Sunday, March 11, 2012

Principle of Business Management - Organizing

The term 'Organization' can be used in different senses. It can be used as a group of person working together to as a structure of relationships or as a process of management.
When it is used to refer to a group of person working together, it means a concern, an undertaking or as enterprise.
When it is used to refer to a structure of relationships, it means the structural relationships among the positions and jobs and person (i.e., the framework of responsibility and authority) through which the enterprise functions, and it is called organization structure.

Allen – “An organization is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.”
Mooney and Reily – “Organization is the form of every human association for the attainment of a common purpose.”
Koontz & O’Donnel – Organizing involves the establishment of an intentional structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part f it, the grouping of these activities, the assignment of such groups of activities to manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationships, horizontally and vertically in the organization structure.
Thus organizing function of management includes
a)      Division of work
b)      Grouping of activities
c)       Assignment of duties
d)      delegation of authority and
e)      Defining relationships.

Nature or characteristics of organization -
On the basis of definition we may identify the characteristics of organization as follows –
a)      Division of Labour – Every organization is characterized by the division of work.  The total efforts of the group are divided into different functions and each function is assigned the function for which he is observed to be suited best.
b)      Co-ordination -  As different persona are assigned different functions and all these functions aim at achieving organizational goals, hence necessary relationships are established between them so as to co-ordinate all the activities of all the people of the organization.
c)       Objectives - Organizations exist to achieve objectives, without objectives organizations cannot exist for a long period.
d)      Authority – Responsibility structure - In an organization the positions are so ranked that each of them is subordinate to the one above it and is superior to the one below it.  Each position is delegated necessary authority and responsibility so as to enable it functions effectively.
e)      Communication - Every organization has its own channels or methods of communication.  Effective communication is vital for success of management

There are many principle of organization. The main principles are:
1.       Principle of Objectives: The principle of Objectives stresses the need for setting the objectives of the enterprise. The setting of the objectives of the enterprise is necessary, because the formulation of the organization structure s very much influence by objectives of the enterprises
2.       Principle of Unity 'of Objectives: The Principle of unity of objectives implies that / every part of the organization and the organization as a whole should be geared to the basic objectives of the enterprise, in other words the main objectives of the enterprise.
3.       Principle of division of work and specialization: Specialization has become the / order of the day. So, sound and effective organization must be built on the principle of specialization
4.       Principle of Functional definition: The principle of functional definition implies that / the functions, duties and responsibilities of the different departments and position in the organization their authorities and their relationships with other departments and position must be clearly defined.
5.       Principle of balance of various factors: The principle of balance of various factors suggests that there should be popper balance in the formal structure of the organization in regard to various factors; For instance, there should be proper balance among the; different segments or departments' of the undertaking. That ism, the work- load should be properly distributed among the various departments to maintain balance and harmony the working of the organization. There should be balance in authority allocation to different departments.
6.       Principle of simplicity: The principle of simplicity means that the organization structure should be simple with a minimum number of managerial levels. If there are a large number of managerial levels in the organization structure, there may raise the problem of effective co-ordination and communication
7.       Principle of Span of Control or Span of Management: Span of control or span of management refers 10 'numbers of subordinates a superior can direct, guide and control effectively. The span of control should be minimum, because there is a limit to the number of subordinates that can be effectively supervise by a superior.
8.       The Scalar Principle, the scalar chain, the chain of the command or line of authority: Scalar chain is the chain of superiors. the line of command or the line of authority form the highest rank to the lowest rank in the organization established for the purpose of communication in both the directions, it establishes the channel through" which communications should pass, and also states the superior- subordinate relationships in the organization.
When the strict following of the line of authority becomes detrimental, and there is a need of swift action, the scalar chain can be short-circuited by taking the permission of their immediate superiors. Through this arrangement, the scalar chain principle is safeguarded, and at the same time, the subordinate officers are enabled to take swift action. Such an arrangement is known as Gang Plank. In this context, it must be noted that the short circuiting of the scalar chain is permitted only on routine matters. But matters pertaining to decision -making should be routed through the usual scalar chain.
9.       Principle of responsibility: Responsibility is the obligation of performing the duties assigned. Responsibility is fixed with different positions in the organization. Responsibility cannot be shifted to others. The Principles of responsibility implies that the superior cannot avoid responsibility by delegating authority to his subordinates. He (i.e., the superior) must be held responsibi1ity for the acts of his subordinates to whom he has delegate authority.
10.   Principles of delegation of authority: With the allocation of duties and responsibilities, u'1ere must logically go the grant of necessary authority to the subordinates so as to enable him to perform his duties efficiently. The Principle of delegation of authority emphasizes that the organization structure should provide for the delegation of authority to the subordinates.
11.   Principle of unity of command: The principle of unity of command suggests that each subordinate should have only one superior. In other words there should not be dual subordination. Dual subordination results in undermining of authority, delay, confusion, disorder and indiscipline of subordinates.

