ORGANISATION

• The word ‘organisation’ has come from the

word ‘organism’ which means a structure of
interrelated and interdependent parts. The
parts or components of organisation consists
of men, machines, materials, methods,
MEANING money, functions, authority and
responsibility.
• The task of organisation is to unite or
integrate these components effectively for
the purpose of attaining the common goal.
DEFINITION
• Organising is the process of identifying and
grouping the work to be performed, defining and
delegating responsibility and authority, and
establishing relationships for the purpose of
enabling people to work most effectively together
in accomplishing objectives’ – Louis A Allen
• Organisation is the structural frame work within
which the various efforts are coordinated and
related to each other- Theo Haimann
 1. Common Purpose :
Every organisation exists to accomplish some common goals.
2. Division of Labour :
The total work of an organisation is divided into functions and sub-functions and assigned to
particular individual. It ensures specialisation.
3. Authority Structure :
There is an arrangement of positions into a graded series. The authority of every position is
defined. The chain of superior – subordinate relationship is known as chain of command.
4. People :
An organisation is basically a group of persons. People constitute the dynamic human element of
NATURE an organisation.
(CHARACTERISTICS) 5. Communication :
OF ORGANISATION Every organisation has its own channels of Communication. It is necessary for mutual
understanding and co-operation among the members of an organisation.
6. Coordination :
Coordinating different activities and parts of organisation is essential to achieve its common goal.
Co-operative effort is a basic feature of organisation.
7. Environment :
An organisation function is an environment comprising economic, social, political and legal
factors.
8. Rules and Regulations :
Every organisation has some rules and regulations for orderly functioning of people.
PRINCIPLES OF ORGANISATION
1. Unity of Objectives
Every part of the organisation should be designed to facilitate the achievement of
common objectives. Therefore, the objectives must be stated in clear and concise
terms.
2. Division of work
The total work should be divided in such a way that as far as possible every
individual performs a single function.
3. Span of control
No executive in the organisation should be required to supervise more subordinates
than he can effectively manage.
4. Scalar principle
The line of authority (called the chain of command) from the top executive to the
lowest level should be clear and unbroken.
5. Principle of Exception
Every manager should take routine decision himself. Only exceptional matters
beyond the scope of authority should be refered to higher authorities.
6. Unity of command
Each individual should receive orders from and be accountable to only one boss.
7. Functional definition
The authority and responsibility of every individual should be clearly defined. The
relationships between different jobs should be clearly specified.
8. Unity of Direction
There must be one head and one plan for a group of activities directed towards the
same objectives.
9. Delegation
Authority delegated to an individual should be adequate to enable him to
accomplish the results expected of him.
11. Absoluteness of Responsibility
No superior should be allowed to avoid his responsibility by delegating authority to his
subordinates. He must be held accountable for the acts of his subordinates.
12. Simplicity
The organisation structure should be kept simple with minimum numbers of levels.
13. Flexibility
The organisation structure should be adoptable to changing circumstances. There
should be scope for expansion without disrupting the basic design.
14. Efficiency
The organisation structure should enable the enterprise to function efficiently and to
achieve its objectives with minimum cost and effort.
15. Continuity
The organisation structure should be continued for a long period of time.
Organizing is mainly based on two principles:
• Authority
• Span of management/span of control/ span of supervision
Authority
• It is the key to the managerial job
• It is the lifeblood of the
managerial position
• It gives legitimate power to the
manager or supervisor to give
directives to subordinates
• It is limited in scope by both
internal and external factors
Span of Management
• It is also called span of control and
span of supervision
• It is the number of subordinates that a
manager directs and supervises
• The number of subordinates varies
• The smaller or narrower the span, the
more levels of management will be
required
• Some managers are able to supervise
more subordinates than are others
FORMAL ORGANISATION

Formal organisation is a well-

defined structure of authority
It works along pre-defined set
and responsibility that defines
of policies, plans, procedures,
delegation of authority and
schedules and programmes.
relationships amongst the
organisational members.
FEATURES OF FORMAL ORGANISATION

• Deliberately created structure.

• Job-oriented
• Division of work
• Departmentation
• Formal authority
• Delegation
• Coordination
• Principles of organising
 • It clearly defines objectives of the organization.
MERITS of • It results in optimum utilisation of scarce organisational
FORMAL resources.
ORGANISATION • Develops effective system of communication
• The organisational hierarchy avoids overlapping of
activities between two individuals or two departments.
• Career advancement and promotional avenues is clearly
defined.
• The rate of absenteeism and labour turnover remains low.
• synthesis of individual, group and organisational goals.
DEMRITS OF FORMAL ORGANISATION

LOSS OF
INITITATIVE

UNSATISFIED
SOCIAL NEEDS
INFORMAL
ORGANISATIO
N
• A network of personal and social
relationships that arise
spontaneously as people
associate with one another in a
work environment. It is
composed of all the informal
groupings of people within a
formal organisation.
INFORMAL
ORGANISATIO
N
• A network of personal and social
relationships that arise
spontaneously as people
associate with one another in a
work environment. It is
composed of all the informal
groupings of people within a
formal organisation.
TYPES of
groups in
informal
organisations
WHY PEOPLE THEY
FORM INFORMAL
GROUPS?

• Need for satisfaction.

• Proximity and interaction
• Similarity - The birds of a feather
flock together
Why • They maintain the social and cultural values
the group members are supposed to have in
Informal common
Groups • They provide group members not only
opportunity for status but also opportunity
Remain in for social interaction and fulfillment
Existence? • They provide necessary information for their
members
• They influence the work environment
 Improving organisational effectiveness by
blending of formal and informal
organization

benefits Support service to management

provided by
the informal Useful communication

organisation
Better management
DEMERITS OF
informal
organisation
• Resistance to change
• Conflict
• Rumuors
• Conform
 FORMAL AND INFORMAL
ORGANISATION
Basis for Comparison Formal Organization Informal Organization
An organization type in which the job of An organization formed within the formal
each member is clearly defined, whose organization as a network of interpersonal
Meaning
authority, responsibility and accountability relationship, when people interact with each
are fixed is formal organization. other, is known as informal communication.

Creation Deliberately by top management. Spontaneously by members.

To fulfill, the ultimate objective of the To satisfy their social and psychological
Purpose
organization. needs.
Nature Stable, it continues for a long time. Not stable
Communication Official communication Grapevine
Control mechanism Rules and Regulations Norms, values and beliefs
Focus on Work performance Interpersonal relationship
Members are bound by hierarchical
Authority All members are equal.
structure.
Size Large Small
Working
ORGANISATION
AL CULTURE -
PRESENT