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UNIT-3ORGANIZING Q1) Define organizing.A1) 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. Q2) State the characteristics of organization.A2) Following are the main characteristics/features of organizing:i. Division of Labour: Work is assigned to the employee who are experts specialised in that particular work.ii. 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.iii. Objectives: Objectives of the organization need to be specifically defined so that their proper accomplishment becomes possible.iv. 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.v. Communication: The techniques, the flow and importance of communication must be known to all the members in the organization to avoid chaos and confusion. Q3) What is the nature of business organization?A3) By nature, a business organization is a science as well as an art.Business Organization as an artT.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 behavioral science as it mostly deals with human behavior. Q4) Explain the process of organizing.A4) Organizing is the core function which binds all the activities and resources together in a systematic and logical sequence. It encompasses a number of steps which are pursued to achieve organizational goals. Now, we will discuss those steps in detail: 1. Identification and division of work: Organizing process begins with identifying the work and dividing them as per the plans. Basically, the work is classified into different manageable activities, to avoid redundancy, and sharing of work is encouraged. 2. Classification of Activities: After classifying the work into different activities, the activities having a similar nature are grouped together. This process is called as departmentalization which facilitates specialization and forms the basis for creating departments. 3. Assignment of the task: After the formation of departments, employees are placed in different departments under a manager, called as a departmental manager. Thereafter, employees are assigned the jobs as per their skills, qualifications and competencies. For the effectiveness of the performance, the manager must ensure that there is a proper match between the job and the incumbent, i.e. the right person has to be placed at the right job. 4. Delegation of authority: A person will be able to perform the task assigned to him when he has proper authority for it. Work assigned without delegating authority will be meaningless. Q5) What is the significance of organizing?A5) Organizing is integral to management as it facilitates the smooth functioning of the enterprise. The importance of organizing is as under:• Advantage of Specialization: Organizing helps in the classification of jobs systematically amongst the workforce, which helps in the reduction of workload, as well as improved productivity. This is because the organization will get the benefit of specialization wherein workers will perform specific work on a regular basis, according to their competency. • Describes work relationships: The definition of work relationships describes the flow of communication and determine the superior-subordinate relationship. This removes confusion and chaos, in getting orders and instructions. • Effective utilization of resources: Organizing function ensures the best possible utilization of resources whether it is human, material, financial or technical. • Adaptation to change: Organizing process helps the organization to survive and adapt to the changes by making substantial changes in the strategies, hierarchy, relationships, etc. • Development of personnel: Organising encourages creativity in executives. Delegation of authority reduces their work load and they get time to identify new methods to perform the work. It also enables them to explore new areas for their growth and development. Q6) Discuss the principles of organizing.A6) The organizing process can be done efficiently if the managers have certain guidelines so that they can take decisions and can act. To organize in an effective manner, the following principles of organization can be used by a manager. 1. Principle of Specialization: According to the principle, the whole work of a concern should be divided amongst the subordinates on the basis of qualifications, abilities and skills. It is through division of work specialization can be achieved which results in effective organization. 2. Principle of Functional Definition: According to this principle, all the functions in a concern should be completely and clearly defined to the managers and subordinates. This can be done by clearly defining the duties, responsibilities, authority and relationships of people towards each other. Clarifications in authority-responsibility relationships help in achieving co-ordination and thereby organization can take place effectively. For example, the primary functions of production, marketing and finance and the authority responsibility relationships in these departments should be clearly defined to every person attached to that department. 3. Principles of Span of Control/Supervision: According to this principle, span of control is a span of supervision which depicts the number of employees that can be handled and controlled effectively by a single manager. According to this principle, a manager should be able to handle what number of employees under him should be decided. This decision can be taken by choosing either froma wide or narrow span. 4. Principle of Scalar Chain: Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of authority available, wastages of resources are minimized, communication is affected, overlapping of work is avoided and easy organization takes place. A scalar chain of command facilitates work flow in an organization which helps in achievement of effective results. As the authority flows from top to bottom, it clarifies the authority positions to managers at all level and that facilitates effective organization. 5. Principle of Unity of Command: It implies one subordinate-one superior relationship. Every subordinate is answerable and accountable to one boss at one time. This helps in avoiding communication gaps and feedback and response is prompt. Unity of command also helps in effective combination of resources, that is, physical, financial resources which helps in easy co-ordination and, therefore, effective organization. Q7) What are organization charts? Explain the different types of organization charts.A7) Organization chart is a diagrammatical representation of relationships in an enterprise. It gives a picture of the relationships between different departments or divisions of an enterprise and the relationships between people of various levels.The main characteristics of an organisation chart are as follows:(i) It is a graphic presentation.(ii) It shows at a glance the lines of authority and responsibility.(iii) It serves as a blueprint of the structure of the organisation and helps to clarify the allocation of duties.(iv) It represents the formal organisation structure.(v) It shows clearly the various positions in the organisation and how they relate to one another.(vi) It indicates the channels of communication. The four main types of organization charts: hierarchical, flat, circular and matrix charts.1. Hierarchical/ Vertical Organizational Chart: This is the most common type of organizational chart. A hierarchy is where one person or group of persons is at the top while those with less power are beneath them. It takes the shape of a pyramid. In a hierarchy, members typically communicate upwards with the person they report to and downwards with anyone who reports directly to them.Fig. 4.7 represents Vertical Chart.