 Importance of Organization -
Organizing is the fundamental activity of management.  It is necessary for management to mobilize men machinery money and materials or resources for achieving organizational objectives.  Organizing provides basis for other functions of management, hence scientifically designed organization helps manager to function efficiently and effectively.  The importance of organization may be explained as follows –
a)      Efficiency of Management: A Good organization helps in making optimum use of available resources for achieving organizational objectives, increasing efficiency of management.
b)      Facilities Administration: A properly designed and balanced organization facilitates both management and operation of the enterprise.
c)       Facilitates growth and diversification: On account of sound organizational structure growth and diversification can be successfully achieved for improving competitive strength of the organization.
d)      Facilitates Technological progress: Sound organizational structure is useful for coping with technological changes which have become inevitable under modern conditions.
e)      Encourages healthy human relations: Scientific and balanced organizational structure when manned by right type of people tends to motivate people through job satisfaction that promotes healthy human relations in the organization.  It helps maintaining morale at a higher level.
f)       Stimulates initiative and creativity: Sound organization stimulates creative thinking and initiative by providing opportunities to experiment with new ideas for developing new ways of doing things.
g)      Reduction in work load of top management: Sound organization stimulates creative thinking and initiative by providing opportunities to experiment with new ideas for developing new ways of doing things.
h)      Smooth direction: In sound organization right men are placed at right place hence direction tends to become smooth and effective.
i)        Easy communication
j)        Integration of individual efforts to achieve organizational goals.
k)      Effective control over employees
l)        Continuity and certainty of work performance.

Steps of Organizing.
a)      Identification and Division of Work: The first step in the process of organizing involves identifying and dividing the total work to be done into specific activities (called jobs) in accordance with previously determined plans. Such division of work into jobs is necessary because one individual cannot perform the entire work. By dividing the work, the burden of work can be shared among the employees.
b)      Grouping jobs and Departmentalization: The second step in organizing is to combine or group similar/related jobs into larger units called departments, divisions or sections. This grouping process is called “Departmentalization”. Departments can be created using several criteria as a basis such as products territory etc.
c)       Assignment of Duties: It is necessary to allocate work to various employees. Once departments have been formed, each of them is placed under the charge of an individual, called departmental head (e.g., production, manager, finance manager, marketing manager, etc.) Jobs are then allocated to the members of each department according to their skills and competencies.
d)      Establishing Reporting Relationships: Merely allocating work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. The establishment of such reporting relationships helps in coordination amongst various departments.

Organizing function is basically concerned with the allocation of tasks and delegation of authority.  On account of different practices of distributing authority and responsibility among the members of the enterprise several types of organizational structures have been evolved along with formal organizations non formal organizations also emerge spontaneously and naturally.  Such non-formal arrangement is psychologically and socially oriented.  When all the needs of the employees are not satisfied by the formal organization, non-formal organizations tend to develop in the organization.



Formal (Internal)                                                                                                              Informal

1)      Line Organization
2)      Functional Organization
3)      Line and staff organization
4)      Committee Organization

In the words of Chester Barnard, "An organisation is formal when the activities of two or more persons are consciously co-ordinated towards a common objective".
Features of Formal Organisation:
The main features of formal organisation are:
(a)    In a formal organisation, the position, authority, responsibilities, accountability of each level are clearly defined.
(b)   It prescribes the relationships amongst the people working in the organisation.
(c)    The formal relations in the organisation arise from the pattern of responsibilities that are created by the management.
(d)   The structure is consciously designed to enable the people of the organisation to work together for accomplishing the common objectives of the enterprise.
(e)   A formal organisation is bound by rules) regulation and procedures.
(f)     It is deliberately impersonal.

