5.12 Organising

In PLANNING, we saw how NOKIA finalized N 1200 with camera feature. Now let’s see how to implement the plan by clarifying jobs (to workers and departments) and working relationship and effectively deploying resources (workers, raw-materials, etc) for the attainment of organization goal.

Organizing is implementation of plan by clarifying jobs and working relationship and effectively deploying resources for the attainment of organization goal.
What are the steps in the process of organizing?
  1. Identification and division of work.
  2. Departmentalization.
  3. Assignment of duties.
  4. Establishing reporting relationship.
What is the importance of organizing?
  1. Specialization.
  2. Clarity in working relationship.
  3. Optimum utilization of resources.
  4. Adaptation to change.
  5. Effective administration.
  6. Development of personnel.
  7. Expansion and growth.

Organization Structure.

Why is organization structure needed?
What are the benefits of organization structure?
How is organization structure created?
What are the types of organization structure?

  1. Functional structure –
  2. Divisional structure
What is functional structure?

  1. Functional structure groups an organization’s activities on the basis of functions.
KENT Purifiers has 4 major functions:

  1. Production function – Production department
  2. Purchase function – Purchase department
  3. Finance function – Finance department
  4. Marketing function – Marketing department.
What are the advantages and disadvantages of functional structure?
  1. Functional specialization
  2. Effective control and coordination
  3. Improves efficiency
  4. Avoid duplication
  5. Proper attention
  1. Functional Empire
  2. Difficulty in coordination
  3. Difficulty to hold accountability
  4. Conflicts of interest
  5. Inflexibility
Discuss the suitability of functional structure.
  1. Suitable for large organizations
  2. Suitable for organizations that carry diversified activities
  3. Suitable for tasks that require high degree of specialization
  1. What is Divisional Structure?
    1. Divisional structure groups activities on the basis of products.
KENT Purifiers makes water purifiers and air purifiers.

  1. Division 1 – Water Purifiers
    1. RO
    2. ORM
    3. Stella
  2. Division 2 – Air Purifiers
    1. Aura
    2. Grand
    3. Zoom
Mention the advantages and disadvantages of divisional structure.
  1. Product specialization
  2. Greater accountability
  3. Flexibility
  4. Expansion and growth
  1. Departmental conflicts
  2. Costly
  3. Ignore organizational interests
Discuss the suitability of functional structure.
  1. Suitable for organizations that manufacture large variety of products using different productive resources.
  2. Suitable organizations that plan to add more departments or more line of products in the future.
  3. Suitable for organizations that determine profit and loss made by each product-line so that decision can be taken to:
    1. Expand that product
    2. Continue that product
    3. Close that product

Formal Organizations

What is formal Organization?

Refers to the organization structure which is designed by the management to accomplish a particular task.

Eat India Company is a formal organization. Here they have a particular set of tasks. They want profit. They hope to rise to India’s most trusted food manufacturing company.
What are the features of formal organizations?
  1. Job positions and reporting relationships are clearly stated.
  2. They are run to the set rules and procedures.
  3. Top management purposely frames the structure of formal organization in order to achieve its desired objective.
  4. It is the framework of a formal structure in which activities of all departments are coordinated.
  5. The main focus is on work; not interpersonal relations.
What are the advantages of formal organizations?

  1. It becomes easy to fix responsibilities as authority-responsibility relationships are clearly stated.
  2. Role of each member is clearly defined so wastage of efforts is low.
  3. Formal structure ensures that an employ should report only to his boss and therefore unity of command is followed.
What are the limitations of formal organization structure?

Informal Organizations

Informal Organization refers to the network of social relations which emerges on its own due to interactions among individuals to fulfill their personal and social needs.


What is delegation?
Delegation is the transfer of authority from superior to subordinate. It has three elements: Authority, Responsibility and Accountability.
What is the importance of delegation?

  1. Effective management.
  2. Employ development.
  3. Motivation of employs.
  4. Facilitation of growth. When Raju’s skills improves, the company will benefit from him.
  5. Basis of management hierarchy.
  6. Better coordination.

Centralization & Decentralization

What is centralization?

  1. Centralization refers to concentration of decision making authority at higher or top level of management.
  2. All decision are taken by one manager or a few managers at higher levels.
  3. Retention of all decision making functions by higher levels of management makes the organization centralized.
What is decentralization?
Decentralisation refers to the transfer of decision making authority throughout all levels of the organisation.
What is the importance of decentralisation of authority

  1. Decentralization helps in development of managerial talent,
  2. Helps quick decision making reducing burden on top management,
  3. Development of initiative,
  4. Growth and better control.

Written by Biju John

Biju John is an educational writer, educator and the author of OM - The Otherwise Men. He gives live classes on Skype and Facebook. You can attend his 3 Day Classes (English & Business Studies) in Delhi, Bangalore, Qatar and Dubai. His Contact number is 91 9810740061.

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