Chapter - 5 Organisation - I Q - 1 Give the meaning of "Organisation" and explain its formation. (stages of organisation) (july 06) Ans.

INTRODUCTION :- (CLD3EP) When a large number of people are working for the accomplishment of an objective, specific understanding and clarity are necessary as to what functions are to be performed who will perform which, who will issue orders, who will implementation etc. This work is done by an Organisation. MEANING :" Organisation is that structure that assigns authority and responsibility amongst individuals working together for the accomplishment of a common objective". Formation of an Organisation :The formation of an Organisation is a scientific process. Only a flexible Organisation that can adjust itself to changing circumstances can work successfully. A ready-made organisation may not be suitable to all business units. So every business has to form an Organisation suitable to its objectives and functions. Stages :For the formation of an ideal Organisation the following stages are helpful. (1) Clarification of Objectives :An organisation can be formed only after knowing clearly the primary and secondary, objectives of the business. Structure of an organisation can be decided only with respect to these objectives. An Organisation formed without clarity of objectives is liable to fail. (2) Listing of Function :A detailed list of functions to be performed for the accomplishment of objectives should be prepared. Whenever necessary, the functions should be properly defined, to get a clear understanding of the same. A function can be separated from another only when the task of each one is decided.

(3) Departmentation :Various functions listed should be departmentalised by related and indentical functions being grouped. e.g. sales department, purchase department, personnel department etc. Division of labour and specialisation can be achieved by such departmentation. Departmentation can also be done on the basis of production, function, geographical area etc. (4) Departmental Positions and Qualifications thereof :Once departments have been decided upon. the position of head of the department to take over the responsibility of the relevant functions must be decided, e.g. sales manager for sales department, purchase manager for purchase department etc. The qualifications expected to do justice to the duties of every department should be decided at this stage. (5) Delegation of Authority and Assignment of Responsibility :Every departmental head should be assigned his duties and be vested with the necessary autjority to perform these successfully. Authority at every position must be clearly defined. Who will be responsible to whom must be clarified. It is also necessary that authority should be in proportion to responsibility. (6) Establishment of Inter-relationship :Inter-department relationship should be clarified. Such relationships as to who is to be at the top, who is the subordinate, who will be at the same level, who will issue orders, etc.must be clarified. Then only can effective coordination be maintained. (7) Preparation of Organisational Chart :An Organisational chart should be prepared so that every officer and other personal involved in the organisation, get a clear idea of their respective positions. This chart must be prominently displayed on the notice board. CONCLUSION :Over and above this, the matter has to be thought over that how many employees would assist departmental head. This will make sure effective and efficient control and supervision. This matter is known as 'Span of control' .

Q - 2 State the type of Organisations (T.B.)(March 06)

Ans. The scope of business expands with its size. So Assignment of authority and responsibilities becomes complex. Hence, clarity of interrelationship of personnel becomes necessary. Assignment of authority is the basis of Organisation. On the basis of such assignment the follwing will be the types of Organisations :

1. Line Organisation 2. Functional Organisation 3. Committee Organisation 4. Line and staff Organisation 5. Matrix Organisation

Q - 3 Write a short note on :- Line Organisation (T.B)(March 08) Or Write a short note on :- Departmental Organisation Or Give meaning and Merits, Demerits of Line Organisation Ans. MEANING:Line Organisation is such an Organisation where authority and responsibility flow downward from top to the bottom and where every person is responsible to his immediate superior. The higher the position the more is the authority and lower the position the converse in the case. Line Organisation is an old and simple and has been used by the millitary for years. Here in this Organisation it is department which is important & not function. That is why it is also called departmental Organisation. FORMATION :Entier business is divided into various departments and departmental head is appointed for every department, who is given full authority and responsibility of his department.

