Unit - 3
Nature and purpose of Organizing
Nature of Organizing- Organizing involves defining jobs and working relationships, assigning different tasks in relation to plans, arranging and allocating resources, designing a structure which distinguishes duties, responsibilities and authorities, scheduling activities etc. in order to maintain smoothness and effectiveness in operations. It succeeds planning and coordinates human efforts, arranges resources and incorporates the two in such a way which helps in the achievement of objectives. It decides the ways and means with which the plans can be implemented. In short, with organizing, the manager brings order out of disorder, removes chaos and confusion with respect to work and responsibility and builds an ideal environment where all the members of the organization can work in harmony.
Characteristics of Organization
Following are the main characteristics/features of organizing:
- Division of Labour: Work is assigned to the employee who are experts specialised in that particular work.
- Coordination: Different members of the organization are assigned different tasks. When all the tasks are arranged logically and sequentially, the work becomes complete and it results in the desired manner. Thus, coordination is required.
- Objectives: Objectives of the organization need to be specifically defined so that their proper accomplishment becomes possible.
- Authority-Responsibility Structure: An organization is built with various positions arranged in a hierarchy with well-defined authority and responsibility. For an effective authority responsibility structure, the position of each manager and subordinate is to be clearly stated.
- Communication: The techniques, the flow and importance of communication must be known to all the members in the organization to avoid chaos and confusion.
Nature of Business Organization
By nature, a business organization is a science as well as an art. Business Organization as an art T.L. Massie says, “In any activity that is classed as an art the emphasis is on applying skills and knowledge and accomplishing an end through deliberate effort.” According to G.R. Terry, art is “bringing about of a desired result through application of skills.” Thus, art is concerned with application of skills and continuous effort for achieving certain goals. In this sense, business organization is an art as it has to apply skills and knowledge in dealing with various situations in order to achieve desired goals. Organization is a creative art as it involves getting things done through others by motivating them and coordinating their efforts. Business Organization as a science. In the words of Keynes, “Science is a systematized body of knowledge which establishes relationship between cause and effect.” Organization is systematized body of knowledge acquired and developed by mankind through observation and experimentation, capable of verification. Thus, organization and its activities are, in a way, is science as it involves the use of systematized principles and philosophies developed by management thinkers and scientists over the years. Though it is not pure science like physics or chemistry but it may be called behavioural science as it mostly deals with human behaviour.
Key Takeaways
1. Organizing involves defining jobs and working relationships, assigning different tasks in relation to plans, arranging and allocating resources, designing a structure which distinguishes duties, responsibilities and authorities, scheduling activities etc. in order to maintain smoothness and effectiveness in operations.
2. Organizing is the establishment of authority relationship among persons so that it helps in the achievement of organizational objectives.
3. Organization is characterized by division of labour, coordination, authority relationship and communication between members of the institution.
4. Organization is science as well as art.
5. Like an art, organization has to apply skills and knowledge in dealing with various situations in order to achieve desired goals.
6. Organization and its activities are, in a way, is science as it involves the use of systematized principles and philosophies developed by management thinkers and scientists over the years.
7. Though it is not pure science like physics or chemistry but it may be called behavioural science as it mostly deals with human behaviour.
Purpose of Organizing
Organization is the mechanism which determines the relationship of various persons. With the help of a well-defined organization, management is able to perform the functions of direction, co-ordination and control. Thus, organizing is done for the following purposes:
1. To help management: The organization helps management to have a control over various business functions. The work is divided properly and control centres are established. Authority is delegated and responsibilities are fixed. It helps management to have a co-ordinated administration.
2. To increase production: The duties are assigned according to the principle of division of labour. The efficient system of organization encourages every employee to make his best contribution in raising output. The increase in output and control of wasteful expenditure helps to decrease the cost of production. The profitability of the concern will also go up.
3. Co-operation of employees: The organizational structure will succeed only if employees co-operate with others. The manager introduces various incentive schemes and gives monetary and other benefits to the employees so that they work in a team spirit. Key Takeaway
4. Among other things, the purpose of organizing is to help management to have control over its functions, to increase production and productivity of employees and to secure co-operation in employees.
