ORGANISATION STRUCTURE

AND RELATIONSHIP

ABSTRACT
To understand how an organisational structure is an interesting fundamental
challenge in the area of organisation behavior. In this report,we study about
organisation, different types of structure of an organisation , representation of

an organisations structure via organization charts and different types of

organisational relationships. Organisational structure provides a structure of
(interlevel) relationships between these multiple sets of dynamic properties.
Thus organisational structure is reflected in formalisation of the dynamics of
organisational behaviour.
As an illustration,we have also added questionnaire depicting the organisational
relationship and structure in ICICI bank.

TABLE OF CONTENTS

ABSTRACT

TABLE OF CONTENTS

ORGANISATION-DEFINITIONS

ADVANTAGES OF ORGANISATION
CLASSICAL THEORY OF ORGANISATION

9
10

CRITICAL EVALUATION OF THE CLASSICAL THEORY OF

ORGANISATION
11
RELEVANCE

13

NEO-CLASSICAL THEORY OF ORGANISATION

14

MODERN THEORY OF ORGANISATION

16

ORGANISATIONAL STRUCTURE

18

PRINCIPLES OF FORMAL ORGANISATION

19

METHODS TO FIND OUT WHAT STRUCTURE IS NEEDED

21
ORGANISATIONAL CHART

22

Definition of Organisation Chart

22

Features of Organisation Chart

23

Advantages of Organisational Chart

23

Limitations of Organisational Chart

23

TYPES OF ORGANISATION CHART

24

Divisional organizational chart

24
Hierarchical organisational chart:

25

Matrix organisational chart

26

Flat or Horizontal

27

Line or Direct

28

Functional Organizational Chart

29

Line and Staff Organizational Chart

30

Committee Organizational Chart

30

DEPARTMENTATION

32

Common Bases For Departmentation

32

Need and importance of departmentation

33

PATTERNS OF DEPARTMENTATION
Functional Departmentation:
35
Products
Territories
Customers
Process or Equipment Departmentation
Time Departmentation
Composite or Combined Departmentation
Departmentation

34

SPAN OF MANAGEMENT

36
37
38
39
40
40
41

Theoretical considerations

43

Factors determining the span of management:

44

FUTURE ORGANISATION

45

ORGANIZATIONAL RELATIONSHIPS

47

LINE ORGANIZATION:-

47

STAFF ORGANIZATION:-

50

LINE AND STAFF ORGANIZATION-

51

FUNCTIONAL ORGANIZATION

56

COMMITTEE ORGANIZATION-

59

AUDIT RELATIONSHIP:

60

Design of Questionnaire

62

RESULTANT FINDINGS

64

FINDINGS

66

CONCLUSION

69

BIBLIOGRAPHY

70

ORGANISATION-DEFINITIONS
An organisation is a social entity that has a collective goal and is linked to
an external environment. The word is derived from the Greek word
organon, which is derived from the better-known word ergon which means
"organ" a compartment for a particular task.According to Mooney and
Reily, "Organisation is the form of every human association for the
attainment of a common purpose."
Organisation is related with developing a frame work where the total work
is divided into manageable components in order to facilitate the
achievement of objectives or goals.An organization is defined by the
elements that are part of it (who belongs to the organization and who
does not), its communication (which elements communicate and how do
they communicate), its autonomy (the changes that are executed
autonomously by the organization or its elements), and its rules of action
compared to outside events (the factors that cause an organization to act
as a collective actor). By coordinated and planned cooperation of these
elements, the organization is able to solve tasks that lie beyond the
abilities of the individual elements. The price paid by the elements is the
limitation of the degrees of freedom of the same. Advantages of
organizations are enhancement (more of the same features), addition
(combination of different features) and extension. The disadvantages
could be inertness (through co-ordination) and the loss of interaction.
In the social sciences, organizations are the object of analysis for a
number of disciplines, such as sociology, economics, political science,
psychology, management, and organizational communication. The
broader analysis of organizations is commonly referred to as
organizational structure, organizational studies, organizational behaviour,
or organizational analysis.
Every discipline derives its own meaning of organisation.In the social and
political sciences in general, an "organization" may be more loosely
understood as the planned, coordinated and purposeful action of human
beings working through collective action to reach a common goal or
construct a tangible product. This action is usually framed by formal
membership and form i.e. institutional rules. Sociology distinguishes the
term organization into planned formal and unplanned informal i.e.
spontaneously formed organizations. Sociology analyses organizations in
the first line from an institutional perspective. In this sense, organization is
a permanent arrangement of elements. These elements and their actions
are determined by rules so that a certain task can be fulfilled through a

system of coordinated division of labour. From an institutional perspective,

an organization is viewed as a purposeful structure within a social context.
Economic approaches to organizations take the division of labour as the
starting point. The division of labour allows for economies of
specialization. Increasing specialization necessitates coordination. From an
economic point of view, markets and organizations are alternative
coordination mechanisms for the execution of transactions.
Like 'management', the term 'organisation' has also been used in a
number of ways. Broadly speaking, the term 'organisation' is used in four
different senses: as a process, as a structure of relationship, as a group of
persons and as a system, as given below:
Organisation as a Process: In this first category, organisation is treated
as a dynamic process and a managerial activity which is essential for
planning the utilization of the company's resources, plant and equipment,
money and people to accomplish the various objectives.
Organisation as a Framework of Relationship: In the second
category, organisation refers to the structure of relationships and the
positions or jobs which are created to attain certain objectives. The
definitions of Henry, Urwick, Farland, Northcourt, Lansburgh and Spriegel
Breach, Davis, Mooney and Reily etc., come under this group.
Organisation as a Group of persons: Under this an organisation is
very often viewed as a group of people contributing their efforts towards
certain goals. An organisation begins when people combine their efforts
for some common purpose. It is a universal truth that an individual is
unable to fully utilise all resources by himself. According to Chester I.
Barnard, "Organisation is a system of co-operative activities of two or
more persons."
Organisation as a System: In the fourth category, the organisation is
viewed as a system. System concepts recognize that organizations are
made up of components each of which has unique properties, capabilities
and mutual relationships. The constituent elements of a system are linked
together in such complex ways that actions taken by one producer have
far reaching effect on others.
Thus an organisation is defined in a variety of ways which depends on the
scholar defining it and the discipline for which it is being defined. There
are some features however that remains constant in all these definitions.
Some of these are the objective of an organisation, assignment of duties
and creating an authority relationship. It is the existence of these features
that make the study of organisations imperative.
7

ADVANTAGES OF ORGANISATION
The well-known industrialist of U.S.A. late Andrew Carnegie, showed his
confidence in organisation by uttering the following words, "Take away our
factories, take away our trade, our avenues of transportation, our money,
leave nothing but our organisation, and in four years, we shall reestablished ourselves." Since ages and in every walk of life, organisation
has been playing a vital role. The significance or main advantages of
organisation are as follows:
Facilitates Administration and management: Organisation is an
important and the only tool to achieve enterprise goals set by
administration and explained by management. A sound organisation
increases efficiency, avoids delay and duplication of work, increases
managerial efficiency, increases promptness, motivates employees to
perform their responsibility.
Helps in the Growth of Enterprise: Good organisation is helpful to the
growth, expansion and diversifications of the enterprise.
Ensures Optimum Use of Human Resources:Good organisation
endows people with different interests, skills, knowledge and viewpoints.
Stimulates Creativity: A sound and well-conceived organisation
structure is the source of creative thinking and initiation of new ideas.
Tool for Achieving Objectives: Organisation is a vital tool in the hands
of the management for achieving set objectives of the business
enterprise.
Prevents Corruption: Usually corruption exists in those enterprises
which lack sound organisation. Sound organization prevents corruption by
raising the morale of employees. They are motivated to work with greater
efficiency, honesty and devotion.

Co-ordination in Enterprises: Different jobs and positions are welded

together by structural relationship of the organisation. The organizational
process exerts its due and balanced emphasis on the co-ordination of
various activities.
Eliminates Overlapping and Duplication or work: Over lapping and
duplication of work exists when the work distribution is not clearly
identified and the work is performed in a haphazard and disorganized way.
Since a good organisation demands that the duties be clearly assigned
amongst workers, such overlapping and duplication is totally eliminated.

CLASSICAL THEORY OF ORGANISATION

The classical theory of organization has withheld the test of many
upheavals in the changes that have accrued in the management of
organizations. The modern organizations in the private as well as in the
public sector are facing an environment which does not seem to be
conducive to their structure that is based on the principles of the classical
theory of organizations. The classical school of organization pursued the
development of universal principles that would apply to all organizations
in all situations. The classical theorists conceived of organizations as
mechanical devices to achieve an organization's goals and objectives. The
era of classical theory of organization covers the period from 1900's to
mid-1930s.It is during this period that the classical theories of
organization began to emerge. The important pioneers among them are
F.W. Taylor, Henri Fayol, Max Weber, and Mary Parker Follett.
The classical theory is based on the following three assumptions:
1. The relationship between employees and management is defined by
means of a formal structured communication process, defined tasks and
accountability and formalized procedures and practices to avoid any
conflict in their relationship.
2. Workers have been assumed to be in the form of an economic man
who can be motivated by means of money only.
3. The third assumption is that workers have been considered to be a
factor of production or as a cog in the wheel.

