Organising - Compressed PDF

# Chapter 9: ORGANISING ## Meaning Organisation refers to the way in which the work of a group of people is arranged and distributed among members to achieve the business objectives. It is the working together of two or more persons in a co-ordinated way for achieving common objectives. Organisati...

# Chapter 9: ORGANISING ## Meaning Organisation refers to the way in which the work of a group of people is arranged and distributed among members to achieve the business objectives. It is the working together of two or more persons in a co-ordinated way for achieving common objectives. Organisation establishes relationship among people in the enterprise and co-ordinates their activities in such a way that all the resources are employed for achieving business objectives. So organisation is the process of combining the work of people working in the enterprise for undertaking various duties and responsibilities. The word 'organising', on the other hand, is used for stating it as a function of management for bringing together human and non-human resources i.e., materials, machinery, money etc. and defining and establishing the authority-responsibility relationship for achieving organisational goals. ## Definitions - **Louis Allen:** "Organisation is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives." - **Wheeler:** "Internal organisation is the structural framework of duties and responsibilities required of personnel in performing various functions within the company ... It is essentially a blueprint for action resulting in a mechanism for carrying out function to achieve the goals set up by company management." - **Oliver Sheldon:** "Organisation is the process so combining the work which individuals or groups have to perform with the facilities necessary for its execution, that the duties so performed provide the best channels for the efficient, systematic, positive and co-ordinated application of the available effort." - **George Terry:** "Organising is the establishing of effective authority relationships among selected persons and work places in order for the group to work together efficiently". - **C.H. Northcott:** "The arrangement by which tasks are assigned to men and women so that their individual efforts contribute effectively to some more or less clearly defined purpose for which they have been brought together". - **L.H. Haney:** "Organisation is a harmonious adjustment of specialised parts working in the organisation for the attainment of enterprise goals. Organisation is the adjustment of various activities for the attainment of common purpose or purposes." ## Concept of Organisation There are two concepts of organisation: Organisation as a process and organisation as a structure of relationship. ### 1. Organisation as a Process (Dynamic Concept): Organisation is a process of organising work, people, and the systems. It is not a managerial work that can be performed in a single stroke, it is a chain of various activities. Organisation is concerned with the process of determining activities which may be necessary for achieving an objective and arranging them in suitable groups so as to be assigned to individuals. Organisation changes and require a continuous process to be changed and adjusted to suit the new organisation as an open adaptive system and lays emphasis on individuals and considers organisation as a continuous process. ### 2. Organisation as a Structure of Relationship (Static Concept): Under this concept, organisation is used as a structure, an entity or a network of specified relationship. The responsibilities and authority is defined for every post and superior-subordinate relationship is established. The responsibilities and authority is defined for every post and superior-subordinate relationship is created. In this sense, organisation is a group of people bound together in a formal relationship to achieve common objectives. It lays emphasis on positions and not on individuals. Various posts in different departments of the organisation are mostly permanent. Therefore, organisation as a structure of relationship is called static element. ## Characteristics/Features of Organisation Different authors look at the word 'organisation' from their own angle. One thing which is common in all the viewpoints is that organisation is the establishment of authority relationship among persons so that it helps in the achievement of organisational objectives. Some of the characteristics of organisation are studied as follows: ### 1. Group of Persons: Every organisation requires the services of people for undertaking various tasks. When two or more persons come together for undertaking common work, then the organisation comes into existence. There are different tasks in the organisation and these are assigned to different persons. The main aim of every individual in organisation is to work for attaining common organisational goals. So an organisation exists with a number of persons. ### 2. Division of Work: Organisation deals with the whole task of business. The total work of the enterprise is divided into activities and functions. Various activities are assigned to different persons for their efficient accomplishment. This brings in division of labour. It is not that one person cannot carry out many functions but specialisation in different activities is necessary to improve one's efficiency. Organisation helps in dividing the work into related activities so that they are assigned to different individuals. ### 3. Co-ordination: Co-ordination of various activities is as essential as their division. It helps in integrating and harmonising various activities. Co-ordination also avoids duplications and delays. In fact, various functions in an organisation depend upon one another