Download presentation
Presentation is loading. Please wait.
1
ORGANIZATION Concept, Characteristics,
Formal and informal organization Organization chart and types of organization.
2
Concept of Organization
Organizations have existed since the beginning of civilization process in the world. We all born in organizations are educated by organizations and spend most of our time working in different organizations.
3
Concept of Organization
“An organization is a group of people working together to attain common goals”. G. Moorhead and R.W.Griffin “A formalize intentional structure of roles or positions.” Harold Koontz & Heinz Weihrich
4
Concept of Organization
“Organizations are collections of interacting and inter related human and non-human resources working toward a common goal or set of goals within the framework of structured relationships”. W.J.Duncan
5
Concept of Organization
“An organization is a consciously coordinated social entity, with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals”.- S.P.Robbins “Two or more people who work together in a structured way to achieve a specific goal or set of goals”. -Stoner, Freeman & Gilbert
6
Concept of Organization
From above definitions we can trace out that in organization there should be: Social entity Composed of people or groups of people. Working interdependently-interact with each other in a structured manner. Same purpose/ common goals (these goals either unattainable by individuals working alone or , if attainable individually, are achieved more efficiently through group effort).
7
Characteristics of Organization
Collection of people Common goal Social institution Division of work Coordination Hierarchy of authority Perpetual existence Environment Technology
8
ORGANIZATIONAL CHART Organizational chart is a diagram of official position of the organization and formal line of authority. It is graphic and systemic description of a formal structure of an organization. It indicates how departments are tied together along the principal lines of authority.
9
ORGANIZATIONAL CHART It shows, reporting relationships, chain of command, span of control of an organization. “An organization chart indicates how departments are tied together along the principal lines of authority.” - Harold Koontz/ Heinz Weihrich “Organization chart is a schematic drawing that depicts the hierarchical relationship among all positions within the organization.” – J.L. Pierce & D.G.Gardner
10
ORGANIZATIONAL CHART The organizational chart shows only formal relationships, the informal relationships are not depicted on the chart. An organization chart either shows the functions or titles with or without the names of position holders. In functional chart, various boxes shows the different units, subunits, and sections engaged in different functions. In the title chart, various positions are arranged in a hierarchy ranging from top level to lower level.
11
ORGANIZATIONAL CHART In conclusion organizational chart is:
a systemic diagram That shows official position formal line of authority hierarchical relationship reporting relationships, chain of command, span of control of an organization shows how departments are tied together
12
ORGANIZATIONAL CHART Board Of Directors Managing Director
Production Manager Marketing Manager Personnel Manager Finance Manager Marketing Promotional Manager Sales Manager Marketing Research Manager Regional Sales M A Regional Sales M B Regional Sales M C Sales executive I Sales executive II Sales executive III Sales man Sales man Sales man Sales man
13
TYPES OF ORGANIZATION CHART
Master Chart: shows the entire formal organization structure. it explains the whole organizational structure. Supplementary Chart: shows details of relationships, within the prescribed area of a department or major component of the organization. prepared at departmental level.
14
PRESENTATION OF ORGANIZATION CHART
There are three ways in which organization chart can be prepared. Vertical or top – down chart: Horizontal or left to right chart: Circular chart:
15
PRESENTATION OF ORGANIZATION CHART
1. Vertical or top – down chart: conventional way highest position is shown at the top as the chain of command travels down, at every successive stage, contents of authority tend to decrease takes the shape of pyramid lesser managerial positions on the higher side and more positions on the lower sides.
16
PRESENTATION OF ORGANIZATION CHART
2. Horizontal or left to right chart: the highest to the lowest level reading from left to right not much difference between vertical and horizontal the line of authority begins from left to right Horizontal charts do not serve any additional purpose it is not common in practice
17
2. Horizontal or left to right chart:
Sales executive I Finance Manager Sales man Marketing Promotional Manager Regional Sales M B Personnel Manager Sales man Sales executive II B O D Sales Manager Regional Sales Manager C MD Marketing Manager Sales man Marketing Research Manager Sales executive III Regional Sales M A Production Manager Sales man
18
PRESENTATION OF ORGANIZATION CHART
3. Circular chart: the various positions or functions of an organization can be shown in circular form. in this centre of the circle represents the position of supreme authority. functions and positions making up the organization structure are clustered around the centre the closer the position of function to the centre, the more important the function.
