Organization- Principles, Approaches, structure

FUNCTIONS OF MANAGEMENT – ORGANIZING

Organizing is the process of identification and grouping of activities, assigning duties and delegating authority to the managers, allocating necessary Resources and establishing coordination among individuals and department of an organization with a view to attain its objectives.

PROCESS OF ORGANIZING :

The process of organising consists of the following steps –

Identification of activities: Every enterprise is created with a specific purpose. Based on this, the activities involved can be identified. For example, in a manufacturing firm, producing goods and selling them are the major activities in addition to routine activities like, paying salary to employees; raising loans from outside, paying taxes to the government etc. and these activities vary when the organisation is a service concern or a trading firm.

Grouping of activities: Once activities are identified, then they need to be grouped. They are grouped in different ways. The activities which are similar in nature can be grouped as one and a separate department can be created. For example – activities undertaken before sale of a product, during the sale of the product and after the sale of the product can be grouped under the functions of a Marketing department. Normally, all activities of a manufacturing unit can be grouped into major functions like purchasing, production, marketing, accounting and finance, etc. and each function can be subdivided into various specific jobs.

Assignment of Responsibilities: Having completed the exercise of identifying, grouping and classifying all activities into specific jobs, they can be assigned to individuals to take care of.

Granting authority: On the basis of responsibilities given to specific individuals, they are also to be given the necessary authority to ensure effective performance.

Establishing relationship: This is a very important job of management as everybody in the organisation should know as to who he/she is to report, thereby establishing a structure of relationships. By doing so, relationships become clear and delegation is facilitated.

ORGANIZATION STRUCTURE

Organization structure is a Network of formal authority relationships among people within which behaviour and activities of people are regulated for the accomplishment of organizational objectives.

Forms of Organizational Structure

Line Organization

Pure Line: – Activities at a particular level are same, every employee performs by & large the same type of work.

Departmental Line: – Whole work divided into functional Departments. Each Department works as a self-sufficient unit under the supervision & direction of a department manager who himself work under the immediate boss.

Line and Staff Organization

It is one that has line managers with direct vertical relationships between different levels in the organization in addition to the specialist responsible for advising and assisting the line managers.

Functional Organization

According to this, Line authority is channelized through the staff specialists. In such an organizational structure, Line authority runs through many functional experts who have authority to issue orders in their respective areas of specialisation.

Project Organization

It is a temporary structure designed to accomplish a specific task or project with the help of specialists drawn from different functional departments within the organization.

Matrix OR Grid Organization

It is permanent Organizational Structure designed to accomplish specific project or result by using using teams of specialists drawn from different functional departments within the organization.It is a combination of project organization and functional organization.

Committee Organization

It is a group of 2 or more appointed, nominated or elected persons to consider, discuss decide, recommend or report on some issue or matter assigned to it.

Informal & Formal Organization

Formal organisation refers to the officially established pattern of relationships among departments, divisions and individuals to achieve well-defined goals and is a consciously designed structure of roles.

Informal organisations on the other hand, refers to relationship between individuals in the organisation based on personal attitudes, likes and dislikes and originates to meet their social and emotional needs and develops spontaneously.

Delegation

The active process of entrustment of a part of work or responsibility and authority to another and the creation of accountability for performance is known as delegation. Thus, there are three Elements of delegation as follows-

Assignment of Responsibility: This is also known as entrustment of duties. Duties can be divided into two parts: one part, that the individual can perform himself and the other part, that he can assign to his subordinates to perform.

Granting Authority: Authority refers to the official powers and position required to carry on any task. When duties are assigned to subordinates then the required authority must also be conferred to him

Creating Accountability: The delegatee is fully answerable to his superior for performance of the task assigned to him. Thus, the superior ensures performance through accountability by his subordinate.

Decentralization

Decentralisation refers to a systematic effort to delegate authority at all levels of management and in all departments. This shifts the power of DECISION MAKING to lower level under a well considered plan.

Decentralisation has number of benefits. Firstly, it reduces the workload of the top level management. Secondly, it motivates the employees and gives them more autonomy. It promotes initiative and creativity. It also helps employees to take quick and appropriate decisions. In this process, the top management is freed from the routine jobs and it enables them to concentrate on crucial areas and plan for Growth.

Distinction between Delegations and Decentralisation

Decentralisation is not same as delegation. The points of differences are –

While delegation is the process of assigning responsibility and authority and thereby creating accountability; decentralisation is the ultimate outcome of planned delegation.
Delegation of authority takes place between the manager and his subordinates while decentralisation involves the entire organisation, and is between top management and divisions/departments.
Delegation is done to speed up the work and is essential in trace; while decentralisation is optional and is usually done in large scale organisations.
In case of delegation the responsibility and authority delegated may be withdrawn by the delegator; which is not so easy in case of decentralisation.

