CHAPTER 3 (Divisional Str Altered)

8/19/2019 CHAPTER 3 (Divisional Str Altered)

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CHAPTER 3

ORGANISING AND STAFFING

DEFINITION:

The term 'Organization' connotes different things to different people.

Different writers have defined the word differently and there is no standard definition of

the word “organisation”.

According to Amitai Etizoni:

An organization can be defined as a social unit or uman grou!ing deliberately structured

for the purpose of attaining specific goals"

According to All#n:

An organization can also be defined as the process of id#nti$%ing and grou!ing of the wor

to be performed! d#$ining and d#l#gating responsibility and authority and establishing

relationships for the purpose of enabling people to wor most effectively together in the

accomplishment of their ob"ectives"

According to &on ' P$i$$n#r and Fran( P S#r)ood:

Organisation is the pattern of ways in which large number of people! too many to have

intimate face#to#face contact with all others! and engaged in a comple$ity of tass! relate

themselves to each other in the conscious! systematic establishment and accomplishment of

mutually agreed purposes.

According to 'c F#rland:

Organisation is an identifiable group of people contributing their efforts towards the

attainment of goals.

NAT*RE OF ORGANI+ATION:

,- Organizing is a .asic $unction o$ manag#m#nt: Organizing is done in relation to all

other functions of management! namely planning! staffing! directing and controlling and

in all the areas of business namely production! mareting! purchasing and personnel.

The organizing function is performed by all managers.

Organization helps in the realization of the plans made by the managers.

/- An organization connot#s a grou! o$ !#o!l#: An organization basically consists ofgroup of people who form the dynamic human element of the organization.


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3- Organization connot#s a structur# o$ r#lationsi!: The structure of relationship

deliberately created by the management is referred to as $ormal organization"

An organization may also have a networ of social relationships that arise between

people woring together. %uch relationships are nown as in$ormal organization.

&n $ormal organization people are able to communicate with each other! are willing to

act and share a purpose.

&n in$ormal organization! people wor together because of their lies and dislies.

0- Organization is a continuous !roc#ss: &t is not a on# st#! function.

anagers are continuously engaged in organizing and r#organizing"

1- Communication is t# n#r2ous s%st#m o$ organization: The organizational members

are able to communicate with each other and may coordinate their activities.

(o organization can survive without an efficient system of communication.

&t facilities s#aml#ss communication.

&t ensures to achieve coordination amongst the people woring in various departmentsof the organization.

- Organization is al)a%s r#lat#d to c#rtain o.4#cti2#s: )hether it is organization of the

entire enterprise or part of it! organization is in$lu#nc#d by ob"ectives.

Organization helps in identifying the various tass to be performed which are

assigned to the individuals to perform to achieve the common ob"ectives or common

purpose of the organization.

&t also ensures integrated efforts to achieve organizational ob"ectives or goals.

5- Organization in2ol2#s a n#t)or( o$ autorit% and r#s!onsi.ilit% r#lationsi!: &t

delegates authority to the managers with comm#nsurat# r#s!onsi.ilit% and

accountability for the discharge of their duties and also amongst different hierarchical

levels in an organization.

6- &t helps in nurturing and growing s!#cial s(ills and tal#nts by the virtue of division of

labour.

7- Organizations are part of the larg#r #n2ironm#nt and hence they are influenced by the

#8t#rnal #n2ironm#nt"

,9- &t also aides in achieving $inancial !%sical mat#rial and uman resources.

P*RPOSE OF AN ORGANI+ATION:

Organization is essential for the following purposes*

+, To allocat# autorit% and r#s!onsi.ilit%: Organization structure allocates authority and

responsibility.

&t specifies who is to direct whom and who is accountable for what results.

The structure helps the organization members to now what his role is and how it

relates to others role.


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-, To cr#at# !ro!#r .alanc#: Organization structure creates the proper balance and emphasis

of activities.

Those more critical to the enterprises success might be placed higher in the

organization.

or e$ample R;D in !armac#utical com!an% might be singled out for reporting to

the managing director.

Activity of comparable importance might be placed at the lower level.

/, To $acilitat# !att#rn o$ communication: Organization structure provide pattern of

communication and coordination.

0y grouping activities and people! structure facilitates communication between people

centred on their "ob activities.

1eople who have 4oint !ro.l#m often need to share information to solve the problem.

2, To stimulat# cr#ati2it%: %ound organization stimulates ind#!#nd#nt cr#ati2# tin(ing

and initiati2# by providing well#defined areas of wor with broad attitude of the

development of new and improved ways of doing things.

3, To locat# d#cision c#ntr#s: Organization structure determines the location of decision

maing in the organization.

or e$ample! a d#!artm#ntal stor# may leave pricing decision to the lower level

manager while in oil r#$in#r% pricing decision is at top level.

4, To #ncourag# gro)t: The organization structure provide framewor within which an

enterprise functions.

&f the organization structure is $l#8i.l# it will help in meeting challenges and creating

opportunities for growth.

5, To ma(# us# o$ t#cnological im!ro2#m#nts: A sound organization structure which is

adoptable to changes can mae the best possible use of latest technology.

&t can modify the e$isting pattern of authority#responsibility relationships in the wae

of technological improvements.

PRINCIP


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The activities of the enterprise should be divided according to functions and assigned

to persons according to their specialization.

/, S!an o$ control: A manager can directly supervise only a limited number of e$ecutives.

7ence! it is necessary to have a proper number of subordinates answerable to a

manager. A ma$imum of si8 may be prescribed for this purpose.

