1. Organizational MANAGEMENT
CH.3.
Organizational MANAGEMENT

2. ORGANIZATION: Definition:
Any group of persons united to achieve any constructive task
Group of activities and resources to facilitate efforts to achieve common goals and objectives
Examples: any company, govt. Department, business unit, institute, etc.

4. CHARACTERISTICS OF ORGANIZATION:
Task
Functions
Structure
Management
Working people
Technology
Rules &regulations
Departments
Aims & objectives

5. STEPS IN ORGANIZATION:
Find goals and objectives
Formulate supporting policy and plans
Identify the needed activities and classify them
Best grouping of these activities
Assignment of duties to staff
Horizontal and vertical relationship of authority and responsibility

6. ORGANIZATION STRUCTURE:
Organization has a “definite structure”.
A formal fixed pattern of groups and relationship among them.
Represented by organization chart.
Structure is always stable.
Modified if required.

7. Structure of organization
Goals & objectives
Resources available
Functions
Relationship among tasks & activites
Type of production & production
Span of control
Communication
No. of employees

8. TYPES OF ORGANIZATION:
LINE organization
FUNCTIONAL organization
LINE & STAFF organization
PROJECT organization

9. LINE ORGANIZATION
Also called “scalar organization” or “military organization”.
Oldest and simplest type of organization.
Chain of authorities one above the other.
A separate person will look after the activities of the department and he has full control over the department..
Subordinate reports to immediate superior.
This type of organization is followed in the army on the same pattern. So, it is called military organization.
Under this type of organization, the line of authority flows from the top to bottom vertically. So it is called line organization.
This type of organization is suitable to small size business units where the activities are of routine nature or machine based.

10. Examples: Small business, military, automated industries like textile, paper etc.

11. ADVANTAGES & DISADVANTAGES OF LINE ORGANIZATION
Simplicity
1. Lack of specification
2. Division of authority and responsibility
2. Over loading
3. Unity of control
3. Lack of initiative
4. Speedy action
4. Scope for favoritism
5. Discipline
5. Dictatorial
6. Economical
6. Limited communication
7. Co-ordination
7. Wastage of material and man-hours
8. Direct communication
8. Subjective approach
9. Flexible structure
9. Instability
10. Lack of co-ordination

12. FUNCTIONAL ORGANIZATION
Also called “Staff organization” or “Horizontal organization”.
Grouping of activities as per function.
Each group is assigned with a specific task.
Authority is given to a specialist to give orders and instructions in relation to specific function.
Functional authority has right and power to give command throughout the line with reference to his specified area.

13. FUNCTIONAL ORGANIZATION

14. ADVANTAGES AND DISADVANTAGES OF FUNCTIONAL ORGANIZATION
Benefit of specialization
Application of expert knowledge
Reducing the work load
Efficiency
Adequate supervision
Relief to line executive
Co-operation
Economy
Flexibility
Mass production
Complex relationship
Discipline
Over specialization
Ineffective co-ordination
Speed of action
Centralization
Lack of responsibility
Increasing the overhead expenses
Poor administration
Suitability of functional organization

15. LINE & STAFF ORGANIZATION
Combination of Line and Functional organization.
organization Structure is both horizontal and vertical.
Only successful if joint work of Managers and Executives is seen.
All large and medium scale industries employ this type.
Best suited for Manufacturing and automobile sector.

17. ADVANTAGES AND DISADVANTAGES OF LINE & STAFF ORGANIZATION
Advantages of line and staff organization
Disadvantages of line and staff organization
Facilitates to work faster and better
If powers are not defined then get confusion
Specialization is attained
Line officers may reject advice
Enables to utilize experience and advice
Staff officers are not responsible if favorable results are not obtained.
Officers can take sound advice
Difference between line and staff officers will defeat the very purpose of specialization
New technology or procedure can be introduced without any dislocation
Line officers blame staff officers for unfavorable results
Promotes efficient functioning of line officers
Very good opportunity is made available to young person to get training

18. PROJECT ORGANIZATION

19. PROJECT organization
The project organization idea was developed after the second war.
Its an “inter-organizational team” pulled together for specific purpose.
Team member from organization’s functional units to perform specific task i.e. “Project”.
Purely temporary in nature.
The Success of the project organization depends upon the co-ordination of activities
There is a grouping of a activities for each project. It leads to the introduction of a new line of a authority

20. ADVANTAGES No interference to parent organization.
Result oriented activities are carried out.
Team work culture is developed.

