Nature and Process of Organising PDF

8 Nature and Process of Organising Organisation is more than a chart-it is the mechanism through which management directs, coordinates and controls the business. Itis indeed the foundation of management. If the organisation...

8 Nature and Process of Organising Organisation is more than a chart-it is the mechanism through which management directs, coordinates and controls the business. Itis indeed the foundation of management. If the organisation plan is ill-designed, if itis merely a makeshift arrangement, then management is rendered difficult and ineffective. If. on the other hand, it is logical, clear-cut and streamlined to meet present day requirements, then the first requisite of sound management has been achieved. -LounsburyFish The term organisation is used in management in two different senses(1) organisationas a structure, and (2) organisationas apro Cess. Organisation Structure As a structure,organisation is the network of horizontal and verti cal authority relationships among the membersof a group designed to accomplish some common objective(s). It is a system or pattern of for mal relationships that govern the activities of people. Organisation structure consists of asocial group of persons, a structured framework in which people interact to accomplish common goals. As a systematic combination of people, functions and facilities, organisation structure provides the mechanism within which people work together for accom plishment of desired objectives. The formal structure of an organisation 1s two-dimensionå-horizontal andvertical, The horizontal dimension depicts differentiation of jobs into departments or divisions. The vertical dimension reflects the hierarchy of authority relationships with a num ber of levels from top to bottom. It is a structure of duties and respon 165  Management 166. Principles and Practice of achievement of objcctives. AcCor Sibilitics which are necessary for the is the form of every human ding to James D. Mooney, organisation purpose.Thus, organisation association for thcattainment ofa common busincss. The lines of authority structure is "theskeleton framework of at the sametime, communica which hold this framework togcther are. or currents of authority. tion channcls through which flow the elements responsibility and accountability." ofthe term organisa Thisisa static and mechanistic interpretation in the organisation tion. Organisation structure of afirm is depicted chart. Organising Process As a basic function of management, organising is the continuous and dynamic process of creating harmonious authority-responsibility relationships between specialised units. In the words of Allen,"organis ing is the process of identifying and grouping the work to be performed, defining and delegating responsibility andauthority, and establishing a pattern of relationships for the purpose of enabling people to work most effectively together in accomplishing objectives."? According to Koontz and O'Donnell, organising involves "the establishment of an intentional structure of roles by identifying and list ing the activities required to achieve the purpose of an enterprise, the grouping of these activities, the assignment ofsuch groups of activities to a manager, thedelegating of authority to carry them out, and provision for coordinationofauthority relationships horizontally and vertically in the organisation structure." Thus, organising is "the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organising function, the manager defines, departmentalises and assigns activities so that they can be most effectively executed."3 Organising as a process is a dynamic and humanistic concept. However,the two terms (organisation structure and organising process) are complementary toeach other. The process oforganising results in a structure, i.e. organisation structure is the end-result of the process. To recognise both the structure and process concepts,organiSIIE tion may be defined as a structured process in which individualsorgansd interae for achieving predetermined objectives. Nature and Characteristics of Organisation The loregoing description reveals the following 1 features o Peterson and Plowman: op. cit., 2 Louis A. Allen: Management and p. 369. 3. Theo Haimann: Professional Organisation. p. 57. Managemnent. p. 136.  Nature and Process of Organising 167 formal organisation: 1.Group ofpersons: An organisation is a group of people workingbe togetherforthe achievement of common objectives. The group may large or small. According to Barnard, an organisation is a system of nonerative relationships of twoor more persons. 2. Common objectives: Every organisation has a common objective distinct from the personal objectives of the members. An organisation is ot an end in itseltf but a means towards the accomplishment of some Roal. The common goal is the basis of cooperation amongthe members. The objectives of an organisation are usually made explicit. 