FORMAL ORGANIZATIONS:
When the managers are carrying on organizing process then as a result of organizing process an Organizational structure is created to achieve systematic working and efficient utilization of resources. This type of structure is known as formal Organizational structure.
Formal Organizational structure clearly spells out the job to be performed by each individual, the authority, responsibility assigned to every individual, the superior- subordinate relationship and the designation of every individual in the Organization. This structure is created intentionally by the managers for achievement of Organizational goal.
Features of Formal Organization:
(1) The formal Organizational structure is created intentionally by the process of organizing.
(2) The purpose of formal Organization structure is achievement of Organizational goal.
(3) In formal Organizational structure each individual is assigned a specific job.
(4) In formal Organization every individual is assigned a fixed authority or decision-making power.
(5) Formal Organizational structure results in creation of superior-subordinate relations.
(6) Formal Organizational structure creates a scalar chain of communication in the Organization.
Advantages of Formal Organization:
1. Systematic Working:
Formal Organization structure results in systematic and smooth functioning of an organization.
2. Achievement of Organizational Objectives:
Formal Organizational structure is established to achieve Organizational objectives.
3. No Overlapping of Work:
In formal Organization structure work is systematically divided among various departments and employees. So, there is no chance of duplication or overlapping of work.
4. Co-ordination:
Formal Organizational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
Formal Organizational structure clearly defines superior subordinate relationship, i.e., who reports to whom.
6. More Emphasis on Work:
Formal Organizational structure lays more emphasis on work than interpersonal relations.
Disadvantages of Formal Organization:
1. Delay in Action:
While following scalar chain and chain of command actions get delayed in formal structure.
2. Ignores Social Needs of Employees:
Formal Organizational structure does not give importance to psychological and social need of employees which may lead to demotivation of employees.
3. Emphasis on Work Only:
Formal Organizational structure gives importance to work only; it ignores human relations, creativity, talents, etc.
INFORMAL ORGANIZATION:
In the formal Organizational structure individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the Organization. This network of social and friendly groups forms another structure in the Organization which is called informal Organizational structure.
The informal Organizational structure gets created automatically and the main purpose of such structure is getting psychological satisfaction. The existence of informal structure depends upon the formal structure because people working at different job positions interact with each other to form informal structure and the job positions are created in formal structure. So, if there is no formal structure, there will be no job position, there will be no people working at job positions and there will be no informal structure.
Features of informal Organization:
(1) Informal Organizational structure gets created automatically without any intended efforts of managers.
(2) Informal Organizational structure is formed by the employees to get psychological satisfaction.
(3) Informal Organizational structure does not follow any fixed path of flow of authority or communication.
(4) Source of information cannot be known under informal structure as any person can communicate with anyone in the Organization.
(5) The existence of informal Organizational structure depends on the formal Organization structure.
Advantages of Informal Organization:
1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster spread of communication.
2. Fulfils Social Needs:
Informal communication gives due importance to psychological and social need of employees which motivate the employees.
3. Correct Feedback:
Through informal structure the top-level managers can know the real feedback of employees on various policies and plans.
Strategic Use of Informal Organization. Informal Organization can be used to get benefits in the formal Organization in the following way:
1. The knowledge of informal group can be used to gather support of employees and improve their performance.
2. Through grapevine important information can be transmitted quickly.
3. By cooperating with the informal groups the managers can skilfully take the advantage of both formal and informal Organizations.
Disadvantages of Informal Organization:
1. Spread Rumours:
According to a survey 70% of information spread through informal Organizational structure are rumours which may mislead the employees.
2. No Systematic Working:
Informal structure does not form a structure for smooth working of an organization.
3. May Bring Negative Results:
If informal Organization opposes the policies and changes of management, then it becomes very difficult to implement them in Organization.
4. More Emphasis to Individual Interest:
Informal structure gives more importance to satisfaction of individual interest as compared to Organizational interest.
