TYPES OF

ORGANIZATION AND
THEIR STRUCTURE
There are two broad categories of organisation, which are:
1. Formal Organisation
2. Informal Organisation
Formal Organisation: Formal organisation is that type of
organisation structure where the authority and responsibility are
clearly defined. The organisation structure has a defined delegation
of authority and roles and responsibilities for the members.

The formal organisation has predefined policies, rules, schedules,

procedures and programs. The decision making activity in a formal
organisation is mostly based on predefined policies.
There are several types of formal organisation based on their
structure, which are discussed as follows:
1. Line Organisation
2. Line and Staff Organisation
3. Functional Organisation
4. Project Organisation
5. Matrix Organisation
Line Organisation: Line organisation is the simplest organisation structure
and it also happens to be the oldest organisation structure. It is also known
as Scalar or military or departmental type of organisation.

In this type of organisational structure, the authority is well defined and it

flows vertically from the top to the hierarchy level to the managerial level
and subordinates at the bottom and continues further to the workers till
the end.
Advantages of Line organisation
1. Simple structure and easy to run
2. Instructions and hierarchy clearly defined
3. Rapid decision making
4. Responsibility fixed at each level of the organisation.
Disadvantages of Line organisation:
1. It is rigid in nature
2. It has a tendency to become dictatorial.
3. Each department will be busy with their work instead of focusing on the overall
development of the organisation
Line and Staff Organisation: Line and staff organisation is an improved version of
the line organisation. In line and staff organisation, the functional specialists are
added in line. The staff is for assisting the line members in achieving the target
effectively.
Advantages of Line and Staff organisation
1. Easy decision making as work is divided.
2. Greater coordination between line and staff workers.
3. Provides workers the opportunity for growth.
Disadvantages of Line and Staff Organisation
1. Conflict may arise between line and staff members due to the improper
distribution of authority.
2. Staff members provide suggestions to the line members and decision is taken
by line members, it makes the staff members feel ignored.
Functional Organisation: Functional organisation structure is the
type of organisation where the task of managing and directing the
employees is arranged as per the function they specialise. In a
functional organisation, there are three types of members, line
members, staff members and functional members.
Advantages of Functional organisation
1. Manager has to perform a limited number of tasks which improves
the accuracy of the work.
2. Improvement in product quality due to involvement of specialists.
Disadvantages of Functional organisation
1. It is difficult to achieve coordination among workers as there is no
one to manage them directly.
2. Conflicts may arise due to the members having equal positions.
Project Organisation: A project organisation is a temporary form of
organisation structure that is formed to manage projects for a
specific period of time. This form of organisation has specialists
from different departments who are brought together for
developing a new product.
Advantages of Project organisation
1. The presence of many specialists from different departments
increases the coordination among the members.
2. Each individual has a different set of responsibilities which
improves control of the process.
Disadvantages of Project Organization
1. There can be a delay in completion of the project.
2. Project managers may find it difficult to judge the performance of
different specialists.
Matrix Organisation: Matrix organisation is the latest form of
organisation that is a combination of functional and project
organisation. In such organisations there are two lines of authority,
the functional part of the organisation and project management
part of the organisation and they have vertical and horizontal flow
of authority, respectively.
Advantages of Matrix Organisation
1. Since the matrix organisation is a combination of functional and
project management teams, there is an improved coordination
between the vertical and horizontal functions.
2. Employees are motivated as everyone will be working towards
one project.
Disadvantages of Matrix Organisation
1. Due to the presence of vertical and horizontal communication,
there will be increased cost and paperwork.
2.Having multiple supervisors for the workers leads to confusion and
difficulty in control.
Informal Organisation: Informal organisations are those types of
organisations which do not have a defined hierarchy of authority and
responsibility. In such organisations, the relationship between employees
is formed based on common interests, preferences and prejudices.
Organizational Structure Example
Here’s an example of a hierarchical organizational structure for a fictional company:

Company Name: XYZ Corporation

1. Top-Level Management:

• CEO (Chief Executive Officer): Responsible for overall strategic direction and leadership of the company. Directly oversees other top executives and reports to the board of directors.

• CFO (Chief Financial Officer): Responsible for financial planning, reporting, and management. Oversees accounting, budgeting, and financial analysis.

• COO (Chief Operating Officer): Responsible for day-to-day operations of the company. Oversees production, logistics, and supply chain management.

2. Middle Management:

• Vice President of Sales and Marketing: Oversees sales, marketing, and customer relations. Manages sales teams, advertising campaigns, and market research.

• Vice President of Operations: Oversees manufacturing, production, and logistics. Manages production schedules, quality control, and inventory management.

• Vice President of Human Resources: Responsible for recruiting, training, and managing personnel. Manages employee relations, performance evaluations, and HR policies.

3. Lower-Level Management:

• Sales Manager (North Region): Manages sales representatives in the northern region. Sets sales targets, monitors performance, and provides training and support.

• Production Manager: Oversees manufacturing operations and production staff. Ensures production schedules are met, monitors quality standards, and implements process improvements.

• Marketing Manager: Leads marketing campaigns and promotional activities. Coordinates with advertising agencies, analyzes market trends, and develops marketing strategies.