21. DISADVANTAGES
The professionals are deputed for the project ; there is an assurance of continuous work for the professional in a project organization.
The decision is taken in the project organization under pressure of the top controls the staff in an organization.
The top management does not extend its full co-operation for the effective functioning of the project organization. Some hindrance may be caused by the top management.

22. DEPARTMENTATION

23. DEPARTMENTATION
The process of grouping the activities known as departmentation
Departmentation means the process by which similar activities of the business are grouped into units for the purpose of smooth administration at all levels.
Horizontal dimension of organization structure.
Better control and management.

24. TYPES OF DEPARTMENTATION
Grouping of activities according to products.
Applicable to large scale companies.
All depts., carry functions of design, manufacturing ,marketing and sales
More manpower required
BY PRODUCT
Most popular method of departmentation.
The grouping of common & homogeneous activities to form an organizational unit.
basic function can be divided into sub-function
Each department have a head with the title departmental manager
BY FUNCTION
Based on process required to manufacture product..
Sub divisions based on various processes.
BY PROCESS

27. Process Departmentation:

28. PRINCIPLES OF ORGANIZATION
AUTHORITY AND RESPONSIBILITY
SPAN OF CONTROL
EFFECTIVE DELEGATION
BALANCE,STABILITY AND FLEXIBILITY
COMMUNICATION
CENTRALISATION & DECENTRALISATION

29. AUTHORITY AND RESPONSIBILITY
Position ,designation, seniority defines authority
Power to manage work
Types of authority:
Coercive :Use of punishment
Expert : Use of Skill
Reward: Use of reward.
Referent: use of influence

30. AUTHORITY AND RESPONSIBILITY
Responsibility-the other side of coin.
Accountability for result.
Higher authorities have higher responsibilities.
Can be delegated but not be shared.

31. SPAN OF CONTROL Related to delegation
“It is the no of subordinates handled by one manager effectively. ”
Impossible to control a large no of subordinates ; controlling efficiency reduces when such happens.
Span of control gives rise to the concept of “levels of management”.

32. EFFECTIVE DELEGATION
Process that assigns work to others and offers sufficient authority to perform work.
Higher authority assigns duties and responsibilities to subordinates.
Also giving required authority to do work i.e. right to make decisions is available to subordinates due to delegation.
Morale of employees increases.
Better results are possible.

33. BALANCE,STABILITY AND FLEXIBILITY
Organization has a no of functional units ;all should be balanced.
All functions should be executed , developed and controlled in a balanced manner.
Any underdeveloped unit or department must be given attention for overall progress of organization.

34. STABILITY:
Unstable organization is busy solving its problems.
Stable organization is ground for new developments.
Decision making is easier due to stability.
FLEXIBILITY:
Ability to adjust, bend , change and blend according to requirements without disturbing the basic structure is called flexibility.
Flexibility is the reason to be update and in flow.
Helps to work as per changes in environment i.e. technology, market requirements , laws competitors move s,etc.

35. COMMUNICATION

36. COMMUNICATION
“Process by which a person or group transmits some information to other person or group.”
Following can be done by communication:
Forward instructions and orders
Share information
Motivate and appreciate subordinates
Get feedbacks.

37. TYPES OF COMMUNICATION
ORAL
Face to face communication
Speaker says something and listener listens to it.
Eg.Meetings, Telephonic conversation,discussions,debates
WRITTEN
Information is shared in written format
Eg.: notices ,letters, s, reports,etc.
NON VERBAL
Communication withour words.
Done by body language, facial expressions and physical movements.
Anger,fear,surprise,etc.

