BHAISN CLASSES 94531219

33
ORGANIZING OR ORGANIZATION
MEANING OF ORGANIZATION:
The term 'Organization' can be used in different senses. It can be used as a group of person working
together to as a structure of relationships or as a process of management.
When it is used to refer to a group of person working together, it means a concern, an undertaking or as
enterprise.
When it is used to refer to a structure of relationships, it means the structural relationships among the
positions and jobs and person (i.e., the framework of responsibilit and authorit! through which the
enterprise functions, and it is called organization structure.
DEFINITIONS OF ORGANIZATION:
". Theo Haimann# $Organizing is the process of defining and grouping the acti%ities& of the
enterprise and establishing authorit relationships among them$.
'. (oontz and O')onnell# $Organization in%ol%es the grouping of acti%ities necessar to accomplish
goals and plans, the assignment of these acti%ities to appropriate departments end tl"e pro%ision
for authorit, delegation and co * ordination.
+. ,ouis -. -llen# $Organizing is the process of identifing and grouping the work to be performed,
defining and delegating responsibilit and authorit, and establishing relationship the purpose for
enabling people to work most efficientl together in accomplishing objecti%es$.
NATURE & CHARACTERISTICS OF ORGANIZA TION:
The main characteristics and nature of organization are#
Organizing or organization is a management process (i.e., a managerial function!
Organization is concerned with groups of peop".. -n organization cannot be constituted b a
single person. It comes into e/istence onl a group of persons come together.
Organization is, concerned with identification and grouping of acti%ities into logical pattern so as
to secure homogeneous groups of acti%ities.
)i%ision of work of di%ision of labors the basis of organization.
Integration or*coordination of the %arious acti%ities of the enterprise is another important feature
of organization.
-n organization structure has no meaning unless it can contribute to the accomplishment to the
common objecti%es, i.e., the goal or objecti%es of the enterprise.
-n organization structure consists of %arious positions arranged in a hierarch with clear
definition of authorit and responsibilit associated with each of the positions.
Organization process in%ol%es taking a number to steps, such as the identification of the
acti%ities to be performed to attain the objecti%e of the enterprise, the appropriate groping of
acti%ities into logical pattern, assignment to acti%ities to appropriate departments and people,
delegation of authorit, creation of authorit *responsibilit relationships, etc.
PRINCIPLES OF SOUND ORGANIZATION:
There are man principle of organization. The main principles are#
BHAISN CLASSES 94531219
33
". Principe o! O"#ec$i%e&: The principle of Objecti%es stresses the need for setting the objecti%es
of the enterprise. The setting of the objecti%es of the enterprise is necessar, because the
formulation of the organization structure s %er much influence b objecti%es of the enterprises
'. Principe o! Uni$' (o! O"#ec$i%e&: The 0rinciple of unit of objecti%es implies that 1 e%er part of
the organization and the organization as a whole should be geared to the basic objecti%es of the
enterprise, in other words the main objecti%es of the enterprise.
+. Principe o! )i%i&ion o! *or+ an) &peciai,a$ion: 2pecialization has become the 1 order of the
da. 2o, sound and effecti%e organization must be built on the principle of specialization
3. Principe o! F-nc$iona )e!ini$ion: The principle of functional definition implies that 1 the
functions, duties and responsibilities of the different departments and position in the organization
their authorities and their relationships with other departments and position must be clearl
defined.
4. Principe o! "aance o! %ario-& !ac$or&: The principle of balance of %arious factors suggests
that there should be popper balance in the formal structure of the organization in regard to
%arious factors& 5or instance, there should be proper balance among the& different segments or
departments' of the undertaking. That ism, the work* load should be properl distributed among
the %arious departments to maintain balance and harmon the working of the organization.
There should be balance in authorit allocation to different departments.
6. Principe o! &impici$': The principle of simplicit means that the organization structure should
be simple with a minimum number of managerial le%els. If there are a large number of
managerial le%els in the organization structure, there ma raise the problem of effecti%e co*
ordination and communication
7. Principe o! Span o! Con$ro or Span o! Mana.emen$: 2pan of control or span of
management refers "8 'numbers of subordinates a superior can direct, guide and control
effecti%el. The span of control should be minimum, because there is a limit to the number of
subordinates that can be effecti%el super%ise b a superior.
9. The Scaar Principe/ $he &caar chain/ $he chain o! $he comman) or ine o! a-$hori$':
2calar chain is the chain of superiors. the line of command or the line of authorit form the
highest rank to the lowest rank in the organization established for the purpose of communication
in both the directions, it establishes the channel through$ which communications should pass,
and also states the superior* subordinate relationships in the organization.
When the strict following of the line of authorit becomes detrimental, and there is a need of swift
action, the scalar chain can be short*circuited b taking the permission of their immediate
superiors. Through this arrangement, the scalar chain principle is safeguarded, and at the same
time, the subordinate officers are enabled to take swift action. 2uch an arrangement is known as
:ang 0lank. In this conte/t, it must be noted that the short circuiting of the scalar chain is
permitted onl on routine matters. ;ut matters pertaining to decision *making should be routed
through the usual scalar chain.
.. Principe o! re&pon&i"ii$': <esponsibilit is the obligation of performing the duties assigned.
<esponsibilit is fi/ed with different positions in the organization. <esponsibilit cannot be shifted
to others. The 0rinciples of responsibilit implies that the superior cannot a%oid responsibilit b
delegating authorit to his subordinates. =e (i.e., the superior! must be held responsibi"it for
the acts of his subordinates to whom he has delegate authorit.
"8. Principe& o! )ee.a$ion o! a-$hori$': With the allocation of duties and responsibilities, u'"ere
must logicall go the grant of necessar authorit to the subordinates so as to enable him to
perform his duties efficientl. The 0rinciple of delegation of authorit emphasizes that the
organization structure should pro%ide for the delegation of authorit to the subordinates.
"". Principe o! -ni$' o! comman): The principle of unit of command suggests that each
subordinate should ha%e onl one superior. In other words there should not be dual
BHAISN CLASSES 94531219
33
subordination. )ual subordination results in undermining of authorit, dela, confusion, disorder
and indiscipline of subordinates.
"'. Principe o! -ni$' o! )irec$ion: The principle of unit of direction suggests that, for a group of
acti%ities ha%ing the same objecti%e, there should be one plan of action and one objecti%e. This
would facilitate co*ordination of acti%ities and the completion of the task as per the schedule. If
each person in a department is made to work under a different plan or programme of action,
there will be nothing but confusion.
"+. Principe o! coor)ina$ion: -s the organization is di%ided into a number of departments, it is
necessar that there should be co*ordination between the different departments. The principle of
co*ordination emphasizes that co*ordination between the different departments is >uite essential
to bring unit of action and commonness of purpose in the organization.
"3. Principe o! comm-nica$ion: The principle of communication suggests that their should be a
good communication network in the organization to achie%e the objecti%es of the enterprise.
5urther, there should be effecti%e two*wa communication. i.e., downward communication and
upward communication.
"4. Principe e0cep$ion or e0cep$iona ma$$er&: The principle of e/ception implies that the
organization should be so designed that onl e/ceptional or comple/ matters are referred to
e/ecuti%es at higher le%els for their decision and routine meters are decided b the subordinates
themsel%es.
"6. Principe o! !e0i"ii$' or con$in-i$': -n organization is built not just for toda or tomorrow. It is
built to stand and ser%e for a long time. The principle of fle/ibilit means that the organization
structure should be capable of adapting itself to the needs or changing circumstances.
"7. Principe o! e!!icienc': The principle of efficienc means that the organization structure
formulated should enable the undertaking to function efficientl and achie%e the objecti%es of the
enterprises with minimum cost and effort.
"9. Principe o! !acii$a$ion o! ea)er&hip: the principle of facilitation of leadership implies that the
organizational structure should be so designed that there is enough opportunit for the
management to gi%e effecti%e leadership to the undertaking.
".. Principe o! !e0i"ii$': The principle of fle/ibilit suggests that the organization must be fle/ible
so that it can easil adapt itself to the changing en%ironment without changing the basic
organisation design.
FORMAL AND INFORMAL ORGANISATION
In$ro)-c$ion:
In the organizational structure of e%er enterprise, botl" formal and informal organisations e/ist. 2o, it is
necessar for us to ha%e some idea about the formal and informal organisations e/isting in e%er
concern.
