PRINCIPLES OF MANAGEMENT

ORGANISING GROUP WORK PRESENTATION

ORGANISING
NATURE AND PROCESS OF ORGANISING
DEFINITION OF TERMS
Organising Organising is considered as a basic function of management. It defines the role each individual is to play and establishes relationships between them. This term is used in management in two different senses; as a structure and as a process. As a structure, organisation is the mechanism or framework within which people live and work together for the accomplishment of certain objectives. Some people consider it a social system comprising the human relationships existing among persons performing different jobs. As a process, it is a systematic combination of people, functions and facilities, all working together to accomplish some desired purpose. STATIC SENSE Organisation is the structure of relationships among jobs or a network of horizontal and vertical authority relationships designed to accomplish common objectives. It is the vehicle through which enterprise objectives are to be achieved DYNAMIC SENSE In this sense, it is the process of creating harmonious authority-responsibility relationships between different parts of an enterprise. It involves division of work into appropriate specialised units and creating co-operative relationships between them. According to Allen organising is the process of identifying and grouping the work to be performed, defining and delegation responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. In the words of Fayol to organise a business is to provide it with everything useful to its functioning: raw materials, tools, capital and personnel

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Organisation theory It can be defined as the study of the structure, functions and performance of organisations and the behaviour of groups and individuals within themOrganisation theory is the body of thinking and writing which addresses itself to the problem of how to organise.

ELEMENTS OR FEATURES OF ORGANISATION

An organisation can be differentiated from a mob on the basis of the following features of organisation 1. Division of work An organisation only comes into existence only when total work is divided into activities and functions. Division of work is necessary not only because one individual cannot do all the work but also because specialisation results in effective accomplishment of objectives. 2. Common objectives Every organisation exists to achieve some objectives for which it is established. 3. Coordination and Communication There must be co-operative relationships, both vertically and horizontally between the different departments and divisions of the organisation. 4. Plurality of persons An organisation is a group of people working together for the achievement of a common objective. A single person cannot constitute an organisation. 5. Chain of command In every organisation there is a central authority from which a chain of authority relationships stretches throughout the organisation 6. The Dynamic Element An organisation is not a mere mechanical structure but a living organism arising out of the sentiments, attitudes and behaviour of people. The people are the material of construction, their loyalty the foundation and their co-operative spirit the mortar that holds the structure together and gives it vitality

From these elements, an organisation may be defined as co-ordinated structure of positions arranged in hierarchy for the accomplishment of some common objectives through division of labour.

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PROCESS OF ORGANISATION
The process of organising consists of the following steps

1. Determination and division of work:

At the top level, administrative management fixes the common objectives of the organisation. At the middle level, executive management fixes the departmental objectives and at the lower level the supervisory management fixes the day to day objectives. After the objectives are fixed, the top-level management prepares a list of activities which are required to be carried out for achieving the objectives. This prevents duplication, overlapping and wastage of efforts. Enumeration and definition of activities initiates the organising function. E.g. Fayol divided business activities into technical, commercial, financial, security, accounting and managerial.

2. Grouping of activities:
Similar or related activities having a common purpose are grouped together to make departments. Activities may be grouped on the basis of functions, products, territories, customers etc. E.g. Activities or works that are connected too purchasing are grouped together to make the purchasing department. The grouping of similar activities leads to division of labour and specialisation. Each department may be further divided into sections to create a logical structure.

3. Assignment of duties:
The individual departments are then allotted to different positions and individuals. The duties of every individual are defined on the basis of ability and aptitude. Clear definition of the responsibility of each is necessary to avoid duplication of work and overlapping of efforts. Every individual is made responsible for the specific job assigned to him. In this way, duties are assigned to specific individuals.

4. Delegation of authority:
Each employee is given authority. Without authority, the employees cannot carry out their responsibilities. Authority is the right to give orders and the power to get obedience. A chain of command is created from top to bottom through successive delegations of authority. When two or more persons work together for a common goal, it becomes necessary to clearly define the authority relationship between them. Each person should know who is superior,
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from whom he should take orders, and to whom will be answerable. Similarly, each superior should know what authority he has over his subordinates. After defining the authority relationship, the employees are provided with the material and financial resources required for achieving the objectives of the organisation. The last step involves coordinating efforts of all the individuals, groups, departments etc. to achieve goals. Thus, the process of organising is a series of steps which must be undertaken to create a logical structure of authority-responsibility relationships. This process involves division of work, placement of individuals on jobs, delegation of authority, coordination of individual efforts and execution of responsibility for results.