3. Division of work: An organisation comes into existence when the group. Division of work is 1otal task is divided into the members of thecannot necessary not only because oneindividual do all the work but Specialisation resulta in efficiency.and effectiveness. 4.Cooperative efforts: The mémbers of £norganisation are willing to goals. Cooperative rela help each other for the achievementof desiredhorizontally tionships are established both vestically and among dif ferent units of the organisation. organisation communicate 5.Communication: People who form an their efforts. The struc with each other in order to integrate or coordinate ture must be such that people can perform together effectively. 6.Central authority: In an organisation, there is a centraBdirecting of the group. A chain of authority which controls the concerted efforts authority relationships structures out in the form ofa hierarchy from thisis power centre. This chain of authority -responsibility relationships known as the chain of command. orderly and systematic working of 7. Rules and regulations: For the are laid down and enforced by the the members, rules and regulations central authority. organisation is not a mere mechanical 8. The dynamic element: An attitudes arising out of the sentiments, Structure but a living organismpeople construction, are the material of and behaviour of people. The cooperative spirit the mortar that their loyalty the foundationand their holds the structure together and gives it vital1ty. Purpose and Importance of Organisation mechanism that enables people to Organisation is the time-tested cooperate to achieve what they beings IVe and work together. Human An organisation is the framework within Cannot achieve individually. individual management can get things done by coordinating to Wnlch basic aim of allorganisations is in CIlortstowards common goals.The tasks to work enable a group of peoplewho are specialised indillerent specified goals. It is manner for the accomplishment of coordinated blend human and material resour nrough Organisation that managers efforts of thegroup. Collective action can Ces and direct andcontrol the 168 Principles and Practice of Management not be efficient without sound organisation structure. If theorganisation structure is defective, management is rendered difficult and ineffective According to Brech, the whole and sole purpose oforganisation is to pros vide a framework by which plans can be translated intothat action. relationships will "Organising is done for the purpose of creating the respon minimise friction, focus on the objective. clearlyofdefine the objective." sibilities of all parts and facilitate the attainment According to Allen, sound organisation can contribute to the success of an enterprise in the following ways: 1. Facilitates administration: Sound organisation faclitates the achievement ofthe objectives of anenterprise by providinga framework within which the functions of coordination and control can be per and a network for formed effectively. It provides a system of authoritycommon effective communications. It is the means by which mencan do communica uncommon things. Organisation is a network of decision coordinated towards tion centres in which individual efforts can be group goals. It integrates the various jobs into an operating system to provide forthe accomplishment ofthe firm's objectives.Thus, a properly designed and balanced organisation structure facilitates both manage organisation may not ment and operation of the enterprise. Inadequateadministration. only discourage but actually preclude eflective 2. Encourages growth and diversification: It is sound organisation practices that have enabled enterprises to growwithinand expand to giant sizes. An organisationstructure is the framework which an enter prise grows. Systematic division of work and consistent delegation of authority facilitate taking up of new activities. and meeting new demands. Asound structure provides the necessary flexibility forgrow without losing control over the various activities. Balanced emphass can be put on different activities. 3. Optimum use of nes technology: Optimum use of technologiea manned with improvements can be made through a sound structure competent employees. In addition, a sound organisation peruse of optimum utilisation of human resources. It permits humane human beings by avoiding duplication of work and overlapping on placed efforts. Sound organisation ensures that every individual is the job for which he is best suited. organisation 4. Stimulatesinnovation and creativity: Awell-designedemployees.It stimulates creative thinking and initiative on the part of favourably provides for effective management of change and responds of work to changes in the environment. By providing well-defined areas professional and clear-cut responsibility. it provides recognition and the specialist in terms of their achievements. for the 5. Encourages good human relations: In asound organisation assignment individual is assigned the job for which he is best suited. The Spriegel and Lansburg: Industrial Management. p. 401. Nature and Process of Organising 169 right jobs to right persons improves job satisfaction and interpersonal elations. Well-detincd jobs and clear lines of authority and respon- sibility helpsto establish cordial relations betwcen management and workers. 