.
Factors :
1. Change in technology
2. Organizational complexity
3. Human relation
Importance of training
- Reduces accident
- Provides stability and flexibility
- Standardizing the methods
- Increased productivity
- Reduce learning time
 Training methods
• Training input – skills- attitude-knowledge
• On the job training
1. job rotation
2. apprenticeship or coaching
3. committee assignment
4. experience or understudy(Assistant)
5. temporary promotion
 Off the job training

1. Lecture
2. Conference and seminar
3. Role-play
4. Case studies
5. Business game
6. In basket- method- basket contains a number of
correspondences such as memos, circulars letters
and reports which all describe the real time problems
the trainees are required to solve each problem and to
record their decision within a specific time period
 Performance mgt
• Performance mgt is a process by which
managers and employee work together to plan
monitor and review an employee work
objective and overall contribution to the org.
 Barriers of performance appraisal
system
• Faulty assumption
• Psychological barriers- feeling of insecurity,
appraisal as an extra burden.
• Halo effect – it is the tendency of the raters to
depend excessively on the ratee’s one or two
outstandingly good performance in rating all
other traits
• Personal prejudice
Methods of performance appraisal
• Trait-based appraisal
• Job knowledge
• Leadership skills
• Analytical competence
• Judgment ability
• Loyalty
Graphic scale method- employee characteristics
and employee contribution
Ranking method-
Grading- excellent, very good, average, poor etc.
Check list method- many number of yes or no
condition
Critical incident method- based on key incidents.
A stress is given on the behaviour of the
worker on the job.
2. Appraisal by result
MBO
BARS( Behaviourally Anchored Rating Scales)
-combines the elements of traditional traits
scales and critical incident methods
Assessment centers - area polls
career planning and
management
• Edwin B. Flippo defined a career as a
sequence of separate but related work activities
that provide continuity, order and meaning in
person’s life
• Types
1. Individual career
2. Organisation career
 Career mgt
• Two essential components
1. Career planning – the process by which
employee obtain the knowledge about
themselves and information about the working
environment and then making an effort to
achieve a proper goal
2. Career development – ongoing process by
which individual progress through a series of
stages each of which is characterized by a
relatively unique set of issues, themes or tasks.
 Career stages
1. Exploration stage
(adolescence period age: 15 to 25) – during
which persons seriously explores various
occupational alternatives attempting to match
these alternatives with his or her interest and
abilities.
2. Establishment stage
(early adulthood period age:25 to 35)- begins
with the individuals entry into the world of work
ideally in a position which matches the
organisational needs with individual needs
3. Mid-career or advancement stage
(later adulthood period age:35 to 45)
upward movement in the organisation
4. Late-career or maintenance stage
(middle age, from about 45 to 65)
no longer learning about their jobs nor
expected to exceed levels of performance
from previous years
5. Decline or Disengagement stage
(old age, from about 65 years onwards)
marked by retirement