The classical theories of organization were structured by the scholars with

certain objectives in mind. Henry Fayol, a French engineer-cum-manager
in Europe who is generally considered to be the founder and father of the
classical school of organization initiated the administrative theory of
management. He analysed the process of management in terms of the
technical ability which is more pronounced in the lower and middle levels
of management whereas managerial ability is more important in the
higher levels of management. He considered sound management
practices to be a cohesive doctrine of management, one that retains its
utility even in the present theoretical frameworks of organization. Fayol
insisted that management should be considered as a skill like any other
one that could be taught once its underlying principles were understood.
In 1916, Fayol in his world renowned book "General and Industrial
Management described a number of management/organization principles
with can be analysed in terms of (i) human relations, (ii) production
efficiency, and (iii) administration. These three principles again can be
divided into fourteen principles of organization.

CRITICAL EVALUATION OF THE CLASSICAL

THEORY OF ORGANISATION
Classical theorists view organization as a closed system influenced only by
certain immutable laws in its design and management. For the most part,
people have not been considered important elements of production but
rather a cog in the whole process of production and management. Thus it
suffers from superficiality, over simplification and lack of realism. Its
scholars have confined themselves closely to the mechanism of authority,
whether real or ideal, and have failed to address other equally important
factors affecting the performance of the organization.
It has been observed, that there are several characteristics which may
impede rather than aid the achievement of efficiency. Excessive hierarchy,
over-developed specialization, promotion by seniority, and rigid adherence
to rules could cause bureau-pathological behaviour one of the
fundamental problems with the classical theory of organization is that it
does talk of a certain aspect of human behaviour but the importance
given to it is almost negligible. The criticism by the behaviourists was that
that the classical pioneers totally ignored the behavioural dimension of
organization and oversimplified the mechanistic assumption for the
smooth running of organizations, ignoring all the complexities of human
behaviour at work i.e. the social, psychological, and motivational aspect of
10

human behaviour. Thus the focus of classical theory is on "organization

without people".
It has been said that specialization, as visualized by Max Weber, creates
sub unit conflicts. Functional sub unit goals can override the goals of the
organization. The other major weakness is obsessive concern over
following rules. The specialization of labour often inhibits effective
communication among technical workers and specialists. In addition the
rules, regulations, and procedures generally encourage managers to act
mechanically rather than exercising discretion and taking initiative in
making decisions. This often results in resistance to change and
innovation.
Taylor's principles are basically confined to production management. He
ignored certain essential aspects of management like finance, accounting,
marketing, consumer behaviour, which are an integral part of business
management. Scientific management firmly believes in economic
incentives and sanctions as a means to improving productivity. However
concepts like job satisfaction, participative management, and the job itself
have become important elements in increasing productivity. However the
Classical theory still plays an important role in organisational theory and
the reasons for that would be explained subsequently.

11

RELEVANCE
The benefits of the classical theory of organisations are given as follows:
Hierarchical Structure
One of the advantages of the classical management structure is a clear
organizational hierarchy with three distinct management levels. Each
management group has its own objectives and responsibilities. The top
management is usually the board of directors or the chief executives who
are responsible for the long-term goals of the organization. Middle
management oversees the supervisors, setting department goals
according to the approved budget. At the lowest level are the supervisors
who oversee day-to-day activities, address employee issues and provide
employee training. The levels of leadership and responsibilities are clear
and well defined. While the three-level structure may not be suitable for
all small businesses, it can benefit those that are expanding.
Division of Labour
One of the advantages of the classical management approach is the
division of labour. Projects are broken down into smaller tasks that are
easy to complete. Employees' responsibilities and expectations are clearly
defined. This approach allows workers to narrow their field of expertise
and to specialize in one area. The division of labour approach leads to
increased productivity and higher efficiency, as workers are not expected
to multitask. Small-businesses owners can benefit from taking this
approach if they are looking to increase production with minimal expense.
Monetary Incentive
According to classical management theory, employees should be
motivated by monetary rewards. In other words, they will work harder and
become more productive if they have an incentive to look forward to. This
gives management easier control over the workforce. Employees feel
appreciated when being rewarded for hard work. A small-business owner
can take this approach to motivate the employees to achieve production
goals.
Autocratic Leadership
The autocratic leadership approach is the central part of classical
management theory. It states that an organization should have a single
leader to make decisions, to organize and direct the employees. All
decisions are made at the top level and communicated down. The
autocratic leadership approach is beneficial in instances when small12

business decisions need to be made quickly by a leader, without having to

consult with a large group of people, such a board of directors. Small
businesses, especially sole proprietorships, can have an advantage in
taking this approach, as they need a strong leader to grow.

NEO-CLASSICAL THEORY OF ORGANISATION

Previous theoretical models had made considerable efforts to ensure that
the employee would enhance the output of the organisation. With the
introduction of the human relations movement by Elton Mayo in 1933,
focus was shifted to the study of the individual in the organization. The
human relations movement focused on social factors, such as treatment
by management and relationships among colleagues, and not economic
factors, as the driving force behind human behaviour in an organization.
Mayo based much of his work on the results of the famous Hawthorne
studies of 1927. The Hawthorne research team worked to determine the
ideal conditions to bring productivity to capacity level. This end was
approached through series of trials in which the level of lighting in the
factory work area was adjusted. The research collected during these
studies suggested that the attention of the research team, the
relationships of the employees, and employee motivation, rather than an
ideal work condition (e.g., lighting, comfort, temperature), altered the
observed level of work performance (Roethlisberger and Dickson
1939).McGregor's work was also one of the seminal contributions to
understanding the role of psychological variables in the effective
functioning and design of an organization. McGregor argued that the
classical view of human nature as lazy and unambitious, contradicted
actual human nature, which is such that individuals seek out responsibility
and have an innate desire to achieve success. McGregor's Theory is
indicative of the neoclassical approach to organizational design and
management. It encourages managers to place decision-making
capabilities with their subordinates, empowering them to become
personally involved in the organization's goals by increasing their
participation level (McGregor1960). This idea of decentralizing authority
within the organizational structure is the key contribution of the
neoclassical approach, which emphasizes employee satisfaction as
integral to the organization's success.
The neoclassical organizational theorists of the early to mid- 19th century
protested classical organizational theory without really offering solutions.
They could see that current theory wasnt working and sounded the alarm.
In 1946, Herbert Simon launched an all-out attack on classical principles
13

of management published by Fayol, Gulick and others. Simon asserted

that the so-called principles of management were more like proverbs,
which could be applied with equal validity to opposite circumstances.
Specialization, for example, can cause as many, or more, problems in an
organization as it solves. Two years later, Peter Selznick published his
article, Foundations of the Theory of Organization in the American
Sociological Review. Selznick approaches the organization from the
viewpoint of a sociologist, rather than a management or business
specialist, asserting that an organization probably would not behave the
way it ought, because it is composed of people with motivations and goals
that not necessarily aligned with those of the organization. He also says
that an organization can be looked at either as an economy, or an
adaptive social structure. To look at the organization as an economy is
scientific and measurable, while an adaptive social structure leans toward
the non-exact behavioural sciences. Because of the type of thinking that
had dominated science for the previous several hundred years, it was
thought that the laws governing behaviour could be measured and known,
in the same the way we had come to know the laws of gravity and energy.
Selznick proposes that to maintain a system, these imperatives can be
applied:
1. The security of the organization as a whole in relation social forces
in its environment. How the people within and outside the system
get along with each other and what effect that has on the system.
2. The stability of the lines of authority and communication. How much
control the leaders have over the ranks.
3. The stability of informal relations within the organization. How well
people get along within the organization and how that can be used
to control them.
4. The continuity of policy and the source of its determination.
Arbitrary or unpredictable changes in policy undermine the stability
of the organization.
5. Homogeneity of outlook with respect to the meaning and role of the
organization. If youre not with us, youre against us.
The three major ideas in Selznicks theory of organization are;
organizations as cooperative, adaptive social systems; the conflict of
personal and organizational goals and needs; and controlling conflict for
the good of the organization. He was also the first to talk about co-

14

optation, which is a method of protecting the organization and its mission

by inviting threatening elements into the policy making process.
While the neo-classicists shook the foundation of organizational theory,
they pointed out its shortcomings without offering solutions. These
theorists were the first to consider people within an organization as
autonomous beings outside governable scientific laws. The reality that
behavioural science might be considered an oxymoron was dawning on
these neo-classicist theorists. It was possible that men might have
different motives and values than those held by the organization, and the
conflict of those must be addressed.
The classical theorists could predict how a system ought to behave, and
under certain economical and societal conditions it did behave that way.
As the standard of living went up and America experienced peace, or at
least national security, men and women became less controllable aspects
of the organization. The work force was growing with the addition of
women and minorities. Unions were gaining power as they protected the
rights of workers. Einstein and Heisenburg destroyed the idea that we
could know anything for certain. The very fact that we observe a system
might cause it to behave differently. While they didnt seem to have the
answers yet, Simon, Selznick, and their contemporaries laid the
foundation for current organizational theory to build on.

MODERN THEORY OF ORGANISATION

Traditional theories regarded organizations as closed
systems that were autonomous and isolated from the outside world. In the
1960s, however, more holistic and humanistic ideologies emerged.
Recognizing that traditional theory had failed to take into account many
environmental influences that impacted the efficiency of organizations,
most theorists and researchers embraced an open-systems view of
organizations.This is also known as the Open Systems Theory.
The term "open systems" reflected the newfound belief that
all organizations are uniquein part because of the unique environment in
which they operateand that they should be structured to accommodate
unique problems and opportunities. For example, research during the
1960s indicated that traditional bureaucratic organizations generally failed
to succeed in environments where technologies or markets were rapidly
changing. They also failed to realize the importance of regional cultural
influences in motivating workers.
15

Environmental influences that affect open systems can

be described as either specific or general. The specific environment refers
to the network of suppliers, distributors, government agencies, and
competitors with which a business enterprise interacts. The general
environment encompasses four influences that emanate from the
geographic area in which the organization operates. These are:

Cultural values, which shape views about ethics and determine the
relative importance of various issues.