Advantages of Formal Organization

1)      As definite duties and responsibilities of each employee are clearly fixed, it tends to reduce conflicts among employees.
2)      Over lapping of authority and responsibility is avoided.
3)      Entire organization is systematically controlled.
4)      Standards of performance are specified for all the workers which tend to motivate the employees.
5)      On account of classification of tasks, right person in place at a right place, hence job satisfaction and security is experienced by the employees.
6)      For the purpose of evaluation and placement there are no chances for bias, nepotism, favoritism etc.           
7)      It makes organization less dependent on one man.

Disadvantages of Formal Organization

1)      In certain cases, formal organization may reduce the spirit of initiative, and dependence on superiors tends to increase.
2)      Authority may be used, sometimes for sake of convenience of the employees without considering the need for using the authority.
3)      As size and activities of formal organization increases, problems of co-ordination and control become difficult.
4)      It tends to neglect sentiments and values of the employees in the organization.
5)      It may reduce speed of informal communication.

Man is a social animal and wants social interaction.  Formal organizations are jointed by people to satisfy their needs but these organizations cannot satisfy all the needs of people because of their nature.  Hence informal organization emerges in all the formal organizations.
According to Davis informal organizations is” that network of personal and social relations which is not established or required by formal organization.  It is a shadow organization”.
Informal organization is natural or spontaneous network of personal and social relationships between individuals formed on the basis of personal attitudes values emotions, friendships prejudices, interest’s likes and dislikes, regional affinity, common work place etc.  Informal organization is all pervasive and is found at all levels of management.  It consists of small informal groups with their own behavioral patterns, status systems, beliefs and goals.

Causes of Emergence of informal Groups 

1)      To satisfy social needs which are not satisfied by formal organizations.
2)      To enjoy sense of belongingness and identification.
3)      To get knowledge of approved behaviour determined by the informal organization.
4)      To get outlet of employees’ frustration.
5)      To achieve objectives which is not possible in formal organizations.
6)      To get opportunities for influence and creativity.
7)      To perpetuate cultural values.
8)       To promote communication and obtain information.

Features of Informal Organisation:
The chief features of informal organisation are:
1)      Informal Organisation is not established by any formal authority. It arises from the personal and social relations amongst the people working in the organisation.
2)      Informal Organisation arises spontaneously, and not by deliberate or conscious efforts.
3)      It is influenced by the personal attitudes, emotions, whims, likes and dislikes, etc. of the people in the organisation.
4)      It is based on rules, regulations and procedures.
5)      The inter-relations amongst the people in an informal organisation cannot be charted (i.e., cannot be shown in an organisation chart).

Advantages of Informal Organizations:

1)      Informal group gives social satisfaction to the employees.
2)      It promotes sense of belongingness.
3)      It provides safety valve for emotional problems of the employees
4)      It provides social control.
5)      It helps developing communication channels in the organization
6)      It provides help on the job to the employees during illness, accidents etc.
7)      It serves as a check on authority of a manager.
8)      It  provides fertile ground for future leaders
9)      it supports in achieving organizational goals
10)   It reduces supervision.
11)   It may help manager to overcome their natural limitations of ability.

Disadvantages of Informal Organizations:

1)      Informal groups generally resist change.

2)      Interest of formal and informal groups may clash with each other.

3)      As informal groups set their own norms about quote of work to be done hence productivity remain below optimum (maximum) level.

4)      Members of informal organization may adopt group think philosophy by way of assuming that group decision is the only right decision.

5)      Informal group ends to promote rumors, grapevine which spreads at a much faster rate and hence harmful to the organization.

6)      Mangers should not resist formation of in formal groups but try to convince it to contribute to organizational goals.

