SEMINAR O N B U S IN E S S

AD M I N I ST R A TI O N
AN D I N F O R M A T I O N
SYSTE M M A N A GE M E N T
DMBA 501
SUBMITTED BY:
MERITCHE S. PENARANDA MAYNEN G. LUBUGUIN
DMBA 501 STUDENT DMBA 501 STUDENT
 UNIT 1:
MA N A GE M E N T O F
BUSINESS
ORG A N I Z A TI O N S
I. 1. PLANNING

I. 2. ORGANIZING
 REFERENCES:
R IA M -W EB S T ER .C OM /D ICTIONARY/P
HTTPS://WWW.MER % C 2% B 7% E 2 % 8 0%8BNING
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%20%CB% %20PLANNING
:/ /EN .W IK IP EDI A. O RG /W IKI/PLANNING
HTTPS LA NNING.HTML
ES S JA R G O NS .C O M /P
HTTPS://BUSIN M M ER C E/ P LANNING/
HTTPS://BYJ US .C O M /C O
O P PR .C O M /G U ID ES /B U S INESS-
HTTPS://WWW.T N N ING-PROCESS/
STU D IE S/ PL A N N IN G/ P LA
W W .M A N A G EM EN TS TU DYGUIDE.COM/
HTTPS://W TM
ORGANIZING_FUNCTION.H
I.1. PLANNING
WEBSTER WIKIPEDIA
PLANNING IS THE PROCESS OF
- IT IS THE ACT OR PROCESS OF MAKING THINKING REGARDING THE ACTIVITIES
OR CARRYING OUT PLANS REQUIRED TO ACHIEVE A DESIRED
GOAL. PLANNING IS BASED ON
FORESIGHT, THE FUNDAMENTAL
CAPACITY FOR MENTAL TIME TRAVEL.
WHAT IS PLANNING?
PLANNING IS THE FUNDAMENTAL MANAGEMENT FUNCTION,
WHICH INVOLVES DECIDING BEFOREHAND, WHAT IS TO BE DONE,
WHEN IS IT TO BE DONE, HOW IT IS TO BE DONE AND WHO IS GOING
TO DO IT. IT IS AN INTELLECTUAL PROCESS WHICH LAYS DOWN AN
ORGANIZATION’S OBJECTIVES AND DEVELOPS VARIOUS COURSES
OF ACTION, BY WHICH THE ORGANIZATION CAN ACHIEVE THOSE
OBJECTIVES.
WHAT IS PLANNING?
PLANNING IS ASCERTAINING PRIOR TO WHAT TO DO AND
HOW TO DO. IT IS ONE OF THE PRIMARY MANAGERIAL
DUTIES. BEFORE DOING SOMETHING, THE MANAGER MUST
FORM AN OPINION ON HOW TO WORK ON A SPECIFIC JOB.
HENCE, PLANNING IS FIRMLY CORRELATED WITH
DISCOVERY AND CREATIVITY. BUT THE MANAGER WOULD
FIRST HAVE TO SET GOALS. PLANNING IS AN ESSENTIAL
STEP WHAT MANAGERS AT ALL LEVELS TAKE. IT NEEDS
HOLDING ON TO THE DECISIONS SINCE IT INCLUDES
SELECTING A CHOICE FROM ALTERNATIVE WAYS OF
PERFORMANCE.
CHARAC T ER I ST I C S
O F P L A N N I N G
CHARACTERISTICS OF PLANNING
1. MANAGERIAL FUNCTION 2. GOAL ORIENTED
• PLANNING IS A FIRST AND FOREMOST IT FOCUSES ON DEFINING THE GOALS OF
MANAGERIAL FUNCTION PROVIDES THE THE ORGANIZATION, IDENTIFYING
BASE FOR OTHER FUNCTIONS OF THE ALTERNATIVE COURSES OF ACTION AND
MANAGEMENT, I.E. ORGANIZING, DECIDING THE APPROPRIATE ACTION
STAFFING, DIRECTING AND CONTROLLING,
PLAN, WHICH IS TO BE UNDERTAKEN FOR
AS THEY ARE PERFORMED WITHIN THE
REACHING THE GOALS.
PERIPHERY OF THE PLANS MADE.
CHARACTERISTICS OF PLANNING
3. PERVASIVE
IT IS PERVASIVE IN THE SENSE THAT IT IS
PRESENT IN ALL THE SEGMENTS AND IS
REQUIRED AT ALL THE LEVELS OF THE
ORGANIZATION. ALTHOUGH THE SCOPE
OF PLANNING VARIES AT DIFFERENT
LEVELS AND DEPARTMENTS.
4. CONTINUOUS PROCESS
PLANS ARE MADE FOR A SPECIFIC TERM, SAY FOR
A MONTH, QUARTER, YEAR AND SO ON. ONCE
THAT PERIOD IS OVER, NEW PLANS ARE DRAWN,
CONSIDERING THE ORGANIZATION’S PRESENT
AND FUTURE REQUIREMENTS AND CONDITIONS.
THEREFORE, IT IS AN ONGOING PROCESS, AS THE
PLANS ARE FRAMED, EXECUTED AND FOLLOWED
BY ANOTHER PLAN.
CHARACTERISTICS OF PLANNING
5. INTELLECTUAL PROCESS
IT IS A MENTAL EXERCISE AT IT
INVOLVES THE APPLICATION OF MIND,
TO THINK, FORECAST, IMAGINE
INTELLIGENTLY AND INNOVATE ETC.
6. FUTURISTIC
IN THE PROCESS OF PLANNING WE
TAKE A SNEAK PEEK OF THE FUTURE. IT
ENCOMPASSES LOOKING INTO THE
FUTURE, TO ANALYZE AND PREDICT IT
SO THAT THE ORGANIZATION CAN FACE
FUTURE CHALLENGES EFFECTIVELY.
7. DECISION MAKING