Economic conditions,which include economic upswings, recessions,

regional unemployment, and many other regional factors that affect
a company's ability to grow &prosper. Economic influences also
partially dictate organization's role in the economy.

Legal/political environment, which effectively helps to allocate

power within a society and to enforce laws. The legal and political
systems in which an open system operates can play a key role in
determining the long-term stability and security of the
organization's future. These systems are responsible for creating a
fertile environment for the business community, but they are also
responsible for ensuringvia regulations pertaining to operation and
taxationthat the needs of the larger community are addressed.

Quality of education, which is an important factor in high technology

and other industries that require an educated work force.
Businesses will be better able to fill such positions if they operate in
geographic regions that feature a strong education system.

The open-systems theory also assumes that all large

organizations are comprised of multiple subsystems, each of which
receives inputs from other subsystems and turns them into outputs for
use by other subsystems. The subsystems are not necessarily
represented by departments in an organization, but might instead
resemble patterns of activity.

16

ORGANISATIONAL STRUCTURE
An organizational structure consists of activities such as task allocation,
coordination and supervision, which are directed towards the achievement
of organizational aims. It can also be considered as the viewing glass or
perspective through which individuals see their organization and its
environment. Organizational structure allows the expressed allocation of
responsibilities for different functions and processes to different entities
such as the branch, department, workgroup and individual.
Organizations are a variant of clustered entities .An organization can be
structured in many different ways, depending on their objectives. The
structure of an organization will determine the modes in which it operates
and performs.
Organizational structure affects organizational action in two big ways.
First, it provides the foundation on which standard operating procedures
and routines rest. Second, it determines which individuals get to
17

participate in which decision-making processes, and thus to what extent

their views shape the organizations actions. Organizational structures
developed from the ancient times of hunters and collectors in tribal
organizations through highly royal and clerical power structures to
industrial structures and today's post-industrial structures.As pointed out
by Mohr (1982), the early theorists of organizational structure, Taylor,
Fayol, and Weber "saw the importance of structure for effectiveness and
efficiency and assumed without the slightest question that whatever
structure was needed, people could fashion accordingly. Organizational
structure was considered a matter of choice... When in the 1930s, the
rebellion began that came to be known as human relations theory, there
was still not a denial of the idea of structure as an artefact , but rather an
advocacy of the creation of a different sort of structure, one in which the
needs, knowledge, and opinions of employees might be given greater
recognition." In the 21st century, organizational theorists such as Lim,
Griffiths, and Sambrook (2010) are once again proposing that
organizational structure development is very much dependent on the
expression of the strategies and behaviour of the management and the
workers as constrained by the power distribution between them, and
influenced by their environment and the outcome.
The structure defined how
the roles, power and responsibilities are
assigned,
controlled,
and
coordinated, and how information flows between the different levels of
management.A
structure
depends
on
the organization's objectives and strategy. In a centralized structure,
the top layer of management has most of the decision making power and
has tight control over departments and divisions. In a decentralized
structure, the decision making power is distributed and the departments
and divisions may have different degrees of independence. A company
such as Proctor & Gamble that sells multiple products may organize their
structure so that groups are divided according to each product and
depending on geographical area as well.

PRINCIPLES OF FORMAL ORGANISATION

The basic principles of a formal organisation are as follows:
1. Unity of objective-An organisation structure is sound when it
facilitates the accomplishment of objectives. Therefore, the organisation

18

as a whole and every part of it must be geared to the basic objectives of

the enterprise.
2. Specialisation or division of work-The activities of every member of
the organisation should be confined, as far as possible, to the
performance of a single function.
3. Span of control-Every manager should have a limited number of sub
ordinates reporting to him directly. Generally, the span should be narrow
for complex work and wide for simple and routine work. Span should be
neither too wide nor too narrow.
4. Scalar principle-There should be a clear chain of command extending
from top to the bottom of the organisation. Every subordinate should
know who his superior is and who his subordinates are.
5. Functional definition-The duties (functions), authority and
responsibility of every position should be clearly defined so as to avoid
duplication of work and overlapping of functions.
6. Exception principle-Only exceptional matters which are beyond the
authority of lower level persons should be referred to higher levels.
Routine matters should be dealt with by executives at lower levels. This is
also known as Authority Level principle.
7. Unity of command-Each subordinate should have only one superior
whose command he has to obey. This is necessary to ensure discipline and
to fix responsibility for results.
8. Balance-A proper balance between centralisation and decentralisation
should be kept. Each function in the organisation should be developed to
the point at which the value received is at least equal to costs.
9.
Efficiency-The organisation structure should facilitate the
achievements of objectives at minimum possible cost. It should permit the
optimum use of resources.
10. Flexibility-The organisation structure should be adaptable enough to
accommodate technical and other changes in the environment. Therefore,
complicated procedures, red tape and complexity of control should be
avoided. At the same time, the organisation structure should be
reasonably stable so as to withstand changes.
11. Continuity-Proper arrangements should be made for the training and
development of executives.

19

12. Facilitation of leadership-Organisation structure should be so

devised that there is enough opportunity for the management to give
effective leadership to the enterprise.
13.Parity of authority and responsibility-In every position, the
authority and responsibility should correspond. Adequate authority should
be delegated to all levels and wherever authority is delegated the person
should be held responsible.
14.Coordination-The organisation structure should facilitate unity of
effort and co-ordination among different individuals and groups. Channels
of communication should be open and clear.
Thus these are the pillars on which a formal organisation is built.

20

METHODS TO FIND OUT WHAT STRUCTURE

IS NEEDED
Peter F. Drucker suggested three ways of discovering the kind of structure
needed to attain objectives of business

Activities analysis
Decision analysis
Relations analysis

Activities analysisIt is necessary to find out what activities are needed to attain the
objectivesof the enterprise before an organization structure is devised for
it. The activities may be identified and listed in their order of importance.
Then the whole work is to be divided and sub-divided into smaller
homogenous and manageable units for assignment to persons working in
the organization. This process leads to standardization, division of labour
and specialization.
Decision analysisThe decision analysis is another method to find out what structure is
needed. This involves two steps. They are
1. To identify major decisions which are needed to obtain the performance
necessary to attain the business objectives; and
2. To classify the decisions according to type and character.
The decision-making powers are entrusted to various people in the
organization. The authority of decision-making may be spread out so
much that all units are almost independent of each other.
Relations analysisThe relations analysis tells us the formal relationship of a manager with
his superiors, subordinates and other managers of equal rank. Thus,
relationships have to be studied from three angles- upward downward and
sideways.

21

ORGANISATIONAL CHART
Organisation structure of a company can be shown in a chart. Such chart
indicates how different departments are interlinked on the basis of
authority and responsibility. It is a simple diagrammatic method of
describing an organisation structure. It indicates how the departments are
linked together on the basis of authority and responsibility. Such
organisation chart provides information of the organisation structure at a
glance. Organisation chart is like a blue print of a building. It indicates the
number and types of departments, superior-subordinate relationship,
chain of command and communication.

Definition of Organisation Chart

According to George Terry, Organisation chart is "a diagrammatical form
which shows important aspects of an Organisation, including the major
functions and their respective relationships, the channels of supervision
22

and the relative authority of each employee who is in-charge of each

respective function".

Features of Organisation Chart

1. Organisation chart is a diagrammatical presentation.
2. It represents the formal Organisation structure.
3. It shows the lines of authority in the Organisation.
4. It indicates the channel of communication.
5. It indicates who supervises whom and how various units are interrelated.
Advantages of Organisational Chart
1. Brings clarity to the Organisation: The very process of preparing a
chart makes the executive think more clearly about the Organisation
relationships.
2. Provides dear picture of the Organisation: Once the charts are
prepared, they provide lot of information about the Organisation,
both to the members of the Organisation as well as to the outsiders.
This information relates to number and types of departments,
superior subordinate relationships, chain of command and
communication and job titles of each employee.
3. Facilitates training of employees: Organisation charts are useful in
familiarizing and training new employees.
4. Ensures organizational changes: Organisation charts provide a
starting point for planning organizational changes after having
discovered the weaknesses of the existing structure.
5. Provides quick understanding: A chart serves as a better method of
visualizing an Organisation than a lengthy written description of it.

23

Limitations of Organisational Chart

1. Details are not provided: The Organisation chart does not provide
all the details of Organisation structure created. For example, the
chart will show the line of authority but not the extent of authority.
2. Informal relationship is not shown: The chart fails to give
details of informal relationship available in a firm. In fact, human
relationships cannot be shown on a chart.
3. Updated position is not available: The chart shows the position
of Organisation structure when it was formed. It gives a static
picture of the Organisation. Changes made thereafter may not be
available in such charts.
4. Fosters buck-passing: The charts tend to foster 'buck-passing'
and emphasize only formal channels of communication.
5. Lacks flexibility: Organisation chart lacks an element of flexibility.
Such chart also brings an element of rigidity in the working of an
Organisation.
6. Creates rank consciousness: An Organisation chart leads to rank
consciousness among the staff. It destroys team spirit and collective
approach on the part of the staff.

TYPES OF ORGANISATION CHART

1. Divisional organizational chart marks off the organizational
structure according to the specific demands of products, markets or
customers in their specific business environment. Therefore, each
division often has all the necessary resources and functions within it
to satisfy the demands based on the working of an organization. You
can divide the organizational chart by product line, geographic area
or marketing area. Staffs with similar skills are placed in different
divisions.

24

2. Hierarchical: In Hierarchical organization chart the organization is

divided in to different levels where the line of command follows
downwards from the top level to the bottom or the lower level. The
hierarchical organizations charts work best in stable environments
that do not require rapid change of strategy or in organizations that
provide multiple services or products.