and the performance of one influences the other. Unless all of them are properly co-ordinated, the performance of all segments is adversely affected. ### 4. Common Objectives: An organisational structure is a means towards the achievement of enterprise goals. The goals of various segments lead to the achievement of major business goals. The organisational structure should build around common and clear cut objectives. This will help in their proper accomplishment. ### 5. Co-operative Relationship: An organisation creates co-operative relationship among various members of the group. An organisation cannot be constituted by one person. It requires at least two or more persons. Organisation is a system which helps in creating meaningful relationship among persons. The relationship should be both vertical and horizontal among members of various departments. The structure should be designed that it motivates people to perform their part of work together. ### 6. Well-defined Authority-Responsibility Relationships: An organisation consists of various positions arranged in a hierarchy with well defined authority and responsibility. There is always a central authority from which a chain of authority relationship stretches throughout the organisation. The hierarchy of positions defines the lines of communication and pattern of relationships. ### 7. Proper Communication: An organisation works with an effective communication system. Every order or information passes on from upward to downward and vice-versa. The communication system informs various persons the tasks they are to perform. The results of various tasks are brought to the notice of top management. The communication system is an essential element of an organisation. ## Organisation Process/Steps Following steps are involved in organising process. ### 1. Identification of Activities: Organisation structure is developed to achieve business Objectives. Therefore, the activities required to achieve objectives are identified. All business activities are divided and sub-divided into various categories. The purpose is that no work is left unidentified. Identification and classification of activities enable managers to concentrate attention on important activities and also to avoid overlapping and duplication of work. The process of identification of activities should ensure that: (a) all activies are performed (b) there is no duplication of activities and (c) all activities are performed in a co-ordinated manner. ### 2. Grouping Jobs into Departments: After identification of various activities, similar activities are grouped together and put under different departments. The grouping may be done in different ways. The common grouping may be as: (i) functional departmentation and (ii) divisional departmentation under functional departmentation, the activities related to the common function are grouped under one department. For example, all the jobs related to production are grouped under production department, activities related to marketing may be put under marketing department and so on. Under divisional departmentation, if a firm deals in two products say steel and cement, there may be one department related to production and marketing of steel and the other may deal with cement. ### 3. Assigning Responsibilities: When activities are divided into different functions, the next step will be to appoint suitable persons for different duties. Authority relationships are established among various members of the organisation for taking up different duties. The work should be assigned as per the skills and qualifications of persons. The experts in different areas are appointed to head departments. For example, purchase manager must be assigned duties regarding purchase of raw materials. ### 4. Delegation of Authority: In order to carry out different jobs, there is a need to have authority for the same. A persons will be able to perform his duties only when he is given adequate authority for that job. A job assigned without any authority will not be performed. Authority and responsibility are properly balanced. Top management should delegate authority to lower levels and fix responsibility for the tasks. Delegation of authority creates superior-subordinate relationship between various positions in the organisation. Such relationships and channels of communication should be clearly defined. Every person in the organisation should be clear from whom he has to take orders and to whom he is accountable for his performance. For example, when a production manager is given the duty of producing 1000 units in a month, then he should have the authority to instruct his subordinates and give them required instructions. ### 5. Establishing Reporting Relationship: After assigning responsibilities and delegating authority, a reporting relationship should be established among different persons. Everybody should know the person from whom he is to get instructions and to whom he is accountable. It means there is a need to create superior-subordinate relationship. The establishment of clear relationship helps in creating hierarchical structure and helps in co-ordination among different departments. For example, the employees engaged in sales, advertising, promotion should report to marketing manager. ## Principles of Organising On the basis of past experiences certain principles have been derived for a sound business organisation. Taylor, Fayol and Urwick have spelt out various principles on the basis of their experience. Some of these principles are discussed as follows: ### 1. Principle of Objective: The enterprise should set up certain aims for the achievement of which various departments should work. A common goal so devised for the business as a whole and the organisation is set up to achieve that