FORMAL ORGANISATION
MEANING OF FORMAL ORAGANISATION:
In the words of ?hester ;arnard, $ -n organisation is formal when the acti%ities of two or more
persons are consciousl co*ordinated towards a common objecti%e$.
Fea$-re& o! Forma Or.ani&a$ion:
The main features of formal organisation are#
BHAISN CLASSES 94531219
33
(a! In a formal organisation, the position, authorit, responsibilities, accountabilit of each le%el are
clearl defined.
(b! It prescribes the relationships amongst the people working in the organisation.
(c! The formal relations in the organisation arise from the pattern of responsibilities that are created
b the management.
(d! The structure is consciousl designed to enable the people of the organisation to work together
for accomplishing the common objecti%es of the enterprise.
(e! - formal organisation is bound b rules! regulation and procedures.
(f! It is deliberatel impersonal.
(g! It is base on ideal relationship arid the common"@<Athesis of the nature of man.
-d%antages of 5ormal organisation#
5ormal organisation has certain*ad%antages. The are#
(I! It makes e%erbod responsible for a gi%en task.
(II! It ensures law *and order in the organisation b prescribing rules, regulations and
procedures.
(III! It contributes to accomplishment of the common objecti%es of the enterprise.
Dra*"ac+& or Cri$ici&m& o! Forma Or.ani&a$ion:
?ertain criticisms are le%eled against forn"al organisation. The are#
(a! 5ormal Organisation is impersonal. 2o, emotions and sentiments of indi%iduals are ignored in
determining the interactions, communication and accountabilit.
(b! 5ormal Organisation is deliberatel designed to achie%e the goals of the enterprise. It does not
consider the goals of the indi%iduals.
(c! The rules and regulations prescribed in a formal organisation ma be rigid, and so, it ma
become difficult to achie%e goals.
INFORMAL ORGANISATION
Meanin. o! In!orma Or.ani&a$ion:
In the words of 1ei$h Da%i&, BInformal organisation is a network of personal and social relations not
established or re>uired b the formal organisation but arising spontaneousl as people associate with
one anotherC.
Fea$-re& o! In!orma Or.ani&a$ion:
The chief features of informal organisation are#
(a! Informal Organisation is not established b an formal authorit. It arises from the personal and
social relations amongst the people working in the organisation.
(b! Informal Organisation arises spontaneousl, and not b deliberate or conscious efforts.
(c! It is influenced b the personal attitudes, emotions, whims, likes and dislikes, etc. of the people
in the organisation.
(d! It is based on rules, regulations and procedures.
BHAISN CLASSES 94531219
33
(e! The inter*relations amongst the people in an informal organisation cannot be charted (i.e.,
cannot be shown in an organisation chart!.
2ene!i$& o! In!orma or.ani&a$ion:
Informal organisation has certain benefits. The are&
(a! It helps the formal organisation to make a workable sstem to get the work done.
(b! It assists the formal organisation to become humanistic.
(c! It helps the group members to attain specific personal objecti%es.
(d! It pro%ides social satisfaction to group members.
(e! It acts as a means b which the workers achie%e a sense of securit and belonging.
(f! It is best means of emploee communication.
(g! It ser%es as an agenc for social control of human beha%iour.
(h! It acts as a safet %al%e for the emotional problems and the frustrations of the workers of the
enterprise.
(i! It lightens the work*load of the formal managers.
(j! Dan things which cannot be achie%ed through formal organisation can be achie%ed through
informal organisation.
(k! The presence of informal organisation in an enterprise makes the managers plan and act more
carefull.
Dra*"ac+& o! In!orma Or.ani&a$ion:
Informal organisation is not free from drawbacks. It suffers from certain drawbacks. The are#
(a! The communication in informal organisation ma, son"etirnes, lead to rumours.
(b! Informal organisation ma put resistance to changes and inno%ations.
(c! It ma not effecti%el contribute to the attachment of the objecti%es of the enterprise.
Conc-&ion:
5ormal organisation alone is not capable of accomplishing the organizational objecti%es. It needs the
help of informal organisation. Informal organisation supplements the formal organisation in achie%ing
the organizational objecti%es. In the words of Che&$er I3 2arnar), $Informal organisation brings
cohesi%encss to a formal organisation. It brings to the members of a formal organisation, a feeling of
belonging, of status, of self*respect and of gregarious satisfaction$. In the words of (eith )a%is, $-n
informal organisation is 'a powerful influence upon producti%it and job satisfaction ;oth formal and
informal sstem are necessar for group acti%it, just as two blades are essential to make a pair of
scissors workable$.
T4PES OF INTERNAL ORGANISATION
The main tpes of integral organisation are#
(I! ,ine, militar or scalar organisation.
(II! 5unctional Organisation.
(III! ,ine and staff organisation.
(IE!?ommittee form of organisation.
53 LINE ORGANISATION/ SCALAR ORGANISATION
BHAISN CLASSES 94531219
33
OR HIERARCHICAL ORGANISA TION
In$ro)-c$ion:
,ine organisation is& a direct tpe of internal organisation. It is the oldest and the simplest form of
integral organisation.
Meanin. o! Line Or.ani&a$ion:
,ine organisation is a tpe of internal organisation in which there are direct %ertical authorit
relationships (i.e., superior*subordinate relationships!, connecting the positions at each le%el with
those abo%e and those below in the hierarch. In other word, it is a form of organisation in which the
relationships between the %arious le%els of management form a hierarch of authorit or chain of
command.
Char$ &ho*in. $he ine or.ani&a$ion:
The following chart depicts the line organisation#
BHAISN CLASSES 94531219
33
Genera Mana.er
Pro)-c$ion Mana.er
A&&i&$an$ Pro)-c$ion mana.er
Foremen
S-per%i&or&
6or+er&
Fea$-re& o! Line Or.ani&a$ion
The chief features of line organisation are#
Re&pon&i"ii$'
(I! The line organisation forms a %ertical line relationship from the top to the bottom of the
organisation.
(II! There is authorit relationship or superior*subordinate relationship in the line organisation. Fach
position in the organisation structure has authorit o%er its subordinate, and is accountable to his
superior.
(III! Gnder this sstem, authorit flows from the top of the structure to its bottom le%el step b step
through downward delegation of authorit, while responsibilit flows upward from the bottom of
the structure to the top step b step.
(IE!There is no pro%ision for staff officers (i.e., e/perts or specialists! to offer ad%ice to the line
officers under this sstem.
A)%an$a.e& o! Line Or.ani&a$ion:
Line or.ani&a$ion ha& cer$ain a)%an$a.e&3 The' are:
". This sstem is simple to establish and operate.
'. Gnder this sstem, responsibilit and authorit are clearl defined. F%er member of the
organisation knows his e/act position, to whom he is responsible and who are responsible to
him. ;ecause of the clear fi/ation of responsibilit, no person can escape from his liabilit.
+. There is unit of command and control under this sstem. That is, a subordinate recei%es orders
from onl one superior and is responsible onl to one superior.
3. The unified authorit and control implicit in this sstem ensures better discipline among the
emploees.
A-$hori$'
BHAISN CLASSES 94531219
33
4. The unification of authorit and responsibilit present in this sstem facilitates >uick and prompt
decisions.
6. -s all the acti%ities relating to one department or di%ision are managed b one e/ecuti%e, there
can be effecti%e co*ordination of acti%ities.
7. Gnder this sstem, communication is eas and >uick.
9. This sstem is fle/ible or elastic, in *the sense that, as each e/ecuti%e has sole responsibilit in
his own position and sphere of work, he can easil adjust the organisation to changing
conditions.
.. This sstem is less e/pensi%e, as there are no staff specialist to ad%ise the line authorities
Di&a)%an$a.e& o! Line Or.ani&a$ion:
,ine organisation is not free from defects. It suffers from se%eral drawbacks. The main drawbacks
are#
". Gnder this sstem, as onl one e/ecuti%e manages all the acti%ities in his department, there is
no scope for specialization.
'. -s onl one e/ecuti%e is re>uired to manage all the acti%ities in his department, he is o%er*
burdened, -s a result, he ma not be able to direct and control the efforts of his subordinates,
properl.
+. -s all the decisions relating to a department are taken b onl one e/ecuti%e, there is unitar
administration. ?onse>uentl, the successful functioning of the department depends on the
abilities of the departmental head.
3. Gnder this sstem, onl one e/ecuti%e controls all the acti%ities of department and gets undue
importance. The importance of the other people in the department is not recognised. -s a result,
there ma be lack of co*operation and team*spirit.