25

A hierarchy is typically visualized as a pyramid, where the height of

the ranking or person depicts their power status and the width of
that level represents how many people or business divisions are at
that level relative to the wholethe highest-ranking people are at
the apex, and there are very few of them; the base may include
thousands of people who have no subordinates). These hierarchies
are typically depicted with a tree or triangle diagram, creating an
organizational chart or organigram. Those nearest the top have
more power than those nearest the bottom, and there being fewer
people at the top then at the bottom. As a result, superiors in a
hierarchy generally have higher status and command greater
rewards than their subordinates.
Members
of
hierarchical
organizational
structures
chiefly
communicate with their immediate superior and with their
immediate subordinates. Structuring organizations in this way is
useful partly because it can reduce the communication overhead by
limiting information flow; this is also its major limitation

3. Matrix organisational chart is a popular organizational chart that

defines more complex structures to emphasis efficiency, creativity
and innovation. It uses to describe the areas of communication on a
matrix-shaped chart for smaller companies.
26

A matrix structure involves no set divisions or departments. It focus

on hierarchy with multiple levels of communication responsibilities
in a company. Employees may develop their own projects and
assemble a team to work on them. Or the company may be
organized around customers, with different groups assigned to
different customers.
Matrix organizational chart is more complex than traditional
organizational
charts
such
as functional
organizational
chart, divisional organizational chart and hierarchical organizational
chart. However, the matrix organizational structure allows for better
understanding of organization structure where various levels may
answer to more than one department master. In organizations
where there are multiple departments that share authoritative
responsibilities, a matrix organizational chart is the most effective
way to present

27

4. Flat or Horizontal: In Flat organizational chart there are few or no

levels. It may consist of only managers and the workers and this
type of organizational charts are possible only in small or individual
unit organizations.
The flat organization model promotes employee involvement
through a decentralized decision-making process. By elevating the
level of responsibility of baseline employees and eliminating layers
of middle management, comments and feedback reach all
personnel involved in decisions more quickly. Expected response to
customer feedback becomes more rapid. Since the interaction
between workers is more frequent, this organizational structure
generally depends upon a much more personal relationship between
workers and managers. Hence the structure can be more timeconsuming to build than a traditional hierarchical model.

28

The chart also shows relationships between staff in the organization which
can be:

Line - direct relationship between superior and subordinate.

Lateral - relationship between different departments on the same

hierarchical level.

Staf - relationship between a managerial assistant and other areas.

The assistant will be able to offer advice to a line manager.
However, they have no authority over the line manager actions.

Functional - relationships between specialist positions and other

areas. The specialist will normally have authority to insist that a line
manager implements any of their instructions.

Line or Direct
The line organizational chart depicts a straight line of command. Authority
is said to flow downwards only in the line organization. The line
organizational structure is found in schools or in the military.

29

Functional Organizational Chart

The Functional organization chart is a diagram of an organization that is
arranged by its functions. For example, there is a manager in charge of
marketing, and another in charge of production. This type of organization
has an advantage over the Line as experts are appointed to run each
department. All managers report to the General Manager.

The Functional organizational chart combines the straight line of

command of the line organization with horizontal dotted diagonal lines
30

representing functional authority. The dotted diagonal lines in the figure

above show the authority that the Human Resource Manager has over
other departments. The Human Resource Manager is allowed authority in
these department over human resource matters only e.g. to hire and fire
workers. He therefore cannot give directives on production or marketing
matters.

Line and Staf Organizational Chart

The Line and Staff organizational chart combines the line and functional
organization with the addition of staff personnel. Staff workers assist and
advise line workers. Staff workers include consultants, advisors, company
lawyers, executive secretary, auxiliary workers etc. Staff officers do not
have authority, that is, the power to delegate tasks to subordinates in the
31

organization. Their main role is to advise and assist line officers. This is
why there are no vertical lines connecting staff officers to any other
member of staff on the chart. They are therefore, placed at the side
directly below the line officer whom they assist or advise.
Committee Organizational Chart

Committees are advisory bodies. They are usually appointed to advise

organizations.
Examples of committees include; parent teachers
associations and student councils which are committees within a school
organization. Committees usually delegate certain duties to subcommittees. For example, an executive committee may appoint a finance
committee to advise it on financial matters. Note that an element of the
line organization exists in the committee organization as all subcommittees are responsible to the executive committee.

Uses of Organisation Chart

1. An Organisation chart facilitates ready reference. It enables the
management to find out different positions of authority and their
relationships in the Organisation structure.
2. It provides proper guidance to managers in executing, their
assignments and helps them to avoid overlapping and duplication of
work.
3. It provides complete information to understand the character of an
Organisation.
4. An Organisation chart indicates ways to better utilisation of
available manpower.

32

5. An organisation chart points out the consistencies and deficiencies

of an Organisation and enables the management to correct them.

There are several limitations of organizational charts:

If updated manually, organizational charts can very quickly become

out-of-date, especially in large organizations that change their staff
regularly.

They only show 'formal relationships' and tell nothing of the pattern
of human (social) relationships which develop. They also often do
not show horizontal relationships.

They provide little information about the managerial style adopted

(e.g. 'autocratic', 'democratic' or an intermediate style)

In some cases, an organigraph may be more appropriate,

particularly if one wants to show non-linear, non-hierarchical
relationships in an organization.

It often does not include customers.

DEPARTMENTATION
The process of grouping of activities into units for the purpose of
administration is called departmentation. It can be defined "as the process
by which activities or functions of enterprise are grouped homogeneously
33

into different groups." The administrative units are called divisions, units
or departments.
Common Bases For Departmentation
What organizations actually do is group people in a way that relates to the
task they perform. This still leaves a lot of possibilities. Here are six
common bases for departmentation:
1. Knowledge and Skill. People are grouped by what they know. For
example, hospitals have departments like Neurology, Allergy,
Cardiology, Internal Medicine, Gastro-Enterology, etc.
2. Work Process. Workers are grouped based on the process or
activity used by the worker.For example, a manufacturing company
may create separate casting, welding and machining groups. Often,
it
is
the
underlying
technology
that
determines
the
departmentation. For example, a print shop may have separate
letterpress and offset departments-two different processes for
getting the same outputs.
3. Business Function. Grouping by the basic function in the
organization: purchase supplies, raise capital, generate research,
etc. This leads to the familiar departments of manufacturing,
marketing, engineering, finance, and so on.
4. Time. When work is done. For example, shifts in a factory or
hospital or hotel.
5. Output. Grouping based on the products or services that the
employee works on. For example,a manufacturer may have different
divisions for each of its product lines.
6. Client. Grouping based on the type of clients their work is
ultimately sold to. For example, computer companies often have
different sales departments for home, small business, educational,
government and large business customers.
7. Place. Groups are based on the geographical areas that they serve.
For example, during WW2, the US War Dept. was organized into 7
"theatres" corresponding to regions of the world where the US was
fighting. Similarly, Post Offices are often divided by regions and
zipcodes.
There are, however, two approaches to departmentation- top down and
bottom-up approaches.In the top-down approach, activities are divided
step by step downward form the chief executive's job to the operating
jobs. In the bottom-up approach, the division of activities is carried on in a
reverse order.Starting form operating jobs, there arise sections form
34

combining some correlated jobs, departments from combining some

sections and finally the chief executive position form putting departments
together. While the top-down approach gives emphasis on co-ordination
and managerial action, the bottom-up approach gives emphasis on coordination and managerial action, the bottom-up approach focuses
attention on employee performance. Although the top-down approach is
easy for understanding the departmentation process, both the approaches
are utilized in actual practice.
Need and importance of departmentation
The basic purpose of departmentation is to make the size of each
departmental unit manage-able and to secure advantages of
specialisation. Departmentation is necessary on account of the following
reasons:
1. Specialization: Departmentation enables an organisation to
avail of the benefi ts of specialization. When every department looks
after one major function, expertise is developed and efficiency of
operations increases.
2. Expansion: One manager can supervise and direct only a few
subordinates. Grouping of activities and personnel into departments
makes it possible for the enterprise to expand and grow. If there is no
departmentation, the size of the organisation will be restricted to a managers span
of control.
3. Autonomy: Departmentation results in the division of the enterprise
into semi-autonomous units. In these units, every manager is given
adequate freedom. The feeling of autonomy provides job satisfaction and
motivation which in turn lead to higher efficiency of operations.
4. Fixation of responsibility: Departmentation enables each person to
know the specific part he is to play in the total organisation. It provides a
basis for building up loyalty and commitment. The responsibility for results
can be defined more precisely and an individual can beheld accountable
for performance.
5. Appraisal: Appraisal of managerial performance becomes easier when
specific tasks are assigned to departmental personnel. The sources of
information, the skills and competence required for total managerial
decisions can be located.
6.
Management
development:
Departmentation
facilitates
communication, coordination and control. It simplifies the training and
development of executives by providing them opportunity to take
independent decisions and to exercise initiative.
7. Administrative control: Departmentation is a means of dividing the
large and complex organisation into small and flexible administrative
units. Grouping of activities and personnel into manageable units
facilitates administrative control. Standards of performance for each and
every
department
can
be
precisely
determined.
Excessive
departmentation may result in several organisational problems such as

35

erosion of the line of command, multiple accountability, dysfunctional

conflicts and difficulty of co-ordination and control

PATTERNS OF DEPARTMENTATION
After the work to be completed is organized into identifiable jobs
through a process of dividing labor, jobs are then combined into
logical sections or departments. Doing so allows for effective
coordination of effort. There are many ways to departmentalize,
each of which has important advantages and disadvantages. One of
the most common forms is functional departmentalization, which
involves grouping similar jobs into a common department, such as
accounting, sales, human resources, and engineering. Another form
is product departmentalization, which involves organizing around an
enterprise's various product lines. Other ways of departmentalizing
include organizing by customer and by geographic territory. In
practice, most large companies use a hybrid form of
departmentalization, which means they combine one or more of the
above methods to form their organizational structure.