goal. In the absence of a common aim, various departments will set up their own goals and there is a possibility of conflicting objectives for different departments. So there must be an objective for the organisation. ### 2. Principle of Specialisation: The organisation should be set up in such a way that every individual should be assigned a duty according to his skill and qualification. Every person should be assigned a duty so that he specialises in his work. This helps in increasing production in the concern. ### 3. Principle of Co-ordination: The co-ordination of different activities is an important principle of the organisation. There should be some agency to co-ordinate the activities of different departments. In the absence of co-ordination there is a possibility of setting up different goals by different departments. The ultimate aim of the concern can be achieved only if proper co-ordination is done for different activities. ### 4. Principle of Authority and Responsibility: The authority flows downward in the line. Every individual is given authority to get the work done. Though authority can be delegated but responsibility lies with the man who has been given the work. If a superior delegates his authority to his subordinate, the superior is not absolved of his responsibility, though the subordinate becomes liable to his superior. The responsibility cannot be delegated under any circumstances. ### 5. Principle of Definition: The scope of authority and responsibility should be clearly defined. Every person should know his work with definiteness. If the duties are not clearly assigned, then it will not be possible to fix responsibility also. Everybody's responsibility will become nobody's responsibility. The relationship between different departments should also be clearly defined to make the work efficient and smooth. ### 6. Span of Control: Span of control means how many subordinates can be supervised by a supervisor. The number of subordinates should be such that the supervisor should be able to control thier work effectively. Moreover, the work to be supervised should be of the same nature. If the span of control is disproportionate, it is bound to affect the efficiency of the workers because of slow communication with the supervisors. ### 7. Principle of Balance: The principle means that assignment of work should be such that every person should be given only that much work which he can perform well. If some person is over worked and the other is under-worked, then the work will suffer in both the situations. The work should be divided in such a way that everybody should be able to give his maximum. ### 8. Principle of Continuity: The organisation should be amendable according to the changing situations. Everyday there are changes in methods of production and marketing systems. The organisation should be dynamic and not static. There should always be a possibility of making necessary adjustments. ### 9. Principle of Uniformity: The organisation should provide for the distribution of work in such a manner that the uniformity is maintained. Each officer should be incharge of his respective area so as to avoid dual subordination and conflicts. ### 10. Principle of Unity of Command: There should be a unity of command in the organisation. A person should be answerable to one boss only. If a person is under the control of more than one person then there is a likelihood of confusion and conflict. He gets contradictory orders from different superiors. This principle creates a sense of responsibility to one person. The command should be from top to bottom for making the organisation sound and clear. It also leads to consistency in directing, co-ordinating and controlling. ### 11. Principle of Exception: This principle states that top management should interfere only when something goes wrong. If the things are done as per plans then there is no need to be supervised by lower cadres. It is only the exceptional leave routine that attracts the attention of top management. This principle relieves top management of many botherations and routine things. Principle of exception allows top management to concentrate on planning and policy formulation. Important time of management is not wasted on avoidable supervision. ### 12. Principle of Simplicity: The organisational structure should be simple so that it is easily understood by each and every person. The authority, responsibility and position of every person should be made clear so that there is no confusion about these things. A complex organisational structure will create doubts and conflicts among persons. There may also be over-lappings and duplication of efforts which may otherwise be avoided. It helps in smooth running of the organisation. ### 13. Principle of Efficiency: The organisation should be able to achieve enterprise objectives at a minimum cost. The standards of costs and revenue are pre-determined and performance should be according to these goals. The organisation should also enable the attainment of job satisfaction to various employees. #### 14. Scalar Principle: This principle refers to the vertical placement of supervisors starting from top and going to the lower level. The scalar chain is a pre-requisite for effective and efficient organisation. ## Requisites of An Efficient Business Organisation An efficient organisation is essential for the success of a business enterprise. The defining an efficient organisation ensures proper supervision and control. It facilitates expansion and diversification. An effective organisation has the following pre-requisits: ### 1. Able Organisers: Success of an organisation depends upon the competence and calibre of organisers. Success of an organisation properly depends upon the understanding of all aspects of the