19
3. Circular chart: Sales manager Marketing manager n GM HR manager
Finance manager
20
ADVANTAGES OF ORGANIZATIONAL CHART:
Provides complete picture of organization: Useful to deploy resources: Training guide: Reference for outsiders: Avoidance of overlapping and duplicating of task: Management tools:
21
LIMITATIONS OF ORGANIZATIONAL CHART:
Rigidity: Partial view: In appropriate description: Psychological problems:
22
ORGANIZATIONAL MANUAL
An organization manual supplements and provides additional details to the information shown by the organization chart. Organization chart cannot include all the detail which is often desirable and necessary for understanding an organization. Organization manual is a small book containing information about the organizational objectives, authority and responsibility of various positions, and methods and procedures followed. The manuals can be prepared either for the organization as a whole or parts thereof. Usually organization manual contains the following information: Statement of organizational objectives and policies Job descriptions of major positions which include (i) functions performed (ii) authority and responsibilities (iii) relationships among various positions particular reporting relationships. Organizational procedures, methods rules etc.
23
Types of Organization There is no single complete typology of organizations. There exist a number of classifications provided by different authors and scholars. Some of the main classification scheme can be listed as below.
24
Types of Organization Government (Common weal) organization:
They are autonomous institutes formed to perform public welfare activities. The general public is their primary beneficiary and main goal is public welfare. Public welfare activities consist of administrative and infrastructure development work. They are also known as common weal organization. It can be ministries, departments, development projects, military, and police. Nongovernment organization: These organizations are formed by non government agencies to help government. Provides service in different parts of the country. The main aim is to make services of government and nongovernmental organizations accessible to the people in need generally.
25
Types of Organization Professional organizations:
Formed by a group of people to protect their professional right. The primary beneficiaries of such organizations are their members. The basic purpose is to protect the interest and professional right of their members. Nepal Bar Association, Chartered Accountants Associations, Students Unions etc are examples. Service organization: Service organizations are non-profit service oriented institutions. They are mainly involved in providing services to a specific segment or group or society. The clients are the primary beneficiaries of such organizations. Eg. government hospitals, public schools and colleges, charitable institutions, religious and non government organization.
26
Types of Organization Business organization:
profit making concerns. engaged in the production and distribution of products. Eg. goods, services, ideas, information, experiences etc. Their primary beneficiaries are their owners. It may be sole trading concerns, partnership firms, joint stock companies and multinational companies. International organization: Work in two or more countries. The member countries are the beneficiaries of such organizations. The main objective of these organizations is the uplift of the interests of member countries. They are involved in promoting trade and socio cultural relations among the member countries and providing financial aid to them. Eg. World Bank, UNDP, WTO, SAARC are the examples.
27
Types of Organization The line organization Functional Organization
Authority flows from the top to bottom. Directions are issued by the highest authority thru chain of command. Subordinate receive all his instructions from his immediate superior and will directly be responsible to him. Functional Organization The object of functional organization is to give a place to specialists at the supervisory level in the line organization. Under this, the personnel and their work are organized on the basis of the type of activities. All activities of the same type are grouped together under one functional department which is managed by an executive who is expert in his field. There may be separate departments on the basis of major functions like Account, Human Resource, Examination, Faculty etc.
28
Types of Organization Line and staff organization
This system implies the combined role of line (actual doers of the work) and the staff (persons who only advise about during the job) in attaining the objectives of the enterprise. Under line and staff system there are two types of employees, the line people i.e. those who are directly responsible for the performance of the work and staff people i.e. those who provide expert advice to line people and are not directly concerned with production. Committee organization A committee is a group of persons assigned for certain task. This form of organization does not exist by itself but is mainly established in combination with other forms of organization. Committees are found to exist in different areas and levels of an organizational.
29
Formal and Informal Organization
It refers to the structure of well defined jobs, each bearing a definite measure of authority, responsibility and accountability. The structure is consciously designed to enable the people of the organization to work together in accomplishing the common objectives.