Various departmental heads, though at the same lavel, are independent of one another and every departmental head has foreman and supervisors working under him and workers and employees work under there foreman & supervisors. The BOD (Board Of Directors) has top most authority and takes policy decisions, where as status of GM(General Manager) is that of the CEO(Chief Executive Officer) and derives his authority from the board and makes the department officers impement the decisions of the board. As shown in below figure organisation is divided into three department, viz the production sales and administrative and officers such as production, purchase, sales, manager etc appointed. These officers have total authority over their departments and function of GM (General Manager) is to co-ordinate the working of varios departments and also exercise control over them. Thus in a Line Organisation authority and responsibility flow lineally from the top to bottom level. Board Of Directors

MERITS :Line Organisation has following Merits or Advantages :(1) Simple :- Line organisation has a simple structure understood by even the common man. (2) Division of Authority and Responsibility :- Authority and responsibility are clearly demarcated in this type of Organisation. (3) Effective Control :- Since the departmental haed has total authority over his department, discipline and control are maintained. (4) Quick Decision :- Quick decisions are possible as the departmental officer enjoys freedom.

(5) Growth of officers :- Departmental head man develop his efficiency and personally as he has to perform all the functions of the department. (6) Flexibility :- Necessary changes can be affected according to time and circumstances and to that extent flexibility is possible in this structure. (7) Unity of command :- Everyone has to take orders from a simple individual and hence unity of command is maintained. (8) Less expensive :- This structure is comparatively less expensive than the other structure or form Organisation. DEMERITS :- (L4AE) Following are Disadvantages or Demarits of line Organisation. (1) Autocratic Management :- As authority becomes centralised in departmental heads, there is a possibility of the becoming autocratic. (2) Lack Of Specialization :- There is a lack of specialisation in this type of Organisation, as departments have more importance than the functions. (3) Increased Workload :- As departmental heads have to carry out all the functions of their respective departments their burden of work increases. (4) Lack of experts :- In this type of Organisation it becomes difficult to acquire the services of highly qualified executives capable in every respect. (5) Lack of coordination :- As the department and officers are independent, co-ordination is difficult. (6) Lack of proper communication :- In this type of Organisation, many times, the flow of communication from bottom to top level is not effectively done, which creates many problems.

Q - 4 Write a short note on :- Functional Organisation Or Explain in detail functional Organisation (along with Merits and Demerits) Ans. MEANING :The functional type of organization, authority and responsibility is based on functions and not on departments. For each function one experts is appointed and this executive is not only advisors but also administrative officers. These experts are not only responsibility for department, but for entire function of Organisation.

E.g. :- Personal officer minds the functions of recruitment, selection etc. Purchase officer minds the purchase function of entire Organisation. FORMATION OF FUNCTIONAL ORGANISATION :-

In the Functional Organisation the chief executive has the top most authority. The unit is divided into two :- Planning Department and Factory Deoartment. Small segments are decided and handed over to various experts such as Information officers, Accounts officer, Quality officer, Maintenance officer. Every officer can give orders to every worker of the unit, meaning thereby that here function is more important and not the Department. Here workers are not responsible to a single officer but receive orders from different officers. Experts are not independent but are linked inter-se to one another. Chief Executive

MERITS OR ADVANTAGES :- (SDCB2TFQ) (1) Specialization :- Different experts are appointed for each function, which makes specialization possible. (2) Decentralisation of authority :- No single executive has total authority, but all have equal authority and so decentralisation of authority is made possible. (3) Co-ordination :- Every expert is not totally independent, but remains mutually connected. So co-ordination is maintained. (4) Burden reduces :- Executives are responsible only for their part of work. So the burden of work is reduced. (5) Benefit of expertise :- As the responsibility of every work is given to various officers their recruitment becomes easy and hence, the benefit of their expertise is obtained. (6) Training :- Training to workers and officers is easy. (7) Flexible :- Since benefit of expertise is available, flexibility as demanded by time and circumstances is possible. (8) Quick decision :- Decision making process becomes simple and quick.