business so that he may properly organise various aspects of the concern. A well-defined organisational set-up will be helpful in smooth running of the business. The persons at the top should be well versed with everything. He should be a dynamic and should be able to cope with the changing business environment. ### 2. Sound Business Policies: The management should be clear about the objective to be achieved. Various policies should be aimed to achieve the business goals. There should be no conflict and confusion regarding different policies. The policies should be clearly defined and different policies should be consistent. ### 3. Proper Supervision and Control: The success of an organisation will depend upon the effective supervision and control. If the activities of different individuals are not properly controlled, then business goals will not be achieved. The targets of work should be fixed and the performance should be recorded. A corrective action is necessary if the performance is less than the goals. The number of persons to be supervised (span of control) by the supervisors should also be realistic. The supervisors should be able to devote enough time in checking the work of every employee under his control. ### 4. Co-operation and Co-ordination: It is necessary to get the co-operation of everybody in the organisation to make it a success. The goals of the business are common and everybody should try to achieve them in their respective fields. There should be some agency to co-ordinate the activities of various departments. Sales department must know the plans of purchase and finance department should also work in co-ordination with each other. The employees should develop an attitude of co-operation. A central agency should act as a co-ordinating body. ### 5. Efficient Personnel Organisation: Management of personnel is an important aspect of organisation. Proper personnel organisation is necessary for enabling all persons to optimise their contribution towards realising the corporate objective. Personnel organisation includes recruitment, training, job evaluation, merit rating and fixing of remuneration. Working conditions should be improved so that workers are encouraged to work more efficiently and have job satisfaction. ### 6. Capacity for Business Expansion: The organisation should be elastic to enable expansion and diversification of the business. The production may be raised in the same line or more products may be added. The organisational structure should be such that it allows increase or decrease of production, as the case may be without disturbing the whole organisation. If some change in production and sales require a change in organisational set up, it will discourage the growth of the enterprise. ## Importance of Organisation Organisation is the mechanism which determines the relationship of various persons with the help of a well defined organisation management is able to perform the functions of direction, co-ordination and control. An ill-defined organisation plan will not enable the management to make an effective exhibition of its managerial talents to realise business goals. Following are some of the advantages of a good organisation: ### 1. Helps in Optimum Utilisation of Technological Innovations: The test of a good organisation is its success in adjusting to the new and changing situation. The technological improvements are taking place every time and management is required to make use of them to exist in competitive world. The organisation should be flexible to incorporate all new requirements. The adjustment to new changes will require re-scheduling and readjustment of duties and responsibilities in the organisation. There may also be a need to delegate new powers for making best utilisation of technological changes. ### 2. Helps in Administration: An organisation provides sound foundation for effective managerial control. Various managerial functions will be effectively performed with the help of an organisation. The functions like co-ordination and control require a proper division of various functions and their assignment to suitable persons. An important function of planning will be effective only if there is an organisation to implement it. Best plans may fail if these are not executed properly. The assignment of responsibilities among various persons for carrying out different functions will be essential for making the plans effective. There will be a need of proper authority to carry out the functions systematically and effectively. A good organisation is an asset to the management. It helps in achieving organisation goals through the exercise of effective controls. Organisation provides a channel for better management. ### 3. Promotes Growth and Diversification: Area and activities of a business grow if it has a well knit organisation. There will be a need for employing more persons whenever expansion and diversification takes place. A flexible organisational structure will enable the employment of more persons without disturbing the working. Additional activities will not put any strain on the management. ### 4. Easy Co-ordination: Every enterprise has a number of departments and sections. These are assigned different duties for achieving business objectives. There is a need for co-ordinating the working of various segments. A good organisation will divide and sub-divide the activities in such a way that the activities of different segments become complementary. This will bring an automatic co-ordination in the business. ### 5. Training and Development of Personnel: A good organisation offers an opportunity for the training and development of personnel. A clearly defined authority provides a scope for the use of talent. There will be a sufficient scope to try new ideas in