2, E8c#!tion: This principle re8uires that organization structure should be so designed that

managers are re8uired to go through the #8c#!tional matt#rs onl%.

All the routin# d#cisions should be taen by subordinates! where as problems

involving unusual matt#rs and !olic% d#cision should be referred to higher levels.

3, Scalar !rinci!l#: This is also nown as cain o$ command"

There must be clear lines of authority running from the top to the bottom.

Authority is the rigt to d#cid# dir#ct and coordinat#"

6very subordinate must now who his superior is and to whom policy matters beyondhis own authority must be referred for decision.

4, *nit% o$ command: 6ach subordinate should have only one supervisor whose command

he has to obey.

Dual su.ordination must be avoided! for it causes un#asin#ss disord#r and

indisci!lin# and und#rmin# o$ autorit%.

5, D#l#gation: 1roper authority should be delegated at the lower levels of the organization

also.

The authority delegated must be e8ual to responsibility i.e.! the manager should have

enough authority to accomplish the tas assigned to him.

9, R#s!onsi.ilit%: A superior should be held responsible for the acts of his subordinates.

(o superior should be allowed to avoid responsibility by delegating authority to his

subordinates.

:, Autorit%: The authority is the tool by which a manager is able to accomplish the desired

ob"ective.

7ence! the authority of each manager must be clearly defined.

The authority and responsibility must be co>#8t#nsi2# in the organization.

+;, E$$ici#nc%: The organization should be able to attain the mission and ob"ectives at the

minimum cost"

++, Sim!licit%: The organization structure should be as simple as possible with minimum

number of levels.

A large number of levels of organization means difficulty of effective communication

and coordination.

+-, Fl#8i.ilit%: The organization should be fle$ible! should be adaptable to changing

circumstances.

&t should permit #8!ansion and r#!lac#m#nt )itout dislocation and disru!tion of

the basic design.


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A sound organization must avoid com!licat#d !roc#dur#s r#d>ta!# and #8c#ssi2#

com!lication o$ control so that it may adapt itself easily and economically to

business and technical changes.

+/, =alanc#: There should be reasonable balance in the siz# of various departments and

between c#ntralization and d#c#ntralization.

There must be balance in the formal structure as regards to factors having conflicting

claims.

+2, *nit% o$ dir#ction: There must be on# o.4#cti2# and on# !lan for a group of activities

having the same ob"ective.


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(ot only tae decisions but also enforce decisions and thus perform a double role of

taing a decision and ordering its e$ecution.

E8am!l#* =oard o$ dir#ctors is an e$ample of an e$ecutive committee.

>ommittees are also classified as standing committees or ad#hoc tas forces.

3- Standing committ##s: Are formed to deal with r#curr#nt organizational !ro.l#ms"

E8am!l#: $inanc# committ## in a com!an% loan a!!ro2al committ## in a .an(

admission committ## in a coll#g# #tc"

embers of this committee are chosen because of their titl# or !osition instead of

individual 8ualifications or sills.

0- Ad>oc committ##s* 7ave a sort duration! dissolved after the tas is over! or the

problem is solved and their members are chosen for their s(ills and #8!#ri#nc#"

AD@ANTAGES:

+, 1eople get an opportunity to better understand each other@s problems and move

towards organizational goals.

-, >ommittees provide a forum for the pooling of nowledge and e$perience of many

persons of different sills! ages and bacgrounds which helps in improving the 8uality

of decisions.

/, >ommittees provide an opportunity to many persons to participate in the decision#

maing process.

2, >ommittees are an e$cellent means of transmitting information and ideas! both

upward and downward.

3, >ommittees contribute indirectly to their training and development by e$posing

members to different viewpoints.

4, >ommittees are impersonal in action and hence their decisions are generally unbiased

and are based on facts and there is no fear of single individual taing a decision.

EABNESSES:

+, Ind#cisi2#n#ss: inutes and hours are wasted by setting up a committee which taes

a longer time to get action than from an individual manager.

-, Di2#rs#d R#s!onsi.ilit%: &f a wrong decision is taen! no member can be

individually blamed which encourages irresponsibility among members of the

committee.

/, Hig costs: >an be e$pensive form of administration where huge amount is spent on

convening meetings and giving allowances to the members.


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2, Domination .% $#): As the chairman often changes! influence accumulates in the

hands of some other person which may result in domination and may bring about

resistance from others.

3, Com!romis#d d#cisions: Decisions are generally based on some compromise among

members which are not best decisions which results in log> rolling"

4, onsists of large number of persons! hence difficult to maintain

secrecy.

5, 7ave a tendency to perpetuate themselves and hence difficult to dissolve them.

9, embers of the coordinating committees feel appointed to protect the interests of the

departments rather than finding appropriate solution to the problem.

PRINCIP


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'ANAGE'ENT = O=&ECTI@ES '=O-?RES*


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AD@ANTAGES OF '=O:

+, &mprovement in productivity.

-, &mproved communication between superiors and subordinates.

/, Cesults in development and utilization of human resources! prevents waste efforts and

unnecessary e$penditures.

2, otivates subordinates at lower levels as they are also a part of goal setting.

3, Cesponsibility of a worer is fi$ed through 0O.

4, A department does not wor at cross !ur!os# with another department. &n other words! each department@s ob"ectives are consistent with the ob"ectives of

the whole organization.

5, &t provides a basis for planning and increases the commitment towards the goals.


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2, >omparison of actual performance with e$pected performance to identify those

e$ceptions that re8uire the attention of management.