6. Ersur's continuity ofemerprise: Sound organisation helps in the continuity of managenent by providing scope for the training and deveopment of tuture management. An effective organisation provides avenues for. development and promotionthrough extensive delegation and decentralisation of authority. 1. Fosters coordination: Sound organisation facilitates order and ohesiveness in the enterprise. Division of labour, better utilisation of thnology and human talent, etc. help to improve the efficiency and communication among auality ofwork. By providing clear channels ofcoordination. the members of the organisation, it facilitates foundation of effec Thus, sound organisation is the backbone or manager brings tive management. "Organising is the process by which a between people over work or res order outof chaoS, removes conflicts suitable for teamwork." ponsibility. and establishes an environmentAndrew Carnegie, a great Describing the importance oforganisation, our factories, our trade, our industrialist ofU.S.A. remarked: "Take away nothing but our organisa leaveus avenues of transportation,our money, have re-established ourselves." and, in four years, we shall tion Steps in the Process of Organising designing an organisation structure involvesthe The process of following steps: ofactivities: The first stepin the organising process is 1.Identification the established that must be performed to achieve todetermine thetasks an organisation. jobs are building blocks of objectives. Activities and objec performed in an enterprise depend upon theproduc The activities to be the enterprise. For example, there is no into six ves, nature and size of classified business activities store. Fayol account ion activity in aretail commercial, financial, security, Calegories, namely, technical, enumerating the necessary activities, the After Breakdown of activities g and managerial. classified intosub-activities. individual jobs. While mäjor activities are and define down as to determine ensured that: (a) no ISCarried as far reclassifying the activities, it nust be of work;and(c)the Classitying and no duplication Cosentialactivity is left out: (b)there is performed in a coordinated or balanced Various activities are into manner. various activities are then grouped purpose. The 2.Grouping ofactivities: similarity and common to epartments or divisions according necessary for the purpose of specialisation, activitiesis Ouch grouping of p.239. Koontz and O'Donnell: op. cu.  170 Principles and Practice of Management coordination and control. Activities may be grouped on various bases (e.g. functions, products, territories, customerS, etc.) depending on the requirementsof the organisation. Each group (or work unit) of activities mav be further divided into sections or subunits to create a logical struc ture. The topic of departmentation has been described in the next chapter. 3.Assignment ofduties: Groups of activities or departments allotted to different positions. Every position is occupied by an indi vidual best suited for it. The assignment of activities (fitting individuals into jobs) creates responsibility and ensures certainty of work perfor mance. The process of assigning duties should be carried down to the lowest levels. Clear definition of theresponsibility of each individual or position is necessary to avoid duplication of work and overlapping efforts. 4. Delegation of authority: In the last step, every individual is given the authority required to carry out the responsibility assigned to him. A chain of command or hierarchical structure is created through successive delegations of authority. Different positions and individuals are linked vertically and horizontally by establishing formal authority relationships. This provides for the coordination of individual efforts. Every individual must know to whom he is accountable and who are his subordinates. Principles of Organisation (Essentials of Sound Organisation) Experts have laid down the following principles or guidelines which should be followed in designing a sound organisation struc ture: 1. Unity of objectives: The attainment of objectives is the purpose of organising. An organisation and every part of it should be directed towards the accomplishment of basic objectives. Every member of the organisation should be fully familiar with the common objectives or goals. Common objectives create community of interests. According to Uwick, every organisation and every part of theorganisation must be an expression of the purpose of the undertaking concerned. The applica" tion of this principle implies the existence of clearly formulated and well-understood objectives. An organisation structure must be measured against the criterion of effectiveness in meeting these objectives. 2.Functionalspecialisation:The total work should be divided in such amanner that the work ofevery individual in the organisation is limiteo to the performance ofa single leading function. The activities should be assigned to persons on the basis various functions or of their quali" fications and aptitude. 