Difference between formal and Informal organization:

It is official, so it has prescribed structure of roles and relationships.  It is planned and deliberately created by management
It is in unofficial or natural having no specific structure.  It arises spontaneously without official sanction by management
It is based on delegation of authority & may grow to very big size.  It is mechanistic and brings order in the organizations.
It arises through social interactions between employees.  It usually remains small is size.  It is humanistic and gives satisfaction to employees.
It is deliberately created impersonal with emphasis on authority, functions, status differentials and down ward communications
It is personal with emphasis on people and their intricate relationships, informal rankings and multidimensional communications. 
It is hierarchical and pyramid shaped.
It has no definite shape, and no division of work.  It is structural less and ill defined.  It is psychosocial system.
Its tasks, goals and values are economic oriented towards efficiency, productivity profitability and growth.
Its tasks, goals and values are socio- psychological centering on individual and group satisfaction affiliation co-friendship esteem etc.
6. Charts and Manuals
It can be shown in the form of charts and manuals of the organization.
It finds no place on organization charts and manuals.
7. Role and Relationships
It has written roles and procedures, authority and responsibility are clearly defined.  There are well defined roles and relationships.
It has unwritten conventions and norms there are no written rules or procedures.
8. Authority
Formal authority is institutional, it attaches to a position and a person exercises it by virtue of his position. Formal authority flows downwards as it is delegated. 
Informal authority attaches to a person and it flows upwards or horizontally as it has to be earned there is informal leader and has strong influence.
9. Behaviour
It has prescribed system of behaviour .Rewards and punishments are given on the basis of desired behaviour rewards can be both monetary and non monetary.
It is unwritten norms of behaviour, enforced through mutual consent rewards include social esteem, satisfaction group leadership while punishments are censure isolation, boycott etc.
It is rational and created to meet organizational goals.  It is stable, permanent and predictable.
It arises to satisfy man’s quest for social satisfaction It is relatively fickle and unpredictable.
Group membership is rigidly defined, every employee belongs to one workgroup only.
One person can be member of several informal groups of his choice.  He may be a leader in one group and a follower in the other.

The main types of integral organisation are:
1.       Line, military or scalar organisation.
2.       Functional Organisation.
3.       Line and staff organisation.
4.       Committee form of organisation.

Meaning of Line Organisation:
Line organisation is a direct type of internal organisation. It is the oldest and the simplest form of integral organisation. Line organisation is a type of internal organisation in which there are direct vertical authority relationships (i.e., superior-subordinate relationships), connecting the positions at each level with those above and those below in the hierarchy. In other word, it is a form of organisation in which the relationships between the various levels of management form a hierarchy of authority or chain of command.

Chart showing the line organisation:
The following chart depicts the line organisation:
            Authority                                                                                General Manager

Production Manager

Assistant Production manager




Features of Line Organisation
The chief features of line organisation are:
1)      The line organisation forms a vertical line relationship from the top to the bottom of the organisation.
2)      There is authority relationship or superior-subordinate relationship in the line organisation. Each position in the organisation structure has authority over its subordinate, and is accountable to his superior.
3)      Under this system, authority flows from the top of the structure to its bottom level step by step through downward delegation of authority, while responsibility flows upward from the bottom of the structure to the top step by step.
4)      There is no provision for staff officers (i.e., experts or specialists) to offer advice to the line officers under this system.

Advantages of Line Organisation:
Line organisation has certain advantages. They are:
1.       This system is simple to establish and operate.
2.       Under this system, responsibility and authority are clearly defined. Every member of the organisation knows his exact position, to whom he is responsible and who are responsible to him. Because of the clear fixation of responsibility, no person can escape from his liability.
3.       There is unity of command and control under this system. That is, a subordinate receives orders from only one superior and is responsible only to one superior.
4.       The unified authority and control implicit in this system ensures better discipline among the employees.
5.       The unification of authority and responsibility present in this system facilitates quick and prompt decisions.
6.       As all the activities relating to one department or division are managed by one executive, there can be effective co-ordination of activities.
7.       Under this system, communication is easy and quick.
8.       This system is flexible or elastic, in -the sense that, as each executive has sole responsibility in his own position and sphere of work, he can easily adjust the organisation to changing conditions.
9.       This system is less expensive, as there are no staff specialist to advise the line authorities

