Organisation An organization (or organisation) is a social entity that has a collective goal and is linked to an external environment.

The word is derived from the Greek word organon, itself derived from the better-known word ergon which means "organ" a compartment for a particular task. It can also be termed as a group of people who have a particular shared purpose or interest. Organizational Structure An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.[1] It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment. An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organizational structure affects organizational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decisionmaking processes, and thus to what extent their views shape the organizations actions. For simpler businesses in which the owner employs only himself, there is no need for an organisational structure. However, if the business expands and employs other people, an organisational structure is needed. When employing people, everybody needs a job description. These are its main advantages: People who apply can see what they are expected to do. People who are already employed will know exactly what to do. Here is an example of a Job Description taken from the book:

When there is more than one person in a small business and they all do different things, it means that they are specializing in different jobs.

Delegation

Delegation refers to giving a subordinate the responsibility and authority to do a given task. However, the final responsibility still lies with the person who delegated the job to the subordinate. Here are the advantages of delegation for managers and employees, as well as why some managers choose not to delegate.

Pros for the manager: By letting subordinate do smaller tasks, managers have more time to do more important tasks. Managers are less likely to make mistakes if tasks are done by specialist employees. Managers can measure the success of their task more easily. Pros for the subordinates: Work becomes more interesting and rewarding. Employees feel important and trusted. Helps train workers, giving them better career opportunities. Why some managers don't want to delegate: Managers are afraid that their employees will fail. Managers want total control. Managers are scared that the subordinate will do tasks better than them, making them feel insecure.

Delegation must mean: A reduction in direct control by managers or supervisors. An increase in trust of workers by managers or supervisors.

Organisational charts

Eventually, when a business grows larger and employs many people, they will have to create an organisational chart to work out a clear structure for their company. Here is another example of an organisational chart from the book:

Here are the most important features of the chart: It is a hierarchy. There are different levels in the business which has different degrees of authority. People on the same level have the same degree of authority. It is organised into departments, which has their own function. It shows the chain of command, which is how power and authority is passed down from the top of the hierarchy, and span of control, meaning how many subordinates one person controls, of the business. Advantages of an organisational chart: The charts shows how everybody is linked together. Makes employees aware of the communication channel that will be used for messages to reach them. Employees can see their position and power, and who they take orders from. It shows the relationship between departments. Gives people a sense of belonging since they are always in one particular department.

Chain of command and span of control:

Here are two organisations, one having a long chain of command and the other a wide span of control. Therefore, the longer the chain of command, the taller the business hierarchy and the narrower the span of control. When it is short, the business will have a wider span of control.

In recent years, people have began to prefer to have their business have a wider span of control and shorter chain of command. In some cases, whole levels of management were removed. This is called de-layering. This is because short chains of commands have these advantages: Communication is faster and more accurate. The message has to pass through less people. Managers are closer to all employees so that they can understand the business better. Spans of control will be wider, meaning that the manager would have to take care of more subordinates, this makes: The manager delegate more, and we already know the advantages of delegation. Workers gain more job satisfaction and feel trustedbecause of delegation. However, if the span of control is too wide, managers could lose control. If the subordinates are poorly trained, many mistakes would be made.

TYPE of Organisational Structure

A. Line Organisation A line organization is an organizational structure in which authority rests with the top management and flows in a chain of command to the last person in the organizational hierarchy. It is sometimes called the traditional organizational structure. It is oldest type of organization followed. Each department is a complete self contained unit. A separate person will look after the activities of the department and he has full control over the department. It is followed mainly in military organization. Under this the line organization, authority flows from top to bottom vertically. Merits of Line Organization 1. Simplest- It is the most simple and oldest method of administration. 2. Unity of Command- In these organizations, superior-subordinate relationship is maintained and scalar chain of command flows from top to bottom. 3. Better discipline- The control is unified and concentrates on one person and therefore, he can independently make decisions of his own. Unified control ensures better discipline. 4. Fixed responsibility- In this type of organization, every line executive has got fixed authority, power and fixed responsibility attached to every authority. 5. Flexibility- There is a co-ordination between the top most authority and bottom line authority. Since the authority relationships are clear, line officials are independent and can flexibly take the decision. This flexibility gives satisfaction of line executives. 6. Prompt decision- Due to the factors of fixed responsibility and unity of command, the officials can take prompt decision. Demerits of Line Organization 1. Over reliance- The line executives decisions are implemented to the bottom. This results in over-relying on the line officials. 2. Lack of specialization- A line organization flows in a scalar chain from top to bottom and there is no scope for specialized functions. For example, expert advices whatever decisions are taken by line managers are implemented in the same way.