38. TYPES OF COMMUNICATION
UPWARD
Communication with higher authorities
Eg.Complaints,feedback,requests,etc.
DOWNWARD
Communication with subordinates
Eg.: Instructions,orders,etc.
HORIZONTAL
Communication with colleagues an similar cadre people
Eg.Discussions,sharing of knowledge,etc

39. TYPES OF COMMUNICATION
FORMAL
Communication related to official work
E.g. Notices, Meetings, orders ,etc.
INFORMAL
Off record communication , friendly communication , communication other than work.
Eg.Discussions,chichat,communication through social networking

40. BARRIERS IN COMMUNICATION
Language problem
Wrong timing
Cultural barriers
Network breakdown
Lack of feedback
Poor media
Wrong channel of information

41. CENTRALISATION & DECENTRALISATION
Concentration of authority at the centre.
Few seniors or heads will retain important responsibilities.
DECENTRALISATION:
Responsibilities distributed to subordinates
Responsibilities are spread across organization.

42. FACTORS IN SELECTION OF OWNERSHIP
Size of business
Type of product
Capital inflow
Govt. policy
Motive of business
Type of business
Life of business

43. TYPES OF OWNERSHIPS: Proprietorship Partnership General Limited Joint
stock
company
Private ltd.
Public ltd.
Co-operative society
Govnt. sector
Govnt.dept
Public corporation
Public/Govnt. company

44. SOLE PROPRIETORSHIP Oldest type of business.
A business owned and managed by one individual.
Whole and sole authority.
All the functions such as designing , manufacturing, marketing,sales,etc. of the organization are done by single person.
Small scale units, shops, construction business,etc
Example :
Facebook – Mark Zukerberg
Paypal ,Tesla–Elon Musk

45. SOLE PROPRIETORSHIP ADVANTAGES DISADVANTAGES Easy to establish
Start up costs
Owner takes all the profit
Responsible for all the functions
Makes decision on his own
Unlimited liability

46. PARTNERSHIP
Most important type of ownership

47. PARTNERSHIP
An association of two or more people who co-own a business for the purpose of making a profit.
Combine skills and administrative abilities of a number of people
Members in partnership are called as partners.
Minimum Partners = 02 & Maximum Partners = 20
Investment done is limited
Unlimited liability-Losses can be recovered from personal property of partners
Application: Medium scale industries,Malls,hospitalsservice centers,software companies,etc
Examples: Flipkart

48. PARTNERSHIP
Partnership Deed or Partnership Agreement: “Document regarding terms and conditions in partnership”
Contents of Partnership Agreement:
Name of firm and partners
Investment share of each
Authority, Responsibilities & Signatures of all partners
Rules and regulations
Tenure of agreement
Share of profit and loss
Location of business

49. SAMPLE OF A PARTNERSHIP AGREEMENT

51. TYPES OF PARTNERSHIPS GENERAL LIMITED All partners have same status
Success & failures shared by all equally.
More interference.
GENERAL
Limited liability
Few attend meetings
Less interference
LIMITED

52. TYPES OF PARTNERS

53. : TYPES OF PARTNERS Active General Dormant/Sleeping Nominal Secret
Called as “working partners”
Active in day to day activities and management
Active
All partners in partnership are called as general partners.
General
Don’t participate in business activities.
Also called “silent partners.”
Investment is the only contribution : share profit and loss
Dormant/Sleeping
Allow to use their name – Status, reputation and brand name
Nor participate in business activities neither invest in organization.
Nominal
Opposite to nominal partner type
Involve in “Functioning secretly”
Names are confidential
Secret
Partners below 18 years
Limited liability
Consent of Non minor partners is important
Minor

54. JOINT STOCK COMPANIES
Stock: “Investment done in terms of shares in any company.” Stock is finance available to company.
Joint stock company:
“Joint ownership by a no. of shareholders in a company”
Joint stock company is an association of shareholders.
Preferred for large scale organization.
Examples: Bajaj Auto, Tata Motors