improving the working of the organisation. The new entrants get sufficient training in their work. They are attached to experienced persons who guide them on undertaking various jobs. The job training is much better and gives good results as compared to class room training. A well devised organisational system will provide a sufficient opportunity for the training of new trainees and development of existing staff. ### 6. Encourages Initiative: A good organisational structure will provide sufficient scope for taking initiative. Persons are allowed to try new ideas for improving upon their work. The policies and procedures are laid down for the guidance of managerial personnel. But within these limits people are given freedom to show their talent. The initiative and creativeness encouraged in the organisation will make it dynamic and responsive to the new situations. If persons are not encouraged to take new initiative then the management may not be able to cope with the changing business environment. A good organisation clearly defines the scope of work of every person and allows them to grow in that sphere. ### 7. Better Human Relations: Human relations improve in a good organisational setup. An organisation consists of human beings and their satisfaction will help in improving human relations. Individuals to work in a free atmosphere. Everybody will know his responsibilities and may try to remain in that sphere. This will give job satisfaction to employees. ### 8. Proper Communication: A good organisation facilitates smooth flow of information. The communication system can be established through the organisational structure. The system can be established through the organisational structure. Information goes from upward to downward and vice-versa. The superiors can easily communicate their reactions, difficulties, grievances etc. to the higher authorities proper communication system can be established through the organisational structure. ### 9. Creating Specialisation: The work in the organisation is divided into different parts. Different persons are assigned the work on the basis of their skills, qualifications, competency etc. When persons undertake the same work repeatedly, they develop specialisation in those tasks. This helps in improving the performance of employees. So organising function helps in creating specialisation in workers. ## DELEGATION OF AUTHORITY **Concept** Delegation is an administrative process of getting things done by others by giving them responsibility. It involves transfer of authority from superior to subordinate, entrusting of responsibility and creation of accountability for performance. All important decisions are taken at top level by Board of Directors. The execution is entrusted to Chief Executive Officer. The Chief Executive Officer assigns the work to departmental managers who in turn delegate the authority to subordinates for getting a particular work done. The process goes to the level where actual work is executed. The person who is made responsible for a particular work is given the requisite authority for getting it done. **Principle of Absoluteness of Accountability (Delegator of Authority Remains Accountable for Results)** Delegation is an important process to assign authority and responsibility to subordinates for carrying out activities at various levels. Delegation of authority does not absolve the superior of his accountability. The person delegating authority remains accountable for the results even if the work is performed by the subordinates. For example, a production manager has been asked to produce 5000 units in a month and he assigns this work to five supervisors who were given the task of producing 1000 units each in their sections. If one supervisor could not reach his target due to certain reasons then the accountability of production manager remains as such even though the work was to be done at the supervisors level. The production manager should have supervised the work to know the progress. So one can delegate authority but remains accountable for the work delegated. ## Elements of Delegation Delegation involves following three elements: ### 1. Authority: Authority is the degree of discretion conferred on people to make it possible for them to use their judgement. When an enterprise is small then decision-making power is centralised in few hands. As the enterprise grows there is a need to delegate authority to more and more people to cope with the work. The grant of authority is an element of delegation. The delegator grants authority to the subordinate so that the assigned task is accomplished. The delegation of responsibility without authority is meaningless. The subordinate can only accomplish the work when he has the authority required for completing that task. Authority is the power to order or command, delegated from superior, to enable the subordinate to discharge his responsibility. The purpose of this transfer is to enable the subordinate to complete his assigned work properly. The superior should delegate sufficient authority to do the assigned work. **Features of Authority** - It refers to the right to take decision due to managerial position. - Authority determines superior-subordinate relationship. A superior expects compliance of his orders to the subordinate. - Authority is given to influence the behaviour of subordinates for doing the things as per instructions. - Authority is restricted by rules and regulators of the organisation. - The exercise of authority is always subjective. It is influenced by the personality traits of the person on whom it is used. - Authority must be equal to responsibility. ### 2. Responsibility: The next step in delegation is the assignment of work or duty to the subordinate i.e., delegation of authority. The