TYPES OF

ORGANISATION
 After laying down the plans and objectives the
next function to be performed by the managers is
organizing. It determines what activities and
resources are required and decides who will do a
particular task, where it will be done and when it
will be done. Thus organizing means establishing
relationship between various factors of
production
 ORGANIZATION
In general terms, organizing refers to the
systematic arrangement of things and activities.
However, in the context of management,
organizing may be interpreted in two waysas
a structure and as a process.
Meaning of organizing
As a process, organizing is concerned with the
productive integration of human, physical and
financial resources to meet the goals of an
organisation. As a structure, organizing involves
creating a structural framework within which the
individual efforts are coordinated to meet the
needs of an organisation.
 PROCESS OF ORGANIZING
Identification and division of work:
Organizing process starts with the identification of work and division
of total work into smaller units according to skill and knowledge of
employees.
Grouping and departmentalization:
After division the next step is departmentalization i.e. grouping the
similar activities into one place and putting under on Department.
Assignment of duties:
After grouping the similar works into specialized department the next
step is the assignment of duties to the departments according to their
skill and qualification.
Establishing reporting relationship:
This is the last step in organizing process where managerial hierarchy
is developed and reporting relationship i.e. who will report who clearly
defined.
 1. Facilitates Efficient Management

A good organisation avoids confusion, delays and

duplication of work. It increases the promptness and
efficiency, and it motivates the employees to do their
best. All this results in efficient management. Thus,
we can say, good organisation facilitates efficient
management.
Optimum Utilisation of Human Resources

A good organisation facilitates division of labour and

specialisation. It helps in selecting the "Right person
for the right Job." It clearly defines the authority and
responsibility of each employee. It also motivates
them to do their best. All this results in optimum
utilisation of human resources.
 Helps in Growth of Enterprise

A good organisation helps in the growth,

diversification and expansion of the enterprise.
Today's big and giant enterprises are the results
of their best organisation.
Utilises Science and Technology

A good organisation utilises the benefits of

science and technology. It provides the industries
with the latest machines. It provides the
consumers with the latest products. This results
in cost reduction and maximum satisfaction.
 Facilitates Co-ordination

A good organisation co-ordinates the activities of

different individual, groups and departments in order
to achieve the objectives of the business.
Encourages Creativity, Initiative and
Innovation

A good organisation encourages creativity in the

enterprise. This results in brings new ideas,
imaginations, visions, methods, etc. It also encourages
initiative and innovations.

 Motivates the Employees

A good organisation provides the employees with a better

working environment, good remuneration, reasonable
freedom, etc. All this results in job satisfaction for the
employees. So a good organisation motivates the employees
to give good results.

8. Facilitates Delegation of Authority

A good organisation facilitates delegation of authority. That

is, the top executives can keep the important work for
themselves, and they can delegate (surrender or give) the
less important work to their subordinates. This encourages
the subordinates to develop leadership qualities and to
achieve the objectives of the business.
DIFFERENT TYPES OF ORGANISATION ARE:-
Line Organisation
Matrix Organisation
Line & Staff Organisation
Committee Organisation
Functional Organisation

Divisional Organisation
 THE LINE ORGANIZATION STRUCTURE

The Line organization authority is delegated

directly from top to bottom.
There is vertical line of authority running from top
to the bottom of the organisation.
The man at the top has the highest authority and
it is reduced at each successive level down the
hierarchy.
Suitability: This kind of structure is suitable for
smaller organizations.
STRUCTURE OF LINE ORGANIZATION
 MERITS
o Simplicity- easy to understand by workers.
o Discipline- Required high discipline because each
manager has direct contact with his subordinates.
o Prompt Decision- manager is not suppose to consult
staff specialist.
o Orderly Communication.
o Easy Supervision and Control.
o Economical- As no staff specialist are required.
 DEMERITS

o Lack of Specialization due to no specialization.

o Absence of Conceptual thinking- Since they are
overburdened with administrative work.
o Autocratic Approach- Manager has monopoly of
decision making.
o Little upward communication.
LINE AND STAFF ORGANIZATION
Staffauthority is used to support the line
authority. Line and staff organizations
have both line and staff executives. Line
executives are assisted by staff specialists
in planning, distribution, quality, legal,
audit, public relations, etc.