DEMARITS OR DISADVANTAGES :- (CN2UDM) (1) Complexity :- Compared to line organisation it lack's in simplicity and thus results in compexity. (2) No Unity of Command :- As different workers have to obtain order from different workers unity of command is not maintained. (3) No discipline and control :- Since no single executive has total authority lack of discipline and control may results. (4) Uncertainity of responsibility :- Every executive has authority for his work only. So it become difficult to pin point the responsibility in case of failure. (5) Delay in decision :- As decisions are to be taken from various officers the decisions are delayed. (6) More expensive :- As various experts are appointed in this type of organisation it is generally more expensive.

Q - 5 Differentiate between line and functional organisation (T.B.)(July 07) Ans.

Q - 6 Explain in detail formal organisation. Ans. Any structure, established to bridge the relationship between functions and individuals for the accomplishment of specific objectives, is called formal organisation.

Line organisation, functional organisation, line and staff organisation are all formal organisations. In all formal organisations, authority is given for the responsibility of some functions only.

Matters such as who is superior, who is equal, who is subordinate are all made very clear in formal organisation. Everyone involved develops and maintains inter- relationship.

Q - 7 Explain in detail :- Informal Organisation Or Give the meaning of informal organisation along with its merits and demerits. Or Write short note on :- Informal Organisation (T.B.) Ans. MEANING :-

When a group of willing and concerned employees is formed on the basis of human relations it becomes an informal organisation. Informal organisation is a social structure established for the purpose of satisfyinf needs and depends on informal relationship. All groups formed with the growth of human relationship on the basis of similiar ideology, feelings, religion, taste and aptitudes are known as Informal organisation. In short Informal organisation concerns itself with their individuals and their normal inter-relationships, It depends on individuals attitudes and preferences and not on management rules or planning processes. It is the shadow of formal organisation & has no place in organisation chart.

MERITS :-

6. Mental stress of employees is reduced because of personal interaction. 7. The authority of management is restrained becuse of employee
groups.

8. This type of organisation complements the accomplishments of

objectives of formal organisation.

9. It helps in communication. 10. Social restrictions on employees are imposed.

DEMERITS :-

11. Due to opposition by employees there is a possibility of resistances to

changes by the management.

12. Indiscipline is likely to be encouraged. 13. In place of correct information there is a risk of rumours being spread. 14. There is also a risk of industrial peace being endangered due to
negative leadership.

15. There is a possibility of obstacles being placed in management.

Q - 8 Differentiate between (T.B.) (1) Ans. Formal organization & Informal organization

Q - 9 Explain the statement :- (T.B.) (1) Organisation is a structure as well as a process (March 07 & 3 marks) Ans. Various experts have tried to define Organisation with various angles. Certain experts explain Organisation as a process.

According to them, Organisation is a process comprising of below mentioned functions :To decide the objectives, to formulate subsidiary plans, policies and programmes to list the functions for the achievement of objectives and to analyses the same to form functional group, to assign authority and responsibility as well as to decide interrelations. Certain experts describe Organisation as a structure. According to them, after completion of Organisation process, the structure getting formed is called Organisation. It decides the shape of the Organisation based on which administrative and Organisational decisions are taken. In that clarity is made about the authority and responsibility of the

various managerial level employees and their interrelatio between them can be established.

Thus Organisation is a structure as well as a process.

(2) Compared to other factors, the success or otherwise of management depends more on Organisation. (March 07 & 3 marks) Ans. Whether business unit will suceed or fail depends primarily on the Organisation.

Even if the various factors affecting business are favourable but if the Organisation impementing the activities is inefficient, the maximum utilisation of resources will become difficult. Time, energy, resources will be wasted and it will become difficult to meet production targets. As a result it will be difficult to put in the market timely the right quality of products, the market will be lost and business units will fail. As per opinion of a successful industrialist if Organisation is efficient, the lost factories, transportation vehicle, business trade etc.can be regained. Thus success or failure of management primarily depend on its Organisation rather than other factors.

