Structure of Organisation

<–2/”>a >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 Structure

An organizational structure is the way in which an organization is designed to achieve its goals. It is the framework within which the organization’s activities are coordinated and controlled. The organizational structure can be formal or informal, centralized or decentralized, and line or staff.

Centralization vs. Decentralization

Centralization refers to the degree to which decision-making authority is concentrated at the top of the organization. In a centralized organization, most decisions are made by top management. In a decentralized organization, decision-making authority is delegated to lower levels of the organization.

Formal vs. Informal Organization

A formal organization is a system of consciously coordinated activities of two or more people. It is characterized by a hierarchy of authority, a division of labor, and a system of rules and procedures. An informal organization is a network of personal relationships that develop within a formal organization. It is not officially sanctioned by the organization, but it can play an important role in shaping the organization’s culture and Climate.

Line vs. Staff Organization

A line organization is a type of organization in which there is a clear line of authority from top management to the lowest levels of the organization. In a line organization, each employee is responsible for a specific task or set of tasks. A staff organization is a type of organization in which there is a clear distinction between line and staff positions. Line positions are responsible for the organization’s primary goals, while staff positions provide support and assistance to line positions.

Functional vs. Divisional Organization

A functional organization is a type of organization in which departments are grouped according to their functional specialties, such as marketing, finance, and production. A divisional organization is a type of organization in which departments are grouped according to their products or Services, or according to their geographic location.

Matrix Organization

A matrix organization is a type of organization in which employees are assigned to both a functional department and a project team. This type of organization is often used when an organization needs to be able to respond quickly to changes in the market or to manage complex projects.

Project Organization

A project organization is a type of organization that is created to complete a specific project. Once the project is completed, the organization is disbanded. Project organizations are often used for large, complex projects that require the expertise of people from different functional areas.

Network Organization

A network organization is a type of organization that is made up of a network of independent organizations that work together to achieve common goals. Network organizations are often used in industries where there is a lot of competition and where organizations need to be able to respond quickly to changes in the market.

Hybrid Organization

A hybrid organization is a type of organization that combines elements of different organizational structures. Hybrid organizations are often used when an organization needs to be able to respond to a variety of challenges and opportunities.

The choice of organizational structure is an important decision that can have a significant impact on an organization’s success. The right organizational structure can help an organization to achieve its goals, while the wrong organizational structure can hinder the organization’s success. There is no one-size-fits-all answer to the question of which organizational structure is best. The best organizational structure for a particular organization will depend on a variety of factors, such as the organization’s size, Industry, and goals.

What is the difference between a functional and divisional structure?

A functional structure groups employees by their skills and expertise, while a divisional structure groups employees by the products or services they offer.

What are the advantages and disadvantages of a functional structure?

The advantages of a functional structure include:

It can be efficient, as employees can focus on their area of expertise.
It can be effective in coordinating activities within a functional area.
It can be flexible, as employees can be moved around to meet changing needs.

The disadvantages of a functional structure include:

It can be slow to respond to changes in the market, as employees may be focused on their own area of expertise and not be aware of changes in other areas.
It can be difficult to coordinate activities across functional areas.
It can be difficult to motivate employees, as they may not feel like they are part of the overall organization.

What are the advantages and disadvantages of a divisional structure?

The advantages of a divisional structure include:

It can be responsive to changes in the market, as each division can focus on its own market.
It can be efficient, as each division can focus on its own products or services.
It can be effective in coordinating activities within a division.

The disadvantages of a divisional structure include:

It can be slow to respond to changes in the overall market, as each division may be focused on its own market.
It can be difficult to coordinate activities across divisions.
It can be difficult to motivate employees, as they may not feel like they are part of the overall organization.

What are the different types of organizational structures?

The different types of organizational structures include:

Functional structure: Employees are grouped by their skills and expertise.
Divisional structure: Employees are grouped by the products or services they offer.
Matrix structure: Employees are assigned to both a functional area and a project team.
Divisional matrix structure: Employees are assigned to both a functional area and a product or service division.
Team structure: Employees are grouped into teams that work on specific projects.
Flat structure: There are few levels of management, and employees have a lot of autonomy.
Tall structure: There are many levels of management, and employees have less autonomy.
Centralized structure: Decision-making is concentrated at the top of the organization.
Decentralized structure: Decision-making is delegated to lower levels of the organization.

What is the best organizational structure?

The best organizational structure for a particular organization will depend on a number of factors, including the size of the organization, the industry it operates in, and its goals.

What are the benefits of a well-structured organization?

A well-structured organization can benefit from:

Increased efficiency: Employees can focus on their areas of expertise, and activities can be coordinated more effectively.
Improved Communication: Employees can communicate more effectively with each other, and information can be shared more easily.
Increased flexibility: The organization can be more responsive to changes in the market.
Improved decision-making: Decisions can be made more effectively, as employees have access to the information they need.
Increased motivation: Employees are more likely to be motivated when they feel like they are part of a well-functioning organization.

What are the challenges of a well-structured organization?

The challenges of a well-structured organization can include:

Increased Bureaucracy: The organization may become too bureaucratic, and employees may feel like they are bogged down in red tape.
Decreased innovation: The organization may become too focused on efficiency and may not be willing to take risks.
Decreased creativity: The organization may become too focused on following the rules and may not be willing to think outside the box.
Increased costs: The organization may incur higher costs due to the need for more management and coordination.
Decreased flexibility: The organization may become less flexible and may be slow to respond to changes in the market.

Sure, here are some MCQs without mentioning the topic Structure of Organisation:

Which of the following is not a type of organizational structure?
(A) Functional structure
(B) Divisional structure
(C) Matrix structure
(D) Hierarchical structure
Which of the following is the most common type of organizational structure?
(A) Functional structure
(B) Divisional structure
(C) Matrix structure
(D) Hierarchical structure
In a functional structure, employees are grouped by their functional expertise. Which of the following is an example of a functional department?
(A) Marketing
(B) Sales
(C) Finance
(D) All of the above
In a divisional structure, employees are grouped by product, service, or geographic region. Which of the following is an example of a divisional department?
(A) Marketing
(B) Sales
(C) Finance
(D) All of the above
In a matrix structure, employees are assigned to both a functional department and a product or project team. Which of the following is an example of a matrix structure?
(A) A marketing manager who is also assigned to the product development team
(B) A sales manager who is also assigned to the customer service team
(C) A finance manager who is also assigned to the accounting team
(D) All of the above
A hierarchical structure is a type of organizational structure in which there is a clear chain of command, with each employee reporting to a higher-level manager. Which of the following is an example of a hierarchical structure?
(A) A military organization
(B) A government organization
(C) A large corporation
(D) All of the above
A flat structure is a type of organizational structure in which there are few levels of management and employees have a great deal of autonomy. Which of the following is an example of a flat structure?
(A) A small business
(B) A startup company
(C) A non-profit organization
(D) All of the above
A decentralized structure is a type of organizational structure in which decision-making authority is delegated to lower levels of management. Which of the following is an example of a decentralized structure?
(A) A multinational corporation
(B) A government agency
(C) A university
(D) All of the above
A centralized structure is a type of organizational structure in which decision-making authority is concentrated at the top levels of management. Which of the following is an example of a centralized structure?
(A) A small business
(B) A startup company
(C) A non-profit organization
(D) All of the above
A bureaucratic structure is a type of organizational structure that is characterized by a high degree of formalization, specialization, and centralization. Which of the following is an example of a bureaucratic structure?
(A) A government agency
(B) A large corporation
(C) A university
(D) All of the above

I hope these MCQs are helpful!