2. Flat Organizational Chart: Sometimes referred to as a Horizontal Organizational Chart, this type has little or no levels of middle management and typically consists of the top level and lower level. In this type of organization chart the highest position is placed horizontally at the extreme left and the lowest position is shown at the extreme right. In between the two, each successive subordinate position goes on from left to right. It is also known as ‘Left-to-Right Chart’. In companies like this, the workers have more responsibility and are more directly involved in decision-making.Fig. 4.8 represents Horizontal Organization.
3. Circular or Concentric Chart: In such type of organisation chart, the highest position is placed at the centre in the innermost circle and the lowest position at the outermost circle. In between these two positions, each successive subordinate position extends in all directions outward from the centre. The minimum distance of a position from the centre indicates the degree of closeness to the top position. Such a chart can exhibit the personal relationships of the executives in a better way.The following figure depicts Circular Organization chart.
4. Matrix Organizational Chart: This is usually only seen when individuals have more than one manager. This kind of chart is seen in organizations which do not follow the scalar chain of command. For example, an organization could have a team of graphic designers who all report to the head graphic designer. The graphic designers are also working on other projects that are likely headed by a separate project manager. In this case, the graphic designers will have two managers. The following figure depicts Matrix Organization chart.
Q8) What are the different types of organization? Explain.A8) The following are some of the important forms or types of organization:1. Line Organizational Structure:It has only direct, vertical relationships between different levels in the firm. There are only line departments which are directly involved in accomplishing the primary goals of the organization. This type of structure is evident in Military Organization.
2. Staff or functional authority structureIn functional organization the task of management and direction of subordinates is divided according to the type of work involved. All activities are grouped together according to certain functions like production, marketing, finance, personnel etc. and are put under the charge of different persons, who are specialists in that particular field.F.W. Taylor developed the concept of functional organization. He thought that one foreman could not handle all activities of production as he might not have knowledge about everything. He suggested the substitution of line authority by functional foremanship at the lower levels of the organization structure.
3. Line and Staff Organizational Structure:Some organizations have direct, vertical relationships between different levels and also specialists responsible for advising and assisting line managers. Such organizations have both line and staff departments. Staff departments provide line people with advice and assistance in specialized areas. The jobs or positions in an organization are: (i) Line position:A position in the direct chain of command that is responsible for the achievement of an organization’s goals. The line employees are key persons of an organization who are solely responsible for their duties. (ii) Staff position:A position intended to provide expertise, advice and support for the line positions. The staff employees are employed only to assist the line members. They do not have any authority as regards decision making. They can only advice the line members, provide support as per their skills and knowledge.
4. Divisional Organisational Structure:In this type of structure, each organizational function is grouped into a division. Each division will consist of all the resources and support services needed to perform its operations. However the various divisional structures may be in the form of:
(i) Function,(ii) Product,(iii) Geographic territory,(iv) Project and(iv) Combination approach.
5. Project Organizational Structure:It facilitate establishment and distribution of authority for vertical coordination and control rather than horizontal relationships. Its work process may flow in any direction of work depending upon the distribution of talents and abilities in the organisation.
6. Matrix Organisational Structure:It is designed to achieve specific results by using teams of specialists from different functional areas in the organisation.