superior asks his subordinate to perform a particular task in a given period of time. It is the description of the role assigned to the subordinate. Duties in terms of functions or tasks to be performed constitute the basis of delegation process. **Features of Responsibility** - Responsibility arises from superior-subordinate relationship. - It arises from the duty assigned. - It always flows upward from junior to senior. ### 3. Accountability: It is the obligation of a subordinate to perform the duties assigned to him. The delegation creates an obligation on the subordinate to accomplish the task assigned to him by the superior. When a work is assigned and authority is transferred so that a particular work is completed as desired. This authority has to ensure the completion. The authority flows downward and responsibility flows upward. The subordinate should be accountable to only one superior. Single accountability improves work and discipline. **Features of Accountability** - Accountability refers to the performance of the subordinate. - Accountability cannot be delegated. - It is enforced through regular feedback on the extent of work accomplished. - Accountability always goes upward, a subordinate accountable to the superior. - Accountability is always unitary, a subordinate answerable to the boss above him. **Authority granted must be equal to responsibility assigned** For effective delegation, the authority granted must be commensurate with the responsibility assigned. If the authority granted is more than the responsibility assigned, then the authority may be misused. If the authority granted is less than the responsibility assigned then the work may not be done effectively. ## Difference between Authority and Responsibility | Sr.No. | Basis | Authority | Responsibility | |:---:|:---:|:---:|:---| | 1. | Meaning | It is the right to take decision or command the subordinate. | It is the obligation to perform the assigned task. | | 2. | Origin | Authority normally arises from formal position in the organisation. | It arises from superior-subordinate relationship. | | 3. | Delegation | Authority can be delegated from a superior to a subordinate. | Responsibility cannot be fully delegated. | | 4. | Duration | Authority may continue for a long period. | Responsibility is over when the assigned task is completed. | ## Difference between Responsibility and Accountability | Basis | Responsibility | Accountability | |:---:|:---:|:---| | Meaning | It is the assignment of work to a person in the organisation. | It is the obligation to perform the assigned work. | | Delegation | Responsibility cannot be entirely delegated as superior passes on his responsibility to the subordinate. | It cannot be delegated, it lies with the superior as well as with the subordinate. | | Flow of direction | Responsibility flows upward. | Accountability always goes upward. | ## Comparative Study of Elements of Delegation | Basis | Authority | Responsibility | Accountability | |:---:|:---:|:---:|:---| | Meaning | Right to take decision | Obligation to perform a task | Answerable to assigned task | | Origin | Arises from formal position | Arises from superior-subordinate relationship | Arises from responsibility | | Delegation | Can be delegated | Cannot be fully delegated | Cannot be delegated at all | | Flow of direction | Flows down from superior to subordinate | Flows upward from subordinate to superior | Always flows upward | ## Importance of Delegation of Authority An organisation benefits by delegation in the following ways: ### 1. Relieving Top Executives: Top executives cannot perform and supervise each and every work. Moreover they are required to undertake important tasks of planning and controlling. Delegation helps executives in delegating their work to subordinate officers. ### 2. Improves Functioning: In the absence of delegation some persons may be burdened with more tasks while others may not have sufficient work to do. Delegation helps in rationalising the functioning of an organisation. Work is divided among various persons in such a way that it is done in an efficient way. Nobody is unduly burdened and no work is left unattended. ### 3. Basis of Management Hierarchy: Delegation establishes superior subordinate relationship, which becomes the basis for hierarchy of managers. The power of different persons is devided and reporting relationship is established. ### 4. Employee Development: When subordinates are given independent assignment then they will be able to use their initiative and experience. This will also give them confidence in taking up further responsibilities. Without delegation, subordinates will not get a chance to try their initiative. Delegation of power is the best way in developing subordinates and preparing them for taking up more responsibilities in future. ### 5. Helps in Expansion and Diversification: The expansion and diversification of an enterprise needs the services of more and more persons. The assignment of various tasks to subordinates will prepare them for undertaking new assignment. If subordinates are not assigned important works earlier then it will be dangerous to give them independent tasks straight away. Delegation is very useful for undertaking expansion and diversification plans. ### 6. Better Co-ordination: Delegation enables the employees to be clear about the authority and responsibility to carry out the same. The systematic distribution of duties and clarity among employees for taking up the same responsibilities and the elimination of duplication of duties and clarity among employees worked leads to better co-ordination among employees and better results will be achieved. ### 7. Motivation of Employees: When a superior delegates authority to a subordinate it shows confidence in the