36

1. Functional Departmentation: - This is the simplest form of

departmentation when grouping of departments is done on
the basis of functions such as production finance marketing
sales purchase and personnel etc, it is known as functional
departmentation. Further sub divisions of the functions may
be formed like marketing can be divided in to advertisement
sales and after sales service. So we can classify functions into
two parts:
Basic functions i.e. Production, Marketing ,Finance and
Personnel.
Secondary Functions: - These are further parts of basic
functions according to the organizational needs or operations
like Production: - Product planning, R&D, Quality control and
material handling.
Functional departmentation is useful where there is production
of single product or similar kind of product, for example TV
Computer monitor or TFT.
37

Advantages:

Advantage of specialization
Easy control over functions
Pinpointing training needs of manager
It is very simple process of grouping activities.

Disadvantages

Lack of responsibility for the end result

Overspecialization or lack of general management
It leads to increase conflicts and coordination problems among
departments.

38

2. Products: - When grouping of activities and departments formed are

given name on the basis of products manufactured in an organization, it is
called products departmentation. It is applied where there is a large range
of products are manufactured. When there are several product lines and
each product line consists of a variety of items, functional classification
fails to give balanced emphasis on each product. Apart form this use;
product or services may be made the basis of major divisions by a
departmental store, a banking concern and an insurance company. Again,
manufacturing an marketing departments may subdivide their activities
on the basis of products.

Advantages

It ensures better customer service

Unprofitable products may be easily determined
It assists in development of all around managerial talent
Makes control effective
It is flexible and new product line can be added easily.

Disadvantages

It is expensive as duplication of service functions occurs in

various product divisions
Customers and dealers have to deal with different persons
for complaint and information of different products.

39

3. Territories: - Like the products basis, geographical regions are

adopted for main division as well as for subdivision purposes. When
activities of an organization are physically dispersed in different locations
territorial departmentation is adopted. Units that are located at different
areas are made so many self-contained divisions of the organization.
Marketing activities are very often subdivided on the basis of geographical
areas. This form of departmentation can be useful where business is on
national or international level. For eg. Indian railways, insurance company
use territorial departmentation.

Advantages

Help to cater to the needs of local people more

satisfactorily.
It facilitates effective control
Assists in development of all-round managerial skills

Disadvantages

Communication problem between head office and regional

office due to lack of means of communication at some
location
Coordination between various divisions may become
difficult.
Distance between policy framers and executors
It leads to duplication of activities which may cost higher.

40

4. Customers: - When departments are formed to cater different kind of

customers it is known as customer departmentation this basis of
classification is widely followed in subdividing activities of the marketing
department. When the products are offered to market through various
channels and outlets, it has the special merit of supplying goods in
accordance with the peculiar needs of customers. Customers may be
classified according to buying capacity or nature like whole sale, retail and
export or government or general public. Most departmental stores may
attempt t reach customers preferring low price or higher price

Advantages

It focused on customers who are ultimate suppliers of

money
Better service to customer having different needs and
tastes
Development in general managerial skills

Disadvantages

Sales being the exclusive field of its application, coordination may appear difficult between sales function and
other enterprise functions.
Specialized sales staff may become idle with the downward
movement of sales to any specified group of customers.

41

5. Process or Equipment Departmentation: Under this basis,

activities are grouped on the basis of production processes or
equipment involved. This is generally used in a manufacturing enterprise
and at lower levels of organisation. For example, a textile mill may be
organised into ginning, spinning, weaving and dyeing departments.
Similarly, a printing press may consist of composing, proofreading,
printing and binding departments. Such departmentation may also
be used in engineering and oil industries. The main object is to
achieve efficiency and economy of operations.

Advantages
T h e re i s c l e a r- c u t t e c h n i c a l d i v i s i o n o f w o r k .
This ensures specialisation and facilitates training of junior
executives.
It is possible to appoint persons with special education and
experience for each process.
Location of similar type of machines in one place results in
economies in costs of re-pairs and maintenance.
Disadvantages
There may be difficulty in co-ordinating different process
departments.
Conflicts among man-agers of different processes may arise.
It cannot be used where manufacturing activity does notinvolve
distinct processes.
It is suitable only for special and composite type of plants.

42

6.Time Departmentation
Under this basis activities are grouped on the basis of the time of their
performance. For ex-ample, a factory operating twenty-four hours may
have three departments, one each for morning, day and night shifts. The
idea is to obtain the advantages of people specialized to work in a
particular shift. In case of departmentation by simple numbers, activities
are grouped on the basis of their performance by a certain number of
persons. For example, in the army soldiers are grouped into squads,
battalions, companies, brigades and regiments on the basis of the number
pre-scribed for each unit. This basis of departmentation is used at the
lower levels of hierarchy. Departmentation by numbers is useful when the
work is repetitive and unskilled, where manpower is the most important,
where group efforts are more important than individual efforts and where
the group performance can be measured. It is useful only at the lowest
level.

43

7. Composite or Combined Departmentation Departmentation is not

an end in itself but A means for achieving organisational objectives. Each
basis of departmentation has its own merits and demerits. Therefore, the
relative advantages and limitations of various types of departmentation
should be analyzed in the light of the needs and circumstances of the
particular enterprise. That basis of departmentation is the best which
facilitates the achievement of organisational objectives most economically and
efficiently. In practice, no single pattern is ideal to suit all situations.
Therefore, no single basis is followed for grouping activities. Rather, most
of the big enterprises follow a composite or combination of several bases.
Generally, functional departmentation is used at the top level. Activities
of the sales department may be grouped on product or territorial basis
which may further be sub-divided on customer basis. Similarly, activities
in the production department may be grouped on the basis of process or
equipment employed

SPAN OF MANAGEMENT

44

Span of management refers to the number of subordinates that a manger

can efficiently manage. Number of subordinate directly reporting to a
manager is known as span. It signifies how the relations are planned
between superior and subordinates in an organization.
Span of management is important for

Determining the complexity of an individual managers job and

Determining shape and structure of the organization

Span of management is generally categorized under two heads

Narrow span
Wide span

Narrow Span of management means a single manager or supervisor

oversees few subordinates. This gives rise to a tall organizational
structure. While, a wide span of management means a single manager or
supervisor oversees a large number of subordinates. This gives rise to a
flat organizational structure. There is an inverse relation between the span
of management and the number of hierarchical levels in an organization,
i.e., narrow the span of management , greater the number of levels in an
organization.

Narrow span of management is more costly compared to wide span of

management as there are larger number of superiors/ managers and thus
there is greater communication issues too between various management
levels. The less geographically scattered the subordinates are, the better
it is to have a wide span of management as it would be feasible for
45

managers to be in touch with the subordinates and to explain them how to

efficiently perform the tasks. In case of narrow span of management,
there are comparatively more growth opportunities for a subordinate as
the number of levels is more.

The more efficient and organized the managers are in performing their
tasks, the better it is to have wide span of management for such
organization. The less capable, motivated and confident the employees
are, the better it is to have a narrow span of management so that the
managers can spend time with them and supervise them well. The more
standardized is the nature of tasks ,i.e., if same task can be performed
using same inputs, the better it is to have a wide span of management as
more number of subordinates can be supervised by a single superior.
There is more flexibility, quick decision making, effective communication
between top level and low level management, and improved customer
interaction in case of wide span of management. Technological
advancement such as mobile phones, mails, etc. makes it feasible for
superiors to widen their span of management as there is more effective
communication.
An optimal/ideal span of control according to the modern authors is fifteen
to twenty subordinates per manager, while according to the traditional
authors the ideal number is six subordinates per manager. But actually, an
ideal span of control depends upon the nature of an organization, skills
and capabilities of manager, the employees skills and abilities, the nature
of job, the degree of interaction required between superior and
subordinates.

46

Theoretical considerations
The first to develop a more general theory of management was Henri
Fayol, who had gathered empirical experience during his time as general
manager of a coal and steel company, the Commentary-Fourchambault
Company. He was first to add a managerial perspective to the problem of
organizational governance. The rationale for defining a strict hierarchy of
communication channels is found in the need for vertical integration of
activities, imposed by management's need for control and information.
However, exercising control over activities performed by subordinates and
monitoring their communication, the nodes at the upper hierarchical
levels would be suffering from information overload, since all
communication to other branches of the organizational structure would be
routed through them. In addition, a larger number of subordinates also
requires supervisors to monitor a high number of interactions below their
own level, i.e. that information overload and span of control are positively
correlated.
Graicunas distinguished three types of interactions direct single
relationships, cross-relationships, and direct group relationships each of
them contributing to the total amount of interactions within the
organization. According to Graicunas, the number of possible interactions
can be computed in the following way. Let n be the number of
subordinates reporting to a supervisor. Then, the number of relationships
of direct single type the supervisor could possibly engage into is

The number of interactions between subordinates (cross relationships) he

has to monitor is

and the number of direct group relationships is

The sum of these three types of interactions is the number of potential

relationships of a supervisor. Graicunas showed with these formulas, that
each additional subordinate increases the number of potential interactions
significantly. It appears natural, that no organization can afford to
maintain a control structure of a dimension being required for
implementing a scalar chain under the unity of command condition.
Therefore, other mechanisms had to be found for dealing with the
dilemma of maintaining managerial control, while keeping cost and time
47

at a reasonable level, thus making the span of control a critical figure for
the organization. Consequently, for a long time, finding the optimum span
of control has been a major challenge to organization design.