DECISIONS ARE MADE REGARDING THE CHOICE

OF ALTERNATIVE COURSES OF ACTION THAT CAN
BE UNDERTAKEN TO REACH THE GOAL. THE
ALTERNATIVE CHOSEN SHOULD BE BEST AMONG
ALL, WITH THE LEAST NUMBER OF THE NEGATIVE
AND HIGHEST NUMBER OF POSITIVE OUTCOMES.
IMPORTANCE OF PLANNING

•PLANNING IS DEFINITELY SIGNIFICANT AS IT

DIRECTS US WHERE TO GO, IT FURNISHES DIRECTION
AND DECREASES THE DANGER OF RISK BY MAKING
PREDICTIONS.
SIGNIFICANT ADVANTAGES OF PLANNING
1. PLANNING PROVIDES DIRECTION
PLANNING ASSURES THAT THE OBJECTIVES ARE
CERTAINLY ASSERTED SO THAT THEY SERVE AS A
MODEL FOR DETERMINING WHAT ACTION
SHOULD BE TAKEN AND IN WHICH DIRECTION. IF
OBJECTS ARE WELL ESTABLISHED, EMPLOYEES
ARE INFORMED OF WHAT THE COMPANY HAS TO
DO AND WHAT THEY NEED DO TO ACCOMPLISH
THOSE PURPOSES.
2. PLANNING DECREASES THE
CHANCES OF RISK
• PLANNING IS AN ACTIVITY WHICH
PERMITS A MANAGER TO LOOK
FORWARD AND PREDICT CHANGES. BY
DETERMINING IN PRIOR THE TASKS TO
BE COMPLETED, PLANNING NOTES THE
WAY TO DEAL WITH CHANGES AND
UNPREDICTABLE EFFECTS.
SIGNIFICANT ADVANTAGES OF PLANNING
3. PLANNING DECREASES
OVERLAPPING AND WASTEFUL
ACTIVITIES:
• PLANNING WORKS AS THE FOUNDATION OF
ORGANIZING THE ACTIVITIES AND PURPOSES
OF DISTINCT BRANCHES, DEPARTMENTS, AND
PEOPLE. IT ASSISTS IN AVOIDING CHAOS AND
CONFUSION. SINCE PLANNING GUARANTEES
PRECISION IN UNDERSTANDING AND ACTION,
WORK IS CONDUCTED ON EASILY WITHOUT
DELAYS.
4. PLANNING ENCOURAGES INNOVATIVE
IDEAS
• SINCE IT IS THE PRIMARY FUNCTION OF
MANAGEMENT, NEW APPROACHES CAN
TAKE THE FORM OF ACTUAL PLANS. IT IS
THE MOST CHALLENGING PROJECT FOR
THE MANAGEMENT AS IT LEADS ALL
PLANNED ACTIONS POINTING TO
GROWTH AND OF THE BUSINESS.
5. • IT ENCOURAGES THE MANAGER TO LOOK
PLANNING INTO THE FUTURE AND MAKE A DECISION

AIDS
FROM AMONGST SEVERAL ALTERNATIVE
PLANS OF ACTION. THE MANAGER HAS TO

DECISION ASSESS EACH OPTION AND PICK THE MOST

VIABLE PLAN.

