7/30/2019 L AND T

1/9

http://www.wbiconpro.com/23-Ernest-Inida-Latest.pdf

http://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_

big.jpg

http://kalyan-city.blogspot.com/2010/06/organisation-organizational-

structure.html#sthash.nkiaIIll.dpuf

http://company.monsterindia.com/lntin/

1. Introduction To Organisation

Organisation is one important element of the management process. It is next to planning. Inmanagement, organisation is both the process as well as the end-product of that process which is

referred to as organisation structure. Such structure acts as the foundation on which the whole

super-structure of management is built. Sound organisation structure is essential for the conduct

of business activities in an efficient manner. It is within the framework of the organisation that

the whole management process takes place. The success of the management process will be

determined by the soundness of the organisation structure. Organising involves integration of

resources in order to accomplish the objectives.

The term 'Organisation' is derived from the word 'organism' which means a structure of body

divided into parts that are held together by a fabric of relationship as one organic whole. In an

enterprise, many managers and employees work together for achieving common objectives. It is

the organisation structure which binds them together and brings proper adjustment and

coordination in their work. The division of work and authority and the establishment of

relationship among individuals or groups are possible due to the organisation structure.

Objectives of organistion structure

Organisation involves the following aspects:-

a. Identifying the activities required to achieve organizational objectives.b. Grouping up of these activities into workable units (Departmentation).

http://www.wbiconpro.com/23-Ernest-Inida-Latest.pdfhttp://www.wbiconpro.com/23-Ernest-Inida-Latest.pdfhttp://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_big.jpghttp://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_big.jpghttp://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_big.jpghttp://kalyan-city.blogspot.com/2010/06/organisation-organizational-structure.html#sthash.nkiaIIll.dpufhttp://kalyan-city.blogspot.com/2010/06/organisation-organizational-structure.html#sthash.nkiaIIll.dpufhttp://kalyan-city.blogspot.com/2010/06/organisation-organizational-structure.html#sthash.nkiaIIll.dpufhttp://company.monsterindia.com/lntin/http://company.monsterindia.com/lntin/http://company.monsterindia.com/lntin/http://kalyan-city.blogspot.com/2010/06/organisation-organizational-structure.html#sthash.nkiaIIll.dpufhttp://kalyan-city.blogspot.com/2010/06/organisation-organizational-structure.html#sthash.nkiaIIll.dpufhttp://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_big.jpghttp://www.larsentoubro.com/lntcorporate/common/ui_templates/images/corp_organisational_chart_big.jpghttp://www.wbiconpro.com/23-Ernest-Inida-Latest.pdf

7/30/2019 L AND T

2/9

c. Assigning duties and responsibilities to subordinates in order to achieve the tasksassigned.

d. Delegating authority necessary and useful for the accomplishment of tasks assigned.e. Establishing superior-subordinate relationship.f. Providing a system of co-ordination for integrating the activities of individuals and

departments.

Definition

According to Louis A. Allen, Organisation is "the process of identification and grouping the

work to be performed, defining and delegating responsibility and authority and establishingrelationships for the purpose of enabling people to work most effectively together in

accomplishing objectives".

James Mooney defines organisation as "the form of every human association for attainment

of a common purpose".

Importance of Organisation

1. Ensures optimum utilisation of human resources: Every enterprise appoints employeesfor the conduct of various business activities and operations. They are given the work

according to their qualifications and experience. Organisation ensures that every

individual. Is placed on the job for which he is best suited.

2. Facilitates coordination: It acts as a means of bringing coordination and integrationamong the activities of individuals and departments of the enterprise. It establishes clear-

cut relationships between operating departments and brings proper balance in their

activities.

3. Facilitates division of work: Different departments are created for division of work,specialization and orderly working of the enterprise. Similarly, delegation relieves top

level managers from routine duties.

7/30/2019 L AND T

3/9

4. Ensures growth, expansion and diversification: Sound Organisation structure facilitatesexpansion/diversification of an enterprise. Organisation structure has in-built capacity to

absorb additional activities and also effective control on them. A business enterprise

brings diversification in its activities within the framework of its Organisation.

5. Stimulates creativity: Organisation provides training and self-development facilities tomanagers and subordinates through delegation and departmentation. It also encourages

initiative and creative thinking on the part of managers and others.

6. Facilitates administration: Effective administration of business will not be possiblewithout the support of sound organisation structure. Delegation, departmentation and

decentralisation are the tools for effective administration.

7. Determines optimum use of technology: Sound Organisation structure providesopportunities to make optimum use of technology. It facilitates proper maintenance of

equipment and also meets high cost of installation.

8. Determines individual responsibility: Responsibility is an obligation to perform anassigned work. In a sound Organisation, the manager finds it easy to pinpoint individual

responsibility when the work is spoilt.

Types Of Organisation Structure

Organisation structure is defined as "The logical arrangement of task and the network of

relationships and roles among the various positions established to carry out the activities

necessary to achieve the predetermined objectives of business". Internal Organisation structure

constitutes the arteries and veins through which the blood of work flows in the body of

Organisation.

