PRINCIPLES OF MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR

(PMOB)

(Common to all branches)

Course Code: 19HS1MG02 Regulation: R19

Major Concepts
The syllabus has divided into 6 units and 15 concepts to learn the overview of
Subject.
Sl.No. Concept Units
1 Basics of Management Study Unit-1: Introduction to
2 Theories & Principles of management Management and
3 Organization: Principles & Structures Organization
4 Motivation & it’s theories Unit-2: Motivation &
5 Leadership models & theories Leadership
6 Organizational Behaviour (OB) & it’s importance Unit-3: Introduction to
7 Approaches and Models of OB Organizational Behaviour
8 Perception: Factors, Selectivity & Social Perception Unit-4: Perception and
9 Personality: Determinants & Theories Personality
10 Communication: Directions, Levels & Barriers
Unit-5: Interpersonal Skills
11 Teams & Groups: Qualities, Theories & Models
12 Conflict Management
13 Stress Management Unit-6: Contemporary
14 Change Management issues of Management
15 Organizational Development & its Interventions

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
1. BASICS OF MANAGEMENT STUDY:
This section covers why should anyone study this and how to learn and adapt this with
various Definitions, Nature, Scope, it’s importance and basic functions of Management.

Why PMOB?
Organizations need Managers to focus on the following responsibilities:
• To set the Goals
• To make Plans
• To organize & arrange things
• To lead and motivate people
• To evaluate the goals & it’s accomplishment
• To change things when needed
How to Learn PMOB?
• Through Management Rolls (Case studies of people and firms)
• Through Functions, Theories & Principles (Concepts of Syllabus)
• Through Identifying & Managing Self-Skills (Activities & assignments)
1(a) Various definitions of Management
1. According to Louis Allen, “Management is what a manager does”
2. According to F.W.Taylor, “Management is the art of knowing what you want
to do and then seeing that they do it in the best and the cheapest manner”.
3. According to Mary Parker Follet, “Management is an art of getting things
done through people”
4. Harold Koontz, extended Mary Parker’s definition as “Management is the art of
getting things done through others and with formally organized groups”
5. George Robert Terry, who was professor of Ball State University, emphasized
the management functions on his definition and defined as “Management is a
distinct process consisting of planning, organizing, actuating and controlling;
utilizing in each both science and arts, and followed in order to accomplish pre-
determined objective”
Conclusion: “Management is a distinct process of allocating inputs of an
organization by variety of specialist functions for the purpose of achieving stated
objectives”. In this the inputs includes, material, human, financial and informational,
etc.
1(b) Nature of Management discipline:
1. Management is Universal process to manage all kind of professional situations at
individual and group level.
2. It is a Goal Oriented approach
3. This can be used as multi-dimensional and multi-disciplinary field of expertise
4. Always dynamic function to adapt and train people
5. An intangible force that no one can give the evidence except the impact of result.
6. The practice of management is effective at both individual & group level

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 7. It is a continuous process at all levels to be performed and experienced.
8. Results depends on people and situations
9. The understanding of concepts, principles and functions are mostly perceptual by
experiences
10. It is popular as Science, Art & as Profession with all the following features:
o Management as Science: Science is characterized by following main features:
▪ Universally acceptance principles
▪ Experimentation & Observation
▪ Cause & Effect Relationship
▪ Test of Validity & Predictability
o Management as Art: The art is characterised by:
▪ Natural skills
▪ Always different results
▪ Create and Innovative
▪ Expertise through practice
o Management as Profession: The essentials of a profession are
▪ Specialized Knowledge
▪ Formal Education & Training
▪ Social Obligations
▪ Code of Conduct
1(c) Scope of Management discipline:
The following areas of expertise can train a personal or organizational level:
1. Personal / Skill Management
2. Human Resource Management
3. Organizational Management
4. Behavioural Management
5. Project Management
6. Financial Management
7. Production Management
8. Marketing Management
9. Conflict & Risk Management
10. Change Management, etc.