MAKING
PLANNING
P R OC E SS
 PLANNING PROCESS
1. RECOGNIZING NEED FOR
ACTION 2. SETTING OBJECTIVES
• AN IMPORTANT PART OF THE PLANNING PROCESS IS TO BE • THIS IS THE SECOND AND PERHAPS THE MOST IMPORTANT STEP
AWARE OF THE BUSINESS OPPORTUNITIES IN THE FIRM’S OF THE PLANNING PROCESS. HERE WE ESTABLISH THE
EXTERNAL ENVIRONMENT AS WELL AS WITHIN THE FIRM.  OBJECTIVES FOR THE WHOLE ORGANIZATION AND ALSO
ONCE SUCH OPPORTUNITIES GET RECOGNIZED THE MANAGERS INDIVIDUAL DEPARTMENTS. ORGANIZATIONAL OBJECTIVES
CAN RECOGNIZE THE ACTIONS THAT NEED TO BE TAKEN TO PROVIDE A GENERAL DIRECTION, OBJECTIVES OF
REALIZE THEM. A REALISTIC LOOK MUST BE TAKEN AT THE DEPARTMENTS WILL BE MORE PLANNED AND DETAILED.
PROSPECT OF THESE NEW OPPORTUNITIES AND SWOT
ANALYSIS SHOULD BE DONE. • OBJECTIVES CAN BE LONG TERM AND SHORT TERM AS WELL.
THEY INDICATE THE END RESULT THE COMPANY WISHES TO
• SAY FOR EXAMPLE THE GOVERNMENT PLANS ON PROMOTING ACHIEVE. SO OBJECTIVES WILL PERCOLATE DOWN FROM THE
COTTAGE INDUSTRIES IN SEMI-URBAN AREAS. A FIRM CAN MANAGERS AND WILL ALSO GUIDE AND PUSH
LOOK TO EXPLORE THIS OPPORTUNITY. THE EMPLOYEES IN THE CORRECT DIRECTION.
 PLANNING PROCESS
3. DEVELOPING PREMISES
• PLANNING IS ALWAYS DONE KEEPING THE FUTURE IN MIND,
HOWEVER, THE FUTURE IS ALWAYS UNCERTAIN. SO IN
THE FUNCTION OF MANAGEMENT CERTAIN ASSUMPTIONS WILL
HAVE TO BE MADE. THESE ASSUMPTIONS ARE THE PREMISES.
SUCH ASSUMPTIONS ARE MADE IN THE FORM OF FORECASTS,
EXISTING PLANS, PAST POLICIES, ETC.
• THESE PLANNING PREMISES ARE ALSO OF TWO TYPES –
INTERNAL AND EXTERNAL. EXTERNAL ASSUMPTIONS DEAL
WITH FACTORS SUCH AS POLITICAL ENVIRONMENT, SOCIAL
ENVIRONMENT, THE ADVANCEMENT OF TECHNOLOGY,
COMPETITION, GOVERNMENT POLICIES, ETC. INTERNAL
ASSUMPTIONS DEAL WITH POLICIES, AVAILABILITY OF
RESOURCES, QUALITY OF MANAGEMENT, ETC.
4. IDENTIFYING ALTERNATIVES
• THE FOURTH STEP OF THE PLANNING PROCESS IS TO IDENTIFY
THE ALTERNATIVES AVAILABLE TO THE MANAGERS. THERE IS
NO ONE WAY TO ACHIEVE THE OBJECTIVES OF THE FIRM, THERE
IS A MULTITUDE OF CHOICES. ALL OF THESE ALTERNATIVE
COURSES SHOULD BE IDENTIFIED. THERE MUST BE OPTIONS
AVAILABLE TO THE MANAGER.
• MAYBE HE CHOOSES AN INNOVATIVE ALTERNATIVE HOPING
FOR MORE EFFICIENT RESULTS. IF HE DOES NOT WANT TO
EXPERIMENT HE WILL STICK TO THE MORE ROUTINE COURSE
OF ACTION. THE PROBLEM WITH THIS STEP IS NOT FINDING THE
ALTERNATIVES BUT NARROWING THEM DOWN TO A
REASONABLE AMOUNT OF CHOICES SO ALL OF THEM CAN BE
THOROUGHLY EVALUATED.
 PLANNING PROCESS
5. EXAMINING ALTERNATE 6. SELECTING THE
COURSE OF ACTION ALTERNATIVE
• FINALLY, WE REACH THE DECISION MAKING STAGE OF THE
• THE NEXT STEP OF THE PLANNING PROCESS IS TO EVALUATE
PLANNING PROCESS. NOW THE BEST AND MOST FEASIBLE PLAN
AND CLOSELY EXAMINE EACH OF THE ALTERNATIVE PLANS.
WILL BE CHOSEN TO BE IMPLEMENTED. THE IDEAL PLAN IS THE
EVERY OPTION WILL GO THROUGH AN EXAMINATION WHERE
MOST PROFITABLE ONE WITH THE LEAST AMOUNT OF
ALL THERE PROS AND CONS WILL BE WEIGHED. THE
NEGATIVE CONSEQUENCES AND IS ALSO ADAPTABLE TO
ALTERNATIVE PLANS NEED TO BE EVALUATED IN LIGHT OF THE
DYNAMIC SITUATIONS.
ORGANIZATIONAL OBJECTIVES.
• THE CHOICE IS OBVIOUSLY BASED ON SCIENTIFIC ANALYSIS
• FOR EXAMPLE, IF IT IS A FINANCIAL PLAN. THEN IT THAT CASE
AND MATHEMATICAL EQUATIONS. BUT A MANAGERS INTUITION
ITS RISK-RETURN EVALUATION WILL BE DONE. DETAILED
AND EXPERIENCE SHOULD ALSO PLAY A BIG PART IN THIS
CALCULATION AND ANALYSIS ARE DONE TO ENSURE THAT THE
DECISION. SOMETIMES A FEW DIFFERENT ASPECTS OF
PLAN IS CAPABLE OF ACHIEVING THE OBJECTIVES IN THE BEST
DIFFERENT PLANS ARE COMBINED TO COME UP WITH THE ONE
AND MOST EFFICIENT MANNER POSSIBLE.
IDEAL PLAN.
 PLANNING PROCESS
7. FORMULATING
SUPPORTING PLAN
• ONCE YOU HAVE CHOSEN THE PLAN TO BE IMPLEMENTED,
MANAGERS WILL HAVE TO COME UP WITH ONE OR MORE
SUPPORTING PLANS. THESE SECONDARY PLANS HELP WITH
THE IMPLEMENTATION OF THE MAIN PLAN. FOR EXAMPLE
PLANS TO HIRE MORE PEOPLE, TRAIN PERSONNEL, EXPAND
THE OFFICE ETC ARE SUPPORTING PLANS FOR THE MAIN
PLAN OF LAUNCHING A NEW PRODUCT. SO ALL THESE
SECONDARY PLANS ARE IN FACT PART OF THE MAIN PLAN.
8. IMPLEMENTATION OF THE
PLAN
• AND FINALLY, WE COME TO THE LAST STEP OF THE
PLANNING PROCESS, IMPLEMENTATION OF THE PLAN.
THIS IS WHEN ALL THE OTHER FUNCTIONS OF
MANAGEMENT COME INTO PLAY AND THE PLAN IS
PUT INTO ACTION TO ACHIEVE THE OBJECTIVES OF
THE ORGANIZATION. THE TOOLS REQUIRED FOR SUCH
IMPLEMENTATION INVOLVE THE TYPES OF PLANS-
PROCEDURES, POLICIES, BUDGETS, RULES,
STANDARDS ETC.
 I.2. ORGANIZING
• ORGANIZING IS THE FUNCTION OF MANAGEMENT WHICH FOLLOWS PLANNING. IT IS
A FUNCTION IN WHICH THE SYNCHRONIZATION AND COMBINATION OF HUMAN,
PHYSICAL AND FINANCIAL RESOURCES TAKES PLACE. ALL THE THREE RESOURCES
ARE IMPORTANT TO GET RESULTS. THEREFORE, ORGANIZATIONAL FUNCTION HELPS
IN ACHIEVEMENT OF RESULTS WHICH IN FACT IS IMPORTANT FOR THE FUNCTIONING
OF A CONCERN. ACCORDING TO CHESTER BARNARD, “ORGANIZING IS A FUNCTION
BY WHICH THE CONCERN IS ABLE TO DEFINE THE ROLE POSITIONS, THE JOBS
RELATED AND THE CO-ORDINATION BETWEEN AUTHORITY AND RESPONSIBILITY.
HENCE, A MANAGER ALWAYS HAS TO ORGANIZE IN ORDER TO GET RESULTS.
A MANAGER PERFORMS ORGANIZING FUNCTION WITH THE HELP OF FOLLOWING STEPS:

1. IDENTIFICATION OF 2. DEPARTMENTALLY ORGANIZING

ACTIVITIES THE ACTIVITIES

• ALL THE ACTIVITIES WHICH HAVE TO BE • IN THIS STEP, THE MANAGER TRIES TO
PERFORMED IN A CONCERN HAVE TO BE COMBINE AND GROUP SIMILAR AND
IDENTIFIED FIRST. FOR EXAMPLE,
RELATED ACTIVITIES INTO UNITS OR
PREPARATION OF ACCOUNTS, MAKING SALES,
DEPARTMENTS. THIS ORGANIZATION OF
RECORD KEEPING, QUALITY CONTROL,
INVENTORY CONTROL, ETC. ALL THESE DIVIDING THE WHOLE CONCERN INTO
ACTIVITIES HAVE TO BE GROUPED AND INDEPENDENT UNITS AND DEPARTMENTS
CLASSIFIED INTO UNITS. IS CALLED DEPARTMENTATION.
 4. CO-ORDINATION BETWEEN
3. CLASSIFYING THE AUTHORITY AUTHORITY AND RESPONSIBILITY
• ONCE THE DEPARTMENTS ARE MADE, THE MANAGER LIKES TO
CLASSIFY THE POWERS AND ITS EXTENT TO THE MANAGERS. THIS
• RELATIONSHIPSARE ESTABLISHED AMONG VARIOUS
ACTIVITY OF GIVING A RANK IN ORDER TO THE MANAGERIAL
GROUPS TO ENABLE SMOOTH INTERACTION TOWARD
POSITIONS IS CALLED HIERARCHY. THE TOP MANAGEMENT IS INTO THE ACHIEVEMENT OF THE ORGANIZATIONAL GOAL.
FORMULATION OF POLICIES, THE MIDDLE LEVEL MANAGEMENT INTO EACH INDIVIDUAL IS MADE AWARE OF HIS AUTHORITY
DEPARTMENTAL SUPERVISION AND LOWER LEVEL MANAGEMENT INTO
AND HE/SHE KNOWS WHOM THEY HAVE TO TAKE
SUPERVISION OF FOREMEN. THE CLARIFICATION OF AUTHORITY HELP IN
BRINGING EFFICIENCY IN THE RUNNING OF A CONCERN. THIS HELPS IN ORDERS FROM AND TO WHOM THEY ARE
ACHIEVING EFFICIENCY IN THE RUNNING OF A CONCERN. THIS HELPS IN ACCOUNTABLE AND TO WHOM THEY HAVE TO REPORT.
AVOIDING WASTAGE OF TIME, MONEY, EFFORT, IN AVOIDANCE OF
A CLEAR ORGANIZATIONAL STRUCTURE IS DRAWN
DUPLICATION OR OVERLAPPING OF EFFORTS AND THIS HELPS IN
BRINGING SMOOTHNESS IN A CONCERN’S WORKING. AND ALL THE EMPLOYEES ARE MADE AWARE OF IT.
IMPORTANCE OF ORGANIZING FUNCTION
1. SPECIALIZATION
ORGANIZATIONAL STRUCTURE IS A
NETWORK OF RELATIONSHIPS IN WHICH
THE WORK IS DIVIDED INTO UNITS AND
DEPARTMENTS. THIS DIVISION OF WORK
IS HELPING IN BRINGING SPECIALIZATION
IN VARIOUS ACTIVITIES OF CONCERN.
2. WELL DEFINED JOBS
• ORGANIZATIONAL STRUCTURE HELPS IN
PUTTING RIGHT MEN ON RIGHT JOB WHICH
CAN BE DONE BY SELECTING PEOPLE FOR
VARIOUS DEPARTMENTS ACCORDING TO THEIR
QUALIFICATIONS, SKILL AND EXPERIENCE. THIS
IS HELPING IN DEFINING THE JOBS PROPERLY
WHICH CLARIFIES THE ROLE OF EVERY
PERSON.
 IMPORTANCE OF ORGANIZING
FUNCTION
3. CLARIFIES AUTHORITY
ORGANIZATIONAL STRUCTURE HELPS IN CLARIFYING
THE ROLE POSITIONS TO EVERY MANAGER (STATUS
QUO). THIS CAN BE DONE BY CLARIFYING THE POWERS
TO EVERY MANAGER AND THE WAY HE HAS TO
EXERCISE THOSE POWERS SHOULD BE CLARIFIED SO
THAT MISUSE OF POWERS DO NOT TAKE PLACE. WELL
DEFINED JOBS AND RESPONSIBILITIES ATTACHED HELPS
IN BRINGING EFFICIENCY INTO MANAGERS WORKING.
THIS HELPS IN INCREASING PRODUCTIVITY
4. CO-ORDINATION
• ORGANIZATION IS A MEANS OF CREATING CO-
ORDINATION AMONG DIFFERENT DEPARTMENTS OF
THE ENTERPRISE. IT CREATES CLEAR CUT
RELATIONSHIPS AMONG POSITIONS AND ENSURE
MUTUAL CO-OPERATION AMONG INDIVIDUALS.
HARMONY OF WORK IS BROUGHT BY HIGHER LEVEL
MANAGERS EXERCISING THEIR AUTHORITY OVER
INTERCONNECTED ACTIVITIES OF LOWER LEVEL
MANAGER.
 IMPORTANCE OF ORGANIZING FUNCTION
5. EFFECTIVE
ADMINISTRATION
• THE ORGANIZATION STRUCTURE IS HELPFUL
IN DEFINING THE JOBS POSITIONS. THE ROLES
TO BE PERFORMED BY DIFFERENT MANAGERS
ARE CLARIFIED. SPECIALIZATION
ACHIEVED THROUGH DIVISION OF WORK.
THIS ALL LEADS TO EFFICIENT AND
EFFECTIVE ADMINISTRATION.
6. GROWTH AND
DIVERSIFICATION
• A COMPANY’S GROWTH IS TOTALLY DEPENDANT ON HOW
EFFICIENTLY AND SMOOTHLY A CONCERN WORKS.