3, Ceporting the balance to management.

4, Decision maing* this prescribes the action to be taen to control the performance! ad"ust

e$ceptions to changing conditions or utilize opportunity.

AD@ANTAGES OF '=E:

+, uch of the manager time is saved.

&t would be a waste "ust to listen about the routine standard activities.

-, anager finds more time and feels comfortable to thin of improvements.

/, %ubordinates feel free and tae responsibility of the wor.

2, 1eople at lower level also thin and tae corrective action for minor problems.

3, This principle brings confidence among worers in their wor.

DISAD@ANTAGES OF '=E:

+,


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Sales Manager

1 2 3 4 5 6 7 8 9 10 11 12

FLAT ORGANISATION

Sales Manager

Asst. Sales ManagerAsst. Sales ManagerAsst. Sales Manager

1 2 3 41 2 3 41 2 3 4

TALL ORGANISATION

A narrow span results in tall organization with many levels of supervision between

top management and lowest organizational levels which creates more communication

and cost !ro.l#ms"

On the other hand! a wide span for the same number of employees results in $lat

organization with fewer management levels between top and bottom.

E8am!l#* %uppose a sales manager has +- salesmen reporting to him! his span of

management is +-.

&f he feels that he is not able to wor closely enough with each salesman and decides

to reduce the span by adding three assistant managers E each to supervise four

salesmen then his span of management is three as shown in fig.

&n doing so! he has added a level of management through which communication

between him and salesmen must pass and he has added the cost of three additional

managers.

igure* Decrease in span of control increases the number of levels.

FACTORS GO@ERNING THE SPAN OF 'ANAGE'ENT:

The following are some of the factors which influence the span of management*

+, A.ilit% o$ t# manag#r: %ome managers are more capable than others and hence can

handle a large number of subordinates.

-, A.ilit% o$ t# #m!lo%##s: &f employees are more com!#t#nt possess necessary s(ills and

moti2ation to perform the tas assigned! then less attention from the managers is re8uired

and a larger span of management can be used.

0ut if the employees are dissatisfied with their "obs or are incompetent! then close

supervision is re8uired and this will reduce the span of management.

%alesmen


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/, #ll>d#$in#d autorit% and r#s!onsi.ilit%: >lear#cut authority and responsibility helps a

manager to supervise large number of subordinates which avoids the need to mae fre8uent

calls on supervisors for guidance and instructions.

2, Economic consid#rations: (arrow the span! taller is the structure and more is the cost due

to large number of managers with added salaries.

On the other hand! wider span reduces the number of levels and but involves e$tra

cost due to the inefficiencies that result from diminished managerial leadership.

3, T%!# o$ )or(: &f employees are doing similar 4o.s! the span of management can be

large. &f their "obs are 8uite different! a small span may be necessary.

E8am!l#: professor of a class in which every student does identical wor can handle

more students than one in which instructions! assignments and testing are

individualised.

4, G#ogra!ic location: An officer who has -3 employees in one room may be able to

supervise them well.

On the other hand a sales manager who has -3 people located in -3 different locations

would find direct supervision impossible.

5,


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A

!

A

!

! !

> will have two direct one#to#one relationships! viz.!

-, Dir#ct Grou! r#lationsi!s: Direct group relationships e$ist between the superior and

each possible combination of subordinates. A may tal to 0 with > in attendance

or A may

tal to > with 0 in attendance.

(umber of direct group

relationships F n /n? /- > ,-"

n F number of subordinates

/, Cross R#lationsi!s: >ross relationships are created when subordinates consult one

another. 0 with > and > with 0

The formula to ascertain the number of all three inds of relationships is as under

(umber of direct group relationships F n /n? /- n > ,-

n F number of subordinates

)ith four subordinates! the total relationships go up to 22!

)ith five subordinates to +;;!

)ith si$ to ---!

)ith +; to 3-+;! and

)ith +- to -25;9! and

)ith -; to more than crore.

Graicunas $ormula! however! is not very useful in practise for two reasons*

+, &t ignores the $r#u#nc% and im!ortanc# of relationships.

-, The actual span of management is determined by a num.#r o$ $actors which have

not been taen into consideration while framing the formula.

A*THORIT RESPONSI=I

,-

F


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POER:

&t may be defined as the capacity or ability to influence the behaviour of other

individuals.

&f a person has a power! it means that he is able to influence the behaviour of others. The essence of power is control over the behavior of others.

A*THORIT:

&t is the institutionalized right of a superior to command and compel his

subordinates to perform a certain act.

&t rests in the chair or position.

&f position changes the authority of the individual also changes.

According to H#nr% Fa%ol “Authority is the right to order or command and is

delegated from the superior to the subordinate to discharge his responsibilities.

The authority may be e$ercised through persuasions or sanctions.

&f the subordinates does not obey! the superior has right to tae disciplinary action.

TPES OF A*THORIT:


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)henever a superior assigns a tas to him! it is the responsibility of the subordinate to

perform it.

Cesponsibility has two dimensions

+, irst dimension is the r#s!onsi.ilit% $or

-, %econd dimension is the r#s!onsi.ilit% to

+, R#s!onsi.ilit% $or: &t is the obligation of a person to perform certain duties in "ob

description or accepted by him.

-, R#s!onsi.ilit% to: &t is his accountability to superiors and associated with chec up!

su!#r2ision control and !unism#nt"

Cesponsibility cannot be d#l#gat#d or trans$#rr#d"

The superior can delegate to subordinate the authority to perform and accomplish a

specific "ob.