4. 2ince onl one e/ecuti%e controls all the acti%ities in his department, there is much scope for
nepotism and fa%ouritism.
6. Gnder this sstem, the subordinates should follow the orders of their superior without e/pressing
their opinion on the orders. That means, there$ is limited communication.
7. Gnder this sstem, the lower le%el managers lose their initiati%es and interest, as the ha%e to
merel carr out the orders and instructions of their superiors.
9. When there are too man le%els of management, the process of communication ma become
difficult under this sstem.
.. There is the danger that the line authorities ma become autocratic or dictatorial.
"8. ,ine organisation is rigid and infle/ible.
S-i$a"ii$' o! Line Or.ani&a$ion:
It is true that line organisation suffers from man limitations. ;ut its importance has not been
reduced. It is considered suitable for#
(a! 2mall concerns, i.e., concern which carr on their operations on a small scale.
(b! ?oncerns which ha%e a small number of subordinates.
(c! ?oncerns which are engaged in operations which ate mainl of routine tpe.
(d! ?oncerns which has straight and simple methods of machines.
(e! ?oncerns where acti%ities are performed b automatic machines.
(f! Industries where continuous processes are followed.
73 FUNCTIONAL ORGANISATION
BHAISN CLASSES 94531219
33
Meanin. o! F-nc$iona Or.ani&a$ion:
5unctional organisation is a tpe of organisation in which the work of the whole enterprise is di%ided
into a number of specialised functions like production, purchasing, marketing, office management,
personnel relations, etc. and each of these spcciA""ised functions is entrusted to a functional e/pert
or specialist.
Fea$-re& o! F-nc$iona Or.ani&a$ion:
5unctional organisation has certain characteristic features. The main features of functional
organisation are#
("! 5unctional organisation is a comple/ tpe of organisation when compared to line organisation
and line and staffing organisation.
('! There is specialization in functional organisation, as the work of the concern as a whole is
di%ided into different specialised functions like production, purchasing, marketing, finance,
personnel relations, etc. and each specialised function is entrusted to a functional e/pert or
specialist.
(+! In this tpe of organisation, the line e/ecuti%e recei%es instructions not onl from his line boss but
also from one or more specialists. 5or instance, a foreman in the production department ma
recei%e orders and instructions from the superintendent, who is his line boss, and also from the
specialists like the personnel manager, marketing managers, financial manager, etc.
(3! Gnder this sstem, the principle of unit of command is not obser%ed, as a single worker has to
get instructions from more than one specialist.
(4! In this tpe of organisation, more importance is gi%en to staff specialists or functional e/perts.
The functional e/perts are gi%en e%en some line authorit.
(6! In this tpe of organisation, Aere are three tpe of authorit relationships, %iz., (i! line authorit
relationship, (ii! staff authorit relationship and (iii! functional authorit relationship.
(7! Gnder this tpe, the e/ecuti%e ha%e to perform limited number of operations.
A)%an$a.e& o! F-nc$iona Or.ani&a$ion:
5unctional organisation has certain ad%antages. The are#
". This sstem ensures ma/imum use of the principle of specialisation at e%er work point and
helps the enterprise to enjo the benefits of specialisation of functions.
'. -s the workers ha%e to perform onl a limited number of functions under this tpe of
organisation, this sstem contributes to higher efficienc of the workers.
+. -s there is no scope for one*man control in this form of organisation, this sstem ensures co*
operation and team*work among the workers.
3. Gnder this sstem, the line officers are freed from the worries of technical problems faced b
the workers, as instruction regarding the technical problems flow to the workers directl from
the specialists.
4. This sstem is fle/ible, in the sense that an change in the organisation can be introduced
without disturbing the whole organisation.
6. This sstem is >uite suitable for training oung specialists.
7. This sstem ensures the separation of mental functions (i.e., planning! from manual functions
(i.e., functions at the workshop!, and thereb, simplifies managerial control.
Di&a)%an$a.e o! F-nc$iona or.ani&a$ion:
BHAISN CLASSES 94531219
33
5unctional organisation suffers from some drawbacks. The are#
". Gnder this tpe of organisation,' there are man super%isor staff of e>ual rank. This ma lead to
conflicts among them.
'. -s the workers ha%e to work under man bosses under this sstem, it is difficult to maintain
discipline among the workers.
+. -s there are se%eral functional e/perts in the organisation under this sstem, there ma be the
difficult or co*ordination.
3. The speed of action ma be hampered under this sstem, as the control is di%ided among
se%eral specialists.
4. -s there are se%eral functional e/perts under this sstem, the top management ma find it
difficult to fi/ responsibilit, when there is unsatisfactor progress.
6. -s the workers ha%e to carr out the orders of man posses or specialists, there is no unit of
command under this sstem.
7. -s a large number of specialists, there e/perts are re>uired to be appointed under this tpe
organisation, this sstem is %er e/pensi%e.
9. It is %er difficult to put this sstem into operation.
.. This sstem makes relationship more comple/.
S-i$a"ii$' o! F-nc$iona Or.ani&a$ion:
5unctional organisation is >uite good for di%ision of work at the top. ;ut for the di%ision in the %arious
departments, this sstem is not %er successful, as there is no clear line of authorit.
Char$ &ho*in. F-nc$iona Or.ani&a$ion
2oar) o! Direc$or&
Mana.er Mana.er Mana.er Mana.er
Pro)-c$ion Mar+e$in. Finance Per&onne
Sec$ion Sec$ion Sec$ion Sec$ion
O!!icer I O!!icer II O!!icer III O!!icer I8
93 LINE AND STAFF ORGANISATION
In$ro)-c$ion:
BHAISN CLASSES 94531219
33
In line organisation, there is unit of command, hut there is no specialization. In functional organisation,
there is e/treme specialisation, hut there is no unit of command. To o%ercome the defects and to take
ad%antage of the merits of both line organisation and functional organisation, line and staff organisation
has been e%ol%ed. ,ine and staff organisation is the Gsual fonn of organisation found in modern
enterprise.
Meanin. o! Line an) S$a!! Or.ani&a$ion:
,ine and staff organisation is a combination of line organisation and functional organisation. It is a tpe
of organisation in which there arc two sets of officers for administration, %iz., ("! line officers who ha%e
the authorit and command o%er the subordinates and are responsible for the accomplishment of the
results, and*('! staff officers or specialists who render e/perts ad%ice to the line officers to help them to
discharge their functions efficientl.
Fea$-re& o! Line an) S$a!! Or.ani&a$ion:
The main features of line and staff organisation are#
". ,ine and 2taff organisation is a combination of line organisation and functional (i.e., staff!
organisation. Gnder this sstem, there are line officers who ha%e authorit and command o%er the
subordinates and are accountable for the tasks entrusted to them, and there are staff officers or
specialists to offer e/pert ad%ice to the line officers to perform their tasks efficientl.
'. ,ine and staff organisation clear distinction between the two aspects of administration. Eiz. planning
and e/ecution. The staff personnel prepare the plans and gi%e ad%ice to the line officials, and line
officials e/ecute the plans with help of the departmental personnel.
+. The line and staff organisation is based on the principle of specialization, in the sense that the staff
officers specialize in the planning function and the line officers specialisation in the e/ecution or
doing function of the administration.
A)%an$a.e o! Line an) S$a!! Or.ani&a$ion:
,ine and staff organisation enjos certain ad%antages. The are#
". 2pecialisation is ensured under the line and staff organisation' as the staff officers specialise in the
planning function, and the line officers specialise in the e/ecution or doing function.
'. ,ine and staff organisation has greater fle/ibilit , in the sense that new specialised acti%ities can be
added to the line acti%ities without disturbing the line procedure.
+. The e/pert ad%ice and guidance gi%en b the staff officers to the line officers benefits the entire
organisation.
3. -s the decisions are made b e/perts or specialists, there will be sound managerial decisions under
this sstem.
4. -s the staff officers look after t""e detailed analsis of each important managerial acti%it, the line
officers get a big relief.
6. Gnder this sstem, man %arieties of responsible jobs are a%ailable. That means, more opportunities
are there for the ad%ancement of the workers under this sstem.
Di&a)%an$a.e o! Line an) S$a!! Or.ani&a$ion:
,ine and staff organisation also is not free from drawbacks. It suffers from a number of limitations. The
are#
BHAISN CLASSES 94531219
33
". If the pattern of authorit relationship between the line officers and the staff officers is not clearl
indicated, there will be considerable confusion in the organisation. 5urther, there ma be conflicts
between the line officers and the staff officers.
