WELCOME U ALL

INTRODUCTION

• Organization involves division

of work among people whose
efforts must be co-ordinate to
achieve specific objectives
 DEFINITION OF ORGANISATION

Mc Ferland has defined organization as,

"an identifiable group of people
contributing
their efforts towards the attainment of
goals".
Mooney and Railey, "Organization is the
form of every human association for
the attainment of a common purpose.”
 ORGANISATION AS A PROCESS

Organization is the process of establishing

relationship among the members of the
enterprise. The relationships are created
in terms of authority and responsibility.
 The various
steps involved in this process

• Determination of Objectives
• Enumeration of Objectives
• Classification of Activities
• Assignment of Duties
• Delegation of Authority
 Determination of Objectives

• It is the first step in building up an

organization. Organization is always
related to certain objectives.
• Determination of objectives will consist
in deciding as to why the proposed
organization
is to be set up
 Enumeration of Objectives

• The first step in organizing group effort

is the division of the total job into
essential activities. Each job should be
properly classified and grouped.
• For example, the work of an industrial
concern may be divided into the following
major functions – production, financing,
personnel, sales, purchase, etc.
 Classification of Activities

• Activities according to similarities and

common purposes and functions and
taking the human and material resources
into account. Then, closely related and
similar activities are grouped into divisions
and departments and the departmental
activities are further divided into sections.
 Assignment of Duties

• Here, specific job assignments are made

to different subordinates for ensuring a
certainty of work performance. Each
individual should be given a specific job to
do according to his ability and made
responsible for that.
 Delegation of Authority

• Authority without responsibility is a

dangerous thing and similarly responsibility
without authority is an empty vessel.
Everybody should clearly know to whom he
is accountable; corresponding to the
responsibility authority is delegated to the
subordinates for enabling them to show work
performance.
 ORGANISATION STRUCTURE

• An organization structure shows the

authority and responsibility relationships
between the various positions in the
organization by showing who reports to
whom. Organization involves establishing
an appropriate structure for the goal
seeking activities. It is an established
pattern of relationship among the
components of the organization.
 PRINCIPLES OF ORGANISATION

• Consideration of unity of objectives

• Specialization
• Co-ordination
• Clear unbroken line of Authority:
• Responsibility
• Efficiency
 PRINCIPLES OF ORGANISATION

• Delegation
• Unity of Command:
• Span of Management:
• Communication
• Flexibility
 FORMAL AND INFORMAL ORGANISATION

• Formal Organization
• Informal Organization
• *************************
• Formal Organization:
• -"a system of consciously coordinated activities
or forces of two or more persons. It refers to
the structure of well-defined jobs, each bearing
a definite measure of authority, responsibility
and accountability."
 Characteristic Features of formal
organization

• laid down by the top management

• Formal organization prescribes the
relationships
• concentrates on the jobs to be
performed
• individuals are fitted into jobs
• is bound by rules, regulations and
procedures.
• authority, responsibility and
accountability of each level are clearly
defined.
• division of labor and specialization to
achieve efficiency in operations.
• coordination proceeds according to the
prescribed pattern.
 Advantages of formal
organization

• on the jobs to be performed.

• everybody responsible for a given task.
• bound by rules, regulations and
procedures.
• people of the organization to work together
 Disadvantages or criticisms of formal
organization

• does not consider the goals of the

individuals.
• bound by rigid rules, regulations and
procedures. This makes the achievement
of goals difficult.
 Informal Organization

an informal organization is an organization

which is not established by any formal
authority, but arises from the personal and
social relations of the people.
 Characteristics features of informal
organization

• It is unplanned
• reflect human relationships.
• It is not based on rules,
• Informal organizations are based on
common taste, problem, language,
Benefits of Informal organization

• it more effective.
• Many things which cannot be achieved through
formal organization can be achieved
• It provides social satisfaction to group members.
• Job satisfaction.
• the best means of employee communication.
• It serves as an agency for social control of
human behavior.
 Differences Between Formal and
Informal Organization

• Formal Organization:
Formal organization is established with the
explicit aim of achieving well-defined goals.
Informal Organization:
• Informal organization springs on its own. Its
goals are ill defined and Intangible.
• Formal Organization:
is bound together by authority
relationships among members.
Informal Organization:
• is characterized by a generalized sort of
power relationships.
• Formal Organization:
Formal organization recognizes certain
tasks and activities
• Informal Organization:
Informal organization does not have any
well-defined tasks.
• Formal Organization
• The roles and relationships of people in
formal organization are impersonally
defined
• Informal Organization
• In informal organization the relationships
among people are interpersonal.
• Formal Organization
• In formal organization, much emphasis is
placed on efficiency, discipline, conformity,
consistency and control.
• Informal Organization
• is characterized by relative freedom,
spontaneity, homeliness and warmth.
• Formal Organization
• the social and psychological needs and
interests of members of the organization
get little attention.
Informal Organization
• the socio psychological needs, interests
and aspirations of members get priority.
 IMPORTANCE OF ORGANISATION