Factors determining the span of management:

Capacity of manager: Each manager has different capacity and

ability in terms of decision making, leadership, communication,
judgment, guidance and control etc. mangers having more abilities
in respect to these factors may have more number of subordinates.
Capacity of subordinates: capacity of subordinates also affects
the span of a manager. Efficient and trained subordinates may work
without much help of their manager. They may just need broad
guidelines and they will perform accordingly. They would require
lesser time from their superior due to which manager can have large
number of subordinates under him.
Nature of work: If subordinates are performing similar and
repetitive routine work they can do their work without having much
time of the manager. Frequent changes in work would require more
detailed instructions from manager whenever there is change in
work. Type of technology used also affects the span of control.
Degree of Decentralization: degree of centralization or
decentralization affects the span by affecting the involvement in
decision making process. If manager clearly delegates his authority
and defines it fully this would require less time to devote to manage
his subordinates as subordinates will take most of the actions by
their own. Hence manager can have wider span.
Degree of Planning: If the planning is effectively done particularly
if standing plans procedures rules methods are clear then
subordinates can make their decisions on their own. If they have to
make their own plans they would require more guidelines by
superiors and manager can handle narrow span in the case of
improper planning.
Communication System: If communication system is modern i.e.
tools like electronic devices will save time of face to face interaction,
which require more time, span of manager can be increased
Level of Management: level of management also affects the span.
Higher the level of management lesser the number of subordinates
as higher level management does not have much time to supervise.
They spend their most of time in planning and other functions.
Lower level managers can have wider span than the higher level
managers.
48

Physical location: If all the persons to be supervised are located at

same place within the direct supervision of manager, he can
supervise more number of people. If subordinates are at different
locations then manager can supervise less number of spans.

FUTURE ORGANISATION
The mental maps of leaders and organisations need to change drastically
for organisations to be successful and survive in the future.
Mental Maps
Assumptions, generalizations or images that
understand the world and behave accordingly.

influence

how

we

Make sense of our environment to predict and control the future.

Filter to process, make sense of and respond to information; guides our
thinking and behaviour.
Cognitive system reacts to input from the environment processed and
expanded on to create map of environment determine response.
Broader, more comprehensive map allow for appropriate new action/
direction.
Individuals act according to the way they think may allow us to predict
certain outcomes under certain conditions.
Learning/ Expanding our mental maps enhances the ability to evaluate
the future and act differently.
Expanding and enabling our mental maps allow readiness for the
changes we cant see yet, and successfully lead change in an increasingly
uncertain and complex world.

49

The Future Organisation:

Concrete strategic plans & budgets replaced by responsive, flexible and
abstract outcomes.
Joint responsibility for success, including external interfaces.
Flexible, adaptive and responsive.
Larger community/ societal considerations.
Sustainability Triple Bottom Line.
Integrative culture, shared values.
Requisite Leadership attributes not the same as in the past.
Industrial era command and control
New requirements:
Emotional Intelligence
Cross-cultural understanding
Multi-disciplinary
Communication
Networking
New generations expectations:
Authenticity
50

Significance
Excitement
Community
Developing leaders for the future organization

ORGANIZATIONAL RELATIONSHIPS
Organizational structure involves, in addition to task
organizational boundary considerations, the designation of jobs within an
organization and the relationships among those jobs. This network of
relationships which define the hierarchical structure of an organization is
called organizational relationship.There are numerous ways to structure
jobs within an organization, but two of the most basic forms include
simple line structures and line-and-staff structures. The other forms are
the staff structure, the functional structure ,the committee structure and
the audit structure of organization.

LINE ORGANIZATION:Line organization is the most oldest and simplest method of

administrative organization. According to this type of organization, the
authority flows from top to bottom in a concern. The line of command is
carried out from top to bottom. This is the reason for calling this
organization as scalar organization which means scalar chain of command
is a part and parcel of this type of administrative organization. In this type
of organization, the line of command flows on an even basis without any
gaps in communication and co- ordination taking place. Here the top
management has complete control, and the chain of command is clear
51

and simple. Examples of line organizations are small businesses in which

the top manager, often the owner, is positioned at the top of the
organizational structure and has clear "lines" of distinction between him
and his subordinates.

Features of Line Organization

1. It is the most simplest form of organization.
2. Line of authority flows from top to bottom and responsibility flows
upward.
3. Specialized and supportive services do not take place in these
organization.
4. Unified control by the line officers can be maintained since they can
independently take decisions in their areas and spheres.
5. This kind of organization always helps in bringing efficiency in
communication and bringing stability to a concern.
Types Of Line Organization

Pure Line Organization- Here activities in any one level remains the
same ie. Every employee more or less has the same type of work.
52

The divisions exist solely for control and direction

Departmental Line Organization- In this type of organization, the
whole enterprise is divided into different departments that are
convenient for control purposes.In setting up of the departments
the similarity of functions is considered. Each department is a self
sufficient unit and one departmental head does not give or
receivers from other departmental head.

Merits Of Line organization

1. Simplest and less expensive- It is the most simple and oldest
method of administration and as there is no expenditure on staff
personnel.it is less expensive too.
2. Unity of Command- In these organizations, superior-subordinate
relationship is maintained and scalar chain of command flows from
top to bottom.
3. Better discipline- The control is unified and concentrates on one
person and therefore, he can independently make decisions of his
own. Unified control ensures better discipline.
4. Fixed responsibility- In this type of organization, every line
executive has got fixed authority, power and fixed responsibility
attached to every authority.
5. Flexibility- There is a co-ordination between the top most authority
and bottom line authority. Since the authority relationships are
clear, line officials are independent and can flexibly take the
decision. This flexibility gives satisfaction of line executives.
6. Prompt decision- Due to the factors of fixed responsibility and
unity of command, the officials can take prompt decision.

Demerits of Line Organization

1. Over reliance- The line executives decisions are implemented to
the bottom. This results in over-relying on the line officials.

53

2. Lack of specialization- A line organization flows in a scalar chain

from top to bottom and there is no scope for specialized functions.
For example, expert advices whatever decisions are taken by line
managers are implemented in the same way.
3. Inadequate communication- The policies and strategies which
are framed by the top authority are carried out in the same way.
This leaves no scope for communication from the other end. The
complaints and suggestions of lower authority are not
communicated back to the top authority. So there is one way
communication.
4. Lack of Co-ordination- Whatever decisions are taken by the line
officials, in certain situations wrong decisions, are carried down and
implemented in the same way. Therefore, the degree of effective coordination is less.
5. Authority leadership- The line officials have tendency to misuse
their authority positions. This leads to autocratic leadership and
monopoly in the concern.

54

STAFF ORGANIZATION:The staff refers to those elements in the organization which provide
advice and service to the line. The work of investigation, research,
recording, standardization and advising is in the hands of staff. The
responsibility of line is to arrange the actual execution of the work
planned by the staff. It is often said that the staff thinks while line acts .

Types Of Staf

Personal StafThe personal staff is meant to serve the

executives only. A managing director for example may have a staff
secretary to assist him in carrying out various jobs such as attending
the telephone calls, typing letters, fixing appointments etc
Specialised Staf- The specialized staff helps the line by
performing work that requires special skills or more objectivity than
the line can normally be expected to possess. Such specialized
areas are- Accounting, Personnel, Public Relations, Research and
Development etc
General Staf-This category of staff serves as advisers to top
management in specialized areas. Eg . In the figure above, secretary
is the personal staff of the chief executive and the finance manager
is specialized staff to advise the chief executive and managers on
financial matters.

Completed staf workStaff men are supposed to go into depth of the problem. The head of the
staff division should be concerned more with approving or rejecting the
proposal prepared by his staff. It has rightly been said completed staff
work is the study of a problem and presentation of a solution by a staff
55

officer in such a form that all remains to be done on the part of the head
of the staff division is to indicate his approval or disapproval of the
completed action .

LINE AND STAFF ORGANIZATIONThe line-and-staff organization combines the line organization with staff
departments that support and advise line departments. Most medium and
large-sized firms exhibit line-and-staff organizational structures. The
distinguishing characteristic between simple line organizations and lineand-staff organizations is the multiple layers of management within lineand-staff organizations.

A wide variety of positions exist within a line-and-staff organization.

Some positions are primary to the company's mission, whereas others are
secondary to the form of support and indirect contribution. Although
positions within a line-and-staff organization can be differentiated in
several ways, the simplest approach classifies them as being either line or
staff.
A line position is directly involved in the day-to-day operations of the
organization, such as producing or selling a product or service. Line
positions are occupied by line personnel and line managers. Line
personnel carry out the primary activities of a business and are
considered essential to the basic functioning of the organization.

56

Line managers make the majority of the decisions and direct line
personnel to achieve company goals. An example of a line manager is a
marketing executive.Although a marketing executive does not actually
produce the product or service, he or she directly contributes to the firm's
overall objectives through market forecasting and generating product or
service demand. Therefore, line positions, whether they are personnel or
managers, engage in activities that are functionally and directly related to
the principal workflow of an organization.
Staff positions serve the organization by indirectly supporting line
functions. Staff positions consist of staff personnel and staff managers.
Staff personnel use their technical expertise to assist line personnel and
aid top management in various business activities. Staff managers provide
support, advice, and knowledge to other individuals in the chain of
command.
Although staff managers are not part of the chain of command related to
direct production of products or services, they do have authority over
personnel. An example of a staff manager is a legal adviser. He or she
does not actively engage in profit-making activities, but does provide legal
support to those who do. Therefore, staff positions, whether personnel or
managers, engage in activities that are supportive to line personnel.