DE


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/,


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-, Princi!l# o$ A.solut#n#ss o$ R#s!onsi.ilit%* One has to understand that

responsibility can never be delegated and that the superiors are responsible for the

activities of their employees and the performance of the employees has to be absolute

towards their superior@s e$pectations.

/, Princi!l# o$ Parit% $or Autorit% and R#s!onsi.ilit%: There should be a perfect

balance between assigned authority and responsibility.

One cannot be held responsible for a tas where he has limited authority and too

much of authority with too little responsibility can prove to be dangerous.

2, Princi!l# o$ *nit% o$ Command* &f there is a single superior to listen to! conflicts

will be greatly reduced and it will be easy for the subordinate to have a personal

rapport with the superior.

3, Autorit%


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:, Get there be no overlaps and splits in delegation.

CENTRA


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/, The more is the number of ar#as in which decisions can be made at lower levelsI and

2, The fewer are the people to be consulted at the lower level and lesser is the checing

re8uired on the decisions made at the lower levels.

>entralization and decentralization are not a.solut# .ut r#lati2#.

A.solut# c#ntralization is not possible e$cept in on# man #nt#r!ris#.

Decentralization characterises all organizations and there cannot be absolute

decentralization of authority

AD@ANTAGES OF DECENTRA


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,- >oordination of activities of subordinates are better achieved

/- There is no duplication of efforts or resources.

3- Decisions tae into account the interest of the entire organisation.

0- %trong central leadership develops.

ORGANISATION STR*CT*RE:

The formal structure of an organisation is two dimensional#horizontal and vertical.

The horizontal dimension depicts differentiation of the total organizational "ob into

different departments.

The vertical dimension refers to the hierarchy of authority relationship with a number

of levels from top to bottom.

ORGANISATION CHART?ORGANISATION TREE:

Organisation structure of a company can be shown in a chart.

%uch chart indicates how different departments are interlined on the basis of

authority and responsibility.

&t is a simple diagrammatic method of describing an Organisation structure.

%uch Organisation chart provides information of the Organisation structure at a

glance.

Organisation chart is lie a blue print of a building.

DEFINITION OF ORGANISATION CHART:

According to G#org# T#rr%! Organisation chart is Ja diagrammatical form which

shows important aspects of an Organisation! including the ma"or functions and their

respective relationships! the channels of supervision and the relative authority of each

employee who is in#charge of each respective functionJ.

FEAT*RES OF ORGANISATION CHART:

+. Organisation chart is a diagrammatical presentation.

-. &t represents the formal Organisation structure.

/. &t shows the lines of authority and responsibility in the Organisation.

2. &t indicates the channel of communication.

3. &t indicates who supervises whom and how various units are inter#related.

4. &t represents the different inds of managerial relationship which e$istline! staff and

functional,


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"#

M#

GM

$le%tr&%al $ng&neer&ngMe%'an&%al $ng&neer&ng

In()str&al $ng&neer&ng*"r+s ManagerMa&ntenan%e Manager

!",-an Se%retarMar+et&ng Manager/r"()%t&"n Manager/ers"nnel ManagerF&nan%e Manager

"# M# GM

/ers"nnel Manager

F&nan%e Manager

/r"()%t&"n Manager

!",-an Se%retar

Mar+et&ng Manager

$le%tr&%al $ng&neer&ng

Me%'an&%al $ng&neer&ng

Ma&ntenan%e Manager

In()str&al $ng&neer&ng

*"r+s Manager

TPES OF ORGANISATION CHART:

+, @#rtical?!aram#dical cart: One of the most popular methods is the vertical chart in

which the highest "ob is shown at the top with other "obs shown in a descending order

&t shows the chief e$ecutive at the top and all other successive levels of

management vertically downward.

&t reads from top to bottom.

igure* 1aramedical %tructure >hart

/- Horizontal cart: This chart reads from left to right.

&t shows the chief e$ecutive at the left and all other successive levels of

management horizontally rightward.

igure* 7orizontal chart


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G$N$RAL MANAG$R

/r"()%t&"n Manager

Mar+et&ng Manager F&nan%e Manager

/ers"nnel Manager

*"r+s Manager

In()str&al $ng&neerMa&ntenan%e Manager

Sales

A(ert&s&ng

Tra&n&ng Manager

Ser&%e Manager

Saet Manager

3- Circular?conc#ntric cart: The top management chief e$ecutive, is shown at the

centre of the circle and other management levels are shown in concentric circles.

igure* >ircular chart

AD@ANTAGES OF ORGANISATIONA< CHART:

+, =rings clarit% to t# Organisation: The very process of preparing a chart maes

the e$ecutive thin more clearly about the Organisation relationships and reveals

whether the organisation is evenly balanced.

-, Pro2id#s cl#ar !ictur# o$ t# Organisation: Once the charts are prepared! they

provide lot of information about the Organisation! both to the members of the

Organisation as well as to the outsiders.

This information relates to number and types of departments! superior

subordinate relationships! chain of command! span of control! communicationand "ob titles of each employee.


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/, Facilitat#s training o$ #m!lo%##s: Organisation charts are useful in familiarizing

and training new employees.

2, Ensur#s organizational cang#s: Organisation charts provide a starting point for

planning organizational changes after having discovered the weanesses of the

e$isting structure such as one man might be reporting to two persons.

3, Pro2id#s uic( und#rstanding: A chart serves as a better method of visualizing an

Organisation than a lengthy written description of it.