'. -s the staff officers do not ha%e the authorit to put their recommendations into practice, their ad%ice
ma be ignored b line officers.
+. -s the staff officers are not 'concerned with the e/ecution of the plan, the ma not take proper care
before the ad%ice the line officers. That means, this sstem ma encourage carelessness on the
part of the staff officers.
3. This tpe of organisation re>uires the appointment of a large number of staff officers or e/perts in
addition to the line officers. -s a result, this sstem becomes >uite e/pensi%e.
4. -s the line sstem is e/pensi%e, small concerns cannot afford
BHAISN CLASSES 94531219
33
COMPARATI8E STUD4 OF LINE ORGANIZATION/ FUNCTIONAL ORGANISATION AND LINE AND
STAFF ORGANSIATION
". ,ine organisation is a simple form of organisation. ;ut functional organisation and line and staff
organisation are complicated.
'. In the case of the line organisation, there is clear*cut line of authorit .m the case of functional
organisation, there is no clear*cut line of authorit .In the case of line and staff organisation, there is
clear*cut di%ision of authorit for the line officers, but staff officers do not ha%e an authorit.
+. In the case of line organisation, there is clear*cut responsibilit .In the case of functional organisation
and line and staff organisation, there is clear*cut responsibilit for the line officers, but staff officers
do not ha%e an responsibilit.
3. ;ecause of clear*cut line authorit, there is unit of command in the case of line organisation. There
is no unit of command in the case of functional organisation, as a worker has to take instructions
from se%eral authorities. There is unit of command in the case of line and staff organisation
because of the e/istence of the line officers.
4. In the case of line organisation, there is fle/ibilit in the sense that >uick decisions and prompt
actions can be taken to adjust to changing situations because of the e/istence of full authorit.
5unctional organisation is rigid and infle/ible. In the case of line and staff organisation, fle/ibilit is
difficult.
6. 2trict discipline is enforced in the case of line organisation. In the case of functional organisation,
enforcement of discipline is difficult because of lack of unit of command. In the case of line and staff
organisation, there is discipline enforced b line officers.
7. In the case of line organisation, there can be prompt and >uick decisions. In the case of functional
organisation, there cannot be >uick decisions. In the case' of line and staff organisation, there can
be better decisions b the line officers with the help of staff ad%ice.
9. There is no specialisation in the case of line organisation. There is ma/imum specialisation in the
case of functional organisation. There is certain amount of specialisation in the case of line and staff
organisational because of the presence of staff officers.
BHAISN CLASSES 94531219
33
.. In the case of line organisation, there is hea% work load on the e/ecuti%e or managers. There is
less work load in the case of functional organisation. The work load is not hea% in the case of line
and staff organisation.
"8. There is a good communication sstem in the case of line organisation. There is o%erlapping of
communication in the case of functional organisation. There is a good communication sstem in the
case of line and staff organisation.
"". In the case of line organisation, there can be better co*ordination within the department, but inter*
department co*ordination becomes difficult. In the case of functional organisation, there is lack of
effecti%e co*ordination because of e/treme specialisation. In the case of line and staff organisation,
there can be co*ordination through staff officers.
"'. Ffficienc is lacking in the case of line organisation, as one e/ecuti%e is entrusted with man
acti%ities in which he is not efficient. In the case of functional organisation, there is greater efficienc,
as each e/ecuti%e is entrusted with limited duties. There is ma/imum efficienc in the case of line
and staff organisation because of the clear*cut duties of the line officers and the a%ailabilit of e/pert
ad%ice from the staff officers.
"+. ,ine organisation is suitable for small enterprises, trading as well as industrial. 5unctional
organisation is suitable for large industrial enterprises. ,ine and staff organisation is suitable for
medium* sized industrial enterprises.
:3 Commi$$ee Form o! Or.ani&a$ion
- number of persons ma come together to take decision, decide a course of action, ad%ise line officers
on some matters, it is a committee form of organisation. It is a method of collecti%e thinking, corporate
judgement and common decision. - committee ma be assigned some managerial functions or some
ad%isor or e/plorator ser%ice ma be e/pected from it.
Nee) !or Commi$$ee:
The main reason for committee is to secure common judgement on administrati%e matters. The
committees are set up for the following reasons.
"! The committees pro%ide a forum for e/changing ideas among organisational members.
'! The e/change of ideas among members ma generate some suggestions and recommendations
which ma be useful for the organisation.
+! There can be proper discussion on present problems and efforts are made to find the solutions.
3! The committees ma also be needed in establishing and de%eloping organisational policies.
T'pe& o! Commi$$ee;
)ifferent committees mabe formed with different ideas and purposes. 2ome committees ma be onl
ad%isor while some ma perform managerial functions. There ma be following tpes of committees#
"! Forma an) In!orma Commi$$ee&: If a committees is formed as a part of organisation structure
and is delegated some duties and authorit, it is a formal committee. -n informal committee ma be
formed to tackle some problem. - manager ma call some e/perts to help him in analzing a
problem and suggesting a suitable solution.
'! A)%i&or' Commi$$ee: These are the committees to ad%ice line head on certain issues. ,ine officers
ma refer some problems or issues to a committee foe ad%ice.
+! Line Commi$$ee: There ma be committees with managerial powers. Instead of gi%ing work to one
person it ma be assigned to a number of e/ecuti%es.
A)%an$a.e& o! commi$$ee !orm o! or.ani&a$ion:
BHAISN CLASSES 94531219
33
The committee form of organisation has the following has the following ad%antage#
". Pooin. o! opinion&: the members of committees come from different background and areas or
e/pertise and ha%e different %iew points and %alues. When persons with %aried abilities sit together
and discuss a problem, %arious aspects of the case are highlighted and pros and cons are
assessed. The pooled opinion will help in taking a realistic %iew of the problems.
'. 2e$$er co<or)ina$ion: ?ommittee form of organisation brings more co*ordination among different
segments of the organisation when representati%es of different departments sit together, the
understand and appreciate the difficulties faced b others. This tpe of frank discussions help on
fi/ing the targets of different departments and better co*ordination is achie%ed through this tpe of
decision making.
+. 2aancin. o! 8ie*&: this tpe of organisation helps in balancing the %iews e/pressed b different
persons. There is a tendenc to o%er emphasise the aspects of one's own departme@"t b ignoring
the inter dependent character of problems of different departments. - committee helps to bring out
an agreed %iew of the problems b taking into account di%ergent %iews e/presses in such meetings.
3. Doti%ation# The committees consist of managers as well as subordinates. The %iews of subordinates
are gi%en recognition and importance. It gi%es them encouragement and makes them feel as an
integral part of decision making process. 2uch committees boost the morale of subordinates and
moti%ate them to impro%e their performance.
4. )ispersion of power# The concentration of power in few persons ma lead to misuse of authorit and
wrong decisions. ; spreading powers among committee members this problem can be sol%ed.
6ea+ne&& o! Commi$$ee Form o! Or.ani&a$ion
This form of organisation suffers from the following weakness#
"! Dea': The main drawback of committee form of organisation is dela in taking decisions. - number
of persons e/press their %iew points in meetings and a lot of time is taken oh reaching a decisions.
'! Compromi&e: :enerall, efforts are made to reach consensus decisions. The %iew point of the
majorit is taken as a unanimous decision of the committee. The taking of the majorit ma be %alid
but it ma not be pursued for being singled out.
+! No Acco-n$a"ii$': Ho indi%idual accountabilit can be fi/ed if these decisions are bad. F%er
member of the committee tries to defend himself b saing that he suggested a different solution. If
accountabilit is not fi/ed Ahen it is the weakness of the organisation.
3! Domina$ion "' &ome mem"er&: .2ome members tr to dominate in the committee meetings. The
tr to thrust their %iew point on *others.
4! S$raine) Rea$ion&: 2ome times relations among committee members or with others become
strained. If some members take di%ergent stands on certain issues, some ma feel offended. It
affects relations of emploees not onl on the job but at personal le%el also.
BHAISN CLASSES 94531219
33
CENTRALISATION
Meanin. o! Cen$rai&a$ion:
In the words of =enr 5aol, =E%er'$hin. *hich .oe& $o increa&e $he impor$ance o! $he
&-"or)ina$e(& roe i& )ecen$rai&a$ion/ e%er'$hin. *hich .oe& $o re)-ce i$ i& cen$rai&a$ion>.
