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 StructureGM
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