Organising - MANAGEMENT PROCESS

MANAGEMENT PROCESS
H Ramasubramanian
Organising

Organising- Meaning and scope
Organising
• It is the function of management which follows planning.
• It is a function in which the synchronisation and combination of human, physical and financial
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resources takes place.
• All the three resources are important to get results.
• Therefore, organisational function helps in achievement of results which in fact is important for the
functioning of a concern.
• Organising is the process of defining and grouping activities and establishing authority relationships
among them to attain organisational objectives Hence, a manager always has to organise in order to
get results.
Importance of Organising
• Organising helps Organisations to reap the benefit of specialisation.
• Organising provides for Optimum utilisation of resources.
• Organising helps in Effective administration.
• Organising channels for Expansion and growth.
• Organising achieves co-ordination among different departments.
• Organising creates scope for new change.
Organising - MANGEMENT PROCESS 2

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Organising- Meaning and scope

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Organising- Traditional perspectives on organising
• Traditional perspectives on organising:
– View of Fayal, Taylor, Weber, etc;
– Principles of organising;
– challenging to the traditional view:
– Bottomup authority,
– environmental complexity and uncertainty.

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Organsing principles
• The organising function is carried out on the basis of guidelines given by experts. These are known
as principles of organisation. These principles have been developed by management experts
from time to time. You have already seen about the principles of management given by Henry Fayol.
• Since organising is a part of management, you will find some of the principles at both the places.
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Organising- Closed system vs. open system
Closed-System Models: The Classical Perspective
• Closed-system models consider the external environment (technological advancements, the cultural
and demographic characteristics of the community, legal decisions, political decisions, etc. to be
stable and predictable.
• They assume that it does not intervene in or cause problems for the functioning of an organization.
• Therefore, the closed-system models do not depend on the external environment for explanations or
solutions to managerial issues; instead, they are enclosed and sealed off from the outside world.
• These models rely primarily on internal organizational processes and dynamics to account for
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organizational, group, and individual behaviours.
• The central management objective addressed in these models is the efficient running of the
organization.
• Closed systems are easier to deal with theoretically than open systems, and are preferred, despite
their limitations.
• For example, if abuse of prisoners took place in a certain prison, a closed-system approach would
look for explanations for the abuse within the prison itself, and then adopt correctional procedures.
The prison would examine the prison policies, prison warden, correctional officers, prison culture,
officer–inmate interaction, inmate–inmate interaction, and other organizational components of the
prison.
• It would not pay attention to the external environment to identify the causes of the problems.
• In other words, the external environment would not be blamed for the abuse.
• The prison and its officials would assume that something within the facility led to these issues.

Open-System Models: The Humanistic Perspective
• Classical thinkers made significant contributions to the theory and practice of management.
• However, their theories did not always achieve the desired results because they did not include the
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behavioral perspective of management.
• During the early 20th century, the industrialized nations of the world were experiencing social and
cultural changes.
• Their standards of living and working conditions were improving.
• It was increasingly noted that the actions of management were not necessarily consistent with the
ones predicted by the closed-system models.
• More and more, human behaviour was being seen as an important factor in shaping managerial
style and worker actions
Revisiting the example of prisoner abuse that was discussed earlier under the closed-system model, an
open-system approach would look for external reasons to explain the problem.
Researchers may discover that the problem started 2 years back when the governor visited the state
prison. In his speech, the governor mentioned reducing the budget for the prisons, which was not well
received among the inmates. The conditions at that prison were already appalling. Any further cut in the
budget was perceived by the inmates as implying a worsening of inmate privileges and security, making
them angry and confrontational. Such defiant inmate behavior led to more hours of work for the
correctional officers, who were already underpaid due to restrictive budgets.
The officers became angry and resorted to dealing with the prisoners heavy-handedly, thus leading to
abuse. Close examination of this example shows the interaction among an external stimulus, officers’
responses, and inmates’ (customer) reactions, all collectively interacting to create the chaos.

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Organising- Formal & Informal Organisation
Formal organisation:
• It refers to the organisation structure deliberately created by management for achieving the
objectives of enterprise.
• It is a network of official authority responsibility relationships and communication follows.
• It is an official and rational structure.
• According to Chester Bernard, “Formal organisation is a system of consciously coordinated
activities of two or more persons towards a common objectives.
• The essence of formal organisation is conscious common purpose and formal organisation comes
into existence when persons
• (A) are able to communicate with each other
• (B) are willing to act and
• (C) share a purpose.”
Informal Organisation:
• It refers to the pattern of activity interactions and human relationship which emerge spontaneously
due to social and psychological forces operating at the work place.
• It arises naturally on the basis of friendship or some common interest which may or may not be
related with work.
• According to Chester Bernard, “ Informal organisation is joint personal activity with out conscious
common purpose though contributing to joint result.”