55. TYPES OF JOINT STOCK COMPANIES
PRIVATE LTD. COMPANY
Shareholders are private members.
Min Members= 02
Max members = 50
Max no of Directors =02
Shares transferable only among the members
Less documentation
Audit and Financial budget is necessary
Circulation of Balance sheet, Profit and loss account ,etc among members is must.
PUBLIC LTD. COMPANY
Shareholders are general public hence called so.
Min Members= 07
Max members = unlimited
Max no of Directors =03
Shares transferable among general public
More documentation.
General meeting each year is compulsory
Documentation like Memorandum of association ,List of directors, etc is to be declared to public

56. EXAMPLES OF PVT LTD. AND JOINT STOCK COMPANIES

57. CO-OPERATIVE SOCIETY:

58. CO-OPERATIVE SOCIETY:
A cooperative (also known as co-operative) is an  association of people united voluntarily to meet their common economic needs and aspirations through a jointly owned business
Form of private ownership and lies in hands of members.
Service and not profit is the main motive.
Min members = 10 & Max members = unlimited
Election for various higher authorities takes place
Cooperatives include non-profit community organizations and businesses
Producers cooperative :eg. Sugar ,paper
consumer cooperative : owned and managed by the people who use services  
worker cooperative : people who work in a common place
housing cooperative : people who live there 

59. CO-OPERATIVE SOCIETY:
Mostly seen in rural areas
Members are share holders ; they get profit periodically.
Limited liability.
Political interference is more.
Slow decision making.
Not all cooperatives are successful.
The State of Maharashtra has a Cooperative society history since 1870 and has seen the most successful cooperative movements in history.
Suger coopearive societies, Credit societies ,State cooperative banks,etc.

60. GOVERNMENT SECTOR Also called “Public Sector” or “State Enterprises”
As the govnt is representation of public : this type of ownership is called as public sector.
Govnt. Is involved partially or completely.
Capital needed provided by govnt and profit generated is given to govnt.

61. GOVERNMENT SECTOR Central or state govnt have privilege in ownership.
Basic aim: providing service to society ; earning profit is not the priority.
Development of nation.
Employment opportunities.
Balanced regional growth.
Rapid economic and industrialdevelopment.

62. TYPES OF GOVERNMENT SECTOR
GOVERNMENT DEPT
PUBLIC CORPORATION
GOVNT./PUBLIC COMPANY

63. GOVERNMENT DEPT

64. GOVERNMENT DEPT
Government departments are organizations working under the Parliament / state assembly in India
policymaking and working guidelines is done by govnt itself (Parliament / state assembly) ; cabinet and state ministers do this.
Funds are provided by govnt.
Service is the only motive.
Administration heads are Civil servants like IAS ,IRS officers.
ISRO,DRDO,Indian Railways,PWD,etc.

65. PUBLIC CORPORATION

66. PUBLIC CORPORATION Government -owned corporation
Public company i.e. a limited liability company that offers its securities (shares) for sale to the general public.
Service with profit is the motive
Its status varies from being a part of the government to being stock companies with the state as a regular stockholder
Also termed as Public Sector Undertaking(PSU) or a Central Public Sector Enterprise (CPSE)
More professional approach than govnt departments.
Long term rules and policies are done after discussion in Parliament or State Assembly.

67. GOVNT./PUBLIC COMPANY

68. GOVNT./PUBLIC COMPANY Major shares are with govnt.
Earning profit and service are the motives.
Basic policies and mission-vision decided by parliament.
Except few higher posts all the recruitment is done by private agencies.
High level of professionalism than govnt department.
More efficiency.
Revenue generated strengthens government economy

69. Comparison between all types of Govt Sector
Sr.No.
Parameter
Govnt. Department
Public Corporation
Govnt. /Public Company 1
Govnt Control
Highest
Medium
Minimum 2
Freedom in decision making 3
Recruitment by govnt.
All posts
Many posts
Few posts 4
Efficiency
Less
Average
Good 5
Motive
Service
Service and profit
Profit and service