formation of ion

8/3/2019 Formation of ion

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FEATURES OF ORGANISATION

Objective-oriented activity

Delegation of Authority and Responsibility

Dependent on Planning

Importance to Human Element Flexibility

Group activity

Supervision, Control and Co-ordination are its

basis


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Importance ofImportance of

Organisation:Organisation:

Organisation establishes an inter-relation between authority and

responsibility.To clarify the importance oforganisation a successful industrialissays,

Take away our plants,take away ourbusiness , oh! Take away our wealthbut permit us to retain our

organisation. Within no time we shallbe on our feet once a ain. Andrew


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1. The success or failure of a business largely depends upon itsformation of organisation

2. There is no duplication of work and co-ordination ismaintained because of organisation.

3. Organisation establishes inter-relationship between functionsand functions and also between functions and individuals.

4. Maximum utilization of time and resources becomes possibledue to organisation5. Employees become more responsible.6. Organisation makes control easy and effective.7. Discipline and morale of personnel increases.8. Division of labour and research are encouraged , and by

adopting new technology administrative efficiency can beincreased.9. Smooth administration is maintained due to clarity of

authority and responsibility.10. Every activity gets equal justice.


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Every business has to form an organisationfor accomplishment of targetedobjectives.

With the existence of business, there isexistence of organisation.

Organisation should be flexible so as toadapt to the changing time and

circumstances.Following are the stages for the formation

of organisation:


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1. Clarification of Objectives.

2. Listing of Functions.

3. Departmentation.4. Departmental position and

qualification.

5. Delegation of Authority and Assignmentof Responsibility.

6. Establishment of Inter-relationship.

7. Preparation of Organisational Chart.


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1) Line Organization

2) Functional Organization

3) Committee Organization

4) Line and Staff Organization

5) Matrix Organization


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A type of organization where theauthority and responsibility flow in adownward trendfrom top to bottom is

called Line organization It is more known, old and simple type of

organization.

Every person is responsible to hisimmediate superior.

This type of organization is used inmilitary for years.


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Firstly the entire business is divided intodifferent departments.

Each department gets the head of the

department. The departmental head is given full

authority and responsibility of hisdepartment.

Departmental head has internal authorityand are independent of one another.

The other name for this type of

organisation is departmental


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Board of directors

General manager

Production department Sales department Administrative

department

Purchase

officer

Productionofficer

Sales officer Publicityofficer

Administrative

officer

Accounts

officer

Foremen Supervisors

Workers WorkersSalesmen Personnel

officerClerks Clerks


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Line organisation has a simple structurethat can be understood by every commonman .

There is a clear division of authority andresponsibility in such type of organisation.

The departmental head possess fullauthority over his department which helps in

maintaining internal control. Due to internal autonomy the head can take

quick decisions.


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Departmental head concentrates ondeveloping his personality as he himself hasto extract work from persons of his dept.

Flexibility can be brought as per the changesin time and circumstances.

Unity of command is well maintained aseveryone has to take orders from one

individual only. The structure is less expensive and more

economic.


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Sometimes this type becomes autocratic .

Lack of Specialization.

Centralization of authority to one head.

In this type oforganisation it becomesdifficult to acquire the services of highlyQualified executives capable in everyrespect.

As the department and officers areindependent ,co-ordination is difficult.

There is no flow of communication frombottom to top and therefore many problems

are created.


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A type of organisation that gives importanceto functions instead of departments is calledFunctional organisation .

Different functions are given importance.

Experts are included who have specialisationin their own fields.

Different experts are assigned different tasks

of work to bring effectiveness and increasingproductivity.


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Division of authority and responsibility is onthe basis of functions rather than ondepartments.

Experts are appointed for every function.

The experts are given responsibility not for aspecific department but for the unit as awhole.

Workers are responsible to different officersinstead of one officer.

There is a good co-ordination between theexperts to achieve the organizational

objectives.

Chi f E ti


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Chief Executive

Planning

divisionFactory division

Information

officer

Discipline

officer

Accounts

officer

Counseling

officer

Group

officer

Speed

officer

Quality

control

officer

Maintenance

officer

Workers Workers


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1) Specialization is possible.

2) Decentralization of Authority.

3) Co-ordination is possible because all the

experts are inter-dependent.4) Less burden of work.

5) Benefit of expertise.

6) Training.

7) Flexibility.

8) Easy Decision Making.


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1) Complexity.

2) Lack of unity of Command

3) Lack of discipline

4) Lack of Responsibility.5) Delay in Decision.

6) Expensive.


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A committee is a group of people who havebeen formally assigned some task or someproblem for their decision andimplementation.

In modern business enterprise there is awidespread use of committee in all areas ofmgmt.

In short, committee is that type oforganisation that takes decisions collectivelyfor the business.

This type is not only useful in business but

also has been found to be more useful in


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Top executive Committee

Production Committee Sales Committee AdministrativeCommittee

Purchase

Committee

Factory

Committee

Publicity

Committee

Sales

Committee

Secretary Accountant

Clerks Clerks Clerks ClerksWorkers Salesmen


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1) Better decision making.

2) Democratic.

3) Specialization.

4) Co-ordination.5) Decentralization of Authority.

6) Reduced work burden.

7) Improvement in Relations.

8) Research is encouraged.


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1) Secrets maintained.

2) Delay in decision making.

3) No individual responsible.

When it is responsibility of everybody, it is ofnobody.

4) Autocracy.

5) Groupism or internal conflicts.


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A form of organisation in which the authorityis assigned only for meeting the responsibilityof some functions is known as formalorganisation.

It is an organisation to bridge the relationshipfor the accomplishment of specific objectives.

E.g., Line, Functional, Line & Staff

organisation,etc.The hierarchy of authority is clear and well-

defined.

The position of superior subordinate s is well

defined.


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It is a natural structure arising out of the socialtendency of people to associate and interact.

Such organisation emerges when a group of willingand concerned employees is formed on the basisof human relations.

Its values , goals are mainly centered aroundgroup and individual satisfaction, relationship, andfriendship.

People with similar attitudes, interests and work

related needs are attracted to one another. Informal organisation are largely accepted inmodern times.


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1) Mental stress of employees getsreduced.

2) The authority of management isrestrained because of employeegroups.

3) This type complements the

accomplishments of objectives offormal organisation.

4) It helps in communication.

5) Social restrictions on em lo ees are


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Due to opposition by employees thereis a possibility of resistance to changesby the mgmt.

Indiscipline is likely to be encouraged.

In place of correct information there isa risk of rumours being spread.

There is also a risk of industrial peacebeing endangered due to negativeleadership.

There is ossibilit of obstacles bein


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Which is the oldest type of organisation?

Formation of organisation is what type of

process?

Define: Formal Organisation.Give the other name of Line organisation.

What is the basis of organisation?

In which type there is a possibility of

becoming autocratic?

Who has the top most authority in functional

organisation?

formation of ion

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