• Facilitates Administration
• Facilitates Growth and Diversification
• Provides for Optimum use of
Technological Improvements
• Encourages Human use of Human
Beings
• Stimulates Creativity
 IMPORTANCE OF ORGANISATION
(contd)
• Facilitates stability of the organisation
• Reduces Employee Turnover
• Reduces Duplication of Activities
• Fosters Coordination
• Facilitates Administration
• A properly designed and balanced
organization facilitates both management
and operation of the enterprise. It
increases management's efficiency and
promptness, avoids delay and duplication
of work and motivates the employee to
perform their job efficiently.
• Facilitates Growth and Diversification
• The organization structure should provide
for expansion and diversification of the
enterprise otherwise, the enterprise will
find itself in a serious administrative crisis.
Provides for Optimum use of Technological Improvements

• A sound organization structure facilitates

the optimum use of technological
improvements like computer systems etc.
• Encourages Human use of Human Beings

• A sound organization provides for efficient

selection, training and development of
staff, job rotation and job enlargement.
The organization structure can profoundly
affect the people of the company. Proper
organization facilitates the intensive use of
human capital.
• Stimulates Creativity
• organization provides sufficient freedom to the
managers and encourages their initiative,
independent thinking and creativity.
• Facilitates stability of the organization
By ensuring delegation of authority, two-way
communication, co-operation, effective
leadership, employee morale and flexibility to
adjust to changes in the conditions, a sound
organization facilitates stability of the organization.
• Reduces Employee Turnover
• Organization increases employee
satisfaction, ensures better relations
between the management and the
workers, and thereby reduces employee
turnover.
• Reduces Duplication of Activities
• Organisation avoids delay and duplication
of activities and consequent confusion by
• ensuring well-defined responsibilities and
authority.
• Fosters Coordination
• By providing the framework for holding
together the various functions in an orderly
• pattern, organization fosters co-ordination.
 ORGANISATION CHARTS AND MANUALS

• Organization chart: The pattern of network

of relations between the various positions
in an organization as well as between the
persons who hold those positions is
referred to as "Organization chart".
• In the word of J Batty, "An organization
chart is a diagrammatic representation of
the framework or structure of an organization."
 The
organization chart has the following characteristics:

• It is a diagrammatical presentation
• l It shows principal lines of authority in the
organization
It shows the interplay of various functions
and relationships
• l It indicates the channels of communication.
 Advantages of Organization Chart

• It gives a clear picture of the organization

structure.
• It shows at a glance the lines of authority
and responsibility.
• to avoid misunderstanding of jurisdictional
problems
• outsiders can easily know the persons
whom
• they have to approach in connection with
their work.
• to avoid overlapping and duplication of
authority and secure unity of command.
• what extra training is required for
promotion to a higher position.
 Types of Organization Chart

• An organization chart can be drawn in

different forms. They are:
• Top-to-down chart or vertical chart
• Left-to-right chart or Horizontal chart
• Circular chart.
 Top-to-down chart or vertical chart:

• Most organizations use this type of chart

which presents the different levels of
organization in the form of a pyramid with
senior executive at the top of the chart and
successive levels of management
depicted vertically below that
 Left-to-right or Horizontal Chart:

• Horizontal charts which read from left to

right are
• occasionally used. The pyramid lies
horizontally instead of standing in the
vertical position.
The line of command proceeds horizontally
from left to right showing top level at the
left and each successive level extending to
the right.
 Circular Chart:

• In this chart, top positions are located in

the centre of the concentric circle.
Positions of successive echelons extend in
all directions outward from the centre.
Positions of equal status lie at the same
distance from the centre on the same
concentric circle
Meaning of Organization Manual

• an organization may prepare a Manual or

Management Guide. Manual sets down in
the form of a book or booklet all the details
of the organization,.
Good organization manual has the following
contents.

1.Nature of the enterprise

2. Objectives of the enterprise
3. Policies of the management
4. Job Descriptions
5. Duties and responsibilities of various
personnel
6. Instructions relating to the performance of
standard as well as non-standard jobs.
 Types of Manuals

• Policy Manuals:
• Operations Manual:
• Organization Manual:
• Departmental Practice Manual:
• Rules and Regulations Manual:
 Policy Manuals:
• It describes the overall limitations within
which activities are to take place and thus
reveals the broad courses of managerial
action likely to take place under certain
conditions.
 Operations Manual:
• It is prepared to inform the employees of
established methods, procedures and
standards of doing the various kinds of
work.
• Departmental Practice Manual:
• It deals in detail with the internal policies,
organization and procedures of one
department.
 Organization Manual:

• It explains the organization, the duties and

responsibilities of various departments,
and their respective sub-divisions.
• Rules and Regulations Manual: It gives
information about he operating rules
and employment regulations. It is a
handbook of employment rules.
 Advantages of Manuals
• 1. It contains in writing all-important decisions
relating to internal organization of the
enterprise.
2. It avoids conflicts and overlapping of authority.
3. It enables new employees to know the various
procedure and practice in the shortest
possible time.
4. It enables quick decisions.
5. It contains rules and regulations which
employees must follow.
 Disadvantages of Manual
• 1. The preparation of manual is costly and
time consuming and process.
• 2. Manuals leave little scope of individual's
initiative and direction.
• 3. Manuals bring rigidity to the
organization.
• 4. Manuals may put on record those
relationships which no one would like to
see exposed.