Disadvantages of Line Organisation:
Line organisation is not free from defects. It suffers from several drawbacks. The main drawbacks are:
1.        Under this system, as only one executive manages all the activities in his department, there is no scope for specialization.
2.       As only one executive is required to manage all the activities in his department, he is over-burdened, As a result, he may not be able to direct and control the efforts of his subordinates, properly.
3.       As all the decisions relating to a department are taken by only one executive, there is unitary administration. Consequently, the successful functioning of the department depends on the abilities of the departmental head.
4.       Under this system, only one executive controls all the activities of department and gets undue importance. The importance of the other people in the department is not recognised. As a result, there may be lack of co-operation and team-spirit.
5.       Since only one executive controls all the activities in his department, there is much scope for nepotism and favouritism.
6.       Under this system, the subordinates should follow the orders of their superior without expressing their opinion on the orders. That means, there" is limited communication.
7.       Under this system, the lower level managers lose their initiatives and interest, as they have to merely carry out the orders and instructions of their superiors.
8.       When there are too many levels of management, the process of communication may become difficult under this system.
9.       There is the danger that the line authorities may become autocratic or dictatorial.
10.   Line organisation is rigid and inflexible.
Suitability of Line Organisation:
It is true that line organisation suffers from many limitations. But its importance has not been reduced. It is considered suitable for:
(a)    Small concerns, i.e., concern which carry on their operations on a small scale.
(b)   Concerns which have a small number of subordinates.
(c)    Concerns which are engaged in operations which ate mainly of routine type.
(d)   Concerns which has straight and simple methods of machines.
(e)   Concerns where activities are performed by automatic machines.
(f)     Industries where continuous processes are followed.


Meaning of Functional Organisation:
Functional organisation is a type of organisation in which the work of the whole enterprise is divided into a number of specialized functions like production, purchasing, marketing, office management, personnel relations, etc. and each of these spcci~11ised functions is entrusted to a functional expert or specialist.

Features of Functional Organisation:
Functional organisation has certain characteristic features. The main features of functional organisation are:
1)      Functional organisation is a complex type of organisation when compared to line organisation and line and staffing organisation.
2)      There is specialization in functional organisation, as the work of the concern as a whole is divided into different specialized functions like production, purchasing, marketing, finance, personnel relations, etc. and each specialized function is entrusted to a functional expert or specialist.
3)      In this type of organisation, the line executive receives instructions not only from his line boss but also from one or more specialists. For instance, a foreman in the production department may receive orders and instructions from the superintendent, who is his line boss, and also from the specialists like the personnel manager, marketing managers, financial manager, etc.
4)       Under this system, the principle of unity of command is not observed, as a single worker has to get instructions from more than one specialist.
5)      In this type of organisation, more importance is given to staff specialists or functional experts. The functional experts are given even some line authority.
6)      In this type of organisation, there are three types of authority relationships, viz., (i) line authority relationship, (ii) staff authority relationship and (iii) functional authority relationship.
7)      Under this type, the executive have to perform limited number of operations.

Advantages of Functional Organisation:
Functional organisation has certain advantages. They are:
1.       This system ensures maximum use of the principle of specialisation at every work point and helps the enterprise to enjoy the benefits of specialisation of functions.
2.       As the workers have to perform only a limited number of functions under this type of organisation, this system contributes to higher efficiency of the workers.
3.       As there is no scope for one-man control in this form of organisation, this system ensures co-operation and team-work among the workers.
4.       Under this system, the line officers are freed from the worries of technical problems faced by the workers, as instruction regarding the technical problems flow to the workers directly from the specialists.
5.       This system is flexible, in the sense that any change in the organisation can be introduced without disturbing the whole organisation.
6.       This system is quite suitable for training young specialists.
7.       This system ensures the separation of mental functions (i.e., planning) from manual functions (i.e., functions at the workshop), and thereby, simplifies managerial control.

Disadvantage of Functional organisation:
Functional organisation suffers from some drawbacks. They are:
1.       Under this type of organisation,' there is many supervisory staff of equal rank. This may lead to conflicts among them.
2.       As the workers have to work under many bosses under this system, it is difficult to maintain discipline among the workers.
3.       As there are several functional experts in the organisation under this system, there may be the difficult or co-ordination.
4.       The speed of action may be hampered under this system, as the control is divided among several specialists.
5.       As there are several functional experts under this system, the top management may find it difficult to fix responsibility, when there is unsatisfactory progress.
6.       As a large number of specialists, there experts are required to be appointed under this type organisation, this system is very expensive.
7.       It is very difficult to put this system into operation.
8.       This system makes relationship more complex.