3. Inadequate communication- The policies and strategies which are framed by the top authority are carried out in the same way. This leaves no scope for communication from the other end. The complaints and suggestions of lower authority are not communicated back to the top authority. So there is one way communication. 4. Lack of Co-ordination- Whatever decisions are taken by the line officials, in certain situations wrong decisions, are carried down and implemented in the same way. Therefore, the degree of effective co- ordination is less. 5. Authority leadership- The line officials have tendency to misuse their authority positions. This leads to autocratic leadership and monopoly in the concern.

Example of Line Organisation

BOARD OF DIRECTORS

MANAGING DIRECTOR/GENERAL MANAGER

FLOW OF AUTHORITY

MARKETING MANAGER

PRODUCTION MANAGER

FINANCE MANAGER

FLOW OF RESPONSIBILITY

WORKS MANAGER

FOREMEN

SUPERVISOR

WORKERS

B. Line and Staff Organisation

Staff and line are names given to different types of functions in organizations. A "line function" is one that directly advances an organization in its core work. This always includes production and sales, and sometimes also marketing.[1] A "staff function" supports the organization with specialized advisory and support functions. For example, human resources, accounting, public relations and the legal department are generally considered to be staff functions.[2] Both terms originated in the military. Line managers have total authority over their direct reports, but staff workers have primarily advisory authority rather than direct authority. Their function is to create, develop, collect and analyze information, which flows to line workers in the form of advice. Staff positions can have four kinds of authority: "advise authority," with line managers choosing whether or not to seek advice from the staff person, and what to do with it once they get it; "compulsory advice" or "compulsory consultation" in which line managers must consider the staff person's advice, but can choose not to heed it; "concurrent authority," in which the line manager cannot finalize a decision without the agreement of the staff person, and "functional authority" in which the staff person has complete formal authority over his or her area of specialty.[5] Management theorists advise that functional authority for staff positions should be extremely limited in scope: it should cover only a tiny aspect of the line managers' job, it should relate only to areas in which line managers have no expertise, and it should be granted only where company-wide uniformity is required. Common types of functional authority for staff positions include authority over recruiting standards, reimbursement policies and quality standards. Staff workers derive influence from expert authority or "authority of knowledge," from their control of information which may be vital to line managers, and from their closer access to upper management

The above figure shows the representation of Line and Staff Organisational chart. C. Functional Organisation Structure Functional organization has been divided to put the specialists in the top position throughout the enterprise. This is an organization in which we can define as a system in which functional department are created to deal with the problems of business at various levels. Functional authority remains confined to functional guidance to different departments. This helps in maintaining quality and uniformity of performance of different functions throughout the enterprise. The concept of Functional organization was suggested by F.W. Taylor who recommended the appointment of specialists at important positions. For example, the functional head and Marketing Director directs the subordinates throughout the organization in his particular area. This means that subordinates receives orders from several specialists, managers working above them. Features of Functional Organization 1. The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations. 2. Complex form of administrative organization compared to the other two. 3. Three authorities exist- Line, staff and function. 4. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise.

5. Principle of unity of command does not apply to such organization as it is present in line organization. Merits of Functional Organization 1. Specialization- Better division of labour takes place which results in specialization of function and its consequent benefit. 2. Effective Control- Management control is simplified as the mental functions are separated from manual functions. Checks and balances keep the authority within certain limits. Specialists may be asked to judge the performance of various sections. 3. Efficiency- Greater efficiency is achieved because of every function performing a limited number of functions. 4. Economy- Specialization compiled with standardization facilitates maximum production and economical costs. 5. Expansion- Expert knowledge of functional manager facilitates better control and supervision. Demerits of Functional Organization 1. Confusion- The functional system is quite complicated to put into operation, especially when it is carried out at low levels. Therefore, co- ordination becomes difficult. 2. Lack of Co- ordination- Disciplinary control becomes weak as a worker is commanded not by one person but a large number of people. Thus, there is no unity of command. 3. Difficulty in fixing responsibility- Because of multiple authority, it is difficult to fix responsibility. 4. Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not agree on certain issues. 5. Costly- Maintainance of specialists staff of the highest order is expensive for a concern.