Chief Characteristics Of Line and Staf organization.

It clearly distinguishes between the two aspects of administration

viz. planning and execution.
The staff is a supplement to the line.
The staff provides counsel, advice and guidance and does not enjoy
command prerogative. Also, it provides facts and information to the
authorities. The staff works through influence as they have no right
to command.
Staff managers have line authority within their own fields.

Line and Staf ConflictDue to different positions and types of authority within a line-and-staff
organization, conflict between line and staff personnel is almost inevitable.
Although minimal conflict due to differences in viewpoints is natural, conflict on
the part of line and staff personnel can disrupt an entire organization. There are
many reasons for conflict. Poor human relations, overlapping authority and
responsibility, and misuse of staff personnel by top management are all primary
reasons for feelings of resentment between line and staff personnel. This
57

resentment can result in various departments viewing the organization from a

narrow stance instead of looking at the organization as a whole .

Arguments of Line Executives against Staf Managers / Officers

1. Dilution of authority: Line executives argue that the introduction

of staff managers dilutes their authority and also leads to
interference in their work. They feel that their jobs become less
important.
2. Stealing show: Line managers feel that the staff executives tend
to steal show for the work that turns out to be successful. On the
other hand, when things go wrong, they alone have to face the
blame and criticism.
3. Lacks practical knowledge: Line executives argue that staff
executives are not familiar with the situation where actual work is
carried out. The services offered by the staff executives are rather
theoretical and not practical.
4. Lacks human skills: Line executives argue that staff managers
with human relations skills are rarely available. Staff presents
matters mechanically.
5. Domination of staf managers: Line executives argue that staff
managers always feel that they are superior as regards education
and skills. They dominate line executives. This is treated as
unwanted interference.

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6. Easy access to top management: The staff managers work at the

head office and have easy access to top level management. They
try to show their superiority to top level management by making
new plans and suggestions which may not be acceptable to line
executives. The top management feels that the line executives are
incompetent due to which the services of staff officers are required.
This is a source of agony for line managers.
7. Stress on paper work: The staff executives are engaged in the
paper work. In addition, they need information and various details
from the line executives. As a result, there is increase in the paper
work of line executives, which they resent.
Arguments of Staf Managers against Line Executives
1. Resistance to new plans and ideas: According to staff managers,
the line managers usually oppose/resist new plans/ideas. They treat
this as interference in their routine work. A staff manager is a
professional critic. He suggests modifications, which are useful, but
the suggestions are opposed as unnecessary interference. This
leads to conflicts.
2. Inadequate support from line executives: Staff managers argue
that line Managers do not take benefit of their services. Their
services are used only as a measure of last resort.
3. Inadequate scope for the use of authority: Staff managers
argue that line managers do not give importance to suggestions
given by them. This reduces the scope of activities of staff
managers. Moreover, the suggestions of staff managers are not
binding on line executives and this affects their importance and
contribution.
4. Lack of support from top management: Staff managers also
feel that they do not get full support from the top management. The
top management is more concerned with regular production. As a
result, it gives better treatment to line bosses.
5. Limited cooperation from line executives: Staff managers
argue that line executives adopt negative approach towards them
even when both are working in the same Organisation with identical
objectives. Line executives do not take the advice/suggestions of
staff managers in the right spirit. They reject suggestions on the
ground that they are not practicable even without giving fair trail.
This indicates limited co-operation from line executives.
6. Supply of inadequate information: Staff managers argue that
line executives do not approach them well in advance with all
necessary details of the problems faced by them. They do not
59

supply relevant information but want the solution quickly. If solution

is suggested within the time limit, it is again rejected on the ground
that it is not workable. This leads to dissatisfaction and conflicts.
7. Absence of authority: Staff managers feel frustrated as they offer
suggestions for solving the problem through hard work and also by
using their skills and experience. However, they do not have
commanding authority to execute their suggestions.

Remedies for conflictFortunately, there are several ways to minimize conflict. One way is to
integrate line and staff personnel into a work team. The success of the
work team depends on how well each group can work together in efforts
to increase productivity and performance. Another solution is to ensure
that the areas of responsibility and authority of both line and staff
personnel are clearly defined. With clearly defined lines of authority and
responsibility, each group may better understand their role in the
organisation. Also management should place qualified and trained
personnel in staff positions. This will ensure sound advice to the line
managers and they will be able to convince the line managers about its
practicality.A third way to minimize conflict is to hold both line and staff
personnel accountable for the results of their own activities. In other
words, line personnel should not be entirely responsible for poor
performance resulting from staff personnel advice. In advent of line
managers ignoring staff advice there should be proper grounds for it.

Merits Of Line And Staf Organization

Line officers can secure help from specialists by way of advice and
this strengthens the line positions.

The services of staff can be used for training some of the line
officers.

It enables the line officers to work faster and better as they can
concentrate on doing part and for expert knowledge they can rely
upon the staff.

60

The stability and discipline of the line organization are preserved;

only the expertise is added. There is greater flexibility in the
organization as new activities may be introduced.

Demerits Of Line And Staf Organization

It may create confusion when the line and staff relationship is not
understood properly.

Line managers may depend too much on staff experts. This may
lead to loss of judgement and initiative on the part of the line
managers. Also the staff departments may undermine the authority
of the line officers.

The staff officers may remain ineffective because they do not

possess the authority to get their recommendations implemented.

A serious weakness of staff is that they have no responsibility.

Therefore, the staff people may not take proper care before advising
the line managers.

The allocation of authority and responsibility may not be clear

between line and staff executives.

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FUNCTIONAL ORGANIZATION
Functional organization has been divided to put the specialists in the top
position throughout the enterprise. This is an organization in which we can
define as a system in which functional department are created to deal with
the problems of business at various levels. Functional authority remains
confined to functional guidance to different departments. This helps in
maintaining quality and uniformity of performance of different functions
throughout the enterprise.
The concept of Functional organization was suggested by F.W. Taylor who
recommended the appointment of specialists at important positions. For
example, the functional head and Marketing Director directs the subordinates
throughout the organization in his particular area. This means that
subordinates receives orders from several specialists, managers working
above them.
In the functional foremanship, there will be eight specialists/functional heads
called bosses. Out of eight bosses, four bosses will be at the planning level
and the remaining four will be at the slop floor level.
Foremen At Planning Level (Planning Dept.)
1. Time and Cost Clerk: He is concerned with preparing standard time for
the completion of certain piece of work and compiling the cost of that
work.
2. Instruction Card Clerk: He lays down the exact method of doing the
work. He specifies the tools to be used for conducting the production
and also gives other instructions on the instruction cards prepared by
62

him.
3. Route Clerk: The route clerk lays down the exact route through which
each and every piece of work should move through various stages till
completion. He decides the production schedule and the sequence of
steps by which the production process is to move.
4. Shop Disciplinarian: He is concerned with the discipline,
insubordination, violation of rules of discipline and absenteeism. All
cases relating to these matters will be managed by the shop
disciplinarian.
Foremen At Shop Floor Level (Shop Floor)
1. Gang Boss: He assembles and sets up various machines; and tools for
a particular piece of work. He is in-charge of assembling line of
production.
2. Speed Boss: He is concerned with the speeding of machines used for
production. He keeps proper speed of the machines and see that
workers complete the production work as per the schedule time.
3. Repair Boss: The repair boss looks after the proper maintenance of
machines, tools and equipments required during the production
process.
4. Inspector: The inspector controls quality of the products by keeping
adequate check/control when the production work is in progress.

The functional Organisation structure is given in the following chart:-

63

Features of Functional Organization

1. The entire organizational activities are divided into specific functions
such as operations, finance, marketing and personal relations.
2. Complex form of administrative organization compared to the other
two.
3. Identical functions of various departments in the organization are
performed by specialists.
4. Each functional area is put under the charge of functional specialists
and he has got the authority to give all decisions regarding the
function whenever the function is performed throughout the
enterprise.
64

5. Specialists often operate with considerable independence.

Merits of Functional Organization

1. Specialization- Better division of labour takes place which results
in specialization of function and its consequent benefit.
2. Efective Control- Management control is simplified as the mental
functions are separated from manual functions. Checks and
balances keep the authority within certain limits. Specialists may be
asked to judge the performance of various sections.
3. Efficiency- Greater efficiency is achieved because of every function
performing a limited number of functions.
4. Economy- Specialization compiled with standardization facilitates
maximum production and economical costs.
5. Expansion- Expert knowledge of functional manager facilitates
better control and supervision.

Demerits of Functional Organization

1. Confusion- The functional system is quite complicated to put into
operation, especially when it is carried out at low levels. Therefore,
co- ordination becomes difficult.
2. Lack of Co- ordination- Disciplinary control becomes weak as a
worker is commanded not by one person but a large number of
people. Thus, there is no unity of command.
3. Difficulty in fixing responsibility- Because of multiple authority,
it is difficult to fix responsibility.
4. Conflicts- There may be conflicts among the supervisory staff of
equal ranks. They may not agree on certain issues.
5. Costly- Maintainance of specialists staff of the highest order is
expensive for a concern.