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"ar( " #&re%t"rs

Manag&ng #&re%t"rs

/ers"nnel ManagerF&nan%e ManagerMar+et&ng Manager/r"()%t&"n Manager

E8am!l#:


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/r"()%t ManagerS"a-

/r"()%t ManagerT""t'-aste

/r"()%t Managerla(es

/r"()%t ManagerM&l+ -"(er

S'are'"l(ers

"ar( " #&re%t"rs

!'&e $e%)t&e

/r"()%t&"n Manager/)r%'ase ManagerF&nan%&al ManagerMar+et&ng Manager/ers"nal Manager

/r"()%t Manager !"s,et&%s

0- &t is difficult to "udge whether the activities of a particular department are worth their

cost.

3, R#duc#s coordination among $unctions: %ince employees wor in respective

department coordination amongst various departments is reduced.

-


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/res&(ent

!"r-"rate an+&ng!",,)n&t !&t an+&ng

Inst&t)t&"nal an+&ng Agr&%)lt)ral an+&ngReal $state L"ans

AD@ANTAGES:

+, This form relieves top management from operating tass and responsibility and

therefore can concentrate on such centralized activities such as finance! CKD and

control.-, 6nables top management to compare performances of different products and invest

more resources in profitable products and withdraw resources from unprofitable ones.

/, &n this form as the responsibility is entrusted on a particular department head! he is

stimulated for improving his performance.

2, &n this form natural team wor develops as each worer sees that his contribution is

needed to mae the whole product.

DRA=ACBS:

+, This form results in duplication of staff and facilities.

-, 6$tra e$penditure is incurred in maintaining a sales force for each product line.

/, 6mployment of a large number of people with managerial power is re8uired.

2, 68uipment in each product may not be utilized fully.

3- DEPART'ENTATION = C*STO'ERS: An enterprise may be divided into number of departments on the basis of the

customers that it services.

E8am!l#s: An #l#ctronics d#!artm#nt may be divided into separate departments for

military! industrial and consumer customers.An automo.il# s#r2ic# com!an% may organize its departments as heavy vehicles

servicing division! car servicing division and scooter servicing division.

%imilarly an #ducational institut# may have departments for regular courses! evening

and corresponding courses etc.

igure* >ustomer departmentalization


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N),er #e-art,entat&"n

#&&s&"n # #e-art,ent#&&s&"n ! #e-art,ent#&&s&"n #e-art,ent#&&s&"n A #e-art,ent

>ustomer departmentalization is usually found in .an(ing s#ctor but there could

be other organizations that may have customer departmentalization. &n the figure the ban has grouped baning activities according to the types of loans

that will be ac8uires by specific type of customerI e.g.! agricultural baning

department will provide loans to farmers.

Ceal estate loans will be provided to customers who plan to buy property.

&nstitutional baning will deal with institutional customers.

AD@ANTAGES:

+, Departmentation by customer emphasis on customer needs.

-, &t develops e$perience in customer area.

DISAD@ANTAGES:

+, &t may be difficult to analysis customer demands.

-, &t re8uires managers and staff e$pert in customer problems.

/, There may be duplication of facilities.

2, &t may result in under#utilisation of resources and facilities in some departments.

0- DEPART'ENTATION = N*'=ERS:

Departmentation by number is tolling of persons who are to perform the same duties

and putting them under the supervision of a single manager

The essential facts are not what these people do! where they worL Or what they wor with.

&t is that the success of the understanding depends only on the number of persons

included in it.

This method is rapidly used in army.

E8am!l#: %tudents having numbers from + to 3; are made to sit in “A” division of

their class and so on. ilitary forces also use this method.

Departmentalization by numbers is depicted in the image given below.

igure* Departmentation by (umbers


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Sales Manager

Manager*estern Reg&"n

MangerS")t'ern Reg&"n

Manager$astern Reg&"n

Manager N"rt'ern Reg&"n

1- DEPART'ENTATION = REGIONS OR TERRITOR

)hen production or mareting units of an organization are geographically dispersed in

various locations! it is logical to departmentalize those units on a geographical basis.

E8am!l#: The &ndian railways are departmentalized on this basis lie north! west! south!

eastern! central are departments in this sense.

igure* Departmentation by Cegions

AD@ANTAGES:

ollowing are the advantages of departmentalization on the basis of geography*

+, Em!asis on local mar(#t: The local marets can gain benefit as service is provided

according to geography.

&t helps develop that maret.

-, Im!ro2#s coordination: >oordination within the geographical unit is

better because all functional departments operate at the geographic region./, Fac#>to>$ac# communication: There is better communication between the service

provider and service receiver.

2, &t enables the organization to compare regional performances and invest more

resources in profitable regions and withdraw resources from unprofitable ones.

3, &t enables the organization to tae advantage of location factors! such as availability of

raw materials! labour! maret etc.

DISAD@ANTAGES:

+, Pro.l#ms o$ control: As the functions are dispersed! therefore control cannot be

e$ercised effectively.

-, R#uir#s mor# uman ca!ital: from the above it is deduced that more people are

re8uired with general managerial activities.

/, 'a(#s maint#nanc# mor# di$$icult: aintenance of service become difficult.

6) DEPART'ENTATION = PROCESS: Departmentation here is done on the basis of several discrete process or technologies

involved in the manufacture of a product.

6$amples* A 2#g#ta.l# oil com!an% may have separate departments for crushing!refining and finishing.