Q9) What is an organization manual? What are the contents of Organisation Manuals?A9) ‘Manual’ means a hand-book. Organisation manual is a handbook maintained in hard cover, in loose-leaf form containing information about policies, operations, rules and regulations, objectives, procedures, departmental details etc. It is a useful guide to all the organizational members as it gives details of the extent to which authority is exercised by every manager and a detailed analysis of various jobs in terms of job content and job responsibilities. It is a supplement to organisation chart. While organisation chart gives an overview of the organisation structure, organisation manual describes the organisation structure in detail. A manual is, thus, wider in scope and includes organisation chart. It is a useful tool for managers to visualize the company as a whole and to view their responsibilities in the context of overall organisational responsibilities. Manuals state the basic function of the position, the major end-result areas for which manager is responsible, and the reporting relationships involved. Manuals are kept ready for reference by every functional head and his employees so that they do not have to approach their superiors to obtain information for decision-making. Manual contain the following information:1. Objectives and policies:The main and auxiliary objectives and policies of the company are clearly spelled out in organisation manuals to facilitate activities in the targeted direction. Focus on main and auxiliary objectives also enables managers to concentrate more on the main objectives. 2. Glossary of terms:To enable members understand the various terms, like authority, accountability, coordination, responsibility, delegation, centralisation, decentralisation, plans, policies, line and staff and other terms, in their stated nomenclature, the manuals clearly define and describe these terms. 3. Organisation procedures:Procedures define the methods of dealing with any activity. They must be uniformly followed by managers and, therefore, clearly charted out in the organisation manuals. Location of the organisation, its structure (in terms of divisions and departments), policies, rules and regulations of different functional areas are clearly spelled out in the manuals. Q10) What are the types of organisation manuals?A10) Manuals can be of the following types:1. Policy manual: Policy is a general guideline that facilitates managerial action. Policy manual defines the area of operations within which managerial decisions are taken whenever managers face similar problems. It presents the intentions of top management to deal with specific organisational problems. 2. Rules and regulations manual: Rules are the set of directions that must be followed by all organisational members to work in a unified direction. Rules and regulations manual gives information about the rules with respect to activities like absenteeism, medical facilities, housing facilities etc. for the employees. 3. Organisation manual: It explains the structure of organisation in terms of division of work, creation of departments and distribution of responsibility along with authority at each position in the organisational hierarchy. 4. Operations manual: Operations are the activities performed by the organisational members. The operations manual provides information about the programmes, procedures, methods and standards of the organisation. It assists in carrying out various operations smoothly. 5. Departmental practice manual: Manuals that show the practices of each department with respect to policies, procedures, rules etc. are known as departmental practice manuals. Q11) Discuss the merits and limitations of organisation manuals.A11) Organisation manuals have the following merits:1. They provide broad view of the structure of the organisation.2. They provide documentary evidence (in writing) of the authority, responsibility and reporting relationships of each managerial position.3. They provide initiative to managers to develop their potential within the area of discretion.4. They help to avoid overlapping of activities.5. Since they limit the area of work to be performed, managers can know their responsibilities, compare them with their abilities and enhance them (if need be) through training and induction programmes.6. By clearly defining the duties of every member, they provide useful means of controlling various organisational activities.7. They facilitate delegation as managers can differentiate between reserved authority and that which can be delegated to subordinates.8. They help in quick settlement of new employees to the existing structure of the organisation.9. They help in quick decision-making by clearly spelling out organisational plans and policies. Organisation manuals suffer from the following limitations:1. As manuals strictly define the area of work, they limit growth in areas other than those assigned to managers.2. They hamper innovative team work as each individual’s contribution to overall organisational activities is clearly defined.3. Since overemphasis on responsibility is associated with accountability, managers avoid taking assignments for which they are not officially responsible.4. Being costly in terms of money and time, they are suitable forms of documents for large-scale undertakings only. Q12) What are formal and informal organizations?A12) When the managers are carrying on organising process then as a result of organising process an organisational structure is created to achieve systematic working and efficient utilization of resources. This type of structure is known as formal organisational structure. Formal organisational 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 organisation. This structure is created intentionally by the managers for achievement of organisational goal. Features of Formal organization are:(1) The formal organisational structure is created intentionally by the process of organising.(2) The purpose of formal organisation structure is achievement of organisational goal.(3) In formal organisational structure each individual is assigned a specific job.(4) In formal organisation every individual is assigned a fixed authority or decision-making power.(5) Formal organisational structure results in creation of superior-subordinate relations.