Organisation

Organisation is a mechanism or structure that enables living things to work effectively together. It is a group of people, small or large that works under executive leadership. It leads to division of work and responsibilities. Organisation is a step towards the achievement of established goals.

Principles of organisation

1. Consideration of objectives-

2. Relationship of basic components of the organisation.

3. Responsibility and authority

4. Span of control

5. Dividing and grouping work

6. Effective delegation

7. Communication

8. Line and staff relationships

9. Balance stability and flexibility

Line, Military or Scalar Organisation

is the simplest form of organisation structure. It resembled old military organisations. The authority flows directly from the Works Manager to Superintendent to Foreman and from them to workers. Line organisation is direct and people at different levels know to whom they are accountable. Any enterprise that start small probably starts with line type of organisation. . The characteristic feature of this type is that line of authority flows vertically form the top most executive to the lowest subordinate throughout the entire organisational structure. The authority is greatest at the top and reduces through each successive level down the organisational scale. A variation of the pure line organisation is the departmental line organisation, under which the business enterprise is divided into several departments and the authority flows downward from the General Manger through the departmental managers to the lower subordinates. The departmental heads are independent of each other and enjoy equal status.

Advantages

i. It is simple and easy to understand

ii. Flexible: easy to expand and contract

iii. It makes clear division of authority

iv. Clear channel of communication, with no confusion at all.

v. It encourages speedy action.

vi. It is strong in discipline as it fixes responsibility on an individual.

Disadvantages:

i. It neglects specialists

ii. It overloads a few key executives.

iii. It is limited to very small concerns.

iv. It encourages dictatorial way of working.

v. In line organisation provisions are seldom made to train, develop and replace top executives.

vi. Due to lack of specialization, there is more wastage of materials and man hours.

Application:

Small concerns free from all complexities.

Automatic and continuous process industries such as paper, sugar, textile etc.

Functional Organisation

In the functional structure, above, the employees are working in departments based on what they are doing i.e. we have engineering department, maintenance department, finance department, research department, Warehouse department, purchasing department. This structure enhances the experience of each function. For example, all the maintenance engineers are working in the same department and thus they will exchange knowledge and support each other. This structure saves us money because of the economies of scale. This structure makes the coordination between different department more difficult than other structures. It also does not allow for flexibility because of the centralization.

In this type of organisation the personnel and their work are organised on the basis of the same type of work of activities. All works of the same type are grouped together and brought under one department managed by an executive who is an expert. Thus there are separate functional departments, for the major functions of the business viz., engineering or production, purchase, sales, finance personnel etc. Each department performs its specialised function for the entire organisation. For example, the purchase department deals with purchases on behalf of the entire organisation, and so on. Now-a-days almost all business concerns usually follow some sort of functional plan to carry out the primary functions of business. However, it is the rare to find a pure functional organisation and there is always an element of line organisation mixed with it.

The benefits in utilizing a structure which relies upon the functional model are:

· The chain of command is linear and sound

· The human resource abilities are constantly nurtured by concentrated tutoring, leadership, and guidance

· Professional similarities between the organizational participants in each of the different functional offices

· The development of professional expertise attained by clustering specialists in the present function as a single unit

· Provides an easy path for the employees to grow within the organization sideways as well as upwards in the organizational tree

The drawbacks of the functional organizational structure are

· The decision making process is bureaucratic and far from expedient

· The flow of communication and synchronization between functional departments is complicated

· The speed of resolving problem is slow and inefficient

· Grouping based on functions results in a lack of broader view from employees resulting in narrowed vision of overall organizational objective

Line & Staff Organisation

Line organisation gradually developed to shape as line & staff organisation. As the industry grew in size and complexity, the line executives could not perform properly all other functions like R&D, planning, di besides production. This required employing special executives to assist line executives and they were known as staff. The line executives retain supervisory authority and control over the work of their subordinates whereas staff executives performs certain spcialised work and advice them on matters referred to them.

Advantages-

· Expert advice from specialists can be made use of.

· Line executives are relieved from certain load and can pay more attention to production.

· Less wastage of material, man and machine hours.

· No confusion exists as in functional organisation.

· Possesses all advantages of Line and functional organisation.

Disadvantages

· Product cost will increase because of high salaries of staff executives.

· At times the staff department may infringe upon the rights and responsibilities of line organisation, thus weakening it.

· Line and staff executives may get confused if their functions are not clear.

· Friction and jealousy is developed between line and staff executives.

· Line executives may start depending upon staff executives, losing their initiative and integrity.

Application – Medium and large enterprise

Project Organisation

This type of organization is suitable when an organization undertakes specialized work for a particular period as one time operation. In order to deal with such situations organizations develops a unit which is specially designed to accomplish such project works without disturbing the routine jobs of the organization. The organizations engage their existing employees on deputation basis to deal with a particular project and then that particular executive resumes to his parent department after the completion of the project. The advantage of such organizations is that it does not disturb the regular work of the organization. It enables the better control over the project activities because the managers enjoy the authority to function the projects effectively. But at times these organizations spoil the stability of the various departments as the personnel are shifted for the sake of the project and thus disrupt the basic functioning of the parent department. In brief, the project structure is a vehicle for bringing specialised people together in flexible groups for as long as a particular need exists, but no longer.

Advantages

· It does not interfere with existing organisation.

· It provides concentrated attention that a complex project demands

· It allows maximum use of specialists available in the enterprise.

Disadvantages

· Project manager has to deal with variety of jobs.

· Since work differs from project to project experience gained in one project may not be relevant to other projects.

· Very unusual pressures on the project team.

· Large extent of insecurity and uncertainty involved.

Matrix Organisation

Matrix structure, shown above, combines both structures. For example, we can have a functional structure and then assign a manager for each project. Some employees will have two managers: functional manager and project manager. This type of structure tries to get the benefits of functional structure and also of divisional structure; however, it is not easy to implement because of the dual authority. This structure is very useful for multinational companies.

The matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is amongst the purest of organizational structures, a simple lattice emulating order and regularity demonstrated in nature.

·Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.

·Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing power is delicate proposition.

·Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.

Advantages:

1. It effectively focuses resources on a single project permitting better planning and control to meet deadline.

2. It is more flexible than a traditional functional hierarchy.

3. Services of specialists are better utilized as more emphasis is placed on the authority of knowledge than rank of the individuals in the organizational hierarchy.

Limitations:

1. Matyrix organization violates the principle of unity of command as aperson works under two bosses egs. Project manager and functional boss. This may give rise to conflicts in the organization.

2. Organization relationships are more complex and they create problems of coordination.

3. Since persons are drawn temporarily from different departments, project manager does not have line of authority over them.

4. Project group is heterogeneous and due to which morale of the person may be low.

Application:

The matrix organization is used in the following industries –

· Electronics,Chemicals,Industrial products, Advertising, Aerospace, Banking ,Insurance, Hospitals etc.