Key Takeaways:
- Formal Organizational structure clearly spells out the job to be performed by each individual, the authority, responsibility assigned to every individual, the superior- subordinate relationship and the designation of every individual in the Organization.
- The informal Organizational structure gets created automatically and the main purpose of such structure is getting psychological satisfaction.
Koontz and O’Donnell define a department as designating – “a distinct area, division, or branch of an enterprise over which a manager has authority for the performance of specified activities”. Most enterprises are involved in producing a product or a service for the benefit of others. The latter aspect requires marketing or distribution so that the persons for whom the product or service is intended will accept it if it satisfies his needs. These activities require money or sufficient capital or finance.
The grouping of similar activities and employees of organisation into various departments for the purpose of facilitating administration is called departmentation. It implies the division of total work of an organisation into individual functions and sub functions. Departmentation is the process of division of organisation into different parts known as departments.
As per views of Koontz and O’Donnell, “departmentation is a process of dividing the large monolithic functional organisation into smell and flexible administrative units.” The process of departmentation takes place at all levels in the organisation. The chief executive groups activities into major departments such as production, finance, marketing, and personnel.
These departments operate under the control of a manager known as departmental head who report directly to the chief executive. The departmental head has adequate authority over the activities and employees working there. He is ultimately responsible for the smooth functioning of the department.
He further assigns duties to their juniors, for example, the marketing manager may divide his activities on the basis of activities like advertising, marketing research, customer service and so on. At the lower level, there may be sales assistants and sales representatives etc.
Dividing and grouping of activities to be done in an enterprise involves in organization. The identification of activities which are to be done for the achievement of organizational goals is division of work. After identifying various activities, these are grouped together on some logical basis.
Departmentation is the process of grouping various activities into separate units of departments. A department is a distinct section of the business establishment concerned with a particular group of business activities of like nature. The actual number of departments in which a business house can be divided depends upon the size of establishment and its nature.
A big business enterprise will, usually, have more departments as compared to a small one. In the words of Allen, “Departmentation is a means of dividing a large and monolithic functional organisation into smaller, flexible, administrative units.”
A department is a work group combined together for performing certain functions of similar nature. The process of division of the enterprise into different parts is broadly called departmentalization. Departmentation leads to grouping of both functions and personnel who are assigned to carry out allocated functions.
Departmentalization describes the manner in which divided tasks are combined and allocated to work groups. The impact of departmentation is a delineation of executive responsibilities and a grouping of operating activities. Grouping of activities into manageable units is necessary at all levels in the enterprise. Their work must be so coordinated as to ensure contribution to the welfare of the organisation.
The job functions of employees need to be divided among them and combined in a logical way. Workers with related functions usually share a common work area and constitute a work unit. The process of dividing the work of the organisation into various units or departments is departmentation.
An essential step for the efficient functioning of the organization is grouping of activities. It involves the combining of jobs into effective work groups and combining of groups into identifiable units.
Efficiency of work flow depends on the successful integration of various units within the organisation. Division of work and logical combination of tasks should lead to departmentalisation. A department is a work group combined together for performing certain functions of similar nature.
The process of division of the enterprise into different parts is called departmentation. Departmentation leads to grouping of both functions and personnel who are assigned to carryout allocated functions. Grouping of activities into manageable units is necessary at all levels in the enterprise.
Organizational Structure – Top 3 Forms: Functional and Multidivisional, Geographical and Matrix Structure (With Advantages and Disadvantages)
1. Functional and Multidivisional Structure:
A functional structure consists of a CEO who is supported by functional managers belonging to production, marketing, purchase, finance, personnel, R&D, etc. This structure enables the achievement of functional excellence, efficiency and specialisation, but suffers from problems, such as, lack of product focus, long channels of communication, coordination problems, lack of importance given to overall corporate missions and objectives, and excessive involvement of the CEO in integrating decisions and actions across various functions.