Organizational Principles

Organizational principles are guidelines that help organizations to function effectively. They are based on the work of early management theorists, such as Frederick Taylor and Henri Fayol.

The following are some of the most important organizational principles:

Unity of command: Each employee should have only one supervisor. This principle helps to avoid confusion and conflict.
Scalar principle: There should be a clear hierarchy of authority in an organization. This principle helps to ensure that everyone knows who is responsible for what.
Functional principle: Each department in an organization should have a specific function. This principle helps to ensure that tasks are divided up efficiently.
Span of control: The number of employees that a manager can effectively supervise is limited. This principle helps to ensure that managers are not overloaded with work.
Departmentalization: Organizations can be divided into departments based on function, product, customer, or geography. This principle helps to ensure that tasks are grouped together logically.
Centralization and decentralization: The degree to which decision-making is concentrated at the top of an organization is called centralization. Decentralization is the opposite, where decision-making is delegated to lower levels of the organization. The appropriate level of centralization or decentralization depends on the size and complexity of the organization, as well as the nature of its work.
Formalization: The degree to which rules and procedures are written down and enforced is called formalization. A highly formalized organization has many rules and procedures, while a less formalized organization has fewer. The appropriate level of formalization depends on the size and complexity of the organization, as well as the nature of its work.

Organizational Approaches

There are four main approaches to organization: classical, human relations, systems, and contingency.

The classical approach is based on the idea that organizations should be run in a rational and efficient manner. This approach emphasizes the importance of structure, hierarchy, and control.

The human relations approach is based on the idea that organizations should be run in a way that takes into account the needs of employees. This approach emphasizes the importance of motivation, morale, and job satisfaction.

The systems approach is based on the idea that organizations are open systems that interact with their Environment. This approach emphasizes the importance of adaptation, change, and innovation.

The contingency approach is based on the idea that there is no one best way to organize an organization. The appropriate approach depends on the specific situation and circumstances.

Organizational Structure

The organizational structure is the way in which an organization is divided into departments and groups, and how authority and responsibility are distributed. There are many different types of organizational structures, but some of the most common include:

Line organization: A line organization is a simple, hierarchical structure with a clear chain of command. This type of structure is often used in small organizations.
Functional organization: A functional organization is divided into departments based on function, such as marketing, finance, and production. This type of structure is often used in medium-sized organizations.
Divisional organization: A divisional organization is divided into departments based on product, customer, or geography. This type of structure is often used in large organizations.
Matrix organization: A matrix organization is a hybrid structure that combines elements of both line and functional organizations. This type of structure is often used in complex organizations that need to be able to respond quickly to changes in the environment.
Hybrid organization: A hybrid organization is an organization that does not fit neatly into any of the traditional categories. Hybrid organizations often combine elements of different types of organizations in order to meet their specific needs.

The choice of organizational structure depends on a number of factors, including the size and complexity of the organization, the nature of its work, and the environment in which it operates.

What is an organization?

An organization is a group of people who come together to achieve a common goal. Organizations can be formal or informal, and they can be large or small.

What are the principles of organization?

The principles of organization are the guidelines that help organizations function effectively. Some of the most important principles of organization include:

Division of labor: This principle states that tasks should be divided up among different people so that each person can specialize in a particular area.
Hierarchy: This principle states that there should be a clear chain of command in an organization, with each person reporting to a higher-level manager.
Span of control: This principle states that a manager should only have a limited number of direct reports so that they can effectively supervise their work.
Delegation: This principle states that managers should delegate tasks to their subordinates so that they can focus on more important matters.
Communication: This principle states that communication is essential for an organization to function effectively. Managers should communicate with their subordinates, and subordinates should communicate with their managers.

What are the approaches to organization?

There are many different approaches to organization, but some of the most common include:

Functional organization: This approach groups employees according to their functional area, such as marketing, sales, or finance.
Divisional organization: This approach groups employees according to the products or Services they produce.
Matrix organization: This approach combines functional and divisional organization, with employees reporting to both a functional manager and a divisional manager.
Team organization: This approach groups employees into teams that work on specific projects.

What is the structure of an organization?

The structure of an organization is the way in which it is divided into departments and groups. The structure of an organization can be formal or informal, and it can be centralized or decentralized.

What are the benefits of organization?

There are many benefits to organization, including:

Increased efficiency: Organizations that are well-organized can operate more efficiently.
Improved communication: Organizations that are well-organized can communicate more effectively.
Reduced costs: Organizations that are well-organized can reduce costs.
Increased productivity: Organizations that are well-organized can be more productive.
Improved morale: Organizations that are well-organized can have improved morale.

What are the challenges of organization?

