Organising in Management

Meaning of Organising

• Organising is about arranging tasks, grouping activities, and bringing together resources to accomplish a specific organizational goal.
• Henry Fayol defined it as providing an organization with everything necessary for functioning, like raw materials, tools, capital, and personnel.
• William Spriege described organising as a broad concept encompassing relationships between various factors in an enterprise.
• G.R.Terry viewed organising as establishing effective authority relationships among work, people, and locations to ensure efficient teamwork.

Organising Procedure

• Organising involves five key procedures:
  • Identification and Division of Work: Identifying tasks and allocating them to employees (e.g., a bank cashier handling payments).
  • Departmentalisation: Grouping jobs into departments based on functions (e.g., accounting, marketing) or divisions based on products (e.g., cosmetics, textiles, groceries).
  • Assignment of Duties: Assigning specific responsibilities to individuals based on their skills and qualifications.
  • Establishing Reporting Relationships: Defining the chain of command and authority relationships.

Organising Process

• Organising process involves four steps:
  • Identification and Division of Work: Dividing work into manageable tasks or jobs to avoid duplication or overloading.
  • Departmentalisation: Grouping similar tasks into departments by function (e.g., production) or division (e.g., cosmetics, textiles).
  • Assignment of Duties: Formally assigning duties through job descriptions, ensuring alignment with individual skills.
  • Establishing Reporting Relationship: Creating a hierarchy (chain of command) with defined authority and responsibility at each level.

Importance/Significance of Organising

• Organising offers several benefits:
  • Specialization: Each individual focuses on a specific task, improving efficiency through repeated practice.
  • Clarity in Working Relationships: Clear lines of authority and communication, reducing confusion.
  • Optimum Utilization of Resources: Defined roles and responsibilities minimize waste and duplication.
  • Adaptation to Change: Changes are adopted systematically, affecting specific departments and communicated effectively.
  • Effective Administration: Similar jobs grouped together promote coordination and harmony within departments.
  • Expansion and Growth: Planned work and departmentation allow organizations to scale up efficiently.
  • Development of Personnel: Delegation allows managers to focus on developing employees and innovating through new technologies.

Organizational Structure

• Meaning: Defines job positions, authorities, responsibilities, and relationships between people, work, and resources.
• Consequences: Impacts employees' authority levels, operational tasks assigned at each level, and the span of management (number of subordinates per manager).

Types of Organizational Structure

• Functional Structure: Groups activities by functions (e.g., production, sales, finance) and establishes a chain of command within each department.
  • Advantages: Specialization, improved supervision, cost reduction, minimized duplication, easier training, focused attention to functions.
  • Disadvantages: Less emphasis on overall goals, coordination problems, inflexibility, conflict of interest, accountability challenges.
  • Suitability: For companies producing a single product.
• Divisional Structure: Groups activities by product or project. Each division handles all functions related to a specific product.
  • Advantages: Product specialization, faster decision-making, clear accountability.
  • Disadvantages: More resources required, potential product focus, conflict among departments, increased costs.
  • Suitability: Large organizations with multiple product types, companies requiring product-specific specialization, growing companies planning to add more product lines.

Formal and Informal Organization

• Formal Organization: Intentionally designed by management to achieve organizational objectives, with defined roles, authority, and reporting structure.
  • Features: Systematic working, goal achievement, defined jobs, assigned authority, hierarchy, formal communication channels.
  • Advantages: Smooth operations, efficient work, avoids duplication, facilitates coordination.
• Informal Organization: Spontaneously emerges from relationships and interactions among employees.
  • Features: Automatic creation, driven by social connections, satisfies social needs and psychological needs.
  • Advantages: Faster communication, fulfills social needs, real feedback, supports change, quick information transmission, better cooperation.
  • Disadvantages: Rumours, unsystematic working, negative impacts, individual interests over organizational goals.

Formal vs. Informal Organization

• Formal structures are planned and deliberate, while informal structures arise naturally.
• Formal structures focus on efficiency and goals, while informal structures prioritize social interactions.
• Formal structures rely on informal structures for communication and relationships.

Principles and Functions of Management

• Formal Organization:
  • Behavior: Determined by management.
  • Structure: Scalar chain and defined hierarchy exist.
  • Leadership: Leaders are generally managers.
  • Stability: Stable and long-lasting.
  • Rules: Employees must follow rules, violations have consequences.
  • Interdependence: Independent of informal organization.
  • Authority: Top-down flow.
• Informal Organization:
  • Behavior: Difficult to control.
  • Structure: No fixed path for information, primarily oral communication.
  • Leadership: Leadership can arise from individuals with authority or influence.
  • Stability: Unstable and fluid.
  • Rules: No formal rules or regulations, no penalties.
  • Interdependence: Dependent on the formal organization for structure and foundation.

Formal and Informal Organisation

• Formal Organisation: Deliberately designed by managers to achieve organizational goals.
• Informal Organisation: Emerges automatically, satisfying psychological needs.
• Key Difference: Formal organisations have a defined structure with formal communication channels; informal organisations are less structured, with communication often informal.
• Example: A company manufacturing washing machines may find employees are less motivated due to lack of interaction, hindering adaptability.
• Solution: Encourage social interaction to improve motivation and adaptability.

Delegation

• Delegation of Authority: The process where managers assign tasks to subordinates based on their qualifications.
• Elements of Delegation: Responsibility, Authority, Accountability.
• Responsibility: The task or work assigned to an individual.
• Authority: The power to make decisions related to the assigned task.
• Accountability: The subordinate is answerable for the completion of the task, while the manager remains ultimately accountable.
• Principle of Absoluteness of Accountability: Even though responsibilities are delegated, the manager remains accountable for the final outcome.
• Example: If a manager assigns a sales target to subordinates but they fail to meet it due to reasons like illness, the manager is still accountable.
• Key Features of Responsibility: Arises from the superior-subordinate relationship, flows upward.
• Key Features of Authority: Originates from position within the organisation, flows downward, must equal responsibility.