4. Non-Managerial Employees:

• Sales Representatives: Responsible for selling company products or services to customers. Develops leads, negotiates contracts, and maintains customer relationships.

• Production Supervisors: Supervises production line workers and ensures adherence to safety and quality standards. Coordinates with production manager to optimize workflow.

• Marketing Assistants: Assists marketing manager in executing marketing campaigns. Prepares promotional materials, manages social media accounts, and analyzes campaign performance.

This hierarchical organizational structure illustrates the division of roles, responsibilities, and reporting relationships within the company. Each level of management has its own set of duties and authority, with
clear lines of communication and supervision. While this structure provides stability and clarity, it may also face challenges such as bureaucracy and communication barriers.
LEADING
LEADERSHIP
Leaders help themselves and others to do the right things. They set direction, build an inspiring
vision, and create something new. As well as providing direction, inspiration, and guidance,
good leaders exhibit courage, passion, confidence, commitment, and ambition. They nurture the
strengths and talents of their people and build teams committed to achieving common goals
Five Qualities of Effective Leaders
They are self-aware and prioritize personal development.
They focus on developing others.
They encourage strategic thinking, innovation, and action.
They are ethical and civic-minded.
They practice effective cross-cultural communication.
 CONTINGENCIES
CONTINGENCIES The theory states that each of these styles will be effective in some
situations but not in others. It further states that the relationship between a leader’s style and
effectiveness is dependent on the following variables:
Employee characteristics: These include factors such as employees’ needs, locus of control,
experience, perceived ability, satisfaction, willingness to leave the organization, and anxiety.
For example, if followers are high inability, a directive style of leadership may be
unnecessary; instead a supportive approach may be preferable.
Characteristics of work environment: These include factors such as task structure and team
dynamics that are outside the control of the employee. For example, for employees
performing simple and routine tasks, a supportive style is much effective than a directive
one. Similarly, the participative style works much better for non-routine tasks than routine
ones.
When team cohesiveness is low, a supportive leadership style must be used whereas
in a situation where performance-oriented team norms exist, a directive style or
possibly an achievement-oriented style works better. Leaders should apply directive
style to counteract team norms that oppose the team’s formal objectives.
 TRAIT THEORY OF LEADERSHIP
The trait model of leadership is based on the characteristics of many leaders - both successful and
unsuccessful - and is used to predict leadership effectiveness. The resulting lists of traits are then
compared to those of potential leaders to assess their likelihood of success or failure. Scholars taking
the trait approach attempted to identify physiological (appearance, height, and weight), demographic
(age, education and socioeconomic background), personality, self-confidence, and aggressiveness),
intellective (intelligence, decisiveness, judgment, and knowledge), task-related (achievement drive,
initiative, and persistence), and social characteristics (sociability and cooperativeness) with leader
emergence and leader effectiveness. Successful leaders definitely have interests, abilities, and
personality traits that are different from those of the less effective leaders. Through many researches
conducted in the last three decades of the 20th century, a set of core traits of successful leaders have
been identified. These traits are not responsible solely to identify whether a person will be a successful
leader or not, but they are essentially seen as preconditions that endow people with leadership
potential.
Among the core traits identified are:
Achievement drive: High level of effort, high levels of ambition, energy and initiative
Leadership motivation: an intense desire to lead others to reach shared goals Honesty
and integrity: trustworthy, reliable, and open
Self-confidence: Belief in one’s self, ideas, and ability
Cognitive ability: Capable of exercising good judgment, strong analytical abilities, and
conceptually skilled
Knowledge of business: Knowledge of industry and other technical matters
Emotional Maturity: well adjusted, does not suffer from severe psychological disorders.
Others: charisma, creativity and flexibility
Strengths/Advantages of Trait Theory
➢It is naturally pleasing theory.
➢It is valid as lot of research has validated the foundation and basis of the theory.
➢It serves as a yardstick against which the leadership traits of an individual can be
assessed.
➢It gives a detailed knowledge and understanding of the leader element in the
leadership process.
TRANSFORMATIONAL LEADERSHIP THEORY
Creating high-performance workforce has become increasingly important and to do
so business leaders must be able to inspire organizational members to go beyond
their task requirements. As a result, new concepts of leadership have emerged -
transformational leadership being one of them. Transformational leadership may be
found at all levels of the organization: teams, departments, divisions, and
organization as a whole. Such leaders are visionary, inspiring, daring, risk-takers, and
thoughtful thinkers. They have a charismatic appeal. But charisma alone is insufficient
for changing the way an organization operates.
For bringing major changes, transformational leaders must exhibit the following four
factors:
➢Inspirational Motivation: The foundation of transformational leadership is the
promotion of consistent vision, mission, and a set of values to the members. Their vision
is so compelling that they know what they want from every interaction.
Transformational leaders guide followers by providing them with a sense of meaning
and challenge. They work enthusiastically and optimistically to foster the spirit of
teamwork and commitment.
Intellectual Stimulation: Such leaders encourage their followers to be innovative and creative. They
encourage new ideas from their followers and never criticize them publicly for the mistakes committed
by them. The leaders focus on the “what” in problems and do not focus on the blaming part of it. They
have no hesitation in discarding an old practice set by them if it is found ineffective.
Idealized Influence: They believe in the philosophy that a leader can influence followers only when he
practices what he preaches. The leaders act as role models that followers seek to emulate. Such
leaders always win the trust and respect of their followers through their action. They typically place
their followers needs over their own, sacrifice their personal gains for them, ad demonstrate high
standards of ethical conduct. The use of power by such leaders is aimed at influencing them to strive
for the common goals of the organization.
Individualized Consideration: Leaders act as mentors to their followers and reward them for
creativity and innovation. The followers are treated differently according to their talents and
knowledge. They are empowered to make decisions and are always provided with the needed support
to implement their decisions. The common examples of transformational leaders are Mahatma Gandhi
and Obama.
Criticisms of Transformational Leadership Theory
Transformational leadership makes use of impression management and therefore
lends itself to amoral self promotion by leaders
The theory is very difficult to e trained or taught because it is a combination of many
leadership theories. Followers might be manipulated by leaders and there are
chances that they lose more than they gain.
CONTROLLING
Controlling can be defined as that function of management which helps to seek
planned results from the subordinates, managers and at all levels of an organization.
The controlling function helps in measuring the progress towards the organizational
goals & brings any deviations, & indicates corrective action.
Controlling helps managers monitor the effectiveness of their planning, organizing,
and leading activities. Controlling determines what is being accomplished — that is,
evaluating the performance and, if necessary, taking corrective measures so that the
performance takes place according to plans. Control is a primary goal-oriented
function of management in an organisation. It is a process of comparing the actual
performance with the set standards of the company to ensure that activities are
performed according to the plans and if not then taking corrective action
Controlling also ensures that an organization’s resources are being used effectively &
efficiently for the achievement of predetermined goals.
Controlling is a goal-oriented function.
It is a primary function of every manager.
Controlling the function of a manager is a pervasive function
IMPORTANCE OF CONTROLLING
1. Accomplishing Organizational Goals The controlling function is an accomplishment
of measures that further makes progress towards the organizational goals & brings to
light the deviations, & indicates corrective action. Therefore it helps in guiding the
organizational goals which can be achieved by performing a controlling function.
2. Judging Accuracy of Standards A good control system enables management to
verify whether the standards set are accurate & objective. The efficient control system
also helps in keeping careful and progress check on the changes which help in taking
the major place in the organization & in the environment and also helps to review &
revise the standards in light of such changes. 3. Making Efficient use of Resource
3. Making Efficient use of Resources Another important function of controlling is that in
this, each activity is performed in such manner so an in accordance with
predetermined standards & norms so as to ensure that the resources are used in the
most effective & efficient manner for the further availability of resources.
4. Improving Employee Motivation Another important function is that controlling help in
accommodating a good control system which ensures that each employee knows well
in advance what they expect & what are the standards of performance on the basis
of which they will be appraised. Therefore it helps in motivating and increasing their
potential so to make them & helps them to give better performance.
5. Ensuring Order & Discipline Controlling creates an atmosphere of order & discipline
in the organization which helps to minimize dishonest behavior on the part of the
employees. It keeps a close check on the activities of employees and the company can
be able to track and find out the dishonest employees by using computer monitoring
as a part of their control system.
6. Facilitating Coordination in Action The last important function of controlling is that
each department & employee is governed by such predetermined standards and
goals which are well versed and coordinated with one another. This ensures that
overall organizational objectives are accomplished in an overall manner.
CONTROLLING PROCESS
Establishing standards: This means setting up of the target which needs to be achieved to meet
organisational goals eventually. Standards indicate the criteria of performance. Control standards are
categorized as quantitative and qualitative standards. Quantitative standards are expressed in terms of
money. Qualitative standards, on the other hand, includes intangible items.