1(d) Importance of Management:

1. To achieve optimum utilization of resources
2. To promote planning & objectives into action
3. To minimize wastages
4. To encourage teamwork through motivation
5. To maintain cordial relations with people
6. To establish corporate image
7. To accomplish goals
8. To increase productivity & profitability
9. To seek welfare of the society
10. To enhance overall performance of an organizations

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
1(e) Functions of Management:
Management functions serve as a framework to guide and organize the tasks and
responsibilities of managers within an organization. These functions provide a systematic
approach to achieving the goals and objectives of the organization efficiently and
effectively.
Functions proposed by various authors:
Code Luther Gulic Henry Fayol George Terry Harold Koontz
& O’donnel
P Planning Planning Planning Planning
O Organizing Organizing Organizing Organizing
S Staffing Staffing
D Directing Directing
Co Coordination
R Reporting
B Budgeting
F Forecasting
A Actuating
C Commanding
Cn Controlling Controlling Controlling

Consolidated Functions:

1. Planning: According to KOONTZ, “Planning is deciding in advance - what to do,

when to do & how to do. It bridges the gap from where we are & where we want to
be”. A plan is a future course of actions. It is an exercise in problem solving & decision
making.
Features of Planning:
1. Planning provides a basis for other functions of management. Hence, it is called as
Primary Function. Involves selecting the objectives and actions to achieves them
2. It focusses on achieving objectives in long-term and short-term

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 3. As planning is all time process and spread in all levels so is considered as Pervasive
4. It is considered as creating various alternative course of actions.
5. Always focus on future predictions hence it is futuristic.
6. It evolved in decision making
Importance of Planning:
1. Provides decision:
2. Reduces risk of uncertainty:
3. Avoids overlapping and waste tasks:
4. Promotes innovative ideas:
5. Set standards for controlling.
Limitations of Planning:
1. Leads to rigidity and resistance
2. May not work in dynamic environment
3. Reduces creativity of individuals
4. Involves in high costs
5. Time consuming
6. No guarantee for success
2. Organizing: Organizing is a process (series of steps) of identifying and grouping
the work to be performed, defining and delegating responsibility and authority, and
establishing relationships for the purpose of accomplishing objectives. It is an essential
function that makes the plans operational by identifying and classifying necessary
activities.
Steps in Organizing process:
1. Identification and division of work
2. Departmentalization
3. Assignment of duties
4. Establishing reporting relationships
Importance of Organizing:
1. Benefits of Specialization
2. Clarity on working relationships
3. Effective and ministration
4. Optimum utilization of resources
5. Development of personnel
6. Adaptation to change

3. Staffing: Staffing is a process which includes recruitment, selection, training,

placement, appraisal, promotion, and career planning. In small organizations, all these are
taken care of by the manager himself. But in large organizations, a separate department
called Personnel Department looks after these functions and this is headed by a qualified
professional manager called Personnel Manager. In this process the department of Human
resource has to undergo the following functions to make HR utilisation effectively.
• Estimating workforce requirements
• Conducting recruitment process
• Selecting right people to the right job at right time

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 • Conducting performance appraisal
• Caring of Training and development
• Induction and orientation
• Promotions and transfers
• Compensations and incentive benefits
• Separation
4. Directing: This function makes people to do the work in a right manner on the best of
their abilities. Direction is that inert-personnel aspect of management which deals directly
with influencing, guiding, supervising, motivating sub-ordinate for the achievement of
organizational goals. Direction has elements of Supervision, Motivation, Leadership &
Communication:
Features of Directing:
• Directing initiates action
• Continuing function
• Directing takes place at every level
• Directing flows from top to bottom
• It is performance oriented
• It is considered as human element
5. Controllig: According to Koontz & O’Donell “Controlling is the measurement &
correction of performance activities of subordinates in order to make sure that the enterprise
objectives and plans desired to obtain them as being accomplished”. Therefore, controlling
has following steps:
• Establishment of standard performance.
• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out deviation if
any.
• Corrective action.
Nature of Controlling:
• This is called as goal-oriented process
• Pervasive function
• The quality of backward looking as well as forward looking.
Types of Controlling:

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PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
2. THEORIES AND PRINCIPLES OF MANAGEMENT:
This section covers F.W.Taylor’s Scientific Management Theory and Henry Fayol’s 14
Principles of management, Social Responsibility of Management, Planning & Decision making
process.