EFFICIENCY CAN BE BROUGHT ABOUT BY CLARIFYING THE
ROLE POSITIONS TO THE MANAGERS, CO-ORDINATION
IS BETWEEN AUTHORITY AND RESPONSIBILITY AND
CONCENTRATING ON SPECIALIZATION. IN ADDITION TO
THIS, A COMPANY CAN DIVERSIFY IF ITS POTENTIAL GROW.
THIS IS POSSIBLE ONLY WHEN THE ORGANIZATION
STRUCTURE IS WELL- DEFINED. THIS IS POSSIBLE THROUGH
A SET OF FORMAL STRUCTURE.
IMPORTANCE OF ORGANIZING FUNCTION
7. SENSE OF SECURITY
• ORGANIZATIONAL STRUCTURE CLARIFIES THE
JOB POSITIONS. THE ROLES ASSIGNED TO
EVERY MANAGER IS CLEAR. CO-ORDINATION IS
POSSIBLE. THEREFORE, CLARITY OF POWERS
HELPS AUTOMATICALLY IN INCREASING
MENTAL SATISFACTION AND THEREBY A SENSE
OF SECURITY IN A CONCERN. THIS IS VERY
IMPORTANT FOR JOB- SATISFACTION.
8. SCOPE FOR NEW CHANGES
WHERE THE ROLES AND ACTIVITIES TO BE PERFORMED ARE
CLEAR AND EVERY PERSON GETS INDEPENDENCE IN HIS
WORKING, THIS PROVIDES ENOUGH SPACE TO A MANAGER
TO DEVELOP HIS TALENTS AND FLOURISH HIS KNOWLEDGE.
A MANAGER GETS READY FOR TAKING INDEPENDENT
DECISIONS WHICH CAN BE A ROAD OR PATH TO ADOPTION
OF NEW TECHNIQUES OF PRODUCTION. THIS SCOPE FOR
BRINGING NEW CHANGES INTO THE RUNNING OF AN
ENTERPRISE IS POSSIBLE ONLY THROUGH A SET OF
ORGANIZATIONAL STRUCTURE.
 PRINCIPLES OF ORGANIZING
1. PRINCIPLE OF
SPECIALIZATION
ACCORDING TO THE PRINCIPLE, THE WHOLE
WORK OF A CONCERN SHOULD BE DIVIDED
AMONGST THE SUBORDINATES ON THE
BASIS OF QUALIFICATIONS, ABILITIES AND
SKILLS. IT IS THROUGH DIVISION OF WORK
SPECIALIZATION CAN BE ACHIEVED WHICH
RESULTS IN EFFECTIVE ORGANIZATION.
2. PRINCIPLE OF
FUNCTIONAL DEFINITION
• ACCORDING TO THIS PRINCIPLE, ALL THE FUNCTIONS IN A CONCERN
SHOULD BE COMPLETELY AND CLEARLY DEFINED TO THE MANAGERS
AND SUBORDINATES. THIS CAN BE DONE BY CLEARLY DEFINING THE
DUTIES, RESPONSIBILITIES, AUTHORITY AND RELATIONSHIPS OF PEOPLE
TOWARDS EACH OTHER. CLARIFICATIONS IN AUTHORITY-
RESPONSIBILITY RELATIONSHIPS HELPS IN ACHIEVING CO-ORDINATION
AND THEREBY ORGANIZATION CAN TAKE PLACE EFFECTIVELY. FOR
EXAMPLE, THE PRIMARY FUNCTIONS OF PRODUCTION, MARKETING AND
FINANCE AND THE AUTHORITY RESPONSIBILITY RELATIONSHIPS IN
THESE DEPARTMENTS SHOULDBE CLEARLY DEFINED TO EVERY PERSON
ATTACHED TO THAT DEPARTMENT. CLARIFICATION IN THE AUTHORITY-
RESPONSIBILITY RELATIONSHIP HELPS IN EFFICIENT ORGANIZATION.
PRINCIPLES OF ORGANIZING
3. PRINCIPLES OF SPAN OF
CONTROL/SUPERVISION
• ACCORDING TO THIS PRINCIPLE, SPAN OF CONTROL IS
A SPAN OF SUPERVISION WHICH DEPICTS THE
NUMBER OF EMPLOYEES THAT CAN BE HANDLED
AND CONTROLLED EFFECTIVELY BY A SINGLE
MANAGER. ACCORDING TO THIS PRINCIPLE, A
MANAGER SHOULD BE ABLE TO HANDLE WHAT
NUMBER OF EMPLOYEES UNDER HIM SHOULD BE
DECIDED. THIS DECISION CAN BE TAKEN BY
CHOOSING EITHER FROM A WIDE OR NARROW SPAN.
 TWO TYPES OF SPAN OF CONTROL
A. WIDE SPAN OF CONTROL B. NARROW SPAN OF CONTROL
IT IS ONE IN WHICH A MANAGER CAN SUPERVISE AND CONTROL EFFECTIVELY A LARGE ACCORDING TO THIS SPAN, THE WORK AND AUTHORITY IS DIVIDED AMONGST MANY
GROUP OF PERSONS AT ONE TIME. THE FEATURES OF THIS SPAN ARE:- SUBORDINATES AND A MANAGER DOESN'T SUPERVISES AND CONTROL A VERY BIG
GROUP OF PEOPLE UNDER HIM. THE MANAGER ACCORDING TO A NARROW SPAN
• LESS OVERHEAD COST OF SUPERVISION
SUPERVISES A SELECTED NUMBER OF EMPLOYEES AT ONE TIME. THE FEATURES ARE:-
• PROMPT RESPONSE FROM THE EMPLOYEES
• WORK WHICH REQUIRES TIGHT CONTROL AND SUPERVISION, FOR EXAMPLE,
• BETTER COMMUNICATION HANDICRAFTS, IVORY WORK, ETC. WHICH REQUIRES CRAFTSMANSHIP, THERE
NARROW SPAN IS MORE HELPFUL.
• BETTER SUPERVISION