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"ar( " #&re%t"rs

Manag&ng #&re%t"r

General Manager

/r"()%t&"n Manager

Lat'e S)-er&nten(entGr&n(er S)-er&nten(entAsse,l S)-er&nten(ent

T&,e #e-art,entat&"n

Morning S'&t #e-art,entEvening S'&t #e-art,entNight S'&t #e-art,ent

A t#8til# mill may have departments for ginning! spinning! weaving and dyeing.

A wor that would otherwise be done in several different locations in an enterprise is

done in one place because of special e8uipments used.

igure* Departmentation by 1rocess

AD@ANTAGES:

+, &t facilitates the use of heavy and costly e8uipment in an efficient manner.

-, &t is suitable for organisations which involve a large no of processes in manufacturing

the products.

/, &t follows the principle of specialization#special type of wor.

DRA=ACBS:

+, )orers tend to feel less responsible for the whole product.

-, &t does not provide good training and opportunity for all the overall development of

managerial talent.

/, )hen the process is se8uential! a breadown in one department slows the wor of all

other departments.

2, &t is difficult to compare the performance of different process#based departments!

e$cept in some notional way for e$ample! by calculating the profits of eachdepartment on the basis of transfer pricing,

3, Top management needs to devote e$tra attention to maintaining inter#departmental co#

operation.5- DEPART'ENTA


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Mag&% :&ng(", Fl"r&(a$-%"t !entre#&sne MGM St)(&"s

$)r" #&sne T"+" #&snelan(Mag&% :&ng(",*alt #&sne *"rl(

M"t&"n /&%t)res #&sne !'annel Tele&s&"n An&,at&"n

!$O

Attra%t&"ns St)(&"s !"ns),er /r"()%ts

#&sne !atal"g)e#&sne St"res #&sne S"tare#&sne M)s&% L&%ens&ng /)l&s'&ng

igure* Departmentation by Time

AD@ANTAGES:

+, The woring process is carried out and the services are provided throughout -2 hours.

-, &t is a continuing service process.

/, 6$pensive machinery is used in shifts.2, %tudents can wor evening or at night. 1art time "obs for people who are otherwise

busy during the day time,

DISAD@ANTAGES:

+, Gacs supervision at night.

-, Accidental occurrences such as machinery breadown when carried from one shift to

other affect the product of the following shift also.

/, )orers of one shit generally develop a tendency to pass on some portion of theirincomplete wor to the worers of the following shit.

2, Gac of communication and coordination from people of one shift to ne$t shift.

6- DI@ISIONA< STR*CT*RE:

igure* Divisional %tructure


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!",&ne( #e-art,entat&"n

Sales #e-art,ent

Sales /r&%&ng #e-art,ent

Mar+et&ng #e-art,ent

/r"()%t&"n #e-art,ent

;)al&t #e-art,ent

/)r%'ase #e-art,ent

0ecause managers in large companies may have difficulty eeping trac of all their

company's products and activities! specialized departments may develop.

These departments are divided according to their organizational outputs or units called

di2isions"

E8am!l#s include departments created to distinguish among production! customer

service! and geographical categories.

This grouping of departments is called di2isional structur#"

These departments allow managers to better focus their resources and results.

Divisional structure also maes performance #asi#r to monitor"

As a result! this structure is $l#8i.l# and r#s!onsi2# to change.

7owever! divisional structure does have its drawbacs.

0ecause managers are so specialized! they may waste time duplicating each other's

activities and resources.

&n addition! competition among divisions may develop due to limited resources.7- CO'=INED DEPART'ENTAombined Departmentation

TPES?FOR'S?STR*CT*RES OF ORGANI+ATION:


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Mar+et&ng Manager

Asst. Mar+et&ng Manager

Sales S)-er&s"r

Sales,an

F&nan%e Manager

Asst. F&nan%e Manager

A%%")ntant

!ler+s

/r"()%t&"n Manager

S)-er&nten(ent

F"re,an

*"r+ers

General Manager

The following common types of organization find a place in the structure of internal

organization.

+, Gine! ilitary or %calar Organization

-, unctional Organization

/, Gine and %taff Organization2, atri$ Organization

3, >ommittee Organization

4, Tall Organization mechanistic or classical organization structure,

5, lat Organization organic or behavioral structure,

9, Divisional structure.

,-


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/res&(ent

A(,&n&strat&e Ass&stant


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igure* unctional Organisation %tructure

AD@ANTAGES:

+, Facilitat#s s!#cialization: unctional Organisation structure facilitates division of

wor and specialization. 6ach boss has specialized nowledge of his functional area.

7e is in a better position to guide and help the worers.

-, =#n#$its o$ larg#>scal# o!#rations: unctional Organisation offers the benefit of

economy of large#scale operation. &n this Organisation! one administrative unit

manufactures all products. The available machinery! e8uipment and facilities are used

fully for large#scale production.

/, Facilitat#s #$$#cti2# coordination* unctional Organisation facilitates effective

coordination within the function. This is possible as one boss is in#charge of a

particular function and he loos after all activities! which come within that function.

2, O!#rational $l#8i.ilit%: unctional Organisation possesses operational fle$ibility.

(ecessary changes can be introduced easily to suit the needs of the situation without

any adverse effect on the efficiency.

3, Ensur#s #$$#cti2# su!#r2ision: unctional Organisation facilitates effective

supervision by the functional heads and foremen. Due to specialization! they

concentrate on the specific functional area and also eep effective supervision on their

subordinates.