2(a) Scientific Management Theory

1856-1915
Fedrick Wilson Taylor’s Scientific Management Theory:
Taylor’s philosophy focused on the belief that “Making people work as hard
as they could was not as efficient as optimizing the way the work was done”

He proposed that by optimizing and simplifying jobs, productivity can be increased. He

also advanced the idea that workers and managers needed to cooperate with one another. In
olden days managers had little contact with workers. Because of this there was no
standardization and also there were no incentives to work as quickly or as efficiency as
possible. Taylor believed that all workers were motivated by money .So he promoted the idea
of ‘’fair day’s pay for fair day’s work’’
After years of various experiments to determine optimal work methods, Taylor proposed the
1. Replace rule-of-thumb work methods with methods based on a scientific study of
the tasks.
2. Scientifically select, train, and develop each worker rather than passively leaving
them to train themselves.
3. Cooperate with the workers to ensure that the scientifically developed methods are
being followed.
4. Divide work nearly equally between managers and workers, so that the managers apply
scientific management principles to planning the work and the workers actually perform
the tasks.
These principles were implemented in many factories, often increasing productivity by a factor
of three or more. Henry Ford applied Taylor's principles in his automobile factories, and
families even began to perform their household tasks based on the results of time and motion
studies.

DRAWBACKS:
While scientific management principles improved productivity and had a substantial
impact on industry, they also increased the monotony of work. The core job dimensions of
skill variety, task identity, task significance, autonomy, and feedback all were missing from the
picture of scientific management. While in many cases the new ways of working were accepted
by the workers, in some cases they were not. The use of stopwatches often was a protested

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
issue and led to a strike at one factory where "Taylorism" was being tested. Complaints that
Taylorism was dehumanizing led to an investigation by the United States Congress. Despite
its controversy, scientific management changed the way that work was done, and forms of it
continue to be used today.
CONCLUSION:
It is believed that through the use of scientific management Taylor increased
productivity on the shop floor by 200 percent. Taylor’s ideas and thoughts were adopted
throughout the world including in France, Russia and Japan. In today’s world scientific
management has been merged with other ideas and is used by managers in the form of time
and motion studies to eradicate wasted motions, incentive schemes based on performance
and hiring the best qualified workers for each job.

2(b) Henry Fayol’s principles of management

Henri Fayol (1841-1925) was a French management theorist whose

theories in management and organization of labor were widely influential
in the beginning of 20th century. He was a mining engineer who worked
for a French mining company Commentary – Fourchamboult - Decazeville,
first as an engineer. Then he moved into general management and became
Managing Director from 1888 to 1918.
The 14 Management Principles Proposed by Henri Fayol (1841-1925) are:
1. Division of Work:
Dividing the full work of the organization among individuals and creating departments is called
the division of work. Division of work leads to specialization, and specialization helps to
increases efficiency and efficiency which results in improvements in the productivity and
profitability of the organization.
2. Balancing Authority & Responsibility:
Authority must be equal to Responsibility. According to Henri Fayol, there should be a balance
between Authority (Power) and Responsibility (Duties). The right to give orders should not
be considered without reference to responsibility. If the authority is more than responsibility
then chances are that a manager may misuse it. If responsibility is more than authority then
he may feel frustrated.
3. Discipline:
Outward mark of respect in accordance with formal or informal agreements between a firm
and its employees. Discipline means respect for the rules and regulations of the organization.
Discipline may be Self-discipline, or it may be Enforced discipline. No slacking or bending of
rules, not allowed in any organization. The works must respect the rules that run the
organization. To establish discipline, good supervision and impartial judgment are needed.
4. Unity of Command:

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
According to this principle, a subordinate (employee) must have and receive orders from only
one superior (boss or manager). To put it another way, a subordinate must report to only
one superior. It helps in preventing dual subordination. This decreases the possibilities of
“Dual subordination” which creates a problem is a function of managers.
5. Unity of Direction:
One head and one plan for a group of activities with the same objective. All activities which
have the same objective must be directed by one manager, and he must use one plan. This is
called the Unity of Direction. For example, all marketing activities such as advertising, sales
promotion, pricing policy, etc., must be directed by only one manager.
He must use only one plan for all the marketing activities. Unity of direction means activities
aimed at the same objective should be organized so that there are one plan and one person
in charge.
6. Subordination of Individual Interests to the General Interest:
The interest of one individual or one group should not prevail over the general good. The
individual interest should be given less importance, while the general interest should be given
the most importance. If not, the organization will collapse. The interest of the organizational
goal should not be sabotaged by the interest of an individual or on the group.
7. Remuneration:
Remuneration is the price for services received. Pay should be fair to both the employee and
the firm. If an organization wants efficient employees and best performance, then it should
have a good remuneration policy. This policy should give maximum satisfaction to both
employers and employees. It should include both financial and non-financial incentives.
Compensation should be based on a systematic attempt to reward good performance.
8. Centralization:
It is always present to a greater or lesser extent, depending on the size of the company and
the quality of its managers. In centralization, the authority is concentrated only in a few hands.
However, in decentralization, the authority is distributed to all the levels of management. No
organization can be completely centralized or decentralized. If there is complete
centralization, then the subordinates will have no authority (power) to carry out their
responsibility (duties). Similarly, if there is complete decentralization, then the superior will
have no authority to control the organization. Therefore, there should be a balance between
centralization and decentralization.
9. Scalar Chain:
The chain of command, sometimes called the scalar chain, is the formal line of authority,
communication, and responsibility within an organization. The chain of command is usually
depicted on an organizational chart, which identifies the superior and subordinate
relationships in the organizational structure. Or it is the line of authority from top to bottom
of the organization. This chain implements the unity-of-command principle and allows the

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
orderly flow of information. Under the unity of command principle, the instructions flow
downward along the chain of command and accountability flows upward.
10. Order:
A place for everything and everything in its place’ the right man in the right place. There
should be an Order for material/things and people in the organization. Order for things is
called Material Order and order for people is called ‘Social Order’. Material Order refers to
“a place for everything and everything in its place.” Social Order refers to the selection of the
“right man in the right place”.
11. Equity:
While dealing with the employees a manager should use kindliness and justice towards
employees equally. Equity is a combination of kindness and justice. It creates loyalty and
devotion in the employees toward the organization. The equity principle suggests that the
managers must be kind as well as equally fair to the subordinates.
12. Stability of Tenure of Personnel:
Although it could take a lot of time, Employees need to be given fair enough time to settle
into their jobs. An employee needs time to learn his job and to become efficient. The
employees should have job security because instability leads to inefficiency. Successful firms
usually had a stable group of employees.
13. Initiative:
Without limits of authority and discipline, all levels of staff should be encouraged to show
initiative. Management should encourage initiative. That is, they should encourage the
employees to make their own plans and to execute these plans. This is because an initiative
gives satisfaction to the employees and brings success to the organization.
14. Esprit De Corps:
Esprit de Corps means “Team Spirit”. Therefore, the management should create unity, co-
operation, and team-spirit among the employees. They should avoid dividing and rule policy.
Harmony, cohesion among personnel. It’s a great source of strength in the organization. It is
a quality in every successful business.
These principles are guidelines for every management function. The manager must act
according to the 14 principles of management; in order to reach the goal and create a surplus.
These 14 management principles of Henri Fayol are universally accepted. they work as a
guideline for managers to do their job according to their responsibility. The right to issue
commands, along with which must the balanced responsibility for its function.

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
2(c) Social Responsibility of Management:
Management should make every effort to appear and become socially responsible in
everything they do, and what they represent. This helps keep the company in high esteem
with their customers, but also proactively avoids problems caused by new regulations.
The Social Responsibility Debate:
Does it mean the corporation’s actions must not harm society?
or
Does it mean a corporation’s actions should benefit society?

The Four Faces of Social Responsibility:

Legal / Responsible Legal Irresponsible

Illegal / Responsible Illegal / Irresponsible

Conclusion: obligation and commitment of managers to take steps for protecting and
improving societies welfare along with protecting their own interest.

THE 10 COMMANDMENTS OF CORPORATE SOCIAL RESPONSIBILITY:

1. Take corrective action before it is required.
2. Work with affected constituents to resolve mutual problems.
3. Work to establish industry-wide standards and self-regulation.
4. Publicly admit your mistakes.
5. Get involved in appropriate social programs.
6. Help correct environmental problems.
7. Monitor the changing social environment.
8. Establish and enforce a corporate code of conduct.
9. Take needed public stands on social issues.
10. Strive to make profits on an ongoing basis.

2(d) Process of Planning and Decision Making:

Planning and decision-making are closely related processes that play a vital role in achieving
organizational goals.
Process & Steps of Planning:
1. Setting Objectives: The planning process starts by defining clear and specific
objectives or goals that the organization aims to achieve. These objectives provide a
sense of direction and purpose.
2. Analyzing the Situation: Managers gather information about the current internal
and external factors that may affect the organization's ability to achieve its objectives.
This includes understanding market trends, competition, resources, and potential
challenges.

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 3. Generating Alternatives: Based on the analysis, managers brainstorm and develop
various courses of action or strategies that could help the organization reach its goals.
These alternatives consider different approaches and potential outcomes.
4. Evaluating Alternatives: Managers evaluate the pros and cons of each alternative,
considering factors like feasibility, potential risks, costs, benefits, and alignment with
the organization's mission and values.
5. Selecting a Course of Action: After careful evaluation, a specific alternative is
chosen as the preferred course of action. This becomes the organization's official plan,
outlining what needs to be done, who is responsible, and when it should be
accomplished.
Types of Plans:
Plans in an organizational context can be categorized into various types based on their scope,
time frame, and purpose. Here are some common types of plans:
1. Strategic Plans: These are long-term plans typically covering three to five years or
more. Strategic plans outline the organization's overarching goals, direction, and
strategies to achieve its mission. They provide a high-level view of how the
organization will position itself in the market and respond to challenges and
opportunities.
2. Tactical Plans: Tactical plans are medium-term plans that translate the strategic
goals into specific actions for various departments or units within the organization.
These plans focus on the allocation of resources, coordination of activities, and
achieving objectives within a timeframe of one to three years.
3. Operational Plans: These are short-term plans that guide the day-to-day activities
and operations of different functional areas within the organization. They include
detailed instructions on how to execute specific tasks and are usually implemented
within a year or less.
4. Contingency Plans: Contingency plans, also known as "backup" or "what-if" plans,
outline alternative courses of action to be taken in case unexpected events or crises
occur. These plans help organizations respond effectively to unforeseen situations.
5. Financial Plans: Financial plans focus on the allocation and management of financial
resources. They include budgets, forecasts, and financial projections that outline how
the organization will allocate funds to different activities and projects.
6. Marketing Plans: Marketing plans outline the strategies and tactics an organization
will use to promote its products or services. They include details on target markets,
pricing, promotion, distribution, and competitive analysis.
7. Business Continuity Plans: These plans ensure that critical functions can continue
in the event of disruptions such as natural disasters, technological failures, or other
emergencies. They involve measures to minimize downtime and maintain essential
operations.