(3) The basis of Organisation is the balance between authority and responsibility. (July 07 & 3 marks) Ans. The Organisation delegates authority and responsibility among various departments and individuals.

In Organisation, balance should be maintained between authority and responsibility. The employee should be assigned with proper authority and responsibility. If authority given is more than necessary, then there will be misuse of authority. If authority fails short of responsibility then employee will try to reduce some responsibility or otherwise he will fail in competing the job

assigned.

Thus, in Organisation the balance should be maintained between authority and responsibility. Hence, it can be said that the basis of Organisation is balance between authority and responsibility.

(4) Informal Organisation is a shadow of formal Organisation. Or Formal and informal Organisations are compliments to each other. Ans. Formal Organisations are formed procedurally for the impementation of planned activities.

There the creation of various divisions and interrelationship among employees working there in are clarified. Each officers has to strictly follow the order and directions of his superior officer. The employees of all these divisions come across with each other, so friendship and heartily relations develop in them. On account of this they voluntarily try to complete the work of each other and cooperate each other. The system formed in this manner is called informal Organisation. Thus, from formal Organisation the informal Organisation emerge hence they are called the shadows of formal Organisation. On account of informal Organisation the functioning of formal Organisation is eased hence they are considered complementry to each other.

Q - 10 Explain in detail : Committee Organisation Or Write a short note on committee Organisation (T.B.) Ans. INTRODUCTION :Since the other types of Organisations are not able to fully satisfy

the needs of modern times, committee Organisation developed as a complementry Organisation. MEANING :In committee Organisation the responsibility of any special function or that of taking decisions is vested in a group of individuals and not in a single person. This group is called the committee. Since there are more people in the committee, yhe benefit of their experience, knowledge and skill is obtained. FORMATION OF COMMITTEE ORGANISATION :-

Various functions of business are performed by a committee of individuals instead of single person. Members of this committee work as a group. The decisions of this committee are taken after free deliberations among themselves. Decisions taken after a healthy discussion among people represented by various function become more effective. Committee Organisation is useful not only in business but also has been found to be more useful in social institutions, co-operative societies, public undertakings, religious and political institutions etc. The persons appointed in the committee should be experts in their respective fields for the success of this type of Organisation. Top Executive Committee

Following are merits of commitee Organisation (DB2C QGR) (1) Matured decision :Since more individulas are included in decisionmaking, mature decisions are possible. (2) Democratic approch :All members of the committee are given an opportunity to express their views and opinions democratically. (3) Benefit of specialization :The members of the committee are experts in their respective fields and hence the benefits of specialization are available.

(4) Coordination eased :Co-ordination is easily maintained as decisions are taken after free deliberations. (5) Quick decision :Reporting is expedited as the members of the commitee are the know of the decision taken. (6) Decentralization of authority :As more individuals are involved in the decision making process, there is decentralisation of authority. (7) Burden decreases :Burden of work of executives is reduced due to the help of committee. (8) Growth of members :As workers are included in the committees, employer- employee relations are strenghthened. (9) Research is encouraged :In committee organisation when there is need for research in any matter relating to producyion or marketing, then committee consisting experts in that field is formed. DEMERITS OF COMMITTEE ORGANISATION :- (NDUJC) (1) No secrecy :As discussions take place regarding functions or decisions among members of the committee, business secrets are not maintained. (2) Delay in decision :At times decisions are delayed due to less attendence of members of the committee or differences of opinion among them, decisions are delayed. (3) Uncertainity of responsibility :The decisions of the committee are impemented by the administrative officers, so it is difficult to hold any one person responsible for any failure. (4) Injustice in decision :Decisions in the committee are taken by a majority. So, many times even if the minority members are right their views are not accepted and there is a likelihood of injustice to the minority. (5) Conflict between members :If the members of the committee adopt a political stance, there is a possibility of groupism or internal conflict. CONCLUSION :-