• BETTER CO-ORDINATION
• CO-ORDINATION IS DIFFICULT TO BE ACHIEVED.

• SUITABLE FOR REPETITIVE JOBS • COMMUNICATION GAPS CAN COME.

ACCORDING TO THIS SPAN, ONE MANAGER CAN EFFECTIVELY AND EFFICIENTLY HANDLE • MESSAGES CAN BE DISTORTED.
A LARGE NUMBER OF SUBORDINATES AT ONE TIME.
• SPECIALIZATION WORK CAN BE ACHIEVED.
FACTORS AFFECTING SPAN OF
CONTROL
1. MANAGERIAL ABILITIES
• IN THE CONCERNS WHERE
MANAGERS ARE CAPABLE,
QUALIFIED AND EXPERIENCED, WIDE
SPAN OF CONTROL IS ALWAYS
HELPFUL.
2. COMPETENCE OF SUBORDINATES
• WHERE THE SUBORDINATES ARE CAPABLE AND
COMPETENT AND THEIR UNDERSTANDING
LEVELS ARE PROPER, THE SUBORDINATES TEND
TO VERY FREQUENTLY VISIT THE SUPERIORS
FOR SOLVING THEIR PROBLEMS. IN SUCH
CASES, THE MANAGER CAN HANDLE LARGE
NUMBER OF EMPLOYEES. HENCE WIDE SPAN IS
SUITABLE.
FACTORS AFFECTING SPAN OF
CONTROL
3. NATURE OF WORK
• IF THE WORK IS OF REPETITIVE NATURE,
WIDE SPAN OF SUPERVISION IS MORE
HELPFUL. ON THE OTHER HAND, IF
WORK REQUIRES MENTAL SKILL OR
CRAFTSMANSHIP, TIGHT CONTROL AND
SUPERVISION IS REQUIRED IN WHICH
NARROW SPAN IS MORE HELPFUL.
4. DELEGATION OF AUTHORITY
• WHEN THE WORK IS DELEGATED TO LOWER
LEVELS IN AN EFFICIENT AND PROPER WAY,
CONFUSIONS ARE LESS AND CONGENIALITY OF
THE ENVIRONMENT CAN BE MAINTAINED. IN
SUCH CASES, WIDE SPAN OF CONTROL IS
SUITABLE AND THE SUPERVISORS CAN
MANAGE AND CONTROL LARGE NUMBER OF
SUB- ORDINATES AT ONE TIME.
5. DEGREE OF DECENTRALIZATION
• DECENTRALIZATION IS DONE IN ORDER TO ACHIEVE SPECIALIZATION IN WHICH
AUTHORITY IS SHARED BY MANY PEOPLE AND MANAGERS AT DIFFERENT
LEVELS. IN SUCH CASES, A TALL STRUCTURE IS HELPFUL. THERE ARE CERTAIN
CONCERNS WHERE DECENTRALIZATION IS DONE IN VERY EFFECTIVE WAY WHICH
RESULTS IN DIRECT AND PERSONAL COMMUNICATION BETWEEN SUPERIORS AND
SUB- ORDINATES AND THERE THE SUPERIORS CAN MANAGE LARGE NUMBER OF
SUBORDINATES VERY EASILY. IN SUCH CASES, WIDE SPAN AGAIN HELPS.
PRINCIPLES OF ORGANIZING
4. PRINCIPLE OF SCALAR CHAIN
• SCALAR CHAIN IS A CHAIN OF COMMAND OR AUTHORITY
WHICH FLOWS FROM TOP TO BOTTOM. WITH A CHAIN OF
AUTHORITY AVAILABLE, WASTAGES OF RESOURCES ARE
MINIMIZED, COMMUNICATION IS AFFECTED, OVERLAPPING OF
WORK IS AVOIDED AND EASY ORGANIZATION TAKES PLACE. A
SCALAR CHAIN OF COMMAND FACILITATES WORK FLOW IN AN
ORGANIZATION WHICH HELPS IN ACHIEVEMENT OF EFFECTIVE
RESULTS. AS THE AUTHORITY FLOWS FROM TOP TO BOTTOM, IT
CLARIFIES THE AUTHORITY POSITIONS TO MANAGERS AT ALL
LEVEL AND THAT FACILITATES EFFECTIVE ORGANIZATION.
5. PRINCIPLE OF UNITY OF COMMAND
• IT IMPLIES ONE SUBORDINATE-ONE SUPERIOR
RELATIONSHIP. EVERY SUBORDINATE IS ANSWERABLE
AND ACCOUNTABLE TO ONE BOSS AT ONE TIME. THIS
HELPS IN AVOIDING COMMUNICATION GAPS AND
FEEDBACK AND RESPONSE IS PROMPT. UNITY OF
COMMAND ALSO HELPS IN EFFECTIVE COMBINATION
OF RESOURCES, THAT IS, PHYSICAL, FINANCIAL
RESOURCES WHICH HELPS IN EASY CO-ORDINATION
AND, THEREFORE, EFFECTIVE ORGANIZATION.
 Managing Director
AUTHORITY FLOWS FROM
TOP TO BOTTOM ↓

