Organization

&
Management
What is an Organization?

An
organization is
a collection of
people who
work together
to achieve
individual and
organizational
 What is an Organization
An intentionally coordinated social
unit, composed of two or more
people, that functions on a
relatively continuous basis to
achieve a common goal or set of
goals.
Organizations Role in Society

• Organizations exist to allow accomplishment of work that could not be

achieved by people alone.
• As long as the goals of an organization are appropriate, society will allow
them to exist and they can contribute to society.

Organizations and People

• Organizations are strongly influenced by the people that form part of them.
• Organizations can take in part of the personality of the people within them
and their attitudes, perceptions and behaviors affect how an organization
will operate.

Organizations Require Management

• Organizations use management to accomplish the work that is required to
achieve the goals.
Characteristics of Organizations
A good organization is therefore necessary for the following
reasons:

Optimum
Complexity of Growing
utilization of
Industry competition
resources

Fixation of Co-ordination
Reduced labor and directing
authority and
problem efforts
responsibility

Facilitates Stimulates
Administration Creativity
Principles of Organization
• The objectives must be clearly defined for the entire enterprise, for
each department and even for each position in the organization
Unity of Objectives structure
• all efforts can be concentrated on achieving the set goals- at minimum
cost

Division of Labor and • Degree to which tasks are subdivided into separate jobs.
Departmentalization • Grouping of related activities into units

Chain of Command •Line of authority from the top to the bottom of the organization.

• It is the number of employees reporting to a manager.

Span of • The number of employees reporting to one manager affects the
Management number of levels of managers.

• With centralized authority, top managers make important decisions

Centralized and • With decentralized authority, middle and first-line managers make
Decentralized Authority important decisions where the action is

• With the division of labor and departmentalization comes the need to

Coordination coordinate the work of all departments.
 • The organization structure should be simple with minimum
Simplicity number of levels.

• The organizational structure should be flexible enough to

Flexibility permit slight alternations and expansions whenever needed,
due to changed circumstances based on situations demand

•Not only executive should pass down information to the

Communication subordinates , there should be feedback i.e., replies should come
from those who receive information. For better results it should
have free two-way communications.
 Formal Organization
It refers to the organization structure deliberately created by management
for achieving the objectives of enterprise. It is a network of official
authority responsibility relationships and communication follows. It is
an official and rational structure.

Definition :-
According to Chester Bernard , “Formal organization is a system of
consciously coordinated activities of two or more persons towards a
common objectives. The essence of formal organization is conscious
common purpose and formal organization comes into existence when
persons
• are able to communicate with each other
• are willing to act and
• share a purpose.”
Informal Organization
It refers to the pattern of activity interactions and human
relationship which emerge spontaneously due to social
and psychological forces operating at the work place. It
arises naturally on the basis of friendship or some
common interest which may or may not be related with
work.

Definition :
According to Chester Bernard , “ Informal organization
is joint personal activity without conscious common
purpose though contributing to joint result.”
Difference Between Formal and Informal Organization
Basis Formal Organization Informal Organization
Origin It is created deliberately and It emerges spontaneously on
consciously by management. account of socio psychological
forces operating at the work place
Purpose It is created for achieving the It is created by the members of the
sincere objective of the organization for their social and
organization psychological satisfaction.
Size Formal group may be quite large Informal groups tent to be small.
in size
Nature of group Formal groups are stable and may Informal groups were quite unstable
continue for a very long period of in nature
time
Authority It is bound together by a In this all members are equal
hierarchical structure
Communication It normally flows through the The communications pass through
prescribed chain of command the informal channels
Behavior of It is governed by formal rules and It is governed by norms beliefs and
Members regulations value of the group.
 What is Management?

Management is the process of

planning, organizing, leading,
and controlling an
organization’s human,
financial, material, and other
resources to increase its
effectiveness.
The Functions Of Management
Management
process of working with people and resources

to accomplish organizational goals

effective – “Doing things right”
achieve organizational goals

efficient – “Doing the right things”

achieve goals with minimum waste of resources

1-13
What Managers Do
Managers (or administrators)
Individuals who achieve goals through other
people.
Manager: Any person who supervises one or
more subordinates.
Managerial
ManagerialActivities
Activities
••Make
Makedecisions
decisions
••Allocate
Allocateresources
resources
••Direct
Directactivities
activitiesof
ofothers
othersto
to
attain
attaingoals
goals
Plannin Managers’
g Job
Organizin
g
Leading Managem
ent Funct
ions
Controllin Henry Fay
Industria ol a French
g perform f
list wrote
our mana
that all m
anagers
gement fu
nctions
 Managers’ Job
Management Organizing
Functions
Henry Fayol a French Determines what tasks
Industrialist wrote that all
managers perform four are to be done;
management functions
Who is to do them;
Planning How the tasks are to be
Organizing
Leading grouped;
Controlling
Who reports to whom;
and
Planning
Where decisions are to
Organizing
Leading be made.
controlling
 Managers’ Job
Management Leading
Functions
Henry Fayol a French Motivating employees;
Industrialist wrote that all
managers perform four Direct their activities;
management functions
Select the most effective
Planning
Organizing communication channels;
Leading or
Controlling
Resolve conflicts among

Planning
members.
Organizing

Leading
controlling
 Managers’ Job
Management Controlling
Functions
Henry Fayol a French Monitoring performance;
Industrialist wrote that all
managers perform four Comparing performance
management functions
with the set standard;
Planning
Making corrections, if
Organizing
Leading necessary.
Controlling

Planning
Organizing
Leading
Controlling
 Managerial Skills
Conceptual Skills:
The ability to analyze and
diagnose a situation and
distinguish between cause
and effect.
Human Skills:
The ability to understand,
work with, lead, and
control the behavior of
other people and groups.
Technical Skills:
Job-specific knowledge and
techniques.
Skills Needed at Different Management
Levels

Top
Conceptual
Managers Skills
Middle Human
Managers Skills
Technical
Lower-level
Managers Skills

Importance
Managerial Roles
Role: A set of behaviors or tasks a person is
expected to perform because of the position he or
she holds in a group or organization.
In 1960s, Mintzberg after studying 5 executives

to determine what those managers did on their

jobs.
Mintzberg concluded that mangers perform 10

different, highly interrelated roles – or set of

behaviors – attributable to their jobs.
Roles of Manager
Mintzberg’s Management Roles Approach
Interpersonal roles
 Figurehead, leader, liaison

Informational roles
 Monitor, disseminator, spokesperson
Decisional roles
 Entrepreneur, disturbance handler, resource allocator,

negotiator
 Mintzberg’s Managerial Roles

Role Description
Informational

Monitor Receives a wide variety of

information; serves as nerve centre of internal
& external information of the organization

Disseminator Transmits information received from

outsiders or from other employees to
members of the organization

Spokesperson Transmits information to outsiders on

organization's plans, policies, actions, &
results; serves as an expert on
organization’s industry