As against this, the multidivisional structure (also called M – Form) consists of more than one operating division, each of which is a distinct business area. Here, the CEO delegates responsibilities for formulation and implementation of business-level strategies and managing day-to-day affairs to the respective divisional heads, thereby making the corporate office responsible for the development and implementation of the corporate-level strategy and for exercising strategic and financial controls.
Strategic control, as exercised by the corporate office, is defined as the process of target-setting and monitoring in relation to the key operating areas pertaining to each business division, which are otherwise autonomous. To do an effective job in this regard, the corporate office must have a proper understanding of the environment, strategy and operational issues relating to each distinct business area.
The financial controls, exercised by the corporate office ensure that each division achieves the target profit, cash-flows and ROI. Interdependence between the operating divisions (a normal feature in a company which has grown through a related diversification strategy) makes it difficult to exercise financial control, since attributing financial performance correctly to one or the other divisions may involve subjective discretion. This implies that there is a possibility of dilution of internal control when a firm pursues extensive product diversification using the resources of various divisions.
Of all the options available in the organisational structure, an M-Form is the one most used. Chandler identified this form of structure as an innovative response to problems of coordination and control which are normally faced in a functional structure. Other advantages include ease in evaluating business performance, less complexity in allocating financial resources, improved coordination, and availability of more time to the top management for concentrating on long-term strategic issues.
For diversified businesses (both related and unrelated), the M-Form structure is more useful vis-a-vis the functional structure, which works well when the firm is implementing single or dominant business strategies. Once an M-Form structure is put in place, a firm’s potential to enter a large number of diversified businesses (related/unrelated) increases.
Johnson and Scholes have listed the following advantages and disadvantages of functional and multidivisional structures:
FUNCTIONAL STRUCTURE:
Advantages:
a. The CEO in touch with entire operations,
b. Reduction/Simplification of control mechanisms,
c. Clarity of roles and responsibilities,
d. Specialists at senior and middle management levels, and
e. Efficiency and specialization.
Disadvantages:
i. Senior management overburdened with operational matters,
Ii. Lack of attention to strategic issues,
Iii. Difficulty in coping with diversity,
Iv. Coordination between different departments and functions become difficult, and
v. Inability to adapt to changes.
MULTIDIVISIONAL STRUCTURE:
Advantages:
a. Focus on each business area (product-market),
b. Ease of evaluation of unit performance,
c. Facilitates acquisition/divestment of units,
d. Helps in drawing attention of the senior management to strategic issues, and
e. Facilitates development of general management competencies.
Disadvantages:
i. Possible confusion with regard to the extent of centralisation and decentralization.
Ii. Inter-divisional conflict and resulting sub-optimisation.
Iii. Problems of setting transfer prices for inter-unit trading.
Iv. Duplication of resources.
v. Difficulty in coordination if there are too many divisions.
2.GEOGRAPHICAL STRUCTURE:
A firm’s overall geographical spread is divided into a certain number of homogeneous regions or territories, each headed by a regional or territorial head responding to the CEO. Each region, which deals with all the products of the company, is made by and large independent with the required resource support and is expected to pursue region specific strategies is geographical structure. Sometimes, a geographical structure is built-in within a functional or M-Form structure. For example, in cases where there are one or two centralised manufacturing facilities, the firm can have a functional structure below the CEO, but within the overall sales function, it can have a geographical structure.
3.MATRIX STRUCTURE:
A combination of the structural options covered in (1) and (2) above. Such structures are chosen when there is a need for more than one consideration for designing the organisational structure (for example, there is no clear-cut preference for either functional specialisation or product-market focus or geographical thrust) is matrix structure. Normally a matrix structure reflects the need to recognise the simultaneous importance of at least two dimensions, such as, (i) product focus as well as geographical thrust, or (ii) product focus as well as functional specialisation.
While there are certain advantages of a matrix structure, there are also certain disadvantages, as can be seen from the following:
Advantages:
a. Better quality of decision making since multiple perspectives are allowed to be built-in.
b. Face-To-Face contact helps in reducing the impact of bureaucracy.
c. Improved managerial motivation and development.
Disadvantages:
i. Dilution of priority, lack of ownership.