In short committee organisation is that type of organisation that takes decisions collectively for the business by the majority. Q - 11 State the types of organisation and discuss "line organisation" in detail.(T.B) Ans. Refer Ans.2 and Ans. 3 Q - 12 State the features of an organisation. Or Describe the characteristics of an organisation. Ans. MEANING :Same as Ans - 1 FEATURES :- (CI2D2FBNO) (1) Objective oriented :- Organisation is an objective-oriented activity and performs various functions for accomplishment of objective. (2) Delegation of Authority :- Organisation delegate the authority to individuals working and also assigns them duties for the same. (3) Dependent on planning :- Organisation depends on planning. It is rightly said that planning is the brain of a business while organisation is its physical structure. (4) Flexible :- Organisation is flexible. The necessary changes are incorporated into it on the basis of time and circumstances. (5) Importance to human factor :- In the formation of the organisation, human element is at the centre. Thus, it gives importance to human element. (6) Interrelationship of activities :- The organisation establishes inter-relationship among various functions, positions, sections and individuals. (7) Co-ordination of activities :- Supervision control and coordination are basic requirenments for the success of an organisation. (8) Nourishes administerial structure :- organisation is an administrative frame work (structure) (9) Balance between authority and responsibility :- organisation divides the activities of the unit into different sections of departments and divides authority and responsibility among them based on their skill.

Q - 13 Briefly explain the importance of organisation with reference to business unit, (July 06) Ans. INTRODUCTION :Organisation establishes an inter-relationship between authority and responsibility. To clarify the importance of organisation, a successful industrialist notes. ' Take away our plants, take away our business, oh! take away our wealth (finance) but permit us to retain our organisation. Within no time we shall be on our feet once again' . IMPORTANCE :- (D3IURCE) The points given below also clarify the importance of organisation : (1) Basis of success :- The success or failure of a business largely depends on its organisation. (2) No duplication :- There is no duplication of work and coordination is maintained because of organisation. (3) Interrelationship :- Organisation establishes inter-relationships between functions and individuals. (4) Usage of time :- Maximum utilisation of time and resources becomes possible due to organisation. (5) Responsible :- By organisation employees come to known about which employee is to do which activity, in what period etc. Thus employees become responsible and alert. (6) Control :- organisation defines the span of control of each officer. Thus organisation makes control effective. (7) Discipline :- When a division being ahead of other division is disclosed to any other division, then the moral of employees of that division towards work increases and discipline towards work is seen. (8) Division of labour :- Division of labour and research are encouraged, and by adopting new technology administrative efficiency can be increased. (9) Smooth administration :- Smooth administration is maintained due to clarity of authority and responsiblity. (10) Equality :- Every activity gets equal justice. CONCLUSION :The different divisions have different goals but ultimate objective of

organisation is to maintain existence of business and achieve objectives.

Q - 14 In which organisation every person is responsible to his immediate superior. (July 06) Ans. In line organisation every person is responsible to his immediate superior.

Q - 15 Explain three merits of committee organisation (March 07) Ans. Refer Ans. 10 (Merits) Q - 16 State in which type of business line organisation is suitable? (T.B.) Or Where linear organisation is convenient? Or Where linear organisation succeed? Ans. Linear or line organisation convenient or succeed when the unit is small, when discipline and control is required where production is automatic and where same type of function is to be repeated.

Q - 17 Where committee organisation is useful :- (July 07 & March 08) Ans. Committee organisation is useful not only in business but also has been found useful in social institutions, cooperative societies, public undertakings, religious and political institutions. Q - 18 Give two suggestion for the success of committee organisation (T.B.) Ans. Following are the suggestions for the success of committee organisation. (1) Person appointed in committee should be experts in their respective fields for success of organisation.

(2) It is also necessary that the strength of committee be limited and scope made clear. (3) Sub committees can be formed as & when required. Q - 19 Give point of differences between functional and commitee organisation. (March 08) Ans.

Q - 20 State the Merits and Demerits of functional organisation. (T.B.) Ans.