Impor$an$ Fea$-re& o! cen$rai,a$ion:
?entralization has the following features#
"! ?oncentration and reser%ation of the decision*making power with regards to %arious management
functions with the top le%el management.
'! F/ecution of the decisions taken b the top le%el management (i.e., performance of operati%e
functions! b with the middle and lower le%els of management.
+! 5unctioning of the lower le%els of management under the direct command, direction and control of
the top le%el management.
DECENTRALISATION
Meanin. o! Decen$rai&a$ion:
-ccording to =enr 5aol, $F%erthing which goes to increase the importance of the subordinate's role'
is decentralisation, e%erthing which goes to reduce it is centralisation.
A)%an$a.e& or Decen$rai&a$ion:
)ecentralisation has se%eral ad%antages. The are#
". )ecentralisation relie%es the top e/ecuti%e from routine works, and enables them to concentrate on
more important works.
'. ; gi%ing responsibilit, authorit and initiati%e to the subordinates, and thereb, widening the scope
of their acti%ities, decentralisation contributes to the de%elopment of e/ecuti%es or management m
the organisation.
+. ; gi%ing power, prestige and status to the subordinates, decentralisation increases the morale of
the subordinates and moti%ates them to put forth their best.
3. ; gi%ing authorit for decision*making to the lower le%els where actions take place, decentralisation
facilities >uick decisions.
4. Gnder decentralisation, the performance of each unit is judged b the management on the basis of
the profitabilit. This ensures m.f.e, effecti%e control b the management o%er each unit.
6. In a decentralised enterprise, each of the different di%isions or departments is made a separate profit
centre. This contributes to health competition between the different di%isions or departments to
impro%e their performance.
7. In a decentralised enterprise, the di%ision or departments are independent of one another. This is
helpful to the management to e/periment with new ideas in one di%ision or depa""ment without
ad%ersel affecting the functioning of the other di%isions or departments.
9. In a decentralised enterprise, the emploees ha%e greater opportunit to come into close contact
with one another. This contributes to personal intimate relationship between them.
.. )ecentralisation contributes to the di%ersification of acti%ities and products.
Di&a)%an$a.e& o! Decen$rai&a$ion:
BHAISN CLASSES 94531219
33
)ecentralisation is, no doubt, good .;ut it is not free from drawbacks or limitations. The %arious
drawbacks or disad%antages of decentralisation are#
". )ecentralisation re>uires competent managers to run the %arious departments independentl. ;ut it
is difficult to find competent managers.
'. )ecentralisation re>uires the emploment of highl*paid managers. The emploment of highl*paid
managers will increase the administrati%e costs of the enterprise.
+. In a decentralised enterprise, e%er unit ma tr to ma/imize its performance at cost of the other
units. This ma lead to unhealth competition among the different units of the enterprise.
3. In a decentralised enterprise, authorit lies dispersed widel throughout the organisation. Fach
di%ision or department enjos complete freedom in the formulation of policies. This ma increase the
problem of co*ordination.
4. )ecentralisation ma result in duplication of functions and wastage of resources.
6. )ecentralisation ma, sometimes, become a handicap in the case of >uick emergenc decisions.
7. )ecentralisation is not suitable for the de%elopment of specialised ser%ices, .such as personnel,
accounting, statistical departments, etc.
9. In a decentralised enterprise, establishment of ade>uate and effecti%e controls o%er the %arious
di%isions or departments becomes difficult.
Conc-&ion:
F/cessi%e centralisation kills the initiati%e and enthusiasm of the subordinates. 2imilarl, e/cessi%e
decentralisation reduces the importance of the superiors. -gainst complete centralisation is
impossibilit, as management will be impossible without some measure of delegation of authorit.
2imilarl, complete decentralisation will amount to %irtual decentralisation. 2o, too munch of
centralisation or too much of decentralisation must not be res8rted to. - proper balance must be
maintained between e/cessi%e centralisation and e/cessi%e decentralisation.
Fac$or& De$erminin. $he E0$en$ or De.ree o! Decen$rai&a$ion:
)ecentralisation is not an absolute term. 2o, the e/tent or degree of decentralisation %aries from
concern to concern. The degree of decentralisation in an enterprise is determined b a number of
factors. The are#
". The size of the organisation determines the e/tent of decentralisation. -s the size of the
organisation increases. it becomes necessar to decentralise and di%ide the organisation into a
number of semi*autonomous units. In fact the larger is the size of the organisation! the greater is the
e/tent of decentralisation.
'. )ecentralisation re>uires a number of able middle le%el managers to run the %arious di%isions or
departments of the enterprise. That means, the e/tent of decentralisation is determined b the
a%ailabilit of competent middle le%el managers. Where such managers are not a%ailable,
decentralisation is not possible.
+. The e/tent of decentralisation is also determined b the management philosoph (i.e., the outlook of
the top management!. If the top management belie%es in centralisation of authorit, there will not be
much decentralisation. On the other hand, if the top management belie%es in greater .autonom and
freedom to the subordinate, the e/tent of decentralisation will be great.
3. The nature of the growth and e/pansion of the business also determines the degree of
decentralisation. If the enterprise has growth through internal e/pansion, generall, there will be
centralised control, and so, there ma not be much decentralisation. On the other hand if the
BHAISN CLASSES 94531219
33
concern has growth through amalgamation or absorption, generall there will be greater
decentralisation.
4. The phsical dispersion of operations of the enterprise also influences the e/tent of decentralisation.
When the operations of an enterprise are widel dispersed in different territories, generall, there will
be greater decentralisation for better results.
6. :o%ernment policies and regulations also determine the e/tent of decentralisation.
7. The product lines of the enterprise influence the e/tent of decentralisation. Where the product lines
of the enterprise are >uite different, decentralisation is resorted to.
9. Technological changes also ma create conditions fa%ourable for decentralisation.
.. The costliness and the significance of the decisions to be taken also influence the e/tent of
decentralisation. Where the decisions to be taken in%ol%e hea% in%estment or cost, generall,
decentralisation is not thought of. Instead, centralisation is thought of.
)ifference between )elegation and )ecentralisation#
)elegation and )ecentralisation seem to be identical terms. ;ut the are not identical terms. The differ
from each other in man respects. The main differences between them are#
". )elegation is a process or act whereas decentralisation is the end result of delegation.
'. )elegation refers to the relati6nship between two indi%iduals, %iz., a superior and his immediate
subordinate. ;ut decentralisation refers to the relationship between the top management and the
%arious di%isions departments of the organisation.
+. )elegation is >uite essential in the management process, as no manager can get things done
through his subordinates unless he delegates to them the re>uisite authorit for the performance of
the work assigned. ;ut decentralisation is optional (i.e., it maor not be resorted to b the
management!.
3. In the case of delegation, onl authorit is delegated, and responsibilit is not delegated. ;ut in the
case of decentralisation, e%en the responsibilit is delegated (i.e., the superior is relie%ed of his
responsibilit for the work decentralised.
4. In the delegation, the control o%er the subordinate's performance of the job rests entirel with the
delegator (i.e., the superior who has delegated the authorit!. On the other hand, in the case of
decentralisation, the top management ma e/ercise the minimum control in a broad wa and
delegate e%en the power to control to the di%isions or the departments concerned.
Or.ani&a$ion Char$&
Organisation charts is a diagrammatical presentation of relationships in an enterprise. The functions and
their relationships, the channels of authorit and relati%e authorit of different managers etc. are
depicted in an organisational chart.
T'pe& o! Or.ani&a$ion char$&
There are three was in which organisation charts can be shown# (i! Eertical (ii! =orizontal (iii! ?ircular.
I. 8er$ica or Top "o$$om: In this chart major functions are shown at the top and subordinate
functions in successi%e lower positions. In this chart scalar le%els run horizontall and functions run
%erticall. The supreme authorit is shown at the top while lowest authorit at the bottom.
BHAISN CLASSES 94531219
33
II. Hori,on$a or Le!$ $o Ri.h$: In this chart highest positions are put on the left side and those with
diminishing authorit mo%e towards the right. The organisational le%els are represented b %ertical
columns, the flow of authorit from higher to lower le%els being represented b mo%ement from left
to right.
BHAISN CLASSES 94531219
33
III. Circ-ar: In circ-ar char$ the centre of the circle represents the position of supreme authorit
and the functions radiate in all directions from the centre. The higher the positions of authorit the
nearer the are to the centre and the lesser the positions of authorit. more distant the are from
the centre. The positions of relati%e e>ual importance are located at the same distance from the
centre.