65

COMMITTEE ORGANIZATIONCommittee is a group of persons to whom as a group some matter is

committed. It is appointed by an authority with some delegated powers.
It brings into decision making the experience and expertise of two or more
persons. In corporate enterprise committees have become popular to an
extent that the companies are described as a hierarchy of committee. At
the apex is the Board of Directors- the highest policy making body of the
company. The Board appoints various sub-committees to go into specific
problems. Managing
committees are formed for project planning,
budgeting , deciding disputes, solving specific problems and review and
reporting purposes.
The top executive may appoint committees of line officers, line and
staff officers or staff officers to deliberate on specified matters. These
committees may be ebtusted such jobs as investigating into certain
incidents, finding facts
and figures relating to a proposed project,
negotiation with some outside agency deciding some dispute and
coordinate and control the activities of different divisions or departments.
When the problem may be of technical nature and line people are involved
, the committee may consist of line managers and experts. When the
issue relates to various departments, the selected line and staff managers
may form the committee. The management committee may also consist
staff officers when the object is to seek advice on matters which may not
be of direct concern to line managers.

Merits And Demerits Of Committee OrganisationCommittees facilitate group deliberations and judgement. Various
interests and viewpoints are represented on it. It helps in democratizing
the internal administration of the organization and motivates people by
providing
them opportunity to express themselves in committee
meetings. The committees are also an effective instrument of
communication in any organization. It can serve as a link between the
authority which appoints it and the level of personnel whose problems are
investigated by it. Sometimes, committees are also used to postpone an
issue successfully.
66

But on the other side, committees may suffer from indecision. The matter
may be unnecessarily dragged and delayed in committee meetings. The
minority interests may be ignored by the members in majority.
Compromises may be made on the last common denominator which may
be harmful for the organization. The committee members may shirk from
responsibility on the plea that the decision is of the group and they have
no choice. Again committees incur costs which may at times be heavier
than the gain from committee deliberations
Inspite of the limitations, committee is an effective form of organization
and is widely used in business.

AUDIT RELATIONSHIP:
The audit managers are those who evaluate or appraise the work of
others periodically to tell them how well they are performing it. For
example, traditional auditors used to tell whether a department has
stayed within its budget or how closely it is meeting standard cost targets.
Quality inspectors appraise the quality of work completed by the
department. Personnel attached to the works may, by looking at turnover,
grievances, absenteeism etc. will be able to assess whether or not a
supervisor has been able to maintain cordial relationships with people
working with him.
The audit relationship should not be passive. The auditors must
realize the constraints under which the departments work and the
managers function. Similarly the managers must realize that adherence to
certain standards and rules and regulations are in their interest and
deviations from them should be permitted in exceptional cases. When
certain standard set appears to be wrong yhe manager should get it
changed by convincing the auditors.

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OBJECTIVE
An organization can be structured in many different ways, depending on
their objectives. The structure of an organization will determine the modes
in which it operates and performs.It provides the foundation on which
standard operating procedures and routines rest and the designation of
jobs and the relationships among those jobs which we call organizational
relations
determines which individuals get to participate in which
decision-making processes, and thus to what extent their views shape the
organizations actions.
The structure and relationship is very important for an organization.
A sound structure and an efficient organizational relationship is the
backbone for successful running of an organization.
The purpose of this report is to study the structure and relationship of an
organization and understand its hierarchical structure as well as the
network of relationships among those structures.

METHODOLOGY
Selection of organizationWe have taken ICICI bank limited as the subject organization of our study.
It is the second largest bank in India by assets and third largest by market
capitalization. It offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery
channels and through its specialized subsidiaries in the areas of
investment banking, life and non-life insurance, venture capital and asset
68

management. The Bank has a network of 2,772 branches and 9,363 ATM's
in India, and has a presence in 19 countries, including India.
By studying its structure and organizational relationship we aim
to understand its hierarchical structure and see how one of the most
successful and preferred banking organization of India works through the
various modelling of its structure and the designation of jobs and
relationships between them help determine the ground in which it
operates and performs.
Out of the several branches of ICICI, we have taken the ICICI
Rohini branch, sector-8 for our survey.

Sample sizeTo achieve a good understanding and to arrive at a better conclusion we

have taken a sample size of 15 employees of the rohini branch, ICICI.

The goals of this organization are clearly stated..

The division of labor of this organization is flexible.

My immediate supervisor is supportive of my efforts

My relationship with my supervisor was a

Harmonious one.
My immediate supervisor has ideas that are helpful to meand my
workgroup
This organization is not resistant to change.

5
6
7
8

The division of labor in this organization is intended to help it reach

Its goals
The leadership norms of this organization help its progress

I can always talk with my superior if I have a work-related

Problem
10 The manner in which work tasks are divided is a logical one

69

Disagree
DisagreeStrongly

Neutral
DisagreeSlightly

Agree
AgreeSlightly

AgreeStrongly

Design of Questionnaire

11 This organizations leadership efforts result in the organizations

fulfilment of its purposes.
12 The opportunity for promotion exists in this organization.
13 There are a few supervisors in charge of employees.
14 The structure of my work unit is well designed
15 It is clear to me whenever my boss is attempting to guide my work
Efforts
16 1 had enough input from my superior in deciding my work-unit goals
17 The division of labor in this organization actually helps it to reach
its goals
18 I understand my bosss efforts to influence me and the other
members of the work unit
19 This organizations planning and control efforts are helpful to its
growth and development
20 The organizational structure has the ability to change

We have designed a questionnaire of 20 questions divided into 7

parameters namely purposes, structure ,leadership , relationships,
rewards, helpful mechanism and attitude towards change. Each parameter
has been given equal weightage with 5 questions each. Answer to each
question is assigned different score as in
Agree strongly = 1
Agree= 2
Agree slightly=3
Neutral=4
Disagree slightly=5
Disagree=6
Disagree strongly=7

70

Disagree
DisagreeStrongly

Neutral
DisagreeSlightly

Agree
AgreeSlightly

AgreeStrongly

RESULTANT FINDINGS

The goals of this organization are clearly stated.

The division of labor of this organization is flexible.

My immediate supervisor is supportive of my efforts.

My relationship with my supervisor was a

Harmonious one.
My immediate supervisor has ideas that are helpful to me and my
workgroup
This organization is not resistant to change.

The division of labor in this organization is intended to help it reach

Its goals
The leadership norms of this organization help its progress.

5
6
7
8
9

I can always talk with my superior if I have a work-related

Problem
10 The manner in which work tasks are divided is a logical one

71

1
3

11 This organizations leadership efforts result in the organizations

fulfilment of its purposes.
12 The opportunity for promotion exists in this organization.

13 There are a few supervisors in charge of employees.

14 The structure of my work unit is well designed

15 It is clear to me whenever my boss is attempting to guide my work

4
Efforts
16 1 had enough input from my superior in deciding my work-unit goals 5

17 The division of labor in this organization actually helps it to reach

its goals
18 I understand my bosss efforts to influence me and the other
members of the work unit
19 This organizations planning and control efforts are helpful to its
growth and development
20 The organizational structure has the ability to change

4
6

Purposes
1

Structure
2

Leadership
3

Relationships
4

10

11

15

16

17

18

22

23

24

25

29

30

31

32

Total

Total

Total

Total

Rewards
5

Helpful Mechanisms
6

AttitudeTowards Change
7

12

13

14

19

20

21

26

27

28

33

34

35

Total

Total

Total

Average

Average

Average

72

FINDINGS
The information that we collected from the 15 employees at the
organisation helped us to collect valuable insights about the
organisational structure and relations of the same. The answers to certain
questions suggest that the organisation possesses a more open structure
in tune with the modern theory of organisation as opposed to the classical
theory of organisation. The classical theory is characterised by excessive
emphasis on hierarchy, seniority by promotion, rigidity in the allocation of
work, etc. As we can see from the second question that the majority of the
people interviewed i.e. 66.67% felt that the division of labour in the
organisation was of a flexible nature. Moreover not only did the employees
feel that there was flexible division of labour.93.33% felt that this helped
the company to achieve its goals. 73.33% of the employees felt that the
opportunity for promotion was strong in the organisation. Talking about
allocation of work,80% of those interviewed felt that the allocation of
duties was done rationally. Thus we can see that this organisation is
indicative of a more open structure.

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Division of labour of the organisation is flexible

4; 8%
3; 15%

1; 31%

2; 46%

We can also observe from the data that the employees are satisfied with
the planning and execution existing in the organisation. For an
organisation to succeed it should possess clarity with regard to its
objectives.93.99% of the employees felt that the goals of the organisation
were clearly stated.Again 86.67% felt that the planning and control
efforts were helpful to the company in achieving its goals.
Another concept that was dealt with was the span of control.A wide span
of control was characterised by a few employees reporting directly to a
manager. In this case however we see the existence of a wide span of
control as 60% of the employees said that there were a few supervisors in
charge of all the employees.
According to the principles of formal organisation the channels of
communication should be open and clear within the organisation.12 out of
the 15 employees said that they could approach their superior in the
event of a work-related problem.

74

I can always talk with a superior if i have a problem

4; 8%
3; 15%

1; 31%

2; 46%

Moreover this organisation resembles a future organisation which is more

flexible in nature. This is shown by the above findings.
However there is one area where the organisation is lacking and that is
the ability of the organisation to respond to change.12 out of the 15
employees who were interviewed felt that the structure of the
organisation did not permit change and 73.33% of the employees felt that
the organisation was resistant to change.

75

This organisation is not resistant to change

4; 8%
3; 15%

1; 31%

2; 46%

In all the above findings we should be careful of the fact that all the
employees belong to one particular branch of the organisation and thus
we cannot conclude the above with regard to the organisation as a whole.
Through our above findings we can conclude that this particular branch of
the organisation lacks only with regard to its attitude towards change and
if it could rectify the same, it would be able to function more efficiently.

76

CONCLUSION
In our project on Organisational Structure and Relations we have tried to
explain the different theories that have been postulated with regard to
organisations. Furthermore we have explained the concepts of
organisational structure and relations. To understand these concepts
better we have done a survey based on 15 employees of ICICI Bank,
Rohini Branