Everything you need to know about the process of organising. Organising is the second basic function of the management.
The function of organising is to arrange, direct, coordinate, and control the activities of an enterprise. In other words, organising is the function through which management directs, coordinates, and controls business operations.
Organising involves the establishment of a sound organization structure so that work is carried out as planned. The purpose of organising is for people to coordinate with each other and to work for the achievement of organizational goals.
The managerial function of organising may be called as the ‘process of organising’. When the objectives have been set and policies framed, the necessary infrastructure of organization has to be built up. The concentration goes to activities and functions. These form ‘the building blocks’ of the organisational structure.
The process of organising includes:
1. Determination of Objectives Division of Activities 2. Identifying and Classifying the Work Activities 3. Grouping of Activities 4. Collecting Human and Material Resources 5. Defining Authority and Responsibility
6. Designing a Hierarchy of Relationships 7. Determining the Span of Control and Decentralization 8. Co-Ordination 9. Providing Physical Facilities and Right Environment 10. Establishment of Structural Relationship for Overall Control 11. Reviewing and Reorganising.
Process and Steps of Organising
Process of Organising – Determination of Objectives, Division of Activities, Grouping of Activities, Defining Authority and Responsibility, Reviewing and Reorganising
Process # 1. Determination of Objectives:
Organisation is established for some objective. Overall tasks or activities of the organisation are determined to achieve this goal. For example, if the organisation wants to export goods, it should determine the nature and type of goods to be exported, the sources from where raw material will be obtained, countries where goods will be exported, co-ordinate with foreign buyers etc. Determining total workload of the organisation is the first step in the process of organising.
Process # 2. Division of Activities:
Since one person cannot manage all the organisational activities, total task is divided into smaller units and assigned to members. Work is assigned according to qualification and ability of persons.
Division of work leads to specialisation which has the following benefits:
(a) Greater Output:
Adam Smith illustrated a study where one person could manufacture 20 pins a day if he worked alone. Production of pin was broken into sub-activities where people carried out the following specialised tasks —
Drawing out the wire – straightening the wire – cutting the wire – grinding the point – polishing it – putting the pin-head and so on. It was observed that as against 20 pins in a day, division of work and specialisation enabled 10 people to produce 48,000 pins in a day — watch the wonders of specialisation !
Performing the same task over and over again increases the skills and efficiency of workers.
(c) Facilitates Training:
Since the complex task is broken into smaller units, less- skilled workers can be trained to carry out those activities.
Process # 3. Grouping of Activities:
After the work is assigned to people, those performing similar activities are grouped in similar departments. Various departments like production, marketing, finance etc. are created and filled with people having different skills and expertise but performing similar activities. Grouping of activities into departments is called departmentalisation. Every department works under the supervision of departmental head and is governed by a set of rules, procedures and standards.
Process # 4. Defining Authority and Responsibility:
After creating departments, departmental heads are appointed to carry out the activities of their respective departments. It is ensured that competence of departmental head matches job requirements of the department. Every head has authority to get the work done through departmental members.
The departmental head delegates responsibility and authority related to departmental activities to members of his department. This creates a structure of relationships where every individual knows his superiors and subordinates and their reporting relationships.
Process # 5. Co-Ordination of Activities:
When departments work for their objectives, there may develop inter-departmental conflicts. This can affect achievement of organisational goals. For example, the finance department wants to cut down costs, but marketing department wants more funds to advertise the products. This conflict can be resolved through coordination so that all departments share common resources. Resources are scarce and coordination helps in their optimum utilisation. Coordination becomes possible by defining relationships amongst departments and people working at different positions.
Process # 6. Reviewing and Reorganising:
There must be constant appraisal of organising process so that changes in the organisation structure can be introduced, consequent to changes in the internal and external environmental factors. Constant appraisal and reorganisation is an integral part of the organising process.
Process of Organising – 4 Step Process
For a sound and well-defined organising process, a business needs to undertake the following steps:
1. Identification and Classification of Activities:
Organising as a function begins with identifying all activities that are planned for a business based on their mission, goals and objectives. The process then involves ‘division of labour’ that divides the work process into a certain number of tasks, with each task performed separately by employees or groups of employees. These separate tasks are classified into separate business units. Each unit of the total work will be a ‘job’.
For example- banking activities in a bank include managing accounts, providing loans, managing foreign currency, managing customer queries, etc. These activities are divided into smaller tasks or jobs performed among tellers, loan officers, customer care representatives, etc. Individuals with relevant qualifications and expertise are allotted across each of these divided activities making tellers, loan officers, customer care representatives, etc., as specified jobs.
2. Grouping of Activities or Departmentation:
The jobs identified from the previous step are further grouped together and put into separate departments. These departments can be either functional or divisional where in functional departments are related to common functions grouped into one department or divisional departments are created for businesses on the basis of either types of products, geographical location of the business or the targeted customer groups. From the previous banking example, all jobs related to managing car loans, home loans and business loans will come under the ‘Loans Department’.
3. Assignment of Duties:
Subsequent to containing all activities into specialised departments, employees working in these departments are assigned with only one job in that department that suit their skills, qualifications and capabilities. Employees are assigned and granted with duties and responsibilities through a document called ‘job description’ that clearly defines their responsibilities as shown in the table below.
4. Establishing Reporting Relationship:
The final step involves the establishment of authority that creates a chain of command. This implies that employees will have to report to an authority like the top management or superiors who manage, guide, supervise and oversee the work and responsibilities of their subordinate reporting to them.
A superior-subordinate relationship is defined by which each superior should be aware of the extent of authority he/she can have over their subordinates. The purpose of creating the superior-subordinate relationship is to coordinate the efforts of all individuals/groups/departments towards the common goals and objectives of the business.
Process of Organising – 9 Steps Involved in Organizing Process
Organising is an important function of a manager. It is an ongoing process which involves gathering resources, identifying work to be performed, assigning duties and responsibilities, delegating authority, and coordinating the efforts of the employees. A business cannot function in anarchy. “Getting organized” implies the creation of a harmonious work environment.
Important steps involved in organizing process include the following:
Step # 1. Establishing Objectives:
Although this first step is actually part of planning, it is pertinent to know the objectives of the enterprise. Objectives determine the various activities which need to be performed and the type of structure which needs to be built to achieve the goal. Keeping this is view, Alfred Chandler has said, “Structure follows strategy.” For example- the structure required for hospital or educational institution is different from the structure required for a manufacturing company.
Step # 2. Identifying and Classifying the Work Activities:
It is necessary to determine those work activities which are necessary to accomplish enterprise objectives and plans. It is detailing all the work that must be done to attain the organisations goals. Hence, a list of specific tasks must be prepared.
These tasks must be classified into two categories:
(a) On-going tasks – such as hiring, training, record keeping, storing, selling etc.
(b) Once-for-all tasks – such as setting up a new plant or installing a machine.
Step # 3. Grouping of Activities into Departments or Work Units:
The closely related or similar activities must be grouped into manageable divisions, departments or work units. For example- the activities of a manufacturing company may be grouped into such departments as production, marketing, financing and personnel. This grouping or combining of activities is called departmentation.
At this stage, managers perform the following functions:
(i) Examine each activity identified to determine its general nature.
(ii) Group those activities into interrelated functional areas.
(iii) Establish the basic department design for the organisation structure.
The activities of a department may be further classified into sections. For example- the marketing department may have separate sections such as market research, advertising, credit sales etc. By grouping of activities, the efforts within each department can be coordinated in an effective manner.
Step # 4. Collecting Human and Material Resources:
Assessing personnel requirements and determining the physical resources is very necessary to build the structure of an organisation. Necessary inputs such as men, machines, materials, equipments and other physical means must be collected and arranged for.
Step # 5. Assigning Work, Responsibility and Authority:
After grouping the activities into various departments, each department is put in charge of a manager who undertakes the responsibility of achieving the desired results. At this stage, duties are assigned to different subordinates and heads of departments on the basis of their specialisation.
This step is based on the principle of functional definition. Mere assignment of duties and responsibility is not enough, people must also be given some authority of powers to perform their jobs. Every individual must know his area of responsibility i.e., what work he is to do and also what rights and powers him may exercise in doing it.
Step # 6. Designing a Hierarchy of Relationships:
Drucker has said that “an institution is like a tune; it is not constituted by individual sounds, but by the relations between them.” This step involves the creation of superior-subordinate relationships. It is deciding who will act under whom, who will be his subordinates and what will be his status in the organisation. In a hierarchy, the ranking of managerial positions is done by grant of different degrees of rights and powers to different positions. Here, both vertical and horizontal operating relationships are determined.
Step # 7. Determining the Span of Control and Decentralization:
Each company must decide for itself as to how much decentralisation of authority and responsibility it desires to have. Also, the levels at which various major and minor decisions will be made must be determined. Apart from this, the span of control of superiors i.e. the number of subordinates who should report directly to each superior is decided.
Step # 8. Setting up a Coordination Mechanism:
During working, the overall goals of the company may become submerged or conflicts between work units or members may develop. Hence, organisation must provide a mechanism for coordinating the efforts of employees so that they can work together in team spirit. James Stoner says, “Coordinating mechanisms enable members of the organisation to keep sight of the organisations goals and reduce inefficiency and harmful conflicts.”
Step # 9. Monitoring the Effectiveness:
Organising is an ongoing process. With the time, organisations grow and situations change. Hence, a monitoring system to assess the effectiveness of the organisation and to make adjustments, must the established. It will ensure efficient operation of the organisation to meet present needs.
Process of Organising
In order to complete the organising function of management, following steps are taken:
(1) Knowing the Objectives of the Enterprise
(2) Determining various Activities
(3) Grouping and Departmentalization of Activities
(4) Determining of Key Activities
(5) Assigning Responsibilities
(6) Delegating of Authorities
(7) Defining Inter-relationship
(8) Providing Right Environment
(1) Knowing the Objectives of the Enterprise:
The first step in the process of organisation is to know about the objectives of the enterprise. Although the determination of the objectives of an enterprise is done under the first function of management, i.e., planning but before commencing the process of organising a clear and detailed information about these objectives has to be obtained.
On the basis of the information about objectives various functions designed to achieve these objectives are determined. For example- it can be the objectives of the enterprise to produce mobile phones. In this respect information about how many types of mobile phones will be manufactured, whether the necessary parts required for manufacturing mobile phones will be manufactured or purchased, how extensive the sales area will be – will it be the state, the whole country or international?
(2) Determining Various Activities:
After having learnt about the objectives of the enterprise, necessary functions to achieve the objectives are determined. For example- a Mobile Phone manufacturing company can have different activities like purchase of raw material, purchase of manufactured parts, production, advertisement, sales, arrangement of finance, research, accounts, correspondence, keeping stock of material, recruitment of employees, etc.
(3) Grouping of Activities:
In order to achieve the objectives of the enterprise grouping of various activities is done. Under the grouping of activities all the similar type of activities are given to one particular department. For example- the activities like the purchase of raw material, purchase of ready-made parts, production, stocking the material, research, etc., are assigned to the production department.
Similarly, advertisement and sales activities are given to the marketing department, and department of finance takes care of finance, accounts and correspondence. Taking into consideration the importance and quantity of the work a department can be further divided into many branches or sub-departments.
For example- under the Department of Production, purchase department, stock department, research department, etc., can be established to get the benefits of specialisation. It makes the optimum utilisation of human and material resources possible.
(4) Determining Key Activities:
Key activity signifies the importance of this activity in the achievement of the objectives of the enterprise. Such an activity needs special attention. It depends on the objectives of the organisation to determine the key activity. Thus, in all the organisations key activity can be different. In the given example of a Mobile phones producing company the main problem can be of advertisement because only an effective and large scale advertisement can attract the attention of the consumers towards a new product.
Thus, in this case the function of advertisement is the key activity which requires the utmost attention. For this purpose the advertisement activity should be taken from the purview of the marketing department and be handed over to the newly created advertisement department so that the superior officers are in direct touch with this department and they are in a position to pay full attention to it.
(5) Assigning of Responsibilities:
After dividing the various activities into different departments and sub-departments and having determined the activity that each individual is expected to perform, his responsibility is fixed. In other words, what they are to do for the attainment of the objectives of the organisation.
For example- the purchase manager will be given the responsibility for the purchase of goods; the sales manager will be responsible for the sales; the advertising manager will be responsible for advertisement and the finance manager will take care of the responsibility of finance.
(6) Delegating of Authority:
A person who is saddled with a responsibility must be given some authority too. Authority means the freedom of taking decision, guiding the subordinates and the freedom of supervising and controlling. Authority should be in proportion to the work or responsibility. If the responsibility is greater than the authority given and is insufficient to cope with the responsibility, the responsibility cannot be discharged successfully.
For example- if a marketing manager is assigned the responsibility of increasing sales but has not been given the authority to appoint sales representatives needed for the job, the increase in sales cannot be expected. So long as the authority to discharge the responsibility is not given, the person concerned has no accountability. It is only after granting authority to an individual that he can be made accountable.
(7) Defining Inter-Relationship:
When two or more than two persons work for the attainment of common goals their inter-relationship must be defined very clearly. Everybody should know who is his superior and who is his subordinate? For example- the purchase manager will be the superior for all the employees of the purchase department.
They will receive orders from him and will also be responsible to him. On the other hand, the purchase manager will get orders from the General Manager and will be responsible to him. Defining clearly the inter-relationship helps in establishing coordination.
(8) Providing Right Environment:
Organising it is not only such an activity which includes determination of activities; and the defining of inter-relationship but it also ensures the optimum utilisation of human resources by providing physical resources and the right environment.
For example- the factory and the office should be located at a proper place so that the employees can perform better. There should be proper arrangement for making available sufficient machinery, furniture, stationery, material, etc.
Process of Organising – For Achieving Enterprise Objectives
The managerial function of organizing may be called as the ‘process of organizing’. When the objectives have been set and policies framed, the necessary infrastructure of organization has to be built up. The concentration goes to activities and functions. These form ‘the building blocks’ of the organizational structure. There are no such rules as to which will lead to the best organizational structure.
But the following steps can be of great help in the designing a suitable structure, which will laid in achieving enterprise objectives:
Process # 1. Clear Definition of Objectives:
The first step in developing an organizational structure is to lay down its objectives in very clear terms. This will help in determining the type, stability and basic characteristics of the organization. In fact, organization activities are detailed in terms of objective to be achieved.
Process # 2. Determining Activities:
In order to achieve the objectives of the enterprise, certain activities are necessary. The activities will depend upon the nature and size of the enterprise. For example, a manufacturing concern will have production, marketing and other activities. There is no production activity in retail establishment. Each major activity is divided into smaller parts. For instance, production activity may be further divided into purchasing of materials, plant layout, quality control, repairs and maintenance, production research, etc.
Process # 3. Assigning Duties:
The individual groups of activities are then allotted to different individuals according to their ability and aptitude. The responsibility of every individual should be defined clearly to avoid duplication and overlapping of efforts. Each person is given a specific job suited to him and he is made responsible for its execution. Right man is put in the right job.
Process # 4. Delegating Authority:
Every individual is given the authority necessary to perform the assigned activity effectively. By authority, we mean power to take decisions, issue instructions, guiding the subordinates, supervise and control them. Authority delegated to a person should commensurate with his responsibility. An individual cannot perform his job without the necessary authority or power. Authority flows from top to bottom and responsibility from bottom to top.
Process # 5. Coordinating Activities:
The activities and efforts of different individuals are then synchronized. Such coordination is necessary to ensure effective performance of specialized functions. Interrelationship between different job and individuals are clearly defined so that everybody knows from whom he has to take orders and to whom he is answerable.
Process # 6. Providing Physical Facilities and Right Environment:
The success of an organization depends upon the provision of proper physical facilities and right environment. Whereas it is important to have right persons on right jobs, it is equally important to have right working environment. This is necessary for the smooth running and the prosperity of the enterprise.
Process # 7. Establishment of Structural Relationship for Overall Control:
It is very essential to establish well-defined clear-cut structural relationships among individuals and groups. This will ensure overall control over the working of all departments and their coordinated direction towards the achievements of predetermined goals of business.
It is thus clear that organization provides a structural framework of duties and responsibilities. It not only establishes authority relationship but also provides a system of communication.
The various processes of organization explained above are technically performed through-
(b) Delegation of authority and fixation of responsibilities, and
(c) Decentralization of authority subject to central control through centralization of decision-making.
Process of Organising – Determination of Objectives, Enumeration of Activities, Grouping Activities, Allocation of Fixed Responsibility, Delegation of Authority and Coordination
Important steps involved in the process of organising are:
1. Determination of Objectives – It is the first step to build up an organisation. It will help in setting up of the proposed organisation and what will be nature of the work to be done through the organisation.
2. Enumeration of Activities – The total job is sub-divided into essential activities, e.g., the work of an industrial concern may be divided into the following major functions viz., purchasing, production, financing, personnel, sales, export promotion, etc.
3. Grouping Activities – Under the grouping activities, when similar and closely related activities are grouped together to make division and departments, it is known as departmentalization. Functions like sales, production, finance, etc. are made the basis of primary grouping. Secondary grouping is made on the basis of geographical areas, types of customers, equipment used, processes adopted or constituent parts of major leading function.
4. Allocation of Fixed Responsibility to Definite Persons – Here, specific job assignments are made to different subordinates, or ensuring a certainty of work performance.
5. Delegation of Authority – Authority without responsibility is a dangerous thing and similarly, responsibility without authority, is like an empty vessel. Hence, corresponding to the responsibility, authority is delegated to the subordinates for enabling them to show work skill.
6. Coordination – Coordination is an integrating function. This is necessary for most desirable performance. The performance of departments and sections are to be compounded to achieve objectives.
Process of Organising – Steps: Identification and Division of Work, Departmentalisation, Alignment of Duties and Establishing Reporting Relationships
One day a class teacher gave general instructions to his/her class “please change the class boards with new information, arrange the class library and collect all the books from students by tomorrow”. What was happening in the class the next morning was unimaginable. There was chaos all over but no work was done. Can you identify the reason? The class teacher forgot to divide the work, assign responsibilities and develop reporting relationship. In a way, he/she did not ‘organise’.
A good and effective organiser follows series of steps to achieve the desired goal.
Let us discuss the steps involved in the process of organising:
1. Identification and Division of Work:
The first step in organising is to follow a plan and identify the work to be done. Thereafter the work must be divided into smaller and manageable activities to avoid duplication and share the burden among employees.
Example – The teacher should have assigned the responsibility of boards to one group, library maintenance to another and collection of notebooks to the third group.
Departmentalization means selecting the activities which are similar in nature and grouping them together. The grouping of activities facilitates specialization.
i. Activities can be grouped on the basis of functions viz., production, marketing, finance, warehousing, administration etc.
ii. If an organisation has a product line then, activities can be grouped on the basis of products viz. shoes division, garments division, bags division etc.
iii. If the organisation is working in different areas then activities can be grouped on the basis of region/territory viz. North zone, South zone, West zone, East zone.
3. Assignment of Duties:
Once the work is divided and departmentalized then follows the allocation of responsibility. People are employed in each department and work is allocated depending on the competencies and skills of each employee. It is very important that for effective implementation of plans the work is assigned to such people who possess essential abilities and skills to perform their jobs with maximum efficiency.
Example – Every school has departments for each subject like Mathematics department, English department, Languages department etc. Teachers who have proficiency in Mathematics and skills to teach the subject will be employed under Mathematics department. Among all teachers, the teacher who has the ability to administer the overall working of the department will be appointed as Head of the department.
4. Establishing Reporting Relationships:
If there are too many people working in a group it is essential for group members to know from whom they have to take orders and to whom they are accountable. The clearly defined relationships helps to create a hierarchal structure and facilitates coordination amongst different departments.
Example – The teachers working in a department must know that they have to take instructions from and report to the head of the department. The head of the department must know that he/she will take instructions from and report to vice principal or principal. The heads of different departments can discuss collectively about the overall development of school.
Process of Organising – Division of Work, Departmentalisation, Assigning Duties, Delegation of Authority and Coordinating Activities
The important steps of organising are discussed as under:
1. Division of Work:
All the work cannot be done by a single man or machine. Therefore, the initial step will entail dividing the work into different and specific areas or jobs. The division of work enables people to acquire skills and experience in their particular area, and consequently brings efficiency into the organisation. The management has to identify all the different activities required to be done in order to achieve organisational objectives.
In a manufacturing organisation, production and sales are the two major activities. In a trading organisation, purchases and sales are the two main activities. Service organisations provide services such as transportation to their customers. In carrying out these major activities, business units have to perform many other activities such as producing, financing, marketing, accounting, recruiting employees, etc. Thus, the initial step is dividing the entire work into specific jobs. This is known as the division of work in management terms.
This is the step of grouping the work into specific departments, also known as departmentalisation. Once the activities have been identified, they have to be grouped into units and each group is placed under the charge of a manager. Thereafter, a number of groups will be combined and grouped into larger units or departments. After that, departments may be linked depending on their related activities or functions. Organising ensures all departments complement the activities of each other so that they support one another as far as the overall organisational objectives are concerned.
3. Assigning Duties:
In this step, the employees are assigned duties as per their qualifications, experience and suitability to a particular job. Areas such as production and maintenance require certain technical skills and qualifications, and as such, jobs in these areas are given too technically qualified people. People having good skills in communication are given jobs in sales department. People with an aptitude for figures and numbers may be seen fit for the accounts department.
Managerial positions are defined and the extent of their power and authority is fixed. In short, who-is-who and who-will-do-what is decided. People are assigned their duties after matching their capabilities to the job requirements.
4. Delegation of Authority:
After assigning duties, authority is delegated to employees. Delegation of authority is very important as it gives a person the right to carry out his or her responsibilities. This creates the chain of command right from the top to the bottom and a hierarchy is thus created. In a hierarchy, the authority flows from the top to the bottom.
The top has more authority than the lower levels. People are made aware of their responsibilities and authority. Lines of accountability are drawn in black and white. The delegation of authority is responsible for creating subordinate- superior relationship. Thus, channels of communications are also created.
5. Coordinating Activities:
This is where the activities of different individuals are carefully synchronised, and interrelationships clearly defined. It is at this stage that members of the organisation know from whom each has to take instructions and to whom one has to issue instructions. The effect of this coordination is that it lends a feeling of teamwork and an environment of efficiency within the organisation.
Process of Organising – 3 Major Steps: Division of Work, Formation of Departments and Reporting
Organising means to coordinate and prepare for activity. An organisation is a unified whole of the people and their activities. It is a functional unit with thick walls between functional departments. The business organisation is thus a structure and organising is the process.
The process of organising involves the following major steps:
1. Division of Work:
The organisations have strong internal focus on job descriptions and functional specialisations to create conditions for work-flow in a streamlined manner. There are superiors and subordinates who perform similar or different duties to ensure completion of a particular unit of work.
2. Formation of Departments:
Taking into account the available resources and various aspects of coordination, different departments are created at different levels in which jobs are grouped on the basis of their functional direction. To illustrate Materials Management Department may function alongside the Purchase Department to allow better coordination and reduce the ‘lead time’.
The divisions and departments function within the broad parameters of an administrative set up. As a complex organism, the organisations, besides the reporting levels, have cross- functional relationships between different departments or divisions. A definite type of ranking order called hierarchy exists which allows reporting and authority to flow in different directions.
Process of Organising
The organising process involves five broad steps:
Step-I Determining Activities:
It is necessary to determine those activities which are essential to accomplish the organisational objectives. The process of organising involves identification and division of work. The whole work is to be divided into smaller activities so that duplication is avoided and work can be completed as per the organisational objectives. Division of work facilitates specialisation in work.
For example, a school may have different departments like teaching, office administration, library, sports, etc., and a particular department, say teaching, can further be sub-divided into smaller departments on the basis of subjects like Commerce, Economics, English, etc.
Step-II Grouping of Activities:
The process of grouping the activities of similar nature is called Departmentalisation. Departmentalisation facilitates specialisation and coordination in the organisation.
Activities can be grouped in the following ways:
i. On the basis of functions – Various activities are grouped into different departments on the basis of various functions in the organisation. For example, Purchase Department for purchase functions, Finance Department for financing activities, Marketing Department for marketing activities, etc.
For accomplishing the works which are similar in nature different tasks, processes or skills required are to be placed together so as to achieve the organisational objectives.
ii. On the basis of types of products – In this case, activities are grouped into different departments on the basis of products manufactured by the organisation.
iii. On the basis of geography – Activities are grouped on the basis of geographical locations. For example, Northern Zone, Eastern Zone, etc.
Step-III Assigning Duties:
After departmentalisation, the next step is to assign the work to the employees according to their skills and competencies. In order to ensure effective performance, it is essential that parity is created between the nature of a job and ability of the employee responsible for that particular job.
Step-IV Delegation of Authority:
Delegation of authority means when duties and tasks are entrusted to the subordinates by the superior, authority should be granted to them to perform those duties and tasks well. While delegating authority managers should work on establishing authority responsibility relationships in an organisation structure.
This implies the allocation of authority and responsibility among employees of the enterprise in such a way that each person should know who is responsible to whom and for what. It further creates hierarchy in the management. Top management enjoys the highest degree of authority.
The degree of authority reduces as the hierarchy flows towards lower level of management. Authority flows from top to bottom in the hierarchy. Further, establishing reporting relationships facilitates coordination at all levels of management.
Step-V Coordinating Activities:
In order to create a balance and structure in the organisation, the activities of members need to be well- coordinated. Coordination in the organisation is essential for better performance of employees as well as for the timely achievement of organisational goals.
Process of Organising
The organising function is performed by a manager by taking the following steps:
1. Identification of Activities:
First thing first. The activities to be carried out by the organisation have to be identified, grouped and classified into units.
2. Departmentally Organising the Activities:
This step requires the manager to combine and group similar and related activities of the company into units or departments. This process is called departmentalisation.
3. Classifying the Authority:
The next step is about classifying the authority and how much of it is allocated to the managers in the hierarchy. The job of top management is to formulate the policies, the middle level staff is into departmental supervision and the lower level workers supervise the foremen. Clarifying the authority is useful in making the company’s operations efficient. It also arrests the wastage of resources, prevents duplication or overlapping of efforts and aids smooth working of the company.
4. Coordination between Authority and Responsibility:
Healthy relationships between various groups facilitates smooth interaction which assists the organisation in achievement of its goals. Every employee gets acquainted with the authority and gets heedful of the person they are supposed to report. A fair organisational structure is out in the open for all the employees.
Process of Organising – Identification and Division of Work, Grouping of Activities, Assignment of Duties and Delegation of Authority
The process of organising consists of the following steps:
1. Identification and Division of Work:
Organisation exists to achieve certain objectives. The first step, therefore, is to determine the tasks that must be performed to achieve the established objectives. Objectives bring about unity of direction in the organisation. In this step the total work is divided into various activities. For instance, the total work of a manufacturing concern may be – (i) purchase of raw material, (ii) purchase of spare parts, (iii) marketing research, (iv) production, (v) raising funds, (vi) maintaining accounts books, etc.
2. Grouping of Activities:
The various activities are grouped into departments or divisions according to their nature. For instance/in a manufacturing concern, different kinds of purchases like raw material, spare parts, etc., can be put under purchase department. Similarly, advertisements, sales promotion and selling can be given to marketing department. Such grouping of activities is known as – “Departmentation”.
The activities may be grouped on the basis of functions, products, territories, customers, etc., depending on the nature of the business. Each job should be classified under some category. This will avoid duplication of efforts and at the same time ensures nothing is left out. Each function or department may further be sub-divided to get the benefits of specialisation. It makes the optimum utilisation of human and material resources.
3. Assignment of Duties:
After grouping the various activities under different departments and sub-departments, the jobs are assigned to the individuals on the basis of their aptitude and skills. Each individual is allotted a specified job according to his aptitude and skills and made responsible for the performance of that job.
4. Delegation of Authority:
An individual who is entrusted with the responsibility must be given authority necessary to carry out the duties assigned to him. It is the duty of the management to clearly define the relationships in the organisation. Everybody should clearly know to whom he is accountable. This will help create a logical structure of authority-responsibility relationships and establish coordination.
Process of Organising
The following steps constitute the process of organising:
1. Determination of Objectives:
To start with the process of organising, objectives of a business should be determined on the basis of plans framed. Objectives will help determine the broad economic and social goals to be accomplished by the organisation. However, since organisational plans change with the passage of time, organisational objectives have to be also restructured.
2. Determination of Activities:
In the next stage, organisational activities which lead to accomplishment of organisational objectives are to be identified. Interrelationship between the activities is also analyzed on the basis of which they may be grouped.
3. Grouping or Classification of Activities:
In this stage grouping of activities related to one another is done. Usually, this helps in laying out the departments. Grouping and classification of activities helps to attain the benefits of specialisation.
4. Allocation of Duties and Responsibilities:
After grouping of activities assigning duties to competent individuals is done, after deeply analyzing their educational, professional and experience-oriented competencies. Fixation of duties and responsibilities is done for each and every employee of the organisation, so that everyone has their defined scope of operation.
5. Delegation of Authority:
To equip every individual to effectively shoulder the duties and responsibilities assigned to them, there must be delegation of authority. Delegation of authority must be commensurate to the duties and responsibilities assigned. Every individual subsequently delegates authority to individual in the lower hierarchical chain to them.
In this way the chain of command is established. However, accountability arises along with the delegation of authority. While authority and responsibility moves downward in the scalar chain of command in an organisation, accountability moves upwards.
6. Preparation of Organisation Charts and Manuals:
Thereafter, organisation charts and manuals are to be prepared for smooth running of the operations of an organisation. Organisation charts depict the delegation of authority and responsibility and the vertical and horizontal relationships of the different departments and the individuals manning the organisation, while, organisation manuals convey instructions for conducting regular activities.
7. Evaluation of Activities:
Finally, evaluation of activities is done to judge the effectiveness of performance of the different departments. This stage reveals if any reorganising process is necessary to steer the activities of the departments in the desired direction.