Chapter - 5

Organising

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1. Definition: Organising is the process of identifying and grouping various activities, assigning duties, and establishing authority relationships to enable people to work together effectively towards achieving organizational objectives.

2. Nature of Organising:

   • Goal-Oriented: The primary aim is to facilitate the achievement of organizational goals.

   • Pervasive Function: It is essential at all levels of management and in all departments.

   • Dynamic Process: It adapts to changes in the business environment and organizational needs.

   • Systematic Process: It involves a structured and step-by-step approach to allocate resources and assign responsibilities.

   • Involves Division of Work: Specialization and division of work are fundamental principles of organizing.

 

Importance of Organising

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1. Clarity in Working Relationships: Establishes clear lines of authority and communication, reducing ambiguity and confusion.

2. Optimum Utilization of Resources: Ensures that human, financial, and physical resources are used efficiently.

3. Adaptation to Change: Helps the organization adapt to changes in the environment by restructuring and reallocating resources as needed.

4. Coordination: Facilitates coordination among different departments and activities, leading to a cohesive effort towards common goals.

5. Development of Personnel: Provides a framework for employee training and development, enhancing their skills and capabilities.

6. Encourages Innovation: By clearly defining roles and responsibilities, it allows employees to focus on their tasks and innovate within their areas.

 

Process of Organising

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1. Identifying and Dividing the Work: The first step involves identifying the total work and dividing it into manageable activities.

2. Grouping Jobs and Departmentalization: Similar activities are grouped together to form departments or divisions.

3. Assignment of Duties: Specific tasks are assigned to individuals or teams based on their skills and competencies.

4. Establishing Reporting Relationships: Creating a hierarchy of authority and establishing who reports to whom to ensure effective communication and control.

 

Structure of Organisation

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1. Functional Structure:

   • Definition: Groups activities based on functions such as production, marketing, finance, etc.

   • Advantages: Specialization, efficiency, and clarity in role and responsibility.

   • Disadvantages: Limited view of organizational goals, potential for functional silos.

2. Divisional Structure:

   • Definition: Groups activities based on products, services, or geographical locations.

   • Advantages: Focus on product lines or regions, flexibility, and accountability.

   • Disadvantages: Duplication of resources, higher costs.

 

Formal and Informal Organisation

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1. Formal Organisation:

   • Definition: An official structure of roles and responsibilities defined by the organization.

   • Advantages: Clear authority, responsibility, and accountability.

   • Disadvantages: Can be rigid and may not adapt quickly to changes.

2. Informal Organisation:

   • Definition: A network of personal and social relationships that arise spontaneously among employees.

   • Advantages: Promotes social interaction, improves communication, and employee satisfaction.

   • Disadvantages: Can lead to rumor spreading and may conflict with formal structures.

 

Delegation

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1. Definition: Delegation is the process of transferring authority and responsibility to subordinates while retaining accountability.

2. Importance of Delegation:

   • Improves Efficiency: Frees up managerial time for higher-level tasks.

   • Develops Subordinates: Provides growth opportunities for employees.

   • Motivates Employees: Increases job satisfaction and motivation.

3. Elements of Delegation:

   • Authority: The power to make decisions and command resources.

   • Responsibility: The obligation to perform assigned tasks.

   • Accountability: Being answerable for the outcomes of the tasks.

 

Decentralization

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1. Definition: Decentralization is the systematic delegation of authority throughout all levels of the organization.

2. Advantages:

   • Promotes Decision-Making: Encourages decision-making at lower levels.

   • Relieves Top Management: Reduces the burden on top executives.

   • Improves Flexibility: Allows for quicker responses to changes.

   • Develops Managerial Talent: Provides training and development opportunities for middle and lower-level managers.

3. Disadvantages:

   • Can Lead to Inconsistency: Different departments may adopt varying approaches.

   • Requires Skilled Managers: Effective decentralization needs competent managers at all levels.

 

Conclusion

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This chapter emphasizes that organizing is a vital managerial function that helps in the systematic arrangement of activities and resources to achieve organizational goals. By understanding the principles, processes, and importance of organizing, managers can create an efficient and effective organizational structure that promotes coordination, specialization, and overall success.

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