•ACCORDING TO THE ABOVE DIAGRAM, THE Marketing Manager

MANAGING DIRECTOR HAS GOT THE HIGHEST
LEVEL OF AUTHORITY. THIS AUTHORITY IS SHARED
BY THE MARKETING MANAGER WHO SHARES HIS ↓
AUTHORITY WITH THE SALES MANAGER. FROM
THIS CHAIN OF HIERARCHY, THE OFFICIAL CHAIN
OF COMMUNICATION BECOMES CLEAR WHICH IS Sales/ Media Manager
HELPFUL IN ACHIEVEMENT OF RESULTS AND
WHICH PROVIDES STABILITY TO A CONCERN. THIS
SCALAR CHAIN OF COMMAND ALWAYS FLOW FROM ↓
TOP TO BOTTOM AND IT DEFINES THE AUTHORITY
POSITIONS OF DIFFERENT MANAGERS AT
DIFFERENT LEVELS. Salesmen
CLASSIFICATION OF ORGANIZATIONS

1. FORMAL ORGANIZATION 2. INFORMAL ORGANIZATION

• FORMAL ORGANIZATION - THIS IS ONE WHICH REFERS TO A • ITREFERS TO A NETWORK OF PERSONAL AND SOCIAL
STRUCTURE OF WELL DEFINED JOBS EACH BEARING A RELATIONSHIPS WHICH SPONTANEOUSLY ORIGINATES WITHIN
MEASURE OF AUTHORITY AND RESPONSIBILITY. IT IS A THE FORMAL SET UP. INFORMAL ORGANIZATIONS DEVELOP
CONSCIOUS DETERMINATION BY WHICH PEOPLE RELATIONSHIPS WHICH ARE BUILT ON LIKES, DISLIKES,
FEELINGS AND EMOTIONS. THEREFORE, THE NETWORK OF
ACCOMPLISH GOALS BY ADHERING TO THE NORMS LAID
SOCIAL GROUPS BASED ON FRIENDSHIPS CAN BE CALLED AS
DOWN BY THE STRUCTURE. THIS KIND OF ORGANIZATION IS
INFORMAL ORGANIZATIONS. THERE IS NO CONSCIOUS EFFORT
AN ARBITRARY SET UP IN WHICH EACH PERSON IS
MADE TO HAVE INFORMAL ORGANIZATION. IT EMERGES FROM
RESPONSIBLE FOR HIS PERFORMANCE. FORMAL THE FORMAL ORGANIZATION AND IT IS NOT BASED ON ANY
ORGANIZATION HAS A FORMAL SET UP TO ACHIEVE PRE- RULES AND REGULATIONS AS IN CASE OF FORMAL
DETERMINED GOALS. ORGANIZATION.
LINE AND STAFF
ORGANIZATION MANAGING DIRECTOR