Ii. Confused/unclear job and task responsibilities.
Iii. Lack of focus in cost and profit responsibilities.
Iv. Potential for conflict within the teams.
If managed well, by clearly spelling out which arm of the matrix should lead, and duly supported by the right managerial mind set and competencies (for example, the managers should be capable of collaborating across the matrix and they should be comfortable to work under ambiguity), a matrix structure can deliver the desired results. It can improve the quality of decision making in situations where exclusive emphasis on one dimension (be it product, function or geographical) is likely to undermine the overall interest of the organization.
Combination of Structural Forms:
Very few companies adopt one or the other of the above alternatives in their pure form. Further, no organization comply strictly to one particular type of structure for all times to come.
A host of factors, such as:
(i) The strategy the company wishes to follow,
(ii) Its history, tradition and culture,
(iii) The profile of people and their skill level,
(iv) Managerial competencies and motivation,
(v) Requirements of planning, evaluation and control,
(vi) The need for collaboration/liaison between various functional/product/geographical groups for optimum decision making, etc., determine what kind of structure will be appropriate for the firm.
Experience shows that in most cases, the organisation structure chosen after taking into account the just mentioned factors tends to be a mixed one, reflecting the features of more than one of the three types of structure described before.
There are 5 types of organizations such as Line Structure Organization, Line and Staff Organization, Functional Structure Organization, Matrix Structure Organization and Project Structure Organization.
1. Line Structure Organization
Line structure organization is the simplest and oldest form of organization structure. It is called as a scalar type of military or divisional or organization. Under this system, authority flows directly and vertically downward from the top of the managerial hierarchy to different levels of managers and subordinates, and down to the operative level of workers. It is also known as the chain of command or scalar principle.
Advantages of Line Structure Organization: –
- Simple to understand and simple to operate;
- Communication is fast and easy;
- Feedback can be acted upon faster;
- Responsibility is fixed and unified at each level and authority and accountability are clear-cut, hence each individual knows to whom he is responsible and who is or in truth responsible to him;
- Since it is especially useful when the company is small in size, it provides for greater control and discipline in the organization.
- It is a stable form of organization.
Disadvantages of Line Structure Organization: –
- It is a rigid and inflexible form of organization;
- Line authority has a tendency to become dictatorial;
- It overloads the executive with suppressive activities so that long-range planning and policy making are often neglected;
- A line organization can suffer from a lack of specialization. This is because each department manager is concerned only with the activities of his own department.
- Different departments may be more interested in their interests rather than overall organizational interests and welfare;
- This is likely to encourage nepotism;
- It might stop progress and prevent the unit to work effectively.
- It does not provide any means by which a good worker can be rewarded and a bad one can be punished.
2. Line and Staff Organization
Line and staff organization, in management, approach authorities (For example: – managers) establish goals and instructions that are then met by employees and other workers. A line and staff organizational structure attempts to present a large and complex enterprise in a more flexible way without sacrificing managerial authority. Staff groups support those who are engaged in the central productive activity of the enterprise. They back up their work. Staff groups help the organisation in analysing, researching, counselling, monitoring, and in evaluating activities.
Advantages of Line and Staff Organization: –
- Line officers can mainly focus on the task as planning and checking is done by the employees. Specialization provides expert advice and proficiency in management.
- Since the organization includes line and staff functions, decisions can be made easily.
- Staff officers provide complete factual data to line officers covering activity within and without their units. This will help to create more coordination.
- It provides ample opportunities for the advancement of workers.
- Staff services provide a training ground for various positions.
- This arrangement is flexible for newcomers in that employees can be forced to make early adjustments to the line arrangement.
- Staff experts are ideologically oriented to look forward and have time to undertake program and strategic planning and analyse the potential impacts of future potential events.
Disadvantages of Line and Staff Organization: –
- Confusion and conflict may arise between the line and the staff. Because the allocation of authority and responsibility is not clear and the lower-level members may be confused with various line orders and staff advice.
- The staff usually advises the lines, but the line makes decisions and tasks. So, employees often feel powerless.