Principe& o! Or.ani&a$ion Char$&:
The top management should faithfull follow the line of authorit while dealing with subordinates.
-n attempt to be pass the organisation chart will make it meaningless.
BHAISN CLASSES 94531219
33
The chart should define lines of position. The lines of different indi%iduals should be so defined so
that there is no o%erlapping and no two persons should gi%en the same position.
The undue concentration of dut at an point should be a%oided.
The organisation chart should not be influenced b personalities. ;alance of organisation should be
gi%en more importance than the indi%iduals.
The organisation chart should be simple and fle/ible.
A)%an$a.e& o! Or.ani&a$ion Char$&:
-n organisation chart is a managerial tool. It helps in specifing authorit and responsibilit of
e%er .position. The relationships among different persons are also established for smooth working
of the organisation.
-s organisation chart specificall defines authorit and responsibilit of people in the enterprise
there will be no duplication and o%erlapping of duties etc.
The organisation chart will help in pointing out the faults, deficiencies, dual command etc. in the
organisation.
The organisation chart acts as an information centre to the new entrants and the can easil
understand different le%els of authorit and responsibilit.
The charts are also helpful in decision making process. The ct as a guide to the decision makers.
Limi$a$ion& o! Or.ani&a$ion Char$&:
The organisation charts suffer from the following drawbacks.
The organisation charts show the relationship of different positions and not the degree of authorit
and responsibilit. The size of bo/es or circles in the chart cannot show the le%el of authorit etc.
- chart onl depicts formal organisational relationship whereas informal organisation is ignored.
0racticall informal organisation is an useful as formal organisation. Informal organisation greatl
helps management in knowing the reactions of the people and is an important channel of
communication.
- chart shows organisational position and status at different le%els. It gi%es rise to superior*inferior
feeling among people and it retards the feeling of team work.
Dee.a$ion
)elegation is an administrati%e process of getting things done b others b gi%ing them
responsibilit.
-ll important decisions are taken at top le%el b ;oard of )irectors.
The e/ecution is entrusted to ?hief F/ecuti%e.
The ?hief F/ecuti%e assigns to the work to departmental managers who in turn delegate the
authorit to their subordinates.
F%er superior delegates the authorit to subordinates for getting a particular work done.
The process goes to the le%el*Ahere actual work is e/ecuted.
The person who is made responsible for a particular work is gi%en the re>uisite authorit for getting it
done.
There is a limit up to which a person can super%ise the subordinates. When the number of
subordinates increases beond it then he will ha%e to delegate his powers to others who perform
super%ision for him. - manager is not judged b the work he actuall performs on his own but the
work he gets done through others.
BHAISN CLASSES 94531219
33
De!ini$ion&:
-llen. $The entrustment or a part of the work, or responsibilit and authorit to another, and the creation
of accountabilit for performances$.
Charac$eri&$ic& o! Dee.a$ion:
)elegation has following ?haracteristics#
"! )elegation takes place when a manager grants some of his powers to subordinates.
'! )elegation occurs onl when the person delegating the authorit himself as that authorit i.e. a
manager must possess what he wants to delegate.
+! Onl a part of authorit is delegated to subordinates.
3! - manager delegating authorit can reduce, enhance or take it back. =e e/ercises full control o%er
the acti%ities of the subordinates e%en after delegation.
4! It is onl the authorit which is delegated and not the responsibilit. - manager cannot abdicate
responsibilit b delegating authorit to subordinates.
Eemen$& o! Dee.a$ion
)elegation in%ol%es three elements#
"! A&&i.nmen$ o! re&pon&i"ii$': the first step in delegation is the assignment of work or dut to the
subordinate i.e. delegation of authorit.
'! Gran$ o! A-$hori$': the grant authorit is the second element of delegation. The delegator grants
authorit to the subordinates so that the assigned tack is accomplished. The delegation of
responsibilit with authorit is meaningless# The subordinates can onl accomplish the work when
he has the authorit re>uired for completing that task. -uthorit is deri%ed from responsibilit.
+! ?reation of -ccountabilit# -ccountabilit is the obligation of a subordinate to perform the duties
assigned to accomplish the task assigned to him b the superior. When a work is assigned and
authorit is delegated then accountabilit is the b*product of this process. The authorit is
transferred so that a particular work is completed as desired. The subordinate should be made
accountable to onl one superior.
Principe& o! Dee.a$ion:
The following are the principles of delegation#
"! Principe o! F-nc$iona De!ini$ion: The related or similar acti%ities should be grouped together
according to enterprise function. When the definition of a position is clear then delegation of
authorit becomes simple.
'! Principe o! Uni$' o! Comman): the basic management principle is that of unit of command. This
principle states that a subordinate should report onl single superior. This will gi%e a sense of
personal responsibilit.
+! Principe o! Dee.a$ion "' Re&-$& E0pec$e): The delegation of authorit should be based on the
basis of results e/pected. The .authorit should be sufficient to achie%e the desired results.
3! Principe o! A"&o-$ene&& o! Re&pon&i"ii$': The responsibilit of subordinates, once he has
accepted the work, is absolute to his superior. The responsibilit of the superiors does not decrease
once he has delegated authorit. - person can delegate authorit and not responsibilit .=e will
remain accountable for the work e%en if it is delegated to the subordinate. 2o the responsibilit of
superior and subordinate remains absolute.
BHAISN CLASSES 94531219
33
4! A-$hori$' Le%e Principe: The managers delegate authorit to subordinates but ha%e the
temptation to make decisions for them. The should allow the subordinates to take their own
decisions as per the authorit delegated to them.
T'pe& o! )ee.a$ion:
)elegation ma be of the following tpes#
Genera or Speci!ic Dee.a$ion: when authorit is gi%en to perform general managerial functions
like planning. Organising, directing, etc., the subordinate managers perform these functions and
enjo the authorit re>uired to carr out these responsibilit. The chief e/ecuti%e e/ercises o%erall
control and guides the subordinates from time to time. The specific delegation ma relate to a
particular functions or an assigned task. The authorit delegated to the productions manager for
carring out these functions will be specific delegation.
Forma or In!orma Dee.a$ion: 5ormal delegation of authorit is the part of organisational
structure. Whene%er a task is assigned to a person then the re>uired authorit is also gi%en to him.
Informal delegation does not arise due to position but according to circumstances. - person ma
undertake a pa""icular task not because he has been assigned$ it but it is necessar to do his
normal work.
La$era Dee.a$ion: When a person is delegated an authorit to accomplish a task, he ma need
the assistance of a number of persons. It ma take time to formall get assistance from these
persons. =e ma indirectl contact the persons to get their help for taking up the work b cutting
short time of formal delegation. When the authorit is delegated informall it is called lateral
delegation.
Re&er%e) A-$hori$' an) Dee.a$e) A-$hori$': - delegator ma not like to delegate e%er authorit
to the subordinates. The authorit which he keeps with him is called reser%ed authorit and the
authorit which is assigned to the subordinates is delegated authorit.
PRE<RE?UISITES FOR DELEGATION
". 6iin.ne&& $o Dee.a$e: The first prere>uisite to delegation is the willingness of the superior to
part with his authorit .Gnless the superior, is pschologicall prepared to lea%e his authorit,
delegation will not be effecti%e.
'. Cima$e o! Tr-&$ an) Con!i)ence: There should be a climate of trust and confidence among,
superiors and subordinates.
+. Fai$h in &-"or)ina$e&: 2ometimes the superiors do not delegate authorit with the fear that
subordinates will not be able to handle the job independentl. The are not confident of the >ualities
of subordinates and do not want to take risks.
3. Fear o! S-per%i&or&: There is often a fear among superiors that their subordinates ma not o%er
take them, once the are gi%en higher responsibilit. This is a case of interiorit comple/. The
super%isors ma gi%e man logics for delegating authorit but this fear is one of the important
causes.
DIFFICULTIES IN8OL8ED IN DELEGATION OF3AUTHORIT4
There ma be certain defects in organisational structure which hamper proper delegation of authorit.
2ome of the difficulties in%ol%ed in delegation are as such#
". O%er Con!i)ence o! S-perior: The feeling in a superior that onl he can do certain work effecti%el
than others is the main difficult in delegation. When a manager is of the opinion that his
BHAISN CLASSES 94531219
33
subordinates will not be able to make proper decisions then he will concentrate all powers with him
and will not like to delegate his authorit.