DISAD@ANTAGES:

+, A.s#nc# o$ unit% o$ command:


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/res&(ent

Legal A(&s"r


38/50


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!'&e $e%)t&e O@%er


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igure* atri$ organisation

The organization is divided into different functions! e.g. 1urchase! 1roduction! C K D!

etc. 6ach function has a unctional Departmental, anager! e.g. 1urchase anager!

1roduction anager! etc.

The organization is also divided on the basis of pro"ects e.g. 1ro"ect A! 1ro"ect 0! etc.

6ach pro"ect has a 1ro"ect anager e.g. 1ro"ect A anager! 1ro"ect 0 anager! etc.

The employee has to wor under two authorities bosses,. The authority of the

unctional anager flows downwards while the authority of the 1ro"ect anager

flows across side wards,. %o! the authority flows downwards and across. Therefore! it

is called J'atri8 OrganizationJ.

AD@ANTAGES:

+, This structure not only increases employee motivation! but it also allows technical and

general management training across functional areas as well.

-, &mproved environmental monitoring.

/, ast response to changes.

2, 7ighly le$ible.

3, 6ffective utilization of resources.

DISAD@ANTAGES:

+, 1otential confusion over authority and responsibility since scalar chain of command is

not followed.

-, 7igh prospects of conflict due to lac of unity of command.

/, %hortage of resources due to other priority pro"ects.

2, )or may be delayed since too many supervisors control the activities.


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5

1

4

3

2

1- CO''ITTEE ORGANI+ATION REFER TO CO''ITTEES-:

- TAommunication Gines

/, &mpersonality

2, (arrow span of control

3, >entralization

igure* Tall organisation

AD@ANTAGES:

+, The 8uality of performance will improve due to close supervision.

-, Discipline will improve.

/, %uperior # %ubordinate relations will improve.

2, >ontrol and %upervision will become easy and convenient.

3, The manager gets more time to plan and organise the future activities.

4, The efforts of subordinates can be easily coordinated.5, Tall Organisation encourages development of staff.

9, There is mutual trust between superior and subordinates.

DISAD@ANTAGES:

+, Tall Organisation creates many levels of management.

-, There are many delays and distortion in communication.

/, Decisions and actions are delayed.

2, &t is very costly because there are many managers.

3, The managers are paid high salaries.4, &t is difficult to coordinate the activities of different levels.


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1

2

3

Mag&% :&ng(", Fl"r&(a$-%"t !entre#&sne MGM St)(&"s

$)r" #&sne T"+" #&snelan(Mag&% :&ng(",*alt #&sne *"rl(

M"t&"n /&%t)res #&sne !'annel Tele&s&"n An&,at&"n

!$O

Attra%t&"ns St)(&"s !"ns),er /r"()%ts

#&sne !atal"g)e#&sne St"res #&sne S"tare#&sne M)s&% L&%ens&ng /)l&s'&ng

5, There is strict supervision. %o the subordinates do not have any freedom.

9, Tall Organisation is not suitable for routine and standardised "obs.

:, 7ere! managers may become more dominating.

5- Fharacteristics *

+. 7igh levels of decentralization

-. )ide span of control

/. Gess e$tended communication lines igure* lat Organization

AD@ANTAGES:

+, lat Organisation is less costly because it has only few managers.

-, &t creates fewer levels of management./, Muic decisions and actions can be taen because it has only a few levels of

management.

2, ast and clear communication is possible among these few levels of management.

3, %ubordinates are free from close and strict supervision and control.

4, &t is more suitable for routine and standardised activities.

5, %uperiors may not be too dominating because of large numbers of subordinates.

DISAD@ANTAGES:

+, There are chances of loose control because there are many subordinates under one

manager.

-, The discipline in the organisation may be bad due to loose control.

/, The relations between the superiors and subordinates may be bad. >lose and informal

relations may not be possible.

2, There may be problems of team wor because there are many subordinates under one

manager.

3, lat organisation structure may create problems of coordination between various

subordinates.

4, 6fficient and e$perienced superiors are re8uired to manage a large number ofsubordinates.

5, &t may not be suitable for comple$ activities.

9, The 8uality of performance may be bad.

6- DI@ISIONA< STR*CT*RE:


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igure* Divisional %tructure

0ecause managers in large companies may have difficulty eeping trac of all their

company's products and activities! specialized departments may develop.

These departments are divided according to their organizational outputs or units called

di2isions"

E8am!l#s include departments created to distinguish among production! customer

service! and geographical categories.

This grouping of departments is called di2isional structur#"

These departments allow managers to better focus their resources and results.

Divisional structure also maes performance #asi#r to monitor"

As a result! this structure is $l#8i.l# and r#s!onsi2# to change.

7owever! divisional structure does have its drawbacs.

0ecause managers are so specialized! they may waste time duplicating each other's

activities and resources.

&n addition! competition among divisions may develop due to limited resources.

STAFFING

The process of recruiting! retaining! developing and nurturing the worforce is called

sta$$ing"

JThe managerial function of staffing involves the filling and eeping filled! positions

in the organization structureJ ##ric and Boontz"

%taffing involves the determination of manpower re8uirements of the enterprise and

providing it with ade8uate competent people at all levels.

The staffing function performs the following sub functions*

+, anpower planning.

-, Cecruitment./, %election of the best 8ualified from those who sees "ob.


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2, Training and Development.

3, 1erformance appraisal and compensation.

NAT*RE AND I'PORTANCE OF PROPER STAFFING:

+, R#lat#d to uman .#ings: The first important characteristic of staffing is its

relationship with human beings.