- Too much reliance on staff officers may not be beneficial to the business as line officers may have to lose a lot about their decisions and duplication.
- Since staff specialists demand high pay, it is expensive.
- Employees are unable to carry out its plan or recommendations due to lack of authority. So, they sometimes become ineffective, this will make them careless and indifferent to their jobs.
- As the line is performed, with advice provided by employees, if things go right, the employee takes credit and if things go wrong, the line gets the blame for it.
3. Functional Structure Organization
Functional Structure Organization is one of the most common structures of organization. They are grouped based on their specific skills and knowledge. Under this structure, the employees are divided into groups by the organization according to a particular or group of tasks. Where functional structures operate well in stable environments, where business strategies have little inclination for change or mobility, the level of bureaucracy makes it difficult for organizations to react quickly to market changes.
Advantages of Functional Structure Organization: –
- The executive or the team leader has the knowledge and experience of that particular field. For example, the person heading the IT department will have the education and skill necessary to shoulder this responsibility and successfully run his team.
- Because the employee has expertise in that particular field, the work is more efficient and precise. There are fewer mistakes. This also helps with the motivation of the employees of the company.
- Since all team members come from similar backgrounds it allows them to share ideas and come up with solutions. There is a sharing of knowledge, which is always beneficial.
- The employees also having a clear idea of the hierarchy of the firm. They need not report or answer to several managers.
- Also, the employees feel secure in their work. They see that their work and efforts is not going unnoticed. This sense of security helps them perform better.
Disadvantages of Functional Structure Organization: –
- The work can be quite one dimensional. After a while, the employees may start feeling monotony or boredom. The lack of new challenges can make them unenthusiastic for the job at hand.
- In this structure, the manager must take care of the appraisal system. If the correct approach is not taken then conflicts may arise between the employees regarding promotions or appraisals.
- Also, this form of organization requires a high degree of specialization which is difficult to establish
- If there is a necessary change of personnel it can disrupt the whole system and its balance. Also, it is quite a rigid structure, not leaving a lot of scope for adaptation.
- In Functional Organizational Structure, the employees never gain any knowledge or skills outside their own department. This can cause difficulties in inter-departmental communication.
4. Matrix Structure Organization
A matrix organizational structure is a structure of organization in which some individuals report to more than one supervisor or leader, which is described as solid line or dotted line reporting. More broadly, it can also describe the management of cross-functional, cross-business groups and other work models that do not maintain rigid business units or silos grouped by function and geography. For example, an employee may have a primary manager they report to as well as one or more project managers they work under.
Advantages of Matrix Organization: –
- Since there is both vertical and horizontal communication, it increases coordination and this leads to greater and more effective control over operations.
- As the matrix organization is handling many projects, the available resources will be fully utilized.
- It focuses organizational resources on specified projects, thus enabling better planning and control.
- It is highly flexible in following rules, procedures etc. Experience here is the best guide for setting rules and procedures.
- As any department has to put its efforts towards the completion of any one project, employees are effectively motivated.
Disadvantages of Matrix Organization: –
- Since, there is more than one supervisor for each worker, this causes confusion and conflict and reduces effective control.
- There is continuous communication both vertically and horizontally, which increases paper work and costs.
- It is difficult to achieve downward balance on projects technical and administrative aspects.
5. Project Structure Organization
A project structure organizational structure is used to determine the hierarchy and authority of people involved in a specific project. This organizational structure is temporarily created for specific projects for a particular period, for the project to achieve the goal of developing a new product, specialize in various functional departments such as production, engineering, quality control, marketing research etc. and will be ready to work together. These specialists return to their duties as soon as the project is completed.
In fact, the project organization is established with the aim of overcoming the major weakness of functional organization, such as absence of unity of command, delay in decision making and lack of coordination.
Advantages of Project Structure Organization: –
- It is a notable depiction of the relationship between environment, strategy and structure.
- The team can focus properly.
- The clustering of activities on the basis of each project initiates new authorization patterns.
- As experts from different organizations are ready to work together under the project organization, it helps in coordination.
- This makes for personal control and determination of personal responsibility.
Disadvantages of Project Structure Organization: –
- The uncertainty can be attributed to the diverse background of the professional who is deputed in the project.
- The project manager finds it difficult to control in the traditional way in order to motivate and control employees, in the absence of a norm of lines and norms responsible for communication.
- Project completion may be delayed.
- Effective project management can also be hindered by top management who may not be fully aware of the problems in the project centre.
Line and Staff Organisational Structure:
Most large organisations belong to this sort of organisational structure. These organisations have direct, vertical relationships between different levels and also specialists liable for advising and assisting line managers. Such organisations have both line and staff departments. Staff departments provide line people with advice and assistance in specialized areas (for example, quality control advising production department).
Exhibit 10.5 illustrates the line and staff organisational chart. The line functions are production and marketing whereas the staff functions include personnel, quality control, research and development, finance, accounting etc. The staff authority of functional authority organisational structure is replaced by staff responsibility in order that the principle of unity of command isn't violated.
Three sorts of specialized staffs are often identified:
(i) Advising,
(ii) Service and
(iii) Control.
Some staffs perform only one of those functions but some may perform two or all the three functions. the primary advantage is that the use of expertise of staff specialists by the line personnel. The span of control of line managers are often increased because they're relieved of the many functions which the staff people perform to help the line.
Some advantages are:
(i) Even through a line and staff structure allows higher flexibility and specialization it's going to create conflict between line and staff personnel.
(ii) Line managers might not like staff personnel telling them what to do and how to do it even though they recognize the specialists ‘knowledge and expertise.
(iii) Some staff people have difficulty adjusting to the role, especially when line managers are reluctant to simply accept advice.
(iv) Staff people may resent their lack of authority and this might cause line and staff conflict.
Features:
1. Line and staff have direct vertical relationship between different levels.
2. Staff specialists are accountable for advising and assisting line managers/officers in specialized areas.
3. These sorts of specialized staff are (a) Advisory, (b) Service, (c) Control e.g.,
(a) Advisory:
Management information system, Operation Research and Quantitative Techniques, industrial engineering, Planning etc
(b) Service:
Maintenance, Purchase, Stores, Finance, Marketing
(c) Control:
Quality control, Cost control, Auditing etc.
Advantages
(i) Use of experience of staff specialists.
(ii) Span of control are often increased
(iii) Relieves line authorities of routine and specialized decisions.
(iv) No need for all round executives.
Disadvantages:
(i) Conflict between line and staff should arise.
(ii) Staff officers may resent their lack of authority.
(iii) Co-ordination between line and staff may become difficult.
Committee Organisational Structure
Features:
(a) Formed for managing certain problems/situations
(b) Are temporary decisions.
Advantages:
- Committee decisions are better than individual decisions
- Better interaction between committee members results in better co-ordination of activities
- Committee members are often motivated to participate in group decision making.
- Group discussion may result in creative thinking.
Disadvantages:
- Committees may delay decisions, consume more time and hence costlier.
- Group action may result in compromise and indecision.
- Buck passing ‘may result.
The jobs or positions in an organisation are often categorized as:
(i) Line position:
A position within the direct chain of command that's responsible for the achievement of an organisation ‘s goals
(ii) Staff position:
A position intended to produce expertise, advice and support for the line positions.
The line officers or managers have the direct authority (known as line authority) to be exercised by them to attain the organisational goals. The staff officers or managers have staff authority (i.e., authority to advice the line) over the line. this is often also called functional authority.
An organisation where staff departments have authority over line personnel in narrow areas of specialization is understood as functional authority organisation. Exhibit 10.4 illustrates a staff or functional authority organisational structure.
References:
1. Robins S.P. And Couiter M., Management, Prentice Hall India, 10th ed.,2009.
2. Stoner JAF, Freeman RE and Gilbert DR, Management, 6th ed., Pearson Education,2004.
3. Tripathy PC & Reddy PN, Principles of Management, Tata McGraw Hill,1999
