Organizing

The network of social relationships that arises spontaneously due to interaction at work is called informal organisation.

Span of management refers to the number of subordinates that can be effectively managed by a superior.

The functional structure is appropriate when:

1. The size of the organisation is large.
2. The organisation has diversified activities and operations require a high degree of specialisation.

Any two such circumstances are sufficient.

Since the company has units in different places and manufactures consumer products, it should adopt a divisional structure. This structure is suitable for large organisations with diversified activities and different product lines, because each division can work as a separate unit with its own functions.

The steps in the process of organising are:

1. Identification and division of work — the total work is identified and broken into manageable activities.
2. Departmentalisation — similar activities are grouped together into departments.
3. Assignment of duties — jobs are allocated to employees according to their skills and competencies.
4. Establishing authority and reporting relationships — it is तय how authority flows and who reports to whom.

These steps help translate plans into action.

The elements of delegation are:

1. Authority — the right of a superior to command subordinates and take decisions.
2. Responsibility — the obligation of a subordinate to properly perform the assigned duty.
3. Accountability — answerability for the final outcome; it flows upward and cannot be delegated.

Effective delegation requires that authority and responsibility match, while accountability remains with the superior.

Informal organisation supports the formal organisation in several ways:

- It allows faster spread of information and quick feedback.
- It helps fulfill the social needs of employees and increases job satisfaction.
- It can compensate for inadequacies in the formal organisation by testing reactions to plans and policies.
- It can also provide useful communication channels.

Thus, informal groups help work continue smoothly when used wisely by management.

No, a large organisation cannot be totally centralised or totally decentralised.

- In a completely centralised organisation, all decision-making is at the top, which would make a hierarchy unnecessary.
- In a completely decentralised organisation, all decisions would go to lower levels, which would make higher management unnecessary.

Both extremes are unrealistic. A large organisation needs a balance of centralisation and decentralisation according to the importance of decisions.

Decentralisation does mean extending delegation to lower levels, but it is more than delegation.

- Delegation is a transfer of authority from a superior to an immediate subordinate.
- Decentralisation is a policy of systematically dispersing decision-making authority throughout the organisation, up to the lowest levels.

So, decentralisation is the extension of delegation to the lowest level, but it also involves greater autonomy and wider scope than delegation alone.