(6) Formal organisational structure creates a scalar chain of communication in the organisation. Advantages of Formal Organisation are:1. Systematic Working: Formal organisation structure results in systematic and smooth functioning of an organisation.2. Achievement of Organisational Objectives: Formal organisational structure is established to achieve organisational objectives.3. No Overlapping of Work: In formal organisation 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 organisational structure results in coordinating the activities of various departments.5. Creation of Chain of Command:Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports to whom.6. More Emphasis on Work:Formal organisational structure lays more emphasis on work than interpersonal relations. Disadvantages of Formal Organisation are: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 organisational 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 organisational structure gives importance to work only; it ignores human relations, creativity, talents, etc. Informal OrganizationIn the formal organisational 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 organisation. This network of social and friendly groups forms another structure in the organisation which is called informal organisational structure. The informal organisational 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 are:(1) Informal organisational structure gets created automatically without any intended efforts of managers.(2) Informal organisational structure is formed by the employees to get psychological satisfaction. (3) Informal organisational 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 organisation.(5) The existence of informal organisational structure depends on the formal organisation structure. Advantages of Informal Organisation are:1. Fast Communication: Informal structure does not follow scalar chain so there can be faster spread of communication.2. Fulfills 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. Informal organisation can be used to get benefits in the formal organisation 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 skillfully take the advantage of both formal and informal organisations. Disadvantages of Informal organization are:1. Spread Rumours: According to a survey 70% of information spread through informal organisational structure are rumors which may mislead the employees.2. No Systematic Working: Informal structure does not form a structure for smooth working of an organisation.3. May Bring Negative Results: If informal organisation opposes the policies and changes of management, then it becomes very difficult to implement them in organisation.4. More Emphasis to Individual Interest: Informal structure gives more importance to satisfaction of individual interest as compared to organisational interest. Q13) What is span of control?A13) Span of control depicts the number of employees that can be handled and controlled effectively by a single manager. It is a span of supervision. According to Spriegal, “Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve.” There are two types of span of control:-1. Wide span of control- It is one in which a manager can supervise and control effectively a large group of persons at one time. The features of this span are:-i. Less overhead cost of supervisionii. Prompt response from the employeesiii. Better communicationiv. Better supervisionv. Better co-ordinationvi. Suitable for repetitive jobsAccording to this span, one manager can effectively and efficiently handle a large number of subordinates at one time. 2. Narrow span of control- According to this span, the work and authority is divided amongst many subordinates and a manager doesn't supervises and control a very big group of people under him. The manager according to a narrow span supervises a selected number of employees at one time. This scalar chain of command always flows from top to bottom and it defines the authority positions of different managers at different levels. The features are:-i. Work which requires tight control and supervision, for example, handicrafts, ivory work, etc. which requires craftsmanship, there narrow span is more helpful.ii. Co-ordination is difficult to be achieved.iii. Communication gaps can come.iv. Messages can be distorted.v. Specialization work can be achieved. Q14) What are the factors influencing span of control?A14) Span of control depends upon a number of factors. Some of these are mentioned below:1. Managerial abilities- In the concerns where managers are capable, qualified and experienced, wide span of control is always helpful. 2. Competence of subordinates- Where the subordinates are capable and competent and their understanding levels are proper, the subordinates tend to very frequently visit the superiors for solving their problems. In such cases, the manager can handle large number of employees. Hence wide span is suitable. 3. Nature of work- If the work is of repetitive nature, wide span of supervision is more helpful. On the other hand, if work requires mental skill or craftsmanship, tight control and supervision is required in which narrow span is more helpful. 4. Delegation of authority- When the work is delegated to lower levels in an efficient and proper way, confusions are less and congeniality of the environment can be maintained. In such cases, wide span of control is suitable and the supervisors can manage and control large number of sub- ordinates at one time. 5. Degree of decentralization- Decentralization is done in order to achieve specialization in which authority is shared by many people and managers at different levels. In such cases, a tall structure is helpful. There are certain concerns where decentralization is done in very effective way which results in direct and personal communication between superiors and sub-ordinates and there the superiors can manage large number of subordinates very easily. In such cases, wide span again helps. 6. Effectiveness of communication system: If the communication system is effective and the superior can communicate effectively, larger number of subordinates can be managed and controlled. 