Definition
Generally an organization is a group of created and maintained to achieve specific objectives.
Argyris said,” Organizations are intricate human strategy design to achieve certain objectives.”
Barnard said,” An organization is a system of cooperative human behavior.”
Thus in our phrase an organization is define as a cooperative social system involving coordinate efforts of two or more people pursuing a share purpose.
Elements of Organization
Ø Goal oriented : people with a purpose
Ø Social system : people working in a group
Ø Technical system : people using knowledge, technology and machine
Ø Integration of structured activities : people coordinating their efforts
Fayol’s Principles of organization
Fayol introduced such principles as the following.
Ø Unity of command. Each worker is to report to one, and only one, boss. The benefits of this principle are obvious. What happens if two different bosses give you different assignments? Which one should you follow? To prevent such confusion, each person is to report to only one manager.
Ø Hierarchy of authority. All workers should know to whom they should report. Managers should have the right to give orders and expect others to follow.
Ø Division of labor. Functions are to be divided into areas of specialization such as production, marketing and finance.
Ø Subordination of individual interest to the general interest. Workers are to think of themselves as a coordinate team. The goals of the team are more important than the goals of individual workers.
Ø Authority. Managers have the right to give orders and the power to exact obedience. Authority and responsibility are related; whenever authority is exercised, responsibility arises.
Ø Degree of centralization. The amount of decision making power vested in top management should vary by circumstances. In a small organization, it’s possible to centralized all decision making power in the top manager. In a large organization, however, some decision making power should be delegated to lower lever manager and employees on both major and minor issues.
Ø Clear communication channels. All workers should be able to reach others in the firm quickly and easily.
Ø Order. Materials and people should be placed and maintained in the proper location.
Ø Equity. A manager should treat employees and peers with respect and justices.
Ø Esprit de corps. A spirit of pride and loyalty should be created among people in the firm.
Common Characteristics of Organizations
According to Edger Schein, a prominent organizational psychologist, all organizations share four characteristics: (1) coordination of effort, (2) common gal or purpose, (3) division of labor and (4) hierarchy of authority.
Coordination of effort: Individuals who join together and coordinate their mental and/or physical efforts can accomplish great and exciting things. Building the great pyramids, conquering polio, sending manned flights to the moon all these achievements far exceeded the talents and abilities of any single individual.
Common goal or purpose: Coordinating of efforts cannot take place unless those who have joined together agree to strive for something of mutual interest. A common goal or purpose gives the organization focus and its members a rallying point. For example, in 1995, when Marriott International owned 1,000 hotels, Chairman Bill Marriott, Jr. announced the ambitious goal of owning 2,000 hotels by the year 2000. This strategic goal guides Marriott’s aggressive hotel acquisition program and expands its reach. In early 1997, Marriott was on track with 1,300 hotels in 38 nations.
Division of labor: By systematically dividing complex tasks into specialized jobs, an organization can use its human resource efficiently. Division of labor permits each organization member to become more proficient by repeatedly doing the same specialized task. The dividing of labor has been known for a long time. One of its early proponents was the pioneering economist Adam Smith. While touring an eighteen-century pin-manufacturing plant, Smith observed that a group of specialized laborers could produce 48,000 pins a day. This was an astounding figure, considering that each laborer could produce only 20 pins a day when working alone.
Hierarchy of authority: According to traditional organization theory, if anything is to be accomplished formal collective effort, someone should be given the authority to see that the intended goals are carried out effectively and efficiently. Organization theorists have defined authority as the right to direct the actions of others. Without a clear hierarchy of authority, coordination of effort is difficult, if not impossible, to achieve. Accountability also is enhanced by having people serve in what is often called, in military language, the chain of command. For instance, a grocery store manager has authority over the assistant manager, who has authority over the produce department. Without such a chain of command, the store manager would have the impossible task of directly overseeing the work of every employee in the store.
Putting all the pieces together: Four of the foregoing characteristics are necessary before an organization can be said to exist. Many well intentioned attempts to create organizations have failed because something was missing. In 1896, for example, Fredrick Strauss, a boyhood friend of Henry Ford, helped Ford set up a shop, supposedly to produce gasoline-powered engines. But while Stress was busy carrying out his end of the bargain by machining needs parts, Ford was secretly building a horseless carriage in a workshop behind his house. Although Henry Ford eventually wants on to become an automobile-industry giant, his first attempt at organization failed because not all of the pieces of an organization were in place. Ford’s and his partner’s efforts were not coordinated, they worked at cross-purpose, their labor was vaguely divided, and they had no hierarchy of authority. In short, they had organizational intentions, but no organization.
Classifying Organizations
Because organizations are created to pursue particular purposes, they can classify according to their intended purpose. The classification by organizational purpose discussed here has four categories: business, nonprofit service, mutual-benefit and commonweal organizations. Some of today’s large and complex organizations overlap categories. For example, religious organizations are both nonprofit service organizations and mutual-benefit organizations, nevertheless classifying organizations by their purpose helps clarify the variety of roles they play in society and the similar problems shared by organizations with similar purpose.
Business organizations: business organizations such as General Milks, United Airlines and the Washington Post all have one underlying purpose: to make a profit in a society acceptable manner. Business cannot survive, let alone demand for products and services. This economic production function is important to society that many think immediately of business when the word management is mentioned.
Purpose Primary Common Overriding
Beneficiary Example Management problem
Business Owners Computer manufacturers Must make a profit
Fast-food
Newspaper
Restaurant chains
Nonprofit Clients Universities Must selectively screen
Service Welfare agencies large numbers of
Hospitals (nonprofit) potential clients
Mutual-benefit Members Unions Must satisfy members
Clubs needs
Political parties
Cooperatives
Commonweal Public at large Postal service Must provide
Police department standardized service
Fire department to large groups of
Public schools people with diverse
needs
Nonprofit service organization: Unlike business, many organizations survive and even grow, without making any profits at all. They need to be solvent, of course, but they measure their success not in dollars and cents but by hoe well they provide a specific service for some segment of society. The American Heart Association, Notre Dame University and Massachusetts General Hospital are example of nonprofit service organizations. Because the services of such organization are usually in great demand, one of their biggest problems lies in screening larges numbers of applicants to determine who qualifies for service.
Mutual-benefit organizations: Often, as in the case of labor unions or political parties, individuals join together strictly to pursue their own self-interests. In other cases the National Association of Manufacturers, for example- organizations may feel compelled to join together in an umbrella organization. Mutual-benefit organizations, like all other types of organizations, must be effectively and efficiently managed if they are to survive. In this instance, survival depends on satisfying the needs of the members.
Commonweal organizations: Like nonprofit service organizations, commonweal organizations offer public services without attempting to earn a profit. But, unlike nonprofit service organizations, which serve some segment of society, a commonweal organization offers standardized service to all members of a given population. The Canadian Army, for example, protects everyone within Canada’s border, not just a select few.
Formal Organization
Formal organization is a pattern of relationship and task define by official rules, policies and system.
Informal Organization
Informal organization is a network of personal and social relation not established or required by formal organization but arising spontaneously as people associate one another.
Types of Formal Organizations
Ø Line organization : The most simple form organization with no use of advisor and staff.
Ø Line and staff organization : Organization in which line managers make decision and staff personnel provide advice and support.
Ø Functional organization : Organization that give stuff personnel temporary and limited authority for specific task.
Ø Committee : A body of persons formed to managed and responsible for any specific administrative purpose.
Departmentation
Departmentation is the process of grouping jobs according to logical arrangement.
Types of Departmentation
Ø Customer departmentation : Grouping activities according to specific customer or customers’ group.
PresidentBy customer group
Customers
Commercial users
Manufacturers
Institutions
Ø Functional departmentation : Grouping jobs involving same and similar activities.
President
By function
Accounting
Human Resources
Finance
Marketing
Production
Ø Product departmentation : Grouping activities around products and product groups.
Marketing
manager
By product
Trade books
College texts
Technical books
Ø Location departmentation : Grouping jobs on the basis of define geographic areas.
By geographic location
Vice President
(International operations)
Canadian
Division
Japanese
Division
European
Division
Korean
Division
Reason of Departmentation
Ø Proper specialization
Ø Necessity of control
Ø For better coordination
Ø For special attention of activities
Ø To great competition among different department
Ø To consider local condition
Ø To give interest to executive’s interest
Advantages of departmentation
Ø Employees can develop skills in depth and can progress within a department as they master those skills.
Ø The company can achieve economics of scale in that it can centralized all the resource it needs and locate various experts in that area.
Ø There is good coordination within the function, and top management can easily direct and control various department activities.
Disadvantages of departmentation
Ø There may be a lack of communication among the different departments.
Ø Individual employees may begin to identify with their department and its goals rather than with the goals of organization as a whole.
Ø The company’s response to external change may be slow.
Span of Management
Span of management is the number of people who report to a particular manager.
Again spun of management and control means the number of subordinates a supervisor can supervise effectively.
Formula of A V Graicunas,
I = N (2^N/2+N-1)
Here, I = Total number of instruction with and among subordinates
N = Total numbers of subordinates
Organization with Narrow Spans
Advantages
Ø Close supervision
Ø Close control
Ø Fast communication between subordinates and supervisors
Disadvantages
Ø Supervisors tends to get too involved in subordinates’ work
Ø Many levels of management
Ø High cost due to many level
Ø Excessive difference between lowest level and top level
Organization with Wide Spans
Advantages
Ø Superior are forced to delegate
Ø Clear policies must be made
Disadvantages
Ø Technology of overloaded superiors to become decision bottlenecks
Delegation
Delegation is the process of assigning various degrees of decision making authority to lower level employee.
Reasons for Delegation
In effect a manager who delegate is sharing his workload with a subordinate in whom he has confidence. The main reasons why delegation is practiced are:
Ø A manager is relieved of some less important or less immediate tasks and thus has time for higher-level work.
Ø Delegation can be more efficient because decisions are taken lower down the hierarchy and communication delay are reduced or eliminated.
Ø Delegation is good training for junior personnel. They learn to make decision and to live with the consequences. It is more challenging for them.
Ø Delegation makes the organization more flexible and adaptable.
Ø Delegation satisfies ‘higher-order’ needs and is a necessary part of enrichment programmes and is consciously practiced by many organizations as part of staff development programmes.
Centralization
Centralization is defined as the relative relation of decision making authority by top management.
Decentralization
Decentralization is granting of decision making authority by management to lower level employees.
Matrix Organization
Matrix organization is a structure with both vertical and horizontal lines of authority.
Actually it’s a combination of functional and product forms of departmentation in the some organization structure.
Generally an organization is a group of created and maintained to achieve specific objectives.
Argyris said,” Organizations are intricate human strategy design to achieve certain objectives.”
Barnard said,” An organization is a system of cooperative human behavior.”
Thus in our phrase an organization is define as a cooperative social system involving coordinate efforts of two or more people pursuing a share purpose.
Elements of Organization
Ø Goal oriented : people with a purpose
Ø Social system : people working in a group
Ø Technical system : people using knowledge, technology and machine
Ø Integration of structured activities : people coordinating their efforts
Fayol’s Principles of organization
Fayol introduced such principles as the following.
Ø Unity of command. Each worker is to report to one, and only one, boss. The benefits of this principle are obvious. What happens if two different bosses give you different assignments? Which one should you follow? To prevent such confusion, each person is to report to only one manager.
Ø Hierarchy of authority. All workers should know to whom they should report. Managers should have the right to give orders and expect others to follow.
Ø Division of labor. Functions are to be divided into areas of specialization such as production, marketing and finance.
Ø Subordination of individual interest to the general interest. Workers are to think of themselves as a coordinate team. The goals of the team are more important than the goals of individual workers.
Ø Authority. Managers have the right to give orders and the power to exact obedience. Authority and responsibility are related; whenever authority is exercised, responsibility arises.
Ø Degree of centralization. The amount of decision making power vested in top management should vary by circumstances. In a small organization, it’s possible to centralized all decision making power in the top manager. In a large organization, however, some decision making power should be delegated to lower lever manager and employees on both major and minor issues.
Ø Clear communication channels. All workers should be able to reach others in the firm quickly and easily.
Ø Order. Materials and people should be placed and maintained in the proper location.
Ø Equity. A manager should treat employees and peers with respect and justices.
Ø Esprit de corps. A spirit of pride and loyalty should be created among people in the firm.
Common Characteristics of Organizations
According to Edger Schein, a prominent organizational psychologist, all organizations share four characteristics: (1) coordination of effort, (2) common gal or purpose, (3) division of labor and (4) hierarchy of authority.
Coordination of effort: Individuals who join together and coordinate their mental and/or physical efforts can accomplish great and exciting things. Building the great pyramids, conquering polio, sending manned flights to the moon all these achievements far exceeded the talents and abilities of any single individual.
Common goal or purpose: Coordinating of efforts cannot take place unless those who have joined together agree to strive for something of mutual interest. A common goal or purpose gives the organization focus and its members a rallying point. For example, in 1995, when Marriott International owned 1,000 hotels, Chairman Bill Marriott, Jr. announced the ambitious goal of owning 2,000 hotels by the year 2000. This strategic goal guides Marriott’s aggressive hotel acquisition program and expands its reach. In early 1997, Marriott was on track with 1,300 hotels in 38 nations.
Division of labor: By systematically dividing complex tasks into specialized jobs, an organization can use its human resource efficiently. Division of labor permits each organization member to become more proficient by repeatedly doing the same specialized task. The dividing of labor has been known for a long time. One of its early proponents was the pioneering economist Adam Smith. While touring an eighteen-century pin-manufacturing plant, Smith observed that a group of specialized laborers could produce 48,000 pins a day. This was an astounding figure, considering that each laborer could produce only 20 pins a day when working alone.
Hierarchy of authority: According to traditional organization theory, if anything is to be accomplished formal collective effort, someone should be given the authority to see that the intended goals are carried out effectively and efficiently. Organization theorists have defined authority as the right to direct the actions of others. Without a clear hierarchy of authority, coordination of effort is difficult, if not impossible, to achieve. Accountability also is enhanced by having people serve in what is often called, in military language, the chain of command. For instance, a grocery store manager has authority over the assistant manager, who has authority over the produce department. Without such a chain of command, the store manager would have the impossible task of directly overseeing the work of every employee in the store.
Putting all the pieces together: Four of the foregoing characteristics are necessary before an organization can be said to exist. Many well intentioned attempts to create organizations have failed because something was missing. In 1896, for example, Fredrick Strauss, a boyhood friend of Henry Ford, helped Ford set up a shop, supposedly to produce gasoline-powered engines. But while Stress was busy carrying out his end of the bargain by machining needs parts, Ford was secretly building a horseless carriage in a workshop behind his house. Although Henry Ford eventually wants on to become an automobile-industry giant, his first attempt at organization failed because not all of the pieces of an organization were in place. Ford’s and his partner’s efforts were not coordinated, they worked at cross-purpose, their labor was vaguely divided, and they had no hierarchy of authority. In short, they had organizational intentions, but no organization.
Classifying Organizations
Because organizations are created to pursue particular purposes, they can classify according to their intended purpose. The classification by organizational purpose discussed here has four categories: business, nonprofit service, mutual-benefit and commonweal organizations. Some of today’s large and complex organizations overlap categories. For example, religious organizations are both nonprofit service organizations and mutual-benefit organizations, nevertheless classifying organizations by their purpose helps clarify the variety of roles they play in society and the similar problems shared by organizations with similar purpose.
Business organizations: business organizations such as General Milks, United Airlines and the Washington Post all have one underlying purpose: to make a profit in a society acceptable manner. Business cannot survive, let alone demand for products and services. This economic production function is important to society that many think immediately of business when the word management is mentioned.
Purpose Primary Common Overriding
Beneficiary Example Management problem
Business Owners Computer manufacturers Must make a profit
Fast-food
Newspaper
Restaurant chains
Nonprofit Clients Universities Must selectively screen
Service Welfare agencies large numbers of
Hospitals (nonprofit) potential clients
Mutual-benefit Members Unions Must satisfy members
Clubs needs
Political parties
Cooperatives
Commonweal Public at large Postal service Must provide
Police department standardized service
Fire department to large groups of
Public schools people with diverse
needs
Nonprofit service organization: Unlike business, many organizations survive and even grow, without making any profits at all. They need to be solvent, of course, but they measure their success not in dollars and cents but by hoe well they provide a specific service for some segment of society. The American Heart Association, Notre Dame University and Massachusetts General Hospital are example of nonprofit service organizations. Because the services of such organization are usually in great demand, one of their biggest problems lies in screening larges numbers of applicants to determine who qualifies for service.
Mutual-benefit organizations: Often, as in the case of labor unions or political parties, individuals join together strictly to pursue their own self-interests. In other cases the National Association of Manufacturers, for example- organizations may feel compelled to join together in an umbrella organization. Mutual-benefit organizations, like all other types of organizations, must be effectively and efficiently managed if they are to survive. In this instance, survival depends on satisfying the needs of the members.
Commonweal organizations: Like nonprofit service organizations, commonweal organizations offer public services without attempting to earn a profit. But, unlike nonprofit service organizations, which serve some segment of society, a commonweal organization offers standardized service to all members of a given population. The Canadian Army, for example, protects everyone within Canada’s border, not just a select few.
Formal Organization
Formal organization is a pattern of relationship and task define by official rules, policies and system.
Informal Organization
Informal organization is a network of personal and social relation not established or required by formal organization but arising spontaneously as people associate one another.
Types of Formal Organizations
Ø Line organization : The most simple form organization with no use of advisor and staff.
Ø Line and staff organization : Organization in which line managers make decision and staff personnel provide advice and support.
Ø Functional organization : Organization that give stuff personnel temporary and limited authority for specific task.
Ø Committee : A body of persons formed to managed and responsible for any specific administrative purpose.
Departmentation
Departmentation is the process of grouping jobs according to logical arrangement.
Types of Departmentation
Ø Customer departmentation : Grouping activities according to specific customer or customers’ group.
PresidentBy customer group
Customers
Commercial users
Manufacturers
Institutions
Ø Functional departmentation : Grouping jobs involving same and similar activities.
President
By function
Accounting
Human Resources
Finance
Marketing
Production
Ø Product departmentation : Grouping activities around products and product groups.
Marketing
manager
By product
Trade books
College texts
Technical books
Ø Location departmentation : Grouping jobs on the basis of define geographic areas.
By geographic location
Vice President
(International operations)
Canadian
Division
Japanese
Division
European
Division
Korean
Division
Reason of Departmentation
Ø Proper specialization
Ø Necessity of control
Ø For better coordination
Ø For special attention of activities
Ø To great competition among different department
Ø To consider local condition
Ø To give interest to executive’s interest
Advantages of departmentation
Ø Employees can develop skills in depth and can progress within a department as they master those skills.
Ø The company can achieve economics of scale in that it can centralized all the resource it needs and locate various experts in that area.
Ø There is good coordination within the function, and top management can easily direct and control various department activities.
Disadvantages of departmentation
Ø There may be a lack of communication among the different departments.
Ø Individual employees may begin to identify with their department and its goals rather than with the goals of organization as a whole.
Ø The company’s response to external change may be slow.
Span of Management
Span of management is the number of people who report to a particular manager.
Again spun of management and control means the number of subordinates a supervisor can supervise effectively.
Formula of A V Graicunas,
I = N (2^N/2+N-1)
Here, I = Total number of instruction with and among subordinates
N = Total numbers of subordinates
Organization with Narrow Spans
Advantages
Ø Close supervision
Ø Close control
Ø Fast communication between subordinates and supervisors
Disadvantages
Ø Supervisors tends to get too involved in subordinates’ work
Ø Many levels of management
Ø High cost due to many level
Ø Excessive difference between lowest level and top level
Organization with Wide Spans
Advantages
Ø Superior are forced to delegate
Ø Clear policies must be made
Disadvantages
Ø Technology of overloaded superiors to become decision bottlenecks
Delegation
Delegation is the process of assigning various degrees of decision making authority to lower level employee.
Reasons for Delegation
In effect a manager who delegate is sharing his workload with a subordinate in whom he has confidence. The main reasons why delegation is practiced are:
Ø A manager is relieved of some less important or less immediate tasks and thus has time for higher-level work.
Ø Delegation can be more efficient because decisions are taken lower down the hierarchy and communication delay are reduced or eliminated.
Ø Delegation is good training for junior personnel. They learn to make decision and to live with the consequences. It is more challenging for them.
Ø Delegation makes the organization more flexible and adaptable.
Ø Delegation satisfies ‘higher-order’ needs and is a necessary part of enrichment programmes and is consciously practiced by many organizations as part of staff development programmes.
Centralization
Centralization is defined as the relative relation of decision making authority by top management.
Decentralization
Decentralization is granting of decision making authority by management to lower level employees.
Matrix Organization
Matrix organization is a structure with both vertical and horizontal lines of authority.
Actually it’s a combination of functional and product forms of departmentation in the some organization structure.
.jpg)
Comments (0)
Post a Comment