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 8. Project Plans: Project plans are specific to individual projects and provide a roadmap
for the project's execution. They outline project objectives, tasks, timelines, resource
allocation, and milestones.
9. Sales Plans: Sales plans detail the strategies and goals for achieving sales targets. They
often include sales forecasts, market analysis, customer segmentation, and sales team
activities.
10. Human Resource Plans: Human resource plans focus on workforce management,
including recruitment, training, performance evaluation, succession planning, and
employee development.
11. Production Plans: Production plans outline how goods or services will be produced,
including processes, resources, and scheduling to meet demand while optimizing
efficiency.
12. Risk Management Plans: These plans identify potential risks to the organization
and outline strategies to mitigate or manage those risks effectively.
13. Innovation and Research Plans: These plans guide the organization's efforts in
developing new products, services, technologies, or processes, often involving
research and development initiatives.
Each type of plan serves a specific purpose within the organization and contributes to its
overall success by providing direction, coordination, and a framework for decision-making.
Steps in Decision-Making:
1. Identifying the Decision: Decision-making begins when a specific situation requires
choosing between different alternatives or courses of action.
2. Gathering Information: Relevant information is collected to understand the situation
better and to make informed choices. This information might include data, reports,
expert opinions, and stakeholder input.
3. Analyzing Information: The gathered information is analysed to assess the potential
outcomes and implications of each alternative. This helps in understanding the risks,
benefits, and trade-offs associated with each option.
4. Making the Decision: Based on the analysis, a decision is made by selecting the most
suitable alternative. The decision-maker considers both logical reasoning and intuition,
often aiming for the best possible outcome within the given constraints.
5. Implementing and Monitoring: Once a decision is made, it needs to be put into action.
The implementation phase involves allocating resources, assigning responsibilities, and
executing the chosen course of action. Regular monitoring and feedback ensure that
the decision is leading to the desired results.
Both planning and decision-making are iterative processes, and adjustments may be necessary
as circumstances change or new information becomes available. Effective planning and
decision-making contribute to an organization's success by aligning actions with goals,
optimizing resource utilization, and responding to dynamic environments.
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PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
3. ORGANIZATION PRINCIPLES & STRUCTURES:
This section covers definition of organization and various principle feature and organization
structures.

3(a) Definition & Principles of organization:

A group of people with structural relationship to achieve common goals by using administrative
and management process is called an organization. Every organization has certain
principles/features in the process of functioning with its activities as follows:
Here are the principal features of an organization:
• Specific Goals and Objectives
• Structure of Hierarchy
• People of specialization
• Coordination among people and processes
• Physical, intellectual and financial resources
• Division of work and labor
• Communication
• Decision-Making teams and process
• Organization Culture
• Adaptability of change management
• Performance management and measurement
• Innovation as core

3(b) Definition & Principles of organization:

Organizational Structure refers to the formal arrangement of roles, responsibilities,
relationships, and hierarchies within an organization. It defines how tasks are divided, how
communication flows, and how decision-making processes are structured.

There are two primary types of organizational structures: mechanistic and organic.

1. Mechanistic Structures: Mechanistic structures are characterized by rigid hierarchies,

well-defined roles, and strict procedures. This type of structure is more suitable for stable
and predictable environments. Key features of a mechanistic structure include:

➢ Centralization: Decision-making authority is concentrated at the top levels of the

hierarchy. Lower-level employees typically have limited decision-making power.
➢ Hierarchical Control: Clear lines of authority and reporting exist, and employees know
who their superiors are. Instructions flow from top to bottom in a structured manner.
➢ Specialization: Tasks and roles are highly specialized, with employees focusing on
specific functions. This specialization promotes efficiency but can limit flexibility.
➢ Formalization: There are explicit rules, procedures, and standardized processes in
place. Employees are expected to follow established protocols.

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 ➢ Stability: Mechanistic structures are well-suited for stable environments where
processes and tasks remain consistent over time.