IMPORTANCE OF ORGANISATION
An organisation represents a group of people who work together to accomplish something. Everyone who works in an organisation shares the same values, mission, vision and strategic goals. Organisation is the time-honoured mechanism that enables people to live and work together. Sound organisation can contribute to the success of an enterprise in the following ways:

1. Facilitates administration
Good organisation creates room for effective management. It enables smooth operation of the enterprise by providing a framework within which management can perform the functions of planning, directing, controlling and so forth

2. Makes growth and diversification possible

Growth and diversification become possible through systematic division of work and consistent delegation of authority. An organisation facilitates changes necessary for taking up new activities and new lines of business. An ideal organisation would provide the flexibility and strength necessary for meeting new demands.

3. Permits optimum use of resources

A good organisation helps in the optimal use of technological innovations and human resources. It avoids duplication and overlapping of efforts. Optimum use of technological improvements can be made through a sound structure manned with efficient employees.

4. Encourages good human relations

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In a sound organisation, each individual is assigned the job for which he is best suited. This improves employee satisfaction and interpersonal relations.

5. Stimulates initiative and creativity

A well designed organisation demands creative effort, encourages innovation and permits extensive delegation and decentralization. It also helps in continuity of the establishment by providing scope for training and development of executives.

6. Facilitates coordination (Synergy effect)

Organisation is an important means of unifying and integrating individual efforts. It helps in putting balanced emphasis on different activities and in establishing effective relationships between different departments or divisions of the enterprise. It also provides efficient channels for communication between different groups. The result of the work done in group will be higher as compared to the additional value of individual work.

FORMAL AND INFORMAL ORGANISATION

FORMAL ORGANISATION
The formal organisation refers to the structure of jobs and positions with clearly defined functions and relationships. It is deliberately created by top management for the realisation of enterprise objectives. It is made up of official authority-responsibility relationships. Formal organisation is bound by rules, regulations and procedures. Every individual is assigned a special job with definite authority and responsibility. According to Chester Barnard, a formal organisation comes into existence when the activities of two or more persons are consciously coordinated toward a common objective. It is stable and predictable. It defines the official channels of communication and is based upon the concept of rational economic man. It however tends to be inflexible and discourages initiative. It is impersonal and requires subordination of personal goals to common purpose.

INFORMAL ORGANISATION
This refers to the relationships between people in an organisation based not on procedures and regulations but on personal attitudes, prejudices, likes and dislikes etc . It is a natural spontaneous network of relationships based upon personal needs, attitudes and emotions. It is personal and human

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According to Barnard, informal organisation is joint personal activity without conscious common purpose though contributing to joint results. Informal organisation arises because it provides social satisfaction to people. It helps to preserve the intergrity of the work group. It fills the deficiencies of formal organisation and a good leader can easily secure co-operation of employees by using constructively the informal groups. However, informal organisation tends to resist change and maintain status quo. There may be conflict between organisational goals and norms of informal groups. A manager has little control over an informal organisation and cannot eliminate it. He can make use of it to reinforce formal organisation. (use informal organisations to ensure harmonious relations) Informal organisations may be mainly due to the following reasons; a. The desire on the part of the workmen to socialise with the fellow workmen to escape the boredom of repetitive tasks and satisfy the urge to belong and associate with others b. The desire on the part of the workmen to overcome the tension caused by performance of repetitive jobs and to experience a sense of accomplishment. c. The desire on the part of the workmen to give expression to their capabilities and talents which are not fully used in the performance of specialised jobs. d. The desire on the part of the workmen to seek escape routes from the rigid information and communication network of the formal organisation structure which often denies them messages which are meaningful from their point of view.

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DISTINCTION BETWEEN FORMAL AND INFORMAL ORGANISATION

Formal Organisation 1. It is created deliberately and consciously planned 2. It is based on delegation of authority and may grow to immense size. 3. It is deliberately impersonal and the emphasis is on authority and functions. 4. Rules, duties and responsibilities are written and clearly defined 5. It is shown on the organisation chart 6. It provides for division of labour and has a definite structure 7. Formal authority attaches to a position 8. Formal authority flows downwards 9. Formal organisation is created to meet organisational goals 10. It is permanent and stable Informal Organisation It is natural and arises spontaneously

It arises on account of social interaction of people and tends to remain small It is personal with emphasis on people and their relationships. It has unwritten rules and traditions

It has no place in the formal chart It is structureless and develops out of social contacts Informal authority attaches to a person Informal authority flows upwards or horizontally Informal authority arises from mans quest for social satisfaction It is relatively fickle and unstable

MERITS AND DEMERITS OF INFORMAL ORGANISATION

Merits 1. Helps in making organisational system highly effective 2. Reduces managerial work-load 3. Promotes co-operation 4. Enables work to be done quickly and efficiently 5. Promotes job satisfaction on the part of Demerits Causes frustration and lack of motivation

Encourages negativism Generates inter-personal and group rivalries Opposes change of any kind

Causes undue harassment to certain

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employees 6. Leads to effective communication 7. Provides an outlet for employee emotions

employees Promotes undesirable rumour mongering Promotes dissatisfaction among employees

PRINCIPLES OF ORGANISATION
In order to achieve a sound organisation structure, it is vital that the following be adhered to:

i.

Unity of objectives
Focus toward achieving a particular set of goals is very vital to any organisation. This implies that it is imperative that an organisation first set out to formulate and make understood its objectives so as to make an organisation structure guided by the desired objectives.

ii.

Efficiency
This is the ability of an organisation structure to achieve its objectives with minimum cost implication while maintaining high standards. Efficiency should however make sure that there is a derived satisfaction by the organisation in achieving its goals.

iii.

Division of work
The total task should be divided in such a way that the work of every individual in the organisation is limited as far as possible to the performance of a single function. Breakdown of tasks in the organisation should happen in a grouped or sub-divided manner so as to achieve efficiency. Overlapping roles should however be avoided so as to curb confusion or general neglect of the task all together.

iv.

Span of control
Control as far as management is concerned should be limited to the total number of people that a manager can efficiently manage. By this it is important to avoid over burdening an individual as this would lead to poor managerial skills.

v.

Scalar discipline
The organisation structure of a company MUST show a clean chain of command from the highest to the lowest executive. Every subordinate must know who is superior and to whom policy matters beyond their own authority should be referred for decision to be made. This helps to avoid unnecessary battles of who is superior to the other.

vi.

Delegation
The authority delegated to a manager ought to be sufficient so as to enable him/her achieve the desired results. Delegation of authority should done to the lowest level but

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consistent with necessary control. This is to enable coordination and decision making as close as possible to the point of action.

vii.

Functional definition
The duties and authority-relationships of different individuals or groups MUST be clearly defined so that there is no confusion or overlapping. The relationship between various jobs should also be well and clearly defined.

viii.

Correspondence
Authority and responsibility must be conterminous and co-extensive. By this, it is meant that the responsibility exacted from a position should be commensurate with the authority delegated to that position, and vice versa.

ix.

Unity of command
Every individual should report to only one superior and be accountable to him/her. The necessity of this is so that to avoid the issue of conflict of instructions and a divided loyalty and to ensure a feeling of personal responsibility for results. Blame games and multiple quarters of instruction easily break apart organisations.

x. xi.

Unity of direction
Its important to have one head and one plan for a group of activities directed towar ds the same objective.

Balance
There should exist the giving of undue emphasis on various parts of an organisation at the cost of others. For the sake of a good organisational structure, it is necessary to maintain balances between centralization and decentralization, between a narrow span of management and long lines of communication, between line and staff.

xii.

Exception principle.
A manager should only take decisions within his/her scope and of authority and matters beyond scope should be referred to higher levels of management. This is also known as authority level principle.

xiii.

Coordination
There ought to be an orderly arrangement of group effort and unity of action in achieving a common goal. Efficiency and productivity of the organisation fully depends on the security of unity of effort.

xiv.

Flexibility
An organisation should be free from complex procedures that stagger it in the event of a change of environment. The structure of devices, techniques and environmental factors should be built in such a way that they permit adaptation to any changes in the environment.

xv.

Continuity
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Change is unavoidable and thus a company should be structured in such a way that there is continuity of operations even with change of personnel. People should also find is possible to gain experience in positions of increasing diversity and responsibility within the organisation.

ORGANISATION CHART
Definition
An organisation chart is a diagram that shows the organisation structure of a company. Its purpose is to show all concerned as to what the organisation structure, how the company has been divided into departments and departments into sections and most important on what responsibilities and duties are assigned to which officer/employee.

Purposes of organisation charts

I. II. III. IV. V. VI. It portrays the type of organisation and defines the spheres of authority for the supervising staff. It shows the various departments, departmental sections and their relationship to one another. It is useful when explaining to new members of staff, the type of the organisation they are to work in and their part in it. It shows the chain of command and delegation of authority. It portrays the span of control. It acts as the starting point when the organisation of the firm is being done.

Advantages of Organisation Charts

I. II. III. IV. They show the line of command. Responsibility of work at different levels is clear. The lines of communication both upwards and downwards are indicated. The co-ordination among the various departments improves the efficiency of the organisation.

Disadvantages of Organisation Charts

I. II. III. The chart indicates that the responsibilities of different level have been divided on permanent basis. It becomes difficult to incorporate new changes. The decisions are made by some authorized person only. It becomes difficult to make decisions in some cases. The delays can give loss to the organisation. The rivalry among different departments may be harmful to the organisations.

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Forms of Organisation Charts

This refers to how the organisation chart is put or presented on the piece of paper by direction. An organisation chart may be drawn horizontal or vertically.

a. Vertical Organisation Chart

Fig.1 : Vertical Organisation Chart

b. Horizontal Organisation Chart

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Fig 2: Horizontal Organisation Chart

BIBLIOGRAPHY
Organising Principles. (n.d.). Retrieved from Management Study Guide: http://www.managementstudyguide.com/organising_principles.htm

SALEEMI, N. Principles and Practice of Management. East Africa.

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