Commerce · Ch 10 — Organising
Summary
Summary
- Organising is the process of defining and grouping activities and establishing authority relationships among them.
- Process: the process of organising consists of four steps — (1) Identification and division of work, (2) Departmentalisation, (3) Assignment of duties, and (4) Establishing (authority and) reporting relationships.
- Importance: organising is important because it leads to the benefits of specialisation (division of work), clarity in reporting relationships, optimum utilisation of resources, adaptation to change, better administration, development of personnel (greater creativity), and expansion and growth.
- Organisation structure is the framework within which managerial and operating tasks are performed. It can be functional or divisional. Span of management is the number of subordinates under a superior.
- Functional structure groups activities on the basis of functions. Its advantages are specialisation, better control, managerial efficiency and ease in training employees. Its disadvantages are functional empires, conflict of interest, inflexibility and restriction in managerial development.
- Divisional structure groups activities on the basis of products. Its advantages are integration, product specialisation, greater accountability, flexibility, better coordination and more initiative. Its disadvantages are departmental conflicts, a costly (duplicated) process, ignoring of organisational interests and an increased requirement of general managers.
- Formal organisation is designed by the management to achieve organisational goals. Its advantages are fixation of responsibility, clarity of roles, unity of command and effective accomplishment of goals. Its disadvantages are procedural delays, inadequate recognition of creativity, and being limited in scope.
- Informal organisation arises out of interaction among people at work. Its advantages are speed, fulfilment of social needs, and filling the inadequacies of the formal structure. Its disadvantages are that it can be a disruptive force, cause resistance to change, and give priority to group interests. …