Example structures of mechanistic in nature:

Line Organization / Tall Structure: A tall structure has multiple hierarchical levels and narrow
spans of control, meaning that each manager oversees a small number of employees. This type
of structure is characteristic of mechanistic organizations.

1. Line-and-Staff Structure: This structure combines the traditional line structure (hierarchy
of authority) with staff departments that support and advise the line departments. Staff
departments, such as HR or IT, provide specialized expertise to the line departments.

2. Functional Structure: In this structure, the organization is divided into departments based
on specific functions or tasks, such as marketing, finance, operations, and human resources.
Each department operates independently and focuses on its specialized area.

3. Inverted Pyramid or Hierarchical Structure: This is a classic pyramid-shaped structure with

a clear chain of command. Decision-making authority flows from top management down to
lower-level employees. Each level has well-defined responsibilities and tasks.

4. Cellular organization / Divisional Structure: In a divisional structure, the organization is

divided into semi-autonomous divisions based on products, services, geographic regions, or
customer segments. Each division operates like a separate business unit with its own functional
departments.

5. Matrix Structure: While also having elements of an organic structure, the matrix structure
can be mechanistic in certain aspects. It combines functional and project-based teams,
resulting in dual reporting relationships and a complex balance of authority.

6. Centralized Structure: In a centralized structure, decision-making authority is concentrated

at the top levels of management. Centralization helps maintain control and consistency but
can slow down decision-making.

7. Stable Environment Structure: Mechanistic structures are well-suited for stable and
predictable environments, where tasks and processes remain relatively unchanged over time.

2. Organic Structures: Organic structures are more flexible and adaptable, designed to
respond to changing environments and dynamic conditions. They promote collaboration,
innovation, and empowerment. Key features of an organic structure include:

➢ Decentralization: Decision-making authority is distributed across various levels and

employees within the organization. This empowers employees to make decisions
closer to the point of action.
➢ Flat Hierarchy: Organic structures often have fewer hierarchical levels, leading to
shorter chains of command and more direct communication.
➢ Cross-Functional Collaboration: Teams and departments collaborate across functional
boundaries, fostering innovation and a broader perspective on problems.

PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET
 ➢ Flexibility: Roles are often less specialized, allowing employees to handle a variety of
tasks. This flexibility enables the organization to adapt to changes quickly.
➢ Empowerment: Employees have more autonomy and are encouraged to take
ownership of their work and contribute to decision-making.
➢ Informal Communication: Communication is not solely restricted to formal channels.
Informal communication and networks play a significant role in sharing information
and ideas.
➢ Dynamic Environment: Organic structures are suited for dynamic and uncertain
environments where rapid change and innovation are essential.

Example organization structures:

8. Lean & Flat Structure: In a flat structure, there are fewer hierarchical levels, and managers
have a broader span of control. This promotes direct communication and quicker decision-
making.

9. Team Structure: Organizations with a team-based structure organize their workforce into
cross-functional teams that work together to achieve specific goals. These teams often have
a high degree of autonomy.

10. Network / Virtual Structure: This structure relies on partnerships, alliances, and external
collaborations to accomplish tasks. It's common in industries where outsourcing, partnerships,
and strategic alliances are crucial.

11. Boundaryless Organization: A boundaryless organization seeks to eliminate traditional

hierarchical and structural boundaries. It encourages open communication, information
sharing, and flexibility.

12. Cross-Functional Teams: In cross-functional teams, individuals from different departments

or areas work together on specific projects or tasks. This structure promotes diverse
perspectives and interdisciplinary collaboration.

13. Decentralized Structure: In a decentralized structure, decision-making authority is

distributed throughout the organization. Lower-level employees are empowered to make
decisions related to their areas of responsibility.

14. Dynamic Environment Structure: Organic structures are well-suited for dynamic and
rapidly changing environments, allowing organizations to respond quickly to new challenges
and opportunities.

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PMOB Notes prepared by Dr.N.Aruna Kumari, Asst. Prof. in Mngt. H&S, VNR VJIET