Measurement of actual performance: The actual performance of the employee is measured against the
target. With the increasing levels of management, the measurement of performance becomes difficult.

Comparison of actual performance with the standard: This compares the degree of difference between
the actual performance and the standard.

Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to the standard
plan. An effective control system enables managers to avoid circumstances which cause the company’s loss.
TYPES OF CONTROL There are three types of control viz.,
1. Feedback Control: This process involves collecting information about a finished
task, assessing that information and improvising the same type of tasks in the future.
2. Concurrent control: It is also called real-time control. It checks any problem and
examines it to take action before any loss is incurred. Example: control chart.
3. Predictive/ feedforward control: This type of control helps to foresee problem
ahead of occurrence. Therefore action can be taken before such a circumstance
arises.
ORGANIZATIONAL BEHAVIOUR Chapter 3
MEANING
Organizational behavior is a subset of organizational theory which studies a
more holistic way of structuring a company and managing its resources. The
study of organizational behavior includes areas of research dedicated to
improving job performance, increasing job satisfaction, promoting
innovation, and encouraging leadership.
ORGANIZATIONAL BEHAVIOR IS
A Separate Field of Study and not a Discipline Only.
An Interdisciplinary Approach.
Applied Science.
Normative Science.
A Humanistic and Optimistic Approach.
A Total System Approach.