'. Lac+ o! Con!i)ence in S-"or)ina$e&: The superior ma be of the %iew that subordinates are not
competent to carr out certain things of their own. =e ma lack confidence in his subordinates.
Gnder these circumstances superior will hesitate to delegate authorit.
+. Lac+ o! A"ii$' in S-perior: - superior ma lack the abilit to delegate authorit to subordinates.
The manager ma not be able to identif the areas where delegation is re>uired. ,ack of 0roper
?ontrols# There ma not be proper controls in the organisation which help the manager to keep in
touch with performance of subordinates.
3. Lac+ o! Proper Temperamen$ o! S-perior: The chief e/ecuti%e ma be o%er*cautious or
conser%ati%e b nature. -n element of risk cannot altogether be ruled out but certain risk will ha%e to
be taken.
4. Ina"ii$' o! S-"or)ina$e&: The fear of committing mistakes or lack of confidence on the part of
subordinates ma also act as a barrier in delegation of authorit.
Impor$ance o! Dee.a$ion:
)elegation is a uni%ersall accepted principle. -n industrial undertaking benefits b delegation in the
following was#
". <elie%ing Top F/ecuti%es.
'. Impro%ed 5unctioning.
+. Gse of 2pecialists.
3. =elps in Fmploee )e%elopment.
4. =elps in F/pansion and )i%ersification.
Fac$or& In!-encin. De.ree o! Dee.a$ion
- number of factors influence the decision about delegation. 2ome of these are discussed as follows#
". ?ompan's =istor.
'. -%ailabilit of ?apable 0ersons.
+. Importance and ?ostliness of )ecisions.
3. 2ize of the Fnterprise.
4. -%ailable ?ontrols.
6. Tpes of Fnterprise.
7. Fn%ironmental 5actors.
SPAN OF MANAGEMENT
In the words of 2priegal, $2pan of control means the number of people reporting directl to an authorit.
The principle of span of control implies that no single e/ecuti%e should ha%e more people looking to him
for guidance and leadership than he can reasonabl be e/pected to ser%e.
The span of super%ision is also known as span of control, span of management, span of responsibilit,
span of authorit and span of direction.
Fac$or& in!-encin. $he &pan o! &-per%i&ion
There are number of factors that influence or determine the span of super%ision in a particular
organisation, the most important of these are as follows#
BHAISN CLASSES 94531219
33
". The capaci$' an) a"ii$' o! $he e0ec-$i%e: The characteristics and abilities such as leadership,
administrati%e capabilities& abilit to communicate, to judge, to listen, to guide and inspire, phsical
%igour, etc. differ from person to person. - person ha%ing better abilities can manage effecti%el a
large number of subordinates as compared to the one who has lesser capabilities.
'. Compe$ence an) $rainin. o! &-"or)ina$e&: 2ubordinates who are skilled, efficient,
knowledgeable, trained and competent re>uire less super%ision, and therefore, the super%isor ma
ha%e a wider span in such cases as compared to ine/perienced and untrained subordinates who
re>uires greater super%ision.
+. Na$-re o! 6or+: Hature and importance of work to be super%ised is another factor that influences
the span of super%ision. The work in%ol%ing routine, repetiti%e, unskilled and standardized operations
will not call much attention and time on the part of the super%isor.
3. Time a%aia"e !or &-per%i&ion: The capacit of a person to super%ise and control a large number
of persons is also limited on account of time a%ailable at his disposal to super%ise them. The span of
control would be generall narrow at the higher le%el of management because top manager ha%e to
spend their major time on planning, organising, directing and controlling and the time a%ailable at
their disposal for super%ision will be less.
4. De.ree o! Decen$rai&a$ion an) E0$en$ o! Dee.a$ion: If a manager clearl delegates authorit to
undertake a well*defined task, a well trained subordinate can do it with a minimum of super%isor's
time and attention.
6. E!!ec$i%ene&& o! comm-nica$ion &'&$em: 5ault communication puts a hea% burden on
manager's time and reduces the span of control.
7. ?-ai$' o! Pannin.: Fffecti%e planning helps to reduce fre>uent calls on the superior for
e/planation, instructions and guidance and thereb sa%es in time a%ailable at the disposal of the
superior enabling him to ha%e a wider span.
9. De.ree o! Ph'&ica Di&per&ion: If all persons to be super%ised are located at the same place and
within the direct super%ision of the manager, he can super%ise relati%el more people as compared
to the one who has to super%ise people located at different places.
.. A&&i&$ance o! E0per$&: the span of super%ision ma be wide where the ser%ices of e/perts are
a%ailable to the subordinate on %arious aspects of work. In case such ser%ices are not pro%ided in
the organisation, the super%isor has to spend a lot of time in pro%iding assistance to the workers
himself and a such the span of control would be narrow.
T'pe o! &pan o! &-per%i&ion
;roadl speaking there are two tpes, of span of super%ision#
(a!Wider span of super%ision (b! Harrow span of super%ision.
(a! 6i)er Span o! S-per%i&ion: In this tpe of span, the super%isor controls and guides the acti%ities of
subordinates directl under his control. Wider span or super%ision is fanoured where workers are
competent and trained.
(b! Harrow 2pan of 2uper%ision# under this tpe of super%ision, there are man le%els and more
super%isors are re>uired to perform the job of guidance and control for different acti%ities. It
increases the efficienc of super%ision but the cost of super%ision is %er high as compared to wider
span of super%ision. This tpe of super%ision is fa%oured at higher le%els of management where all
the other acti%ities of planning, organising, directing, and controlling are also to be performed. ;ut
more the le%els of super%ision, more difficult is the task of coordinating the acti%ities of %arious
groups of people.
MANAGEMENT 24 O2@ECTI8ES/ AM323OB
BHAISN CLASSES 94531219
33
Danagement b objecti%es is a process in which the manager and his subordinates jointl agree upon a
set of acti%ities, targets and goal, keeping in %iew the o%erall objecti%es of the organisation. and use
these as the criteria for e%aluating the performance of the subordinates.
Fea$-re& o! mana.emen$ "' O"#ec$i%e&:
". Danagement b objecti%es is an approach and philosoph to*management, and is not just a
techni>ue of management.
'. The basic emphasis of management b objecti%es is on setting of objecti%es or goals of an
organisation.
+. Danagement b objecti%es focuses on the integration of goals It relates the long*range goals of the
organisation with the short*range goals, o%erall sstems goals of the enterprise with the goals of the
societ.
3. D;O 0laces emphasis not onl on the settings of goals but also on their achie%ement (i.e., effecti%e
performance and tangible results!.
4. The techni>ue of D;O recognises the fact that the goals setting and achie%ement process is a co*
operati%e and participati%e endea%our of the superiors and subordinates.
6. The objecti%es enshrined in management b objecti%es pro%ide guidelines for appropriate sstems,
procedures, delegation of authorit, allocation of resources, etc.
7. Danagement b objecti%es pro%ides for substantial transfer of authorit from a small group of top
managers to the large group of subordinate managers.
9. 0eriodic re%iew of performance is an essential feature of management b objecti%es. The re%iew of
performance is done regularl, generall, once in a ear.
.. The philosoph of D;O %iews organisation as a dnamic entit.
"8. Gnder the techni>ue of D;O, consultation replaces e/ercise of authorit, interaction and
communication replaces isolation, and self*control b subordinates replaces imposed control b
superiors.
Objecti%es of Danagement b objecti%es#
To relate indi%idual goals to organisational goals.
To clarif the jobs to be done aI"d the results e/pected to be accomplished.
To e%aluate the performance 'of the subordinates.
To enhance the communication between the superiors and the subordinates.
To stimulate the subordinates moti%ation.
To ser%e as a de%ice for integration.
To ser%e as a de%ice for organisational control.
S$ep& in%o%e) in Mana.emen$ "' o"#ec$i%e&:
". )efining the o%erall specific corporate objecti%es.
'. 2etting of sub*goals for each unit.
+. 2etting performance targets for each indi%idual manager.
3. Datching of goals and resources.
4. F%aluation or appraisal of performance, and re*appraisal
2ene!i$& o! Mana.emen$ "' o"#ec$i%e&:
". It increases the participation and in%ol%ement of the subordinates in decision*making.
'. It pro%ides the subordinates with an opportunit to be self*moti%ating b setting their objecti%es.