later. The subordinate will try his best to improve his performance so that he is able to maintain the confidence of his boss. The delegation of authority will motivate the subordinates and will improve their performance. ## Objective Type Questions (MCQs) **Select the Right Alternative** 1. **Organisation is the process of :** - (a) Arranging various inputs - (c) Increasing managerial efficiency - (b) Defining authority and responsibility - (d) All of these 2. **Organisation deals with** - (a) Centralisation of activities - (c) Centralisation of activities - (b) Decentralisation of activities - (d) Delegation of work 3. **Formal organisation is the :** - (a) Conscious co-ordination of activities - (b) Relationship among people outside the organisation - (c) Relationship based on personal likes and dislikes - (d) Relations based on informal meetings 4. **A business should have :** - (a) Multiplicity of objectives - (c) Decentralisation of work - (b) Centralisation of work - (d) All of these 5. **An organisation involves : ** - (a) Division of work - (c) Distribution of work - (b) Concentration of work - (d) Disbursal of work 6. **Organising process does not involve: ** - (a) Delegation of authority - (c) Fixing responsibility - (b) Appraising of a subordinate - (d) Departmentation 7. **Establishing reporting system leads to :** - (a) Higher productivity - (c) Adaptation to change - (b) Specialisation - (d) Clarity in working relationship 8. **How formal organisation differs from informal organisation :** - (a) Structure - (c) Formal process - (b) Financial procedures - (d) All of the above 9. **Grouping of activities in accordance of their nature is :** - (a) Specialisation - (c) Departmentation - (b) Division of work - (d) None of these 10. ****is the first step in the process of organising.**** - (a) Grouping of work - (c) Establishing reporting relationship - (b) Assigning of duties - (d) Identification and division of work 11. Under which function of management the relationship between position is explained? - (a) Planning - (c) Staffing - (b) Organising - (d) Directing 12. **Informal organisation is based on :** - (a) Positions in the organisation - (c) Assigning of work - (b) Shifting of power - (d) Social needs 13. **A network of social relationship that arises spontaneously due to interaction at work is** - (a) Informal organisation - (c) Formal organisation - (b) Delegated organisation - (d) Centralised organisation 14. **In which type of organisation, the principle of scalar chain is followed?** - (a) Formal organisation - (c) Both (a) and (b) - (b) Informal organisation - (d) None of these 15. **Name the organisation where social relationships become the basis of its formation.** - (a) Centralised organisation - (c) Informal organisation - (b) Staff organisation - (d) Formal organisation 16. **Identify the correct order of steps of organising** - (1) Departmentation - (1) Identification and division of work - (ii) Establishing reporting relationship - (iv) Assignment of duties - (a) (1)-(ii)-(iii)-(iv) - (c) (ii)-(i)-(iv)-(ii) - (b) (iv)-(iii)-(ii)-(i) - (d) (iii)-(ii)-(iv)-(i) ## Answers 2. (c) 3. (a) 4. (a) 5. (a) 6. (b) 7. (d) 8. (a) 9. (c) 10. (d) 11. (b) 12. (d) 13. (a) 14. (a) 15. (c) 16. (c) ## Fill In the Blanks 1. Organisation is an instrument for achieving enterprise **goals**. 2. Organisation is the adjustment of various **activities**. 3. An organisation helps in achieving **business objectives**. 4. An organization will be successful with **effective** communication. 5. Authority and responsibility should be properly **balanced**. 6. **Formal** organisation establishes authority-responsibility relationship. 7. In formal organisation roles and duties of every member is clearly **defined**. 8. When relations are based on personal whims and preferences it is an **informal** organisation. 9. Informal organisation has **voluntary** membership. 10. Rumours are a part of **informal** organization. ## State whether following Statements are Ture or False 1. Organisation identifies and groups different activities. **(T)** 2. Organisation channels create communication problems. **(F)** 3. An informal organisation depends upon the rules and regulations of the company. **(F)** 4. Formal organisation emphasises structure and ignores human element. **(F)** 5. In line organisation authority flows from top to bottom. **(T)** 6. Functional organisation limits scope for expansion. **(F)** 7. In line and staff organisation, authority lies with line officers only. **(T)** 8. Organisation involves division of work. **(T)** 9. A good organisation helps in achieving individual goals. **(F)** 10. An organisation is a soft science. **(T)** 11. Classical writers viewed organisation as a machine. **(F)** 12. New classical organisation theory laid more emphasis on external factors. **(T)** 13. Modern organisation theory was developed in 1947. **(T)** 14. An organisation manual provides information about organisation. **(F)** ## Exercises ### Short Answer Type Questions 1. Define Organisation. 2. Describe various concepts of organisation. 3. Distinguish between formal and informal organisation. 4. What are the requisites of a successful organisation ? 5. Describe the objectives of an organisation. ### Long Answer Type Questions 1. Discuss the nature and importance of organisation. 2. "Organisation is an important step to achieve enterprise objectives." Explain. 3. What is the need of governing organisation by principles ? Explanation various principles of organisation. 4. What is organisation ? Describe the objectives and steps in organisation process? 5. Discuss various concepts of organisation. 6. Discuss the features and advantages of formal organisation. 7. "Organisation is essential for achieving business goals." Explain.