30
Formal and Informal Organization
It is a structure to which an individual must adjust. It tells him/her to do certain things, in a specified manner, to obey orders from designated individuals, and to work cooperatively with others. It facilitates the determination of objectives and policies.
31
Formal and Informal Organization
People come together in formal organizations to achieve ends they cannot accomplish working alone. A formal organization must be flexible. There should be room for discretion, for beneficial utilization of creative talents.
32
Formal and Informal Organization
Characteristics of formal organization: Structure is pre-determined by top management. Based on division of labor and work specialization. Structure is based on jobs to be performed not on the person who perform the job. Unity of command is followed. Consciously designed. Organization charts are usually drawn.
33
Formal and Informal Organization
Emerge through the social contact of people within a formal organization. It is created for meeting socio-psychological needs of the people. It also plays an important role in organizational performance.
34
Formal and Informal Organization
“The undocumented and officially unrecognized relationships between members of an organization that inevitably emerge out of the personal and group needs of employees.” - Stoner/Freeman/Gilbert “Informal organization is a joint personal activity without a conscious joint purpose, even though possibly contributing to joint results.” - Cheter I, Barnard
35
Formal and Informal Organization
relationships between people in the organization based on personal attitudes, emotions, prejudices, likes, dislikes, etc. developed automatically within the organization according the environment in the organization. is pervasive. is fickle and changes from time to time.
36
Advantages of informal organization:
To Employees. Sense of belonging: Value for emotional problem: Aid on the job: Social control: Check on authority: To Manager: Reduced supervision Fills in gaps in a manager’s abilities Gives to manager feedback about employees and their work experiences Effective and quick communication:
37
Disadvantages of informal organization:
Resistance to change: Role conflict and sub-optimization: Rumor: Group think philosophy:
38
Informal organizations
and Informal Organization Informal organizations
39
Differences between Formal and Informal Organization
S.N. Basis Formal Organization Informal Organization 1 Formation created by conscious managerial decisions. formed spontaneously through the social contact of people within the formal organization. 2 Purpose for achieving certain predetermined objectives of an organization. to satisfy socio-psychological needs and other interests of their members. 3 No. of members often large and dependent on the nature and size of the enterprise. often quite small. members may be the members of more than one informal group.
40
Differences between Formal and Informal Organization
Basis Formal Organization Informal Organization 4 Structure are usually pyramid shaped, hierarchical and can be depicted in organization chart. are non-hierarchical and have no clear structure. 5 Stability It is relatively more stable. It is relatively unstable. 6 Rules & Regulations Rules and Regulations are clearly written. Rules and regulations are not written and clear. 7 Responsibility Authority and are clearly defined. Authority flows from top to lower levels and responsibility flows bottom upwards. are not clearly defined. There is horizontal flow of authority and responsibility.
41
Differences between Formal and Informal Organization
S.N. Basis Formal Organization Informal Organization 8 Communication Channels There is prescribed channels of communication and have to be strictly followed by the members. There are no prescribed communication channels. 9 Focus/Orientation Its activities and goals are oriented towards efficiency, productivity, profitability and growth. Its activities and goals revolve around the individual & social needs and interests. 10 Norms of behavior is developed and regulated by management. is evolved through the mutual understanding of its members. 11 Leader/s The managers are the leaders of their work groups through the authority delegated from top management. leaders are those who are accepted by all or by the majority of group members.
42
Types of Organization Design 3. Matrix Structure
Sometimes an organization needs to run according to what projects they have to do. In these situations people usually work together in a team to achieve their projects goals. A person working on a project would have two bosses, the boss of the department that they work in and the leader or manager of the particular project that they are working on at the moment.
43
Types of Organization Design 1. Simple structure
Advantages: Simple to establish. Flexible- can be changed according to the owner’s need. Clear roles, responsibilities, and reporting system. Easy to control and maintain. Disadvantages: Not suitable for larger & complex organization. Information overload at the top level. Risky; everything depends on one person.
44
Types of Organization Design 1. Simple structure
Owner-Manager Barber Barber Barber
45
Types of Organization Design 2. Bureaucracy
Bureaucracy has strictly defined hierarchy of authority. A structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations. Tasks are grouped into functional departments.