There are some challenges to organization, including:

Resistance to change: People can be resistant to change, which can make it difficult to implement new organizational structures or processes.
Lack of communication: If communication is not effective, it can lead to problems within an organization.
Lack of coordination: If different parts of an organization are not coordinated, it can lead to problems.
Lack of flexibility: If an organization is not flexible, it can be difficult to adapt to changes in the environment.
Lack of control: If an organization does not have control over its resources, it can be difficult to achieve its goals.

What are the future trends in organization?

Some of the future trends in organization include:

The rise of the gig economy: The gig economy is a term used to describe the increasing number of people who are working freelance or on short-term contracts. This trend is likely to continue, as more and more people are looking for flexibility in their work arrangements.
The rise of Artificial Intelligence (AI): AI is a rapidly developing technology that has the potential to revolutionize the way organizations operate. AI can be used to automate tasks, improve decision-making, and personalize customer experiences.
The rise of the sharing economy: The sharing economy is a term used to describe the increasing number of people who are sharing goods and services with each other, often through online platforms. This trend is likely to continue, as it offers a more affordable and convenient way to consume goods and services.
The rise of the circular economy: The circular economy is an economic model that focuses on reducing waste and reusing resources. This trend is likely to continue, as it is more sustainable than the traditional linear economy.
The rise of the sustainable economy: The sustainable economy is an economic model that focuses on meeting the needs of the present without compromising the ability of future generations to meet their own needs. This trend is likely to continue, as people become more aware of the environmental impact of their consumption.

Which of the following is not a principle of organization?
(A) Unity of command
(B) Span of control
(C) Division of labor
(D) Delegation of authority
Which of the following is not an approach to organization?
(A) Functional
(B) Divisional
(C) Matrix
(D) Hierarchical
Which of the following is not a type of organizational structure?
(A) Functional
(B) Divisional
(C) Matrix
(D) Bureaucratic
Which of the following is not a benefit of organization?
(A) Increased efficiency
(B) Reduced costs
(C) Improved coordination
(D) Increased Bureaucracy
Which of the following is not a challenge of organization?
(A) Coordination
(B) Communication
(C) Control
(D) Flexibility
Which of the following is not a characteristic of a functional organization?
(A) Employees are grouped by their skills and expertise.
(B) Departments are organized around specific functions, such as marketing, finance, and human resources.
(C) There is a clear chain of command.
(D) Employees are responsible for a wide range of tasks.
Which of the following is not a characteristic of a divisional organization?
(A) Employees are grouped by product, customer, or geography.
(B) Departments are organized around specific products, customers, or geographic regions.
(C) There is a clear chain of command.
(D) Employees are responsible for a narrow range of tasks.
Which of the following is not a characteristic of a matrix organization?
(A) Employees are assigned to both functional and divisional departments.
(B) Employees report to two managers, one from each department.
(C) There is a clear chain of command.
(D) Employees are responsible for a wide range of tasks.
Which of the following is not a benefit of a functional organization?
(A) It is easy to manage.
(B) It is efficient.
(C) It is flexible.
(D) It is effective.
Which of the following is not a benefit of a divisional organization?
(A) It is flexible.
(B) It is effective.
(C) It is efficient.
(D) It is easy to manage.
Which of the following is not a benefit of a matrix organization?
(A) It is flexible.
(B) It is effective.
(C) It is efficient.
(D) It is easy to manage.
Which of the following is not a challenge of a functional organization?
(A) It is not flexible.
(B) It is not effective.
(C) It is not efficient.
(D) It is not easy to manage.
Which of the following is not a challenge of a divisional organization?
(A) It is not flexible.
(B) It is not effective.
(C) It is not efficient.
(D) It is not easy to manage.
Which of the following is not a challenge of a matrix organization?
(A) It is not flexible.
(B) It is not effective.
(C) It is not efficient.
(D) It is not easy to manage.
Which of the following is not a type of organizational culture?
(A) Power
(B) Role
(C) Task
(D) Person
Which of the following is not a characteristic of a power culture?
(A) Decisions are made by a small group of powerful individuals.
(B) Employees are motivated by the desire for power and status.
(C) There is a lot of competition and conflict.
(D) Employees are loyal to the organization.
Which of the following is not a characteristic of a role culture?
(A) Decisions are made by following rules and procedures.
(B) Employees are motivated by the desire to do a good job.
(C) There is a lot of order and stability.
(D) Employees are loyal to their job.
Which of the following is not a characteristic of a task culture?
(A) Decisions are made by a group of employees who are working on a specific task.
(B) Employees are motivated by the desire to achieve a goal.
(C) There is a lot of cooperation and collaboration.
(D) Employees are loyal to the team.
Which of the following is not a characteristic of a person culture?
(A) Decisions are made by a