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Differences between formal and informal organisation:
Formal Informal
Origin
Formal organistion is created
deliberately and consciously by
management.
Informal organisation emerges spontaneously
on account of socio psychological forces
operating at the work place.
Purpose
Formal Organisation is created for
achieving the legitimate objective of
the organisation.
Informal Organisation is created by the
members of the organisation for their social
and psychological satisfaction.
Size Formal group may be quite large in
size. Informal groups tent to be small.
Nature of
Group
Formal groups are stable and may
continue for a very long period of
time.
Informal groups were quite unstable in nature.
Number of
Group
Generally the number of formal group
is smaller
Generally the number of informal group is
greater
Authority Formal organisation is bound
together by a hierarchical structure. In Informal organisation all members are equal
Behavior of
Members
In formal organisation behavior of the
members were governed by formal
rules and regulations
In the informal organisation the behavior of the
members is governed by norms beliefs and
value of the group

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Differences between formal and informal organisation:
Formal Informal
Communication
In formal organisation,
communication normally flows
through the prescribed chain of
command.
In informal organisation communications
pass through the informal channels.
Abolition Management can abolish the formal
groups at any time.
Management has no control over informal
groups which are the creation of natural
desire of human beings to interact.
Leadership In formal organisation, leadership is
vested in managers.
In informal organisation, leadership is not
associated with managership.
Status
There are sharp status differentials
among the members of formal
organisation, which inhibit free
interaction and socialisation.
In informal organisation there may be
social ranking among people but these do
not prevent free interaction among
people.

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Organising- Process of Organisation
Organising Process
• Division of work:
– The first process of Organising includes identification and division of work which shall be
done in accordance with the plans that are determined previously.
• Departmentation:
– Once the work of identifying and dividing the work has been done those are similar are to
be grouped.
• Linking departments:
– When the process of departmentation was completed, linking of departments has to be done
so that those departments operate in a co-ordinated manner which gives a shape to overall
organisation structure.
• Assigning Duties:
– On completion of departmentation process assigning duties i.e. defining authority
and responsibility to the employees on the basis of their skills and capabilities has to be done,
which in consequence magnifies efficiency with regard to their work.
• Defining hierarchal structure:
– Each employee should also know from whom he has to take orders and to whom he
is accountable/responsible.
•

Organising- Departmentation
Departmentation:
• It is the grouping of employees and the tasks into areas of work activities that are similar and
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logically connected.
• It is important to have the jobs arranged in a well-defined way so that a good co-ordination of the
activities involved becomes possible.
• By grouping units of workers into departments, there is a better chance to achieve the goals of an
organisation.
Major ways:
– By function
– By product (or market)

Factors affecting Departmentation
• To get the benefits of specialisation
• Control should be effective so as to ensure clear authority and responsibility
• Coordination should be taken into consideration
• Key activities need to be separated
• Expenses involved in creating separate departments
Basis Of Departmentation
• Functional Departmentation
• Product wise Departmentation
• Territorial or Geographical Departmentation
• Process wise Departmentation
• Customer wise Departmentation
• Time wise Departmentation
Functional Departmentation
• Grouping of common or homogeneous activities to form an organization unit is known as functional
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departmentation
• Further functions in an organization are divided in two categories basic and secondary functions
• Basic functions are those which are necessary for the smooth running of the business like
production ,marketing , finance
• When span of management is too large then further departments are created within the main
departments they take care of secondary functions

• In this case like the basic function is marketing but it may further be divided into advertisement,
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sales, market research.
Product wise Departmentation
• Product departmentation involves the grouping together of all the activities necessary to
manufacture a product or product line.
• Eg: In an automobile organization the departmentation could be car division , truck division , bus
division.
Departmentation by territory or geography
• Departmentation by territory or geography means
“ Grouping of activities by area or territory is common in enterprises operating over wide geographic
areas”.
• Organizations which are involved in banking , insurance , transportation
• Eg: India could be divided into north , south , east , west , central zones
• Further North zone can be divided into Chandigarh , new Delhi , Jalandhar , Ajmer divisions
Process Departmentation
• In this processes involved in production or various type of equipments used are taken as basis of
departmentation
• The basic aim to do process departmentation is to achieve economic benefit
• Eg: process departmentation in case of textile organization can be by dividing the production into
spinning , dyeing , weaving , finishing departments

Customer wise Departmentation
• Grouping of activities around marketing channels involves making an organization structure reflect
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the ways an organisation reaches the ultimate customer
• Advantage of this type is that it focuses on customer who are the ultimate suppliers of money to the
organisation
• Eg: in pharmaceutical companies different customers could be doctors , hospitals , government ,
retail stores
• Further it could be wholesale , retail , export
Time wise Departmentation
• In some organizations where work is performed through day and night , the work is divided into
shifts
• Thus when an organization may operates on three shifts, three different departments may exist

All the activities which have to be performed in a concern have to be identified first.
For example, preparation of accounts, making sales, record keeping, quality
control, inventory control, etc. All these activities have to be grouped and classified
into units.
In this step, the manager tries to combine and group similar and related activities
into units or departments. This organization of dividing the whole concern into
independent units and departments is called departmentation.
Once the departments are made, the manager likes to classify the powers and its
extent to the managers. This activity of giving a rank in order to the managerial
positions is called hierarchy. The top management is into formulation of policies,
the middle level management into departmental supervision and lower level
management into supervision of foremen. The clarification of authority help in
bringing efficiency in the running of a concern. This helps in achieving efficiency in
the running of a concern. This helps in avoiding wastage of time, money, effort, in
avoidance of duplication or overlapping of efforts and this helps in bringing
smoothness in a concern’s working.
Relationships are established among various groups to enable smooth interaction
toward the achievement of the organizational goal. Each individual is made aware
of his authority and he/she knows whom they have to take orders from and to
whom they are accountable and to whom they have to report. A clear
organizational structure is drawn and all the employees are made aware of it.
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Organising-
A manager performs organizing function with the help of following steps:-
Identification
of activities
Departmentally
organizing the
activities
Classifying the
authority
Co-ordination
between
authority and
responsibility

Organising - MANAGEMENT PROCESS

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