3. Span of control: Due to the limitations of time and ability, no  a d Process Nature of Organising 171 supervisorcan cllectively supervisc more tha a particular number of people.Therclore, every exeeutive should beuskedto supervise areasOon- ablenumber of' subordinates, The exact number of subordinates to he supervised by aparticular person will difler depending upon the rature job,the frequeney and intensity of relationships, etc. ofthe4..Scalar priniple: There must be a clear line of authority ranging the bottom of the orgaisation. The unbroken line or from thetopto chain ofcommand should be asshortas possiblec. The more clearthe line of authority from the chiel' executive at the top to every subordinate position, the more cllective will be responsible decision-making and communication. S. Delegation of authority: Authority delegated to an individual manager should bc adequate to cnable himto accomplish the results to the lowest pOssible exDected of him. Authority should be delcgatedcOordination and deci level,consistent with necessary'controlso that sion-making can take place as closcly as possible to the point of action. 6.Functional definition: The dutics andresponsibilities assigned to should be clearly every position and its relationship with other positions of work. The more defined so that there is no overlapping or duplication clearly defined are the duties andauthority of anindividual, more effec tively he can contribute towards the accomplishment of enterprise objectives. individual should receive orders from 7. Unity of command: Everyshould only onesupervisorand no one be accountable to more than one avoided, as it results in con boss at a time. Dual subordination must be of loyalty andlack o: tusion, chaos or disorder, indiscipline, division personal responsibility creates the feeling of instructions. action. Unity of commandproblem lor results and avoids the of conflict in have limited time and, there. Exception: Higher level executives significance should be referred to them. Tore, only matters of exceptional routine matters should be dealtwith by subordinatesat lower levels. enable the top executives to concentrate on crucial policy S Will principle. Decisions w1thin Sues, This is also known as'authority level be made by him and not Kauthority of an individual manager should De referredto upward in the hierarchy. responsibility must be co 2Correspondence: Authority and delegated to a particular posi- terminus anddco-extensive. The authorityresponsibility of that position. tion This should be asCommensurate is known with the parity ofauthority and responsibility. can avoid his res ADSoluteness of responsibility: No supervisor Every manager ponsibility delegating authority to subordinates. by responsible wellas for hiee held for the acts of his subordinates as his own acts. should be kept in II.Balance The various parts of anorganisation functions should be given balance and none of the departments or  172 Principles and Practice of Managemen: undue importanee at the cost of others. In order to balance, a proper balance between conllicting claimscreate a (e.g. structural tralisation and deventralisation, between span of control and cen- ommunication between line and stafl. etc.) must be maintainedlinesVe oi between cal and horizontal dimensions must be kept in reasonable balance b ensuringthat the structure is neither too tall nor too flat. 12.Unity of direction: There should be one head and group of activities having the same objective. Orderly one plan foraof groupefort facilitates unity of action and coordinationarrangement various levels. Therefore, this principle is also known asof activities at principle. coordination 13. Simplicity: The organisation structure should be as possible. The number of organisation levels should be simple as because too many levels obstruct eflective minimum ordination of efforts. communication and c 14. Flexibility:The organisation structure should be it can be easily and economically flexible so that ment. The organisation should have adapted changes in the environ to growth and expansion without dislocation inbuilt mechanism to permit of operations.Agood ong nisation cannot be a straight jacket. 15. Eficiency: The organisation structure should prise to function efficiently and to accomplish its enable the enter lowest possible cost. The principle of objectives with the efficiency should be appiat judiciously so that tion and optimumorganisation members can derive pesonal sa use of material and human made. resoures at l6. Continuity: The lasto have continuity of operations.organisation Arrangements should must be must be so structured made enable mpk to gainexperience in i responsibilin All significant changes positions ofincreasing divesity and It must be borne in should be reflected in the onganisation. and fast rules. Rather theymind are that the foregoing principles ardesigning sound organisation structure. broadguidelines to be used in