Organising Class 12 Notes Business Studies Chapter 5 - CBSE

Chapter: 5

What Are Organising ?

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Organising is a process which starts implementation of plans by clarifying jobs and working relationships and optimum utilisation of resources for attainment of identified and desired goals.

Steps of Organising Process

Identification and division of work
Departmentalisation
Assignment of duties
Establishing authority and reporting relationships

Importance of Organising

Benefits of specialization
Clarity in working relationships
Adaptation to change
Effective administration
Development of personnel
Expansion and growth

Thus, Organising is a process by which the manager brings order out of chaos, removes conflict among people over work or reponsibility sharing and creates an environment suitable for teamwork.

Span Of Management

The number of subordinates that can be effectively managed by a superior.

Organisation Structure

Organisation Structure is the outcome of the organising process. An effective structure will result in increased profitability of the enterprise. The need for an adequate organisation structure is felt by an enterprise whenever it grows in size or complexity.

Types Of Organisational Structure

Functional Structure
Divisional Structure

Functional Structure

Under this structure jobs of similar nature are being grouped together and named as one function. It is suitable for large organisations.

Advantages

Specialisation
Coordination
Operational efficiency
Makes training easier
Higher focus

Disdvantages

Deviation in interests
Conflicts
Lack of Coordination
Rigidity

Divisional Structure

An organizational structure which works as separate units or divisions and each division is accountable for its own job and must consider its own profit and loss. Divisional structure is suitable for those organisations which are producing a variety of products for performing diversified activities.

Advantages

Product Specialisation
Accountability Flexibility Expansion
Prepare for future positions
Better Initiatives

Disdvantages

Conflicts
Duplication of efforts
Misuse of power

Formal Organisation

Formal organisation designed by the management to accomplish a particular task. It specifies clearly the boundaries of authority and responsibility and here is a systematic coordination among the various activities to achieve organisational goals.

Advantages

Easy to fix responsibility
No ambiguity in instructions
Unity of command is maintained
Accomplishment of organisational goals
Provide stability to organisations

Disdvantages

Procedural delays
Poor Organisation Practices
Problem in understanding human relationships.

Informal Organisation

Informal organisation emerges from within the formal organization when people interact beyond their officially defined roles.

Advantages

Quick communication
Faster feedback due to informal communications.
Fulfills social needs
Makes up for inadequacies of formal organisation.

Disdvantages

Spreads rumours
Resistance to change
Pressurises members to conform to group expectations

Delegation

Delegation refers to the downward transfer of authority from a superior to a subordinate.

Elements of Delegation

Authority: It refers to the right of an individual to command his or her subordinate and take action within the scope of his or her position.
Responsibility: Responsibility is the obligation of a subordinate to properly perform the duties assigned by the superior.
Accountability: Accountability means being answerable for the outcome of the assigned work.