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Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives
Nature of organizing
Common purpose Division of labor Authority structure People Communication Coordination Resources Man-made Environment Rules and regulations
Types of Organization
Formal organization: Formal organization is deliberately designed to achieve some particular objectives. It refers to the structure of well-defined jobs, each bearing a definite authority, responsibility and accountability. Informal Organization: A network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another.
Purpose
Size
Nature of Groups
Organization structure
Organization structure refers to the pattern of relationships among individuals and department in an organization.
Line organization
Lines of authority and instructions are vertical ,i.e., they may flow from top to the bottom. The unity of command is maintained in a straight and unbroken line. It implies that each subordinate receives instruction from his immediate superior alone and is responsible to him only.
Advantages
Simple
Discipline
Prompt decision
Economical
Orderly Communication
Limitations
Absence of conceptual thinking
Lack of specialization
Problem of coordination
Autocratic approach
Advantages
Quality decision
Planned specialization
Advantages
Disadvantages
Line staff conflicts
confusion
Ineffective staff
Functional Organization
Functional structure is created by grouping the activities on the basis of functions required for the achievement of organizational objectives. For this purpose, all the functions required are classified into basic, secondary and supporting functions according to their nature and importance.
Advantages
Easier staffing
Better control
Disadvantages
Double command Lack of coordination
Complexity
Problem of succession
Divisional Organization
In this form , the organization is divided into several fairly autonomous units. Each unit is relatively self-contained in that it has the resource to operate independently of other divisions. For example, each division has its own manufacturing, engineering, marketing etc.
Basis of Divisionalisation
1. Product division: In this form, each major product or product line is organized as a separate unit. Each unit has its own functional structure. Example; Reliance industries. 2. Territorial division: In this form regional offices are established as separate units. Each regional office has its own set of functional department and operates under the strategic policies and guidelines established by corporate management. Example; North zone, south zone, west zone and east zone. 3. Strategic Business unit (SBU): In multi-product or multigeographical area companies, divisions are created in the form of various strategic business units.
Characteristics of teams
Mutual accountability Small number of people Complementary skills Common purpose and performance goals Common approach