Internal Organisation structures can be broadly classified into the following types/forms:

1. Line Organisation structure.2. Functional Organisation structure.3. Line and staff Organization structure.

7/30/2019 L AND T

4/9

4. Product Organization structure.5. Committee and Matrix Organization structure.

Line Organisation Structure

Line Organisation (also called Military/Scalar Organisation) is the oldest and the simplest form

of internal Organisation structure. It was first developed by the Roman army and later adopted by

armies all over the world. Factory owners also used line Organisation structure in its purest form

in the nineteenth century in England.

In the line Organisation, the line of authority moves directly from the top level to the lowest level

in a step-by-step manner. It is straight and vertical. The top-level management takes all major

decisions and issues directions for actual execution. The general manager, for example, issues

order to various departmental managers. Thereafter, the departmental manager issues instructions

to works manager. The works manager will issue instructions to foreman. In this manner, the

orders and instructions will be issued to the workers working at the lowest level. Thus authority

moves downward and also step-by-step. The responsibility, on the other hand, moves in the

upward direction.

Line Organisation structure is given in the following chart:

7/30/2019 L AND T

5/9

Functional Organisation Structure

F.W.Taylor, founder of scientific management, conceived the functional Organisation structure.

According to him, it is unscientific to overload a foramen with the entire responsibility of

running a department. He introduced a system of functional foremanship in his Organisation. In

his functional foremanship, there will be eight specialists' foremen who will be required to guide,

direct and control the work. Workers at the plant level will have to follow the instructions of all

these eight specialists called bosses.

In the functional Organisation suggested by F.W.Taylor, the job of management is divided

according to specialization. As a result, functional departments are created. For example, the

personnel department will look after the recruitment, selection, training, wage payment, etc. of

all persons of the Organisation. Similar will be the position of other departments like production,

sales, etc. The scope of work of the department is limited but the area of authority is unlimited.

In the functional Organisation structure, there will be separation of planning of work and

execution of the plan prepared. The basis of division is the function and naturally the

Organisation structure created will be called "Functional Organisation".

7/30/2019 L AND T

6/9

In the functional foremanship, there will be eight specialists/functional heads called bosses. Out

of eight bosses, four bosses will be at the planning level and the remaining four will be at the

slop floor level.

Foremen At Planning Level (Planning Dept.)

1. Time and Cost Clerk: He is concerned with preparing standard time for the completion ofcertain piece of work and compiling the cost of that work.

2. Instruction Card Clerk: He lays down the exact method of doing the work. He specifiesthe tools to be used for conducting the production and also gives other instructions on the

instruction cards prepared by him.

3. Route Clerk: The route clerk lays down the exact route through which each and everypiece of work should move through various stages till completion. He decides the

production schedule and the sequence of steps by which the production process is to

move.

4. Shop Disciplinarian: He is concerned with the discipline, insubordination, violation ofrules of discipline and absenteeism. All cases relating to these matters will be managed

by the shop disciplinarian.

Foremen At Shop Floor Level (Shop Floor)

1. Gang Boss: He assembles and sets up various machines; and tools for a particular pieceof work. He is in-charge of assembling line of production.

2. Speed Boss: He is concerned with the speeding of machines used for production. Hekeeps proper speed of the machines and see that workers complete the production work

as per the schedule time.

7/30/2019 L AND T

7/9

3. Repair Boss: The repair boss looks after the proper maintenance of machines, tools andequipments required during the production process.

4. Inspector: The inspector controls quality of the products by keeping adequatecheck/control when the production work is in progress.

The functional Organisation structure is given in the following chart:-

Line and Staff Organisation Structure

In the line and staff Organisation, line executives and staff (specialists) are combined together.

The line executives are 'doers' whereas staff refers to experts and act as 'thinkers'. The following

chart shows line and staff Organisation structure:

7/30/2019 L AND T

8/9

According to Louis Allen, "Line refers to those positions and elements of the Organisation,

which have the responsibility and authority and are accountable for accomplishment of primary

objectives. Staff elements are those which have responsibility and authority for providing advice

and service to the line in attainment of objectives".

1. Planning and execution: There are two aspects of administration in this Organisation,viz., planning and execution.

2. Combining line and staff: Planning function is entrusted to staff specialists who are'thinkers' while execution function is given to line executives who are 'doers'. The staff is

supportive to line.

3. Role of authority: The line managers have authority to take decisions as they areconcerned with actual production. The staff officers lack such authority.

7/30/2019 L AND T

9/9

4. Guidance from staff: The staff provides guidance and advice to line executives whenasked for. Moreover, line executives may or may not act as per the guidance offered.

5. Exercising control: The staff manager has authority over subordinates working in hisdepartment.

6. Scope for specialization: There is wide scope for specialization in this Organisation asplanning work is given to staff and execution work is given to line executives.

7. Possibility of conflicts: Conflicts between line and staff executives are quite common inthis Organisation but can be minimized through special measures.

8. Suitability: Line and staff Organisation structure is suitable to large-scale businessactivities.