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Purpose of Organization

Organization helps achieve goals, optimize resources, and perform managerial functions. It facilitates growth, diversification, and considers employee well-being. Key aspects of organization include tasks, reporting relationships, coordination systems, specialization, chains of command, authority, responsibility, accountability, delegation, authority types, span of management, and structure configurations like tall versus flat. Departmentalization options include functional, divisional, matrix, team, and network structures. Organizing is important for strategy implementation, market changes, technology shifts, and efficiency gains.

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Abhishek Arora
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3K views4 pages

Purpose of Organization

Organization helps achieve goals, optimize resources, and perform managerial functions. It facilitates growth, diversification, and considers employee well-being. Key aspects of organization include tasks, reporting relationships, coordination systems, specialization, chains of command, authority, responsibility, accountability, delegation, authority types, span of management, and structure configurations like tall versus flat. Departmentalization options include functional, divisional, matrix, team, and network structures. Organizing is important for strategy implementation, market changes, technology shifts, and efficiency gains.

Uploaded by

Abhishek Arora
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Purpose of organization

[edit] Helps to achieve organizational goal


Organization is employed to achieve the overall objectives of business firms. Organization focuses attention of individuals objectives towards overall objectives.

[edit] Optimum use of resources


To make optimum use of resources such as men, material, money, machine and method, it is necessary to design an organization properly. Work should be divided and right people should be given right jobs to reduce the wastage of resources in an organization.

[edit] To perform managerial function


Planning, Organizing, Staffing, Directing and Controlling cannot be implemented without proper organization.

[edit] Facilitates growth and diversification


A good organization structure is essential for expanding business activity. Organization structure determines the input resources needed for expansion of a business activity similarly organization is essential for product diversification such as establishing a new product line.

[edit] Human treatment of employees


Organization has to operate for the betterment of employees and must not encourage monotony of work due to higher degree of specialization. Now, organization has adapted the modern concept of systems approach based on human relations and it discards the traditional productivity and specialization approach.

[edit] Applications
Organizing, in companies point of view, is the management function that usually follows after planning. And it involves the assignment of tasks, the grouping of tasks into departments and the assignment of authority and allocation of resources across the organization.

[edit] Structure
The framework in which the organization defines how tasks are divided, resources are deployed, and departments are coordinated.

1. A set of formal tasks assigned to individuals and departments. 2. Formal reporting relationships, including lines of authority, decision responsibility, number of hierarchical levels and span of managers control. 3. The design of systems to ensure effective coordination of employees across departments.

[edit] Work specialization


Work specialization (also called division of labour) is the degree to which organizational tasks are sub-divided into individual jobs. With too much specialization, employees are isolated and do only a single, tiny, boring job. Many organizations enlarge jobs or rotate assigned tasks to provide greater challenges.

[edit] Chain of command [edit] Authority, responsibility, and accountability


Authority is a manager's formal and legitimate right to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes. Responsibility means an employee's duty to perform assigned task or activities. Accountability means that those with authority and responsibility must report and justify task outcomes to those above them in the chain of command.

[edit] Delegation
Delegation is the process managers use to transfer authority and responsibility to positions below them. Organizations today tend to encourage delegation from highest to lowest possible levels. Delegation can improve flexibility to meet customers needs and adaptation to competitive environments. Managers often find delegation difficult

[edit] Types of authority (and responsibility)


Line authority managers have the formal power to direct and control immediate subordinates. The superior issues orders and is responsible for the resultthe subordinate obeys and is responsible only for executing the order according to instructions. Functional authority is where managers have formal power over a specific subset of activities. For instance, the Production Manager may have the line authority to decide whether and when a new machine is needed but the Controller demands that a Capital Expenditure Proposal is submitted first, showing that the investment will have a yield of at least x%; or, a legal department may have functional authority to interfere in any activity that could have legal consequences. This authority would not be functional but it would rather be staff authority if such interference is "advice" rather than "order". Staff authority is granted to staff specialists in their areas of expertise. It is not a real authority in the sense that a staff manager does not order or instruct but simply advises,

recommends, and counsels in the staff specialists' area of expertise and is responsible only for the quality of the advice (to be in line with the respective professional standards etc.) It is a communication relationship with management. It has an influence that derives indirectly from line authority at a higher level.

[edit] Span of management


Factors influencing larger span of management. 1. 2. 3. 4. 5. 6. 7. Work performed by subordinates is stable and routine. Subordinates perform similar work tasks. Subordinates are concentrated in a single location. Subordinates are highly trained and need little direction in performing tasks. Rules and procedures defining task activities are available. Support systems and personnel are available for the managers. Little time is required in non-supervisory activities such as coordination with other departments or planning. 8. Managers' personal preferences and styles favour a large span.

[edit] Tall versus flat structure

Tall - A management structure characterized by an overall narrow span of management and a relatively large number of hierarchical levels. Tight control. Reduced communication overhead. Flat - A management structure characterized by a wide span of control and relatively few hierarchical levels. Loose control. Facilitates delegation.

[edit] Centralization, decentralization, and formalization


Centralization - The location of decision making authority near top organizational levels. Decentralization - The location of decision making authority near lower organizational levels. Formalization - The written documentation used to direct and control employees.

[edit] Departmentalization
Departmentalization is the basis on which individuals are grouped into departments and departments into total organizations. Approach options include: 1. 2. 3. 4. 5. Functional - by common skills and work tasks Divisional - common product, program or geographical location Matrix - combination of Functional and Divisional Team - to accomplish specific tasks Network - departments are independent providing functions for a central core breaker

[edit] Importance of organizing


Organizations are often troubled by how to organize, particularly when a new strategy is developed Changing market conditions or new technology requires change Organizations seek efficiencies through improvements in organizing

[edit]

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