-, A s#!arat# manag#rial $unction: 6arlier days it was considered part of

organizing.

0ut these days it itself is a ma"or managerial function.

/, Ess#ntial at all manag#rial l#2#ls: The aim of establishing this department is to

assist the managers at every level in the performance of their function of

staffing.

2, R#lat#d to social r#s!onsi.ilit%: The manager should tae care to be impartial

while going through the allied functions of recruitment! selection! promotion etc!

since it is human related.

3, Luantit% and Lualit%: %taffing the organization re8uires attention to both the

numbers 8uantity, and types 8uality, of people brought into! moved within! and

retained by the organization.

The uantit% #l#m#nt basically refers to having enough head count to conduct

business! and

the ualit% #l#m#nt entails having people with the re8uisites so that

"obs are

performed effectively.

4, Organization E$$#cti2#n#ss: %taffing systems e$ist! and should be used! to

contribute to the attainment of organizational goals such as survival! profitability! and

growth.

5, Acuir# D#!lo% and R#tain: Any organization must have staffing systems that guide

the ac8uisition! deployment! and retention of its worforce.

AD@ANTAGES OF PROPER AND EFFICIENT STAFFING:

+, &t helps in discovering talented and competent worers and developing them to move

up the corporate ladder.

-, 6nsures greater production by putting the right man in the right "ob.

/, &t helps to avoid a sudden disruption of an enterprises production run by indicating

shortages of personnel if any in advance.

2, 7elps to prevent underutilization of personnel through over manning and the resultant

high labour cost and low profit margins.

3, 1rovides information to management for the internal succession of managerial

personnel in the event of unanticipated turnover.

RECR*IT'ENT:


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&t is defined as the process of identifying the sources for prospective candidates and to

stimulate them to apply for the "obs.

&t is also defined as generating the applications or applicants for specific positions.

According to 'c Farland it is defined as the process of attracting potential

employees to the company. The management should have a proper plan of recruitment regarding the 8uantity and

8uality of personnel re8uired and the time when it is needed.

SO*RCES OF REL*IRE'ENT:

>an be broadly classified into two categories* int#rnal and #8t#rnal

Int#rnal sourc#s refer to the present woring force of the company.

?acancies other than the lowest level may be filled by the e$isting employees of thecompany.

About more commonly used #8t#rnal sourc#s o$ r#cruitm#nt are*

+, R#>#m!lo%ing $orm#r #m!lo%##s: Gaid off employees or employees left due to personal

reasons may be reemployed who may re8uire less training compared to the strangers of the

enterprise.

-, Fri#nds and r#lati2#s o$ t# !r#s#nt #m!lo%##s: personnel with a record of good

relationships may be encouraged to recommend their friends and relatives for appointment

in the concern where they are employed.

/, A!!licants at t# gat#: suitable unemployed employees who call at the gates of the

factories or companies are interviewed by the factory representative or company personnel

and those who are found suitable for the e$isting vacancies are selected.

2, Coll#g# and t#cnical institut#s: many big companies remain in touch with the colleges

and technical institutions to recruit young and talented personnel.

3, Em!lo%m#nt #8cang#s: employment e$change is an office set up by the government for

bringing together those men who are in search of the employment and those who are

looing for men.

6mployment e$changes are considered a useful source for the recruitment of clers!

accountants and typists.

4, Ad2#rtising t# 2acanc%: can be done by advertising the vacancy in leading news papers

which may be used when the company re8uires services of persons possessing certain

special sills or when there is acute shortage of labour force.

5-


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STEPS IN THE SE


47/50


48/50

things done

DIFFERENCE =ETEEN A*THORIT AND POER:

A*THORIT POER

&t is the institutionalized right of a

superior to command and compel his

subordinates to perform a certain act.

&t is ability of a person to influence

others.

&t rests in the position &t rests in the individual.

&t is delegated to an individual by his

superior.

&t is earned by individual

&t is well defined &t is undefined and infinite.

&t is what e$ists in the eye of law. &t is what e$ists in fact. &t is a de facto

concept.&t serves as a basis of formal organization &t serves as a basis of informal

organization

DIFFERENCE =ETEEN CENTRA


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relationships consciously coordinated

towards a common ob"ective

arising out of the social tendency of people to

associate and interact.

&ts values goals and tass are predominantly

oriented towards productivity! efficiency!

growth and so on.

?alues! goals and tass predominantly centre

around individual and group satisfaction!

esteem! affiliation and friendship.

)ell defined in shape! ma"ority of the formal

organisations being pyramid shaped.

&t is shapeless and there are a number of

multidirectional! intricate relationships which

can be easily charted.

There is prescribed! mostly written system of

reward and punishment and the rewards can

be monetary and nonmonetary.

There is unwritten system of reward and

punishment and rewards tae the form of

continues membership! social esteem!

satisfaction and group leadership.

This organization is usually very enduring

and may grow to any size.

The organisation tends to remain small and is

not very enduring since it depends on the

sentiments of members! which often change.

DIFFERENCE =ETEEN SE


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between the employer and selected employee

DIFFERENCE =ETEEN '=O AND '=E:

'=O '=E

(on#availability of time Availability of time

Team wor &ndividual wor

anagers and employees define

ob"ectives for every department

anagers only interfere when wor goes

out of scope or does not meet the re8uired

standards

6mployees should wor according to the

ob"ectives set by managers

6mployees are free to choose their

decision and wor

>ommunication between superior and

subordinates

There is no much interactions between

superior and subordinates

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CHAPTER 3 (Divisional Str Altered)

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