46
Types of Organization Design 2. Bureaucracy
Characteristics: Formalize rules and regulations to perform routine tasks. Centralize authority. Clearly defined hierarchy. Decision making based on chain of command. Narrow spans of control, and decision making Follows the chain of command.
47
Types of Organization Design 2. Bureaucracy
Advantages: Useful to manage big and complex organizations like government, army. Decision making is rational. It is based on standard rules and operating procedures. Disadvantages: It lacks innovation and flexibility; cannot change with the dynamic changes in the environment. Role conflict occurs due to outdated systems of authority and control. Too much concern with rules. They became red tapes. (official rules that seem more complicated than necessary and prevent things from being done quickly)
48
Types of Organization Design 2. Bureaucracy
Secretary Joint Secretary Joint Secretary Under Secretary Under Secretary Under Secretary Under Secretary
49
Types of Organization Design 3. Matrix Structure
Sometimes an organization needs to run according to what projects they have to do. In these situations people usually work together in a team to achieve their projects goals. A person working on a project would have two bosses, the boss of the department that they work in and the leader or manager of the particular project that they are working on at the moment.
50
Types of Organization Design 3. Matrix Structure
Characteristics: Combines two forms of departmentation functional and project. Specialists are assigned from functional departments to work on projects. Breaks unity of command principle. An employee has two bosses. Time bound structure. Specialists return to their departments after completion of projects.
51
Types of Organization Design 3. Matrix Structure
Advantages: Able to adapt to changes in the environment. This structure fosters flexibility throughout the organization. Facilitates efficient utilization of specialized resources. Improve motivation and personal development. Disadvantages: Employees receive order from departmental boss as well as project boss. This results conflicts and confusion. The structure causes power struggle between functional managers and project managers for allocation of resources. This requires high interpersonal skills. It places stress on individuals.
52
Types of Organization Design 3. Matrix Structure
Advantages: Able to adapt to changes in the environment. This structure fosters flexibility throughout the organization. Facilitates efficient utilization of specialized resources. Improve motivation and personal development. Disadvantages: Employees receive order from departmental boss as well as project boss. This results conflicts and confusion. The structure causes power struggle between functional managers and project managers for allocation of resources. This requires high interpersonal skills. It places stress on individuals.
53
Types of Organization Design 3. Matrix Structure
GM Manager Personnel Manager projects Manager production Manager marketing Manager finance Project A manager Production Group Marketing Group Finance Group Personnel Group Project B manager Production Group Marketing Group Finance Group Personnel Group
54
Types of Organization Design 4. Team Structure
A team structure is a design in which an organization is made up of teams, and each team works towards a common goal. In a team structured organization there is no hierarchy or chain of command. Therefore, teams can work the way they want to, and figure out the most effective and efficient way to perform their tasks. Teams are given the power to be as innovative as they want. Some teams may have a group leader who is in charge of the group.
55
Traditional Vs. modern approach to organization
The traditional concept of organization is work oriented and taken as a closed system. ignores the environmental changes. assumed that the environment will be stable, easily predictable and creates no problem. The modern approach, recognizes organizations as open systems. It believes environment as an important in of organizational life. organizations are complex goal seeking social units the external environment is to be considered. takes organization as social system having many subsystems which are interdependent and interrelated to each other.
56
Traditional versus Modern Approaches to Organization
Basis of comparison Traditional Organizations Modern Organizations System Closed Open Environment Stable Dynamic Management Philosophy Centralization Decentralization Decision-making Authority Consensus Rules and Procedures Rigid Rules and Procedures Flexible Rules and Procedures Communication One way Communication Open and multidirectional Motivation Maintenance/low order needs Motivational/high order needs Management and control approach Tight control; emphasis on positions to achieve goals Emphasis on goals: management by objectives Leadership style Autocratic Approach Democratic Approach Work environment Negative work environment Positive work environment Creativity and innovation No scope for creativity and Innovation Scope for creativity and innovation
Similar presentations
© 2025 SlidePlayer.com Inc.
All rights reserved.