7. Time available for supervision: Span of control would be narrower at the top management level since these managers have less time at their disposal for supervision. Q15) Discuss authority and responsibility relationships.A15) In an organization, dividing work among people and coordinating their activities towards a common objective needs to be done efficiently. Authority and responsibility are two of the most important components of a smooth-functioning business. AuthorityAuthority, in simple words, is the right way of commanding subordinates, issuing orders and instructions, and exacting obedience from the team. It is also the right of the manager to make decisions. Also, to act or not to act depends on how he perceives the objectives of the organization. Henri Fayol, who designed the administrative theory of 14 principles of management, defined authority as ‘the right to give orders and exact obedience‘. He also recognized that any official authority vested in the job was often ineffective. He further added that the presence of leadership qualities and traits like intelligence, experience, etc., usually, enhance authority. However, as an important key to the manager’s job, authority is the power to command others and decide to act or refrain from acting to achieve the organization’s goals. A manager needs authority. It makes his position real and gives him the power to order his subordinates and get them to comply. When there is a chain of superior-subordinate relations in an organization, it is the authority which binds and provides a basis for responsibility. James Mooney specified that coordination is the primary principle of an organization. Therefore, it must have its own principle and foundation in Authority or the supreme coordinating power. Coordination is the all-inclusive principle of organization, it must have its own principle and foundation in Authority or the supreme coordinating power. Always, in every form of organization, this supreme coordinating authority must rest somewhere, else there would be no directive for any truly coordinated effort. Without authority, there will be no relations between subordinates and superiors and the organization will be in chaos. ResponsibilityResponsibility has different meanings in management. The most common description is the obligation on the manager to perform the task himself. The essence of responsibility is ‘obligation’. Anyone who accepts a task must be held responsible for its performance too. In the context of hierarchical relations in an organization, responsibility is the obligation of a subordinate to perform the tasks assigned. Therefore, responsibility is relative to the person. Also, it emanates from the subordinate-superior relations in an organization. Hence, the manager can get the assigned duty done by his subordinate. He also needs to ensure a proper discharge of the duty. Therefore, in an organization, authority and responsibility move as follows – authority flows downwards, whereas responsibility is exacted upwards. Sometimes, informal leadership emerges in an organization. This can create problems in the clear definition of responsibilities of the subordinates. However, the responsibility towards the seniors does not change. AccountabilityEvery employee is answerable to his superior for the accomplishment of the task assigned to him. This is accountability. When a manager delegates a task, he assigns duties and delegates the required authority so that his subordinates can accomplish the task. However, the process is not complete unless the subordinate is answerable to the superior for his functioning. Therefore, authority goes downward and makes everyone accountable for the duties assigned. Authority and PowerIn order to explain the limits to formal authority, many experts make a distinction between authority and power. According to some theories, authority is the right to command in the official hierarchical sense. On the other hand, power is the capacity to influence the behavior of others. However, in the real world, many managers also have the power to exact obedience from their subordinates. The proportion in which they are divided can vary according to the role of the manager. While the head of a division in the Army will have a more complete combination of authority and power, as assistant manager of a call center might not be able to use power to that extent. In an ideal scenario, authority and responsibility along with power and accountability are equal to each other in every position of the organization. If the balance between them gets disturbed, problems arise. Relationship between Authority and Responsibility:Authority is the right of a superior to give orders and instructions to his subordinates to get things done. Responsibility means the duties assigned to a person at the time of delegation of authority. Responsibility also denotes the obligation of the subordinate to perform the duty to the best of his ability. It arises from the superior-subordinate relationship. Authority can be delegated, but responsibility cannot be delegated. Authority moves downward. A superior can always share his authority with his subordinates, but he cannot delegate the responsibility or obligation to perform his duty. Responsibility is owed to one’s superior. Therefore, no subordinate can avoid his responsibility by delegating some authority to his subordinate. Accountability always moves upward and so it cannot be delegated. Authority and responsibility are closely related. There should be parity between the two. A subordinate will be answerable for the authority delegated to him and not beyond that. Q16) Differentiate between Authority and Responsibility.A16) The key differences between authority and responsibility are:1. It is the legal right of a superior to command his subordinates. It is the obligation of a subordinate to perform the work assigned to him by his superior.2. Authority normally arises because of position of the boss in the organisation. Responsibility arises out of superior- subordinate relationship whereby the subordinate agrees to perform such duties as are assigned to him.3. Authority can be delegated by a senior to his subordinate. It cannot be delegated by the subordinate.4. Authority flows downward from superior to subordinate. Responsibility moves in the upward direction from subordinate to superior.
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(i) Function,(ii) Product,(iii) Geographic territory,(iv) Project and(iv) Combination approach.
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