↓ ↓ ↓
•LINE AND STAFF ORGANIZATION IS A MODIFICATION
OF LINE ORGANIZATION AND IT IS MORE COMPLEX Production Marketing Finance
THAN LINE ORGANIZATION. ACCORDING TO THIS Manager Manager Manager
ADMINISTRATIVE ORGANIZATION, SPECIALIZED AND
SUPPORTIVE ACTIVITIES ARE ATTACHED TO THE LINE ↓ ↓ ↓
OF COMMAND BY APPOINTING STAFF SUPERVISORS
AND STAFF SPECIALISTS WHO ARE ATTACHED TO THE Plant Market Chief
LINE AUTHORITY. THE POWER OF COMMAND ALWAYS Supervisor Supervisor Assisstant
REMAINS WITH THE LINE EXECUTIVES AND STAFF
SUPERVISORS GUIDE, ADVICE AND COUNCIL THE LINE ↓ ↓ ↓
EXECUTIVES. PERSONAL SECRETARY TO THE
MANAGING DIRECTOR IS A STAFF OFFICIAL. Foreman Salesman Accountant
FEATURES OF LINE AND STAFF ORGANIZATION
1.THERE ARE TWO TYPES OF STAFF :
1. STAFF ASSISTANTS- P.A. TO MANAGING DIRECTOR, SECRETARY TO MARKETING MANAGER.
2. STAFF SUPERVISOR- OPERATION CONTROL MANAGER, QUALITY CONTROLLER, PRO
2.LINE AND STAFF ORGANIZATION IS A COMPROMISE OF LINE ORGANIZATION. IT IS MORE COMPLEX THAN LINE CONCERN.
3.DIVISION OF WORK AND SPECIALIZATION TAKES PLACE IN LINE AND STAFF ORGANIZATION.
4.THE WHOLE ORGANIZATION IS DIVIDED INTO DIFFERENT FUNCTIONAL AREAS TO WHICH STAFF SPECIALISTS ARE
ATTACHED.
5.EFFICIENCY CAN BE ACHIEVED THROUGH THE FEATURES OF SPECIALIZATION.
6.THERE ARE TWO LINES OF AUTHORITY WHICH FLOW AT ONE TIME IN A CONCERN :
1. LINE AUTHORITY
2. STAFF AUTHORITY
7.POWER OF COMMAND REMAINS WITH THE LINE EXECUTIVE AND STAFF SERVES ONLY AS COUNSELORS.
MERITS OF LINE AND STAFF ORGANIZATION
1.RELIEF TO LINE OF EXECUTIVES- IN A LINE AND STAFF ORGANIZATION, THE ADVICE AND COUNSELING WHICH IS PROVIDED TO THE LINE
EXECUTIVES DIVIDES THE WORK BETWEEN THE TWO. THE LINE EXECUTIVE CAN CONCENTRATE ON THE EXECUTION OF PLANS AND THEY GET
RELIEVED OF DIVIDING THEIR ATTENTION TO MANY AREAS.
2.EXPERT ADVICE- THE LINE AND STAFF ORGANIZATION FACILITATES EXPERT ADVICE TO THE LINE EXECUTIVE AT THE TIME OF NEED. THE PLANNING
AND INVESTIGATION WHICH IS RELATED TO DIFFERENT MATTERS CAN BE DONE BY THE STAFF SPECIALIST AND LINE OFFICERS CAN CONCENTRATE
ON EXECUTION OF PLANS.
3.BENEFIT OF SPECIALIZATION- LINE AND STAFF THROUGH DIVISION OF WHOLE CONCERN INTO TWO TYPES OF AUTHORITY DIVIDES THE ENTERPRISE
INTO PARTS AND FUNCTIONAL AREAS. THIS WAY EVERY OFFICER OR OFFICIAL CAN CONCENTRATE IN ITS OWN AREA.
4.BETTER CO-ORDINATION- LINE AND STAFF ORGANIZATION THROUGH SPECIALIZATION IS ABLE TO PROVIDE BETTER DECISION MAKING AND
CONCENTRATION REMAINS IN FEW HANDS. THIS FEATURE HELPS IN BRINGING CO-ORDINATION IN WORK AS EVERY OFFICIAL IS CONCENTRATING IN
THEIR OWN AREA.
5.BENEFITS OF RESEARCH AND DEVELOPMENT- THROUGH THE ADVICE OF SPECIALIZED STAFF, THE LINE EXECUTIVES, THE LINE EXECUTIVES GET
TIME TO EXECUTE PLANS BY TAKING PRODUCTIVE DECISIONS WHICH ARE HELPFUL FOR A CONCERN. THIS GIVES A WIDE SCOPE TO THE LINE
EXECUTIVE TO BRING INNOVATIONS AND GO FOR RESEARCH WORK IN THOSE AREAS. THIS IS POSSIBLE DUE TO THE PRESENCE OF STAFF SPECIALISTS.
6.TRAINING- DUE TO THE PRESENCE OF STAFF SPECIALISTS AND THEIR EXPERT ADVICE SERVES AS GROUND FOR TRAINING TO LINE OFFICIALS. LINE
EXECUTIVES CAN GIVE DUE CONCENTRATION TO THEIR DECISION MAKING. THIS IN ITSELF IS A TRAINING GROUND FOR THEM.
7.BALANCED DECISIONS- THE FACTOR OF SPECIALIZATION WHICH IS ACHIEVED BY LINE STAFF HELPS IN BRINGING CO-ORDINATION. THIS
RELATIONSHIP AUTOMATICALLY ENDS UP THE LINE OFFICIAL TO TAKE BETTER AND BALANCED DECISION.
8.UNITY OF ACTION- UNITY OF ACTION IS A RESULT OF UNIFIED CONTROL. CONTROL AND ITS EFFECTIVITY TAKE PLACE WHEN CO-ORDINATION IS
PRESENT IN THE CONCERN. IN THE LINE AND STAFF AUTHORITY ALL THE OFFICIALS HAVE GOT INDEPENDENCE TO MAKE DECISIONS. THIS SERVES AS
EFFECTIVE CONTROL IN THE WHOLE ENTERPRISE
DEMERITS OF LINE AND STAFF ORGANIZATION
1. LACK OF UNDERSTANDING- IN A LINE AND STAFF ORGANIZATION, THERE ARE TWO AUTHORITY FLOWING AT ONE TIME. THIS RESULTS IN THE CONFUSION
BETWEEN THE TWO. AS A RESULT, THE WORKERS ARE NOT ABLE TO UNDERSTAND AS TO WHO IS THEIR COMMANDING AUTHORITY. HENCE THE PROBLEM OF
UNDERSTANDING CAN BE A HURDLE IN EFFECTIVE RUNNING.

2. LACK OF SOUND ADVICE- THE LINE OFFICIAL GET USED TO THE EXPERTISE ADVICE OF THE STAFF. AT TIMES THE STAFF SPECIALIST ALSO PROVIDE WRONG
DECISIONS WHICH THE LINE EXECUTIVE HAVE TO CONSIDER. THIS CAN AFFECT THE EFFICIENT RUNNING OF THE ENTERPRISE.

3. LINE AND STAFF CONFLICTS- LINE AND STAFF ARE TWO AUTHORITIES WHICH ARE FLOWING AT THE SAME TIME. THE FACTORS OF DESIGNATIONS, STATUS
INFLUENCE SENTIMENTS WHICH ARE RELATED TO THEIR RELATION, CAN POSE A DISTRESS ON THE MINDS OF THE EMPLOYEES. THIS LEADS TO MINIMIZING OF CO-
ORDINATION WHICH HAMPERS A CONCERN’S WORKING.

4. COSTLY- IN LINE AND STAFF CONCERN, THE CONCERNS HAVE TO MAINTAIN THE HIGH REMUNERATION OF STAFF SPECIALIST. THIS PROVES TO BE COSTLY FOR A
CONCERN WITH LIMITED FINANCE.

5. ASSUMPTION OF AUTHORITY- THE POWER OF CONCERN IS WITH THE LINE OFFICIAL BUT THE STAFF DISLIKES IT AS THEY ARE THE ONE MORE IN MENTAL WORK.

6. STAFF STEALS THE SHOW- IN A LINE AND STAFF CONCERN, THE HIGHER RETURNS ARE CONSIDERED TO BE A PRODUCT OF STAFF ADVICE AND COUNSELING. THE
LINE OFFICIALS FEEL DISSATISFIED AND A FEELING OF DISTRESS ENTERS A CONCERN. THE SATISFACTION OF LINE OFFICIALS IS VERY IMPORTANT FOR EFFECTIVE
RESULTS.