BHAISN CLASSES 94531219
33
+. -s the managers at all le%els are in%ol%ed in setting their objecti%es, the are more committed to the
goals fi/es. That means, the chance of accomplishment of objecti%es are much brighter.
3. Gnder the D;O approach, the managers at all le%els become more aware of the o%erall objecti%es.
This helps them in understanding their role in the total organisation.
4. D;O implies that the objecti%es of each department and each indi%idual are consistent with the
o%erall objecti%es of the organisation. This ensures the integration of indi%idual goals with the goals
of the organisation.
Limi$a$ion& o! Mana.emen$ "' o"#ec$i%e&:
". The D;O approach is too pressure*oriented and time consuming.
'. 0articipation of the subordinates in goal*setting is the corner*stone of D;O. ;ut this ma not be
feasible in e%er organisation.
+. D;O re>uires the setting of %erifiable goals. ;ut it is difficult to set %erifiable goals.
3. D;O will be successful onl if the objecti%es are set in measurable and %erifiable terms. If the
objecti%es cannot be set in >uantitati%e terms, it will be difficult to judge the performance of the
indi%iduals.
4. The "%I;O approach o%er*emphasises >uantification. Therefore, it is likel to o%erlook the >ualitati%e
aspects of the performance of the organisation.
Conc-&ion:
It is true that D;O is subject to certain limitations. ;ut if it is implemented sincerel and seriousl, it will
ield good di%idends.
S-per%i&or' Mana.emen$
". 2uper%isor management le%el is abo%e the operati%es and below the middle management in an
organization.
'. This le%el can be classified into three categories, particularl in a larged*sized organization# senior
super%isor, intermediate super%isors, and front Iline super%isors.
+. 2uper%isor Danagement is concerned with efficienc in using resources of the organization.
3. It is an e/ecutor of policies and procedures making a series of decisions with well*defined and
specified premises.
4. :enerall a super%isor is .called a marginal man is the organization. =e concerned with e/plaining
the %iews of management to workers and the %iews of workers to management.
6. ;ecause of this reason, the job of a super%isor becomes more comple/ than other le%els of
management. Danagement treats him the man of workers which workers treat him the man of
management.
A &-per%i&or &peci!ica' per!orm& $he !oo*in. !-nc$ion&3
". 0lanning the acti%ities of his section, classifing and assigning jobs to workers.
'. :uiding workers about work procedure
+. Danaging and arranging necessar materials, toots, etc., for the workers
3. Fnsuring maintenance of machineries, etc.
4. 0ro%iding on the# job training to workers
6. 2uper%ision and control of functioning of workers
7. 2ol%ing problems of workers relating to jobs
9. ?ommunicating the problems of workers, which are not sol%ed at his le%el
.. 0ro%iding feedback., to management about the nature of work en%ironment in his section
BHAISN CLASSES 94531219
33
"8. Daintaining discipline among workers, de%eloping in them right tpe of approach, and maintaining
good human relations.
Earious functions performed b different le%els of management suggest that managers at e%er le%el
ha%e to perform all fi%e functions. =owe%er, the relati%e importance of a function ma differ from le%el to
le%el. 5or e/ample! planning is the most crucial function at the top le%el while routine and direct control
becomes most important at super%isor le%el.
E!!ec$i%e S-per%i&ion
". Lea)er&hip: ,eadership is a process of influencing the acti%ities of an indi%idual or group for goal
*achie%ement in a gi%en situation. Through this process, indi%idual or group contributes willingl to
the goal *achie%ement. Fffecti%e super%isors perform functions related to leadership instead of doing
the same work as the subordinates do. This stle of super%ision leads to higher morale and more
producti%it. The leadership process will be described later in detail.
'. Co&ene&& o! S-per%i&ion: The degree of closeness of super%ision ma %ar from highl close
*super%ision to highl free*.super%ision. 2uccessful super%isors follow the stle of less close
super%ision. - closed super%ision is defined as fre>uentl checking up on .subordination, pro%iding
them fre>uent and detailed instruction, and limiting their freedom to perform the work in their own
wa. Hormall close super%isor causes low morale and moti%ation because it blocks the gratification
of some strongl felt needs of subordinates. ,ess close super%ision, on the other hand produces
moti%ation and morale, which are essential for high producti%it.
+. Empo'ee <orien$a$ion or H-man Rea$ion&: Taking into account both emploees and work being
performed b them, there can be two stle emploee*oriented and production*oriented. The
emploee*oriented stle stresses the relationship aspects .of emploee's jobs. It emphasizes that
e%er indi%idual is, important and takes interest in e%er one, accepting their indi%idualit and.
personal need. 0roduction*oriented stle emphasizes production and .technical aspects of the jobs
and emploees are taken as tools for accomplishing the jobs. Fffecti%e super%isors follow emploee*
oriented stle and take more personal interest in their men, understand their problems, and punish
them less fre>uentl when mistakes occur.
3. Gro-p cohe&i%ene&&: Fffecti%e super%ision relates to group cohesi%eness. :roup cohesi%eness is
characterized b the group situation in which all members work together for a common goal, or
where e%er one is read to take responsibilit for group chores. :roups with high cohesi%eness
produce more as compared to groups with less cohesi%eness.
4. Dee.a$ion: Though delegation of authorit is applicable to all tpes of superior* subordinate
relationships and all le%els of management, it becomes important at the super%ision le%el because
super%ision management is considered to be the last le%el for delegation of authorit.
6. O$her Fac$or&: There are certain other factors, besides the abo%e, which go to make the
super%ision effecti%e. 5ro e/ample, super%isors who can influence their superiors and satisf the
needs of their 2ubordinates for promotion recognition, and work*center benefits are considered
better b their subordinates. The inspire higher morale in work groups and more satisfaction to the
emploees. The also perform functions like on*the*job training, informing their subordinates their
duties and rele%ant organization matters, and present model beha%ior for their subordinates
FACTORS INFLUENCING DEGREE OF DELEGATION
". Compan'( & Hi&$or': The histor of the compan influences the degree of delegation - compan
grow*n o%er a period of time has a tendenc to centralize powers. When a concern is small then
most of the decision*making is done b the owner. With the growth of business$ the tendenc to
centralize powers remains. On the *other hand if a concern is the outcome of a merger,
amalgamation or combination, there ma be a great amount of decentralization.
BHAISN CLASSES 94531219
33
'. A%aia"ii$' o! Capa"e Per&on&: The element of delegation is linked to the a%ailabilit of
subordinate managers. If sufficient persons are a%ailable who can take responsibilit then delegation
can easil be done. :enerall, managers complain that sufficient subordinate managers are not
a%ailable who can be assigned important, duties. Gnless subordinates are delegated the powers
the win not learn the art of management.
+. Impor$ance an) Co&$ine&& o! Deci&ion: The importance and costliness of decisions greatl
influences the degree of delegation. :enerall speaking, the costlier and more important the
decision, the greater the probabilit of its being made at the upper le%el of the managerial hierarch.
)ecision*making also re>uires %arious facts and figures about the issue. - manager will ensure that
he gets all re>uired information for deciding the issue. This tpe of information is easil a%ailable at
higher le%els of management.
3. Si,e o! $he En$erpri&e: The e/*tent of delegation is linked to the size of the enterprise. In a large
unit more decision making is needed at %arious le%els of management. The problems of
communication and co*ordination often arise in such units. If decision making is closer to the place
of action it will sa%e time, paper work is reduced, misunderstandings in con*"InGllication can largel
be eliminated.
4. A%aia"e con$ro&: - manager delegating authorit want to be sure that it is used in accordance
with his intentions and the general objecti%es of the@ organization. In order to achie%e this there must
be control de%ices. :enerall, managers hesitate to delegate due to the reason that the do not
know how to control.
6. T'pe& o! en$erpri&e: The degree of delegation of authorit ma also be influenced b the tpe of
enterprise. If the enterprise is in an industr which is rapidl e/panding, as in the electronic field, top.
management will ha%e to delegate otherwise it will be o%er burdened with man decisions
If the enterprise operates in a static industr then all decision*making is done at the central le%el In
cage, of banking and insurance the growth is slow and decision*making remains at the top.
7. En%ironmen$a !ac$or&: In addition to internal factors delegation ma be influenced b internal
factors too. These factors ma be natural unions, go%ernment control o%er business and ta/ policies.
2ome large concerns ha%e to deal with workers unions at national le%el. -ll the negotiations are
done and decisions are taken at national le%el. In such a situation the things are decided at head
>uarter le%el and are applicable at all le%els.