Forexample, a production manager (a line

authority) does not have enough time and
experience to handle labour relation
problems. Staffs help them in doing so.
LINE AND STAFF STRUCTURE ORGANIZATION
 Merits Demerits
Planned Specialization Confusion
Quality Decisions Ineffective staff

Expert Advice Line and Staff Conflicts

Training Ground for

Personnel

Suitability: This structure can be followed in large

organizations where specialization of activities.
 FUNCTIONAL ORGANIZATION
This kind of organizational structure classifies people
according to the function they perform in their
professional life or according to the functions performed
by them in the organization.

Under it, organisation is divided into a number of

functional areas. Each function is managed by an expert in
that area.
or
In functional structure activities are grouped and
departments are created on the basis of specific functions
to be performed.
For example, all the jobs related to production are
grouped under production department, sales departments
etc.
FUNCTIONAL ORGANIZATION
 Merits Demerits
Specialization Violates the principle of
Executive Development unity of command
Scope for Expansion Complexity

Better Control Lack of coordination

Suitability: It has been criticized by many authors due

to violation in unity of command.
DIVISIONAL ORGANIZATION
This is the kind of structure that is based
on the different divisions in the
organization.

For example, same food-processing

company may have three separate
divisions for biscuits, bread and milk-
products, respectively
Divisional structures can be divided into:

Product basis It is based on organizing

employees and work on the basis of the
different types of products. If the company
produces three different types of products, they
will have three different divisions for these
products.

Market basis It is used to group employees

on the basis of specific market the company
sells in.
 Geographic basis large organizations have
offices at different place, for example there
could be a north zone, south zone, west and
east zone. The organizational structure would
then follow a zonal region structure.
 ADVANTAGES
1.Product specialization:
All the activities related to one type of product are
grouped under one department only which brings
integration and co-ordination in the activities.

2. Fast Decision making:

The decision is taken much faster in divisional
structure because there is no dependence on other
departments.

3. It become easy to make accountable for non

accomplishment of goal as there is no dependence on
other departments
 DISADVANTAGES

Each department will require all the resources

as very division will be working as an
independent unit.
Each department focuses on their product
only and they fail to keep themselves as a part
of one common organisation.
Conflict on allocation of resources
 MATRIX ORGANIZATION
Combination of function, and product structures.
Matrix organization has been developed to meet the
need of large organizations for a structure which is
flexible and technically sound.
An individual has 2 bosses- his permanent and the
project manager.

Suitability-
it can be successful only when there is an
agreement amongst the key executive.
MATRIX ORGANIZATION STRUCTURE
MERITS OF MATRIX ORGANIZATION
Full time focus of personnel on project of matrix.
It stresses authority of knowledge than the status.

Specialized technical skills to the product/market.

Flexible structure- easily adapted to changes.

Helps in the development of both general and

functional skills.
 Costly to maintain personnel pool of staff matrix.
Participants experience dual authority of matrix
manager and functional area manager.
Little interchange with functional groups outside the
matrix.
Participants of matrix need to have good interpersonal
skill in order for it to work.
Frustration and confusion due to dual chain of
command.
COMMITTEE ORGANISATION
A committee is a group of persons formed to
discuss and deliberate on problems and to
recommend or decide solutions.
It may be authorized to deal with all or specific
activities.
A committee may be constituted at any level of
organisation and its members may be drawn
from various departments.
 TYPES OF COMMITTEES

Standing or Ad Hoc Committee.

Executive or Advisory Committee.
Line or staff Committee.
Formal or Informal Committee.
ADVANTAGES
Group Judgement
Effective coordination- integrates viewpoint of
managers from different departments.
Motivation through participation

Management development.

Consolidation of authority
DISADVANTAGES
Expensive
Slow decision

Compromise decisions

Tyranny of few

Divided responsibility

Misuse of committees