Suitability of Functional Organisation:
Functional organisation is quite good for division of work at the top. But for the division in the various departments, this system is not very successful, as there is no clear line of authority.
Chart showing Functional Organisation
Board of Directors

Manager                              Manager                                              Manager                                                              Manager
Production                         Marketing                                           Finance                                                                                Personnel

Section                                 Section                                                 Section                                                                 Section
Officer I                               Officer II                                              Officer III                                                             Officer IV


In line organisation, there is unity of command, hut there is no specialization. In functional organisation, there is extreme specialisation, hut there is no unity of command. To overcome the defects and to take advantage of the merits of both line organisation and functional organisation, line and staff organisation has been evolved. Line and staff organisation is the Usual form of organisation found in modern enterprise.

Meaning of Line and Staff Organisation:
Line and staff organisation is a combination of line organisation and functional organisation. It is a type of organisation in which there arc two sets of officers for administration, viz., (1) line officers who have the authority and command over the subordinates and are responsible for the accomplishment of the results, and-(2) staff officers or specialists who render experts advice to the line officers to help them to discharge their functions efficiently.

Features of Line and Staff Organisation:
The main features of line and staff organisation are:
1.       Line and Staff organisation is a combination of line organisation and functional (i.e., staff) organisation. Under this system, there are line officers who have authority and command over the subordinates and are accountable for the tasks entrusted to them, and there are staff officers or specialists to offer expert advice to the line officers to perform their tasks efficiently.
2.       Line and staff organisation clear distinction between the two aspects of administration. Viz. planning and execution. The staff personnel prepare the plans and give advice to the line officials, and line officials execute the plans with help of the departmental personnel.
3.       The line and staff organisation is based on the principle of specialization, in the sense that the staff officers specialize in the planning function and the line officers specialisation in the execution or doing function of the administration.

Advantage of Line and Staff Organisation:
Line and staff organisation enjoys certain advantages. They are:
1.       Specialisation is ensured under the line and staff organisation2 as the staff officers specialize in the planning function, and the line officers specialize in the execution or doing function.
2.       Line and staff organisation has greater flexibility, in the sense that new specialized activities can be added to the line activities without disturbing the line procedure.
3.       The expert advice and guidance given by the staff officers to the line officers benefits the entire organisation.
4.       As the decisions are made by experts or specialists, there will be sound managerial decisions under this system.
5.       As the staff officers look after t11e detailed analysis of each important managerial activity, the line officers get a big relief.
6.       Under this system, many varieties of responsible jobs are available. That means more opportunities are there for the advancement of the workers under this system.

Disadvantage of Line and Staff Organisation:
Line and staff organisation also is not free from drawbacks. It suffers from a number of limitations. They are:
1.       If the pattern of authority relationship between the line officers and the staff officers is not clearly indicated, there will be considerable confusion in the organisation. Further, there may be conflicts between the line officers and the staff officers.
2.       As the staff officers do not have the authority to put their recommendations into practice, their advice may be ignored by line officers.
3.       As the staff officers are not 'concerned with the execution of the plan, they may not take proper care before they advice the line officers. That means this system may encourage carelessness on the part of the staff officers.
4.       This type of organisation requires the appointment of a large number of staff officers or experts in addition to the line officers. As a result, this system becomes quite expensive.
5.       As the line system is expensive, small concerns cannot afford.


1.       Line organisation is a simple form of organisation. But functional organisation and line and staff organisation are complicated.
2.       In the case of the line organisation, there is clear-cut line of authority .m the case of functional organisation, there is no clear-cut line of authority .In the case of line and staff organisation, there is clear-cut division of authority for the line officers, but staff officers do not have any authority.
3.       In the case of line organisation, there is clear-cut responsibility .In the case of functional organisation and line and staff organisation, there is clear-cut responsibility for the line officers, but staff officers do not have any responsibility.
4.       Because of clear-cut line authority, there is unity of command in the case of line organisation. There is no unity of command in the case of functional organisation, as a worker has to take instructions from several authorities. There is unity of command in the case of line and staff organisation because of the existence of the line officers.
5.       In the case of line organisation, there is flexibility in the sense that quick decisions and prompt actions can be taken to adjust to changing situations because of the existence of full authority. Functional organisation is rigid and inflexible. In the case of line and staff organisation, flexibility is difficult.
6.       Strict discipline is enforced in the case of line organisation. In the case of functional organisation, enforcement of discipline is difficult because of lack of unity of command. In the case of line and staff organisation, there is discipline enforced by line officers.
7.       In the case of line organisation, there can be prompt and quick decisions. In the case of functional organisation, there cannot be quick decisions. In the case' of line and staff organisation, there can be better decisions by the line officers with the help of staff advice.
8.       There is no specialisation in the case of line organisation. There is maximum specialisation in the case of functional organisation. There is certain amount of specialisation in the case of line and staff organisational because of the presence of staff officers.
9.       In the case of line organisation, there is heavy work load on the executive or managers. There is less work load in the case of functional organisation. The work load is not heavy in the case of line and staff organisation.
10.   There is a good communication system in the case of line organisation. There is overlapping of communication in the case of functional organisation. There is a good communication system in the case of line and staff organisation.
11.   In the case of line organisation, there can be better co-ordination within the department, but inter- department co-ordination becomes difficult. In the case of functional organisation, there is lack of effective co-ordination because of extreme specialisation. In the case of line and staff organisation, there can be co-ordination through staff officers.
12.   Efficiency is lacking in the case of line organisation, as one executive is entrusted with many activities in which he is not efficient. In the case of functional organisation, there is greater efficiency, as each executive is entrusted with limited duties. There is maximum efficiency in the case of line and staff organisation because of the clear-cut duties of the line officers and the availability of expert advice from the staff officers.
13.   Line organisation is suitable for small enterprises, trading as well as industrial. Functional organisation is suitable for large industrial enterprises. Line and staff organisation is suitable for medium- sized industrial enterprises.

4. Committee Form of Organisation
A number of persons may come together to take decision, decide a course of action, advise line officers on some matters, it is a committee form of organisation. It is a method of collective thinking, corporate judgment and common decision. A committee may be assigned some managerial functions or some advisory or exploratory service may be expected from it.
Need for Committee:
The main reason for committee is to secure common judgment on administrative matters. The committees are set up for the following reasons.
1)      The committees provide a forum for exchanging ideas among organisational members.
2)      The exchange of ideas among members may generate some suggestions and recommendations which may be useful for the organisation.
3)      There can be proper discussion on present problems and efforts are made to find the solutions.
4)      The committees may also be needed in establishing and developing organisational policies.

Types of Committee;
Different committees maybe formed with different ideas and purposes. Some committees may be only advisory while some may perform managerial functions. There may be following types of committees:

1)      Formal and Informal Committees: If a committees is formed as a part of organisation structure and is delegated some duties and authority, it is a formal committee. An informal committee may be formed to tackle some problem. A manager may call some experts to help him in analyzing a problem and suggesting a suitable solution.
2)      Advisory Committee: These are the committees to advice line head on certain issues. Line officers may refer some problems or issues to a committee foe advice.
3)      Line Committee: There may be committees with managerial powers. Instead of giving work to one person it may be assigned to a number of executives.

Advantages of committee form of organisation:
The committee form of organisation has the following has the following advantage:
1.       Pooling of opinions: the members of committees come from different background and areas or expertise and have different view points and values. When persons with varied abilities sit together and discuss a problem, various aspects of the case are highlighted and pros and cons are assessed. The pooled opinion will help in taking a realistic view of the problems.
2.       Better co-ordination: Committee form of organisation brings more co-ordination among different segments of the organisation when representatives of different departments sit together; they understand and appreciate the difficulties faced by others. This type of frank discussions help on fixing the targets of different departments and better co-ordination is achieved through this type of decision making.
3.       Balancing of Views: this type of organisation helps in balancing the views expressed by different persons. There is a tendency to over emphasize the aspects of one's own department by ignoring the inter dependent character of problems of different departments. A committee helps to bring out an agreed view of the problems by taking into account divergent views expresses in such meetings.
4.       Motivation: The committees consist of managers as well as subordinates. The views of subordinates are given recognition and importance. It gives them encouragement and makes them feel as an integral part of decision making process. Such committees boost the morale of subordinates and motivate them to improve their performance.
5.       Dispersion of power: The concentration of power in few persons may lead to misuse of authority and wrong decisions. By spreading powers among committee members this problem can be solved.

Weakness of Committee Form of Organisation
This form of organisation suffers from the following weakness:
1)      Delay: The main drawback of committee form of organisation is delay in taking decisions. A number of persons express their view points in meetings and a lot of time is taken oh reaching a decisions.
2)      Compromise: Generally, efforts are made to reach consensus decisions. The view point of the majority is taken as a unanimous decision of the committee. The taking of the majority may be valid but it may not be pursued for being singled out.
3)      No Accountability: No individual accountability can be fixed if these decisions are bad. Every member of the committee tries to defend himself by saying that he suggested a different solution. If accountability is not fixed ~hen it is the weakness of the organisation.
4)      Domination by some members: .Some members try to dominate in the committee meetings. They try to thrust their view point on -others.
5)      Strained Relations: Some times relations among committee members or with others become strained. If some members take divergent stands on certain issues, some may feel offended. It affects relations of employees not only on the job but at personal level also.
In the words of Spriegal, "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve. The span of supervision is also known as span of control, span of management, span of responsibility, span of authority and span of direction.

Factors influencing the span of supervision
There are number of factors that influence or determine the span of supervision in a particular organisation, the most important of these are as follows:
1.       The capacity and ability of the executive: The characteristics and abilities such as leadership, administrative capabilities; ability to communicate, to judge, to listen, to guide and inspire, physical vigour, etc. differ from person to person. A person having better abilities can manage effectively a large number of subordinates as compared to the one who has lesser capabilities.
2.       Competence and training of subordinates: Subordinates who are skilled, efficient, knowledgeable, trained and competent require less supervision, and therefore, the supervisor may have a wider span in such cases as compared to inexperienced and untrained subordinates who requires greater supervision.
3.       Nature of Work: Nature and importance of work to be supervised is another factor that influences the span of supervision. The work involving routine, repetitive, unskilled and standardized operations will not call much attention and time on the part of the supervisor.
4.       Time available for supervision: The capacity of a person to supervise and control a large number of persons is also limited on account of time available at his disposal to supervise them. The span of control would be generally narrow at the higher level of management because top manager have to spend their major time on planning, organizing, directing and controlling and the time available at their disposal for supervision will be less.
5.       Degree of Decentralization and Extent of Delegation: If a manager clearly delegates authority to undertake a well-defined task, a well trained subordinate can do it with a minimum of supervisor's time and attention.
6.       Effectiveness of communication system: Faulty communication puts a heavy burden on manager's time and reduces the span of control.
7.       Quality of Planning: Effective planning helps to reduce frequent calls on the superior for explanation, instructions and guidance and thereby saves in time available at the disposal of the superior enabling him to have a wider span.
8.       Degree of Physical Dispersion: If all persons to be supervised are located at the same place and within the direct supervision of the manager, he can supervise relatively more people as compared to the one who has to supervise people located at different places.
9.       Assistance of Experts: the span of supervision may be wide where the services of experts are available to the subordinate on various aspects of work. In case such services are not provided in the organisation, the supervisor has to spend a lot of time in providing assistance to the workers himself and a such the span of control would be narrow.

Type of span of supervision: Broadly speaking there are two types, of span of supervision:
(a)    Wider Span of Supervision: In this type of span, the supervisor controls and guides the activities of subordinates directly under his control. Wider span or supervision is favoured where workers are competent and trained.
(b)   Narrow Span of Supervision: under this type of supervision, there are many levels and more supervisors are required to perform the job of guidance and control for different activities. It increases the efficiency of supervision but the cost of supervision is very high as compared to wider span of supervision. This type of supervision is favored at higher levels of management where all the other activities of planning, organizing, directing, and controlling are also to be performed. But more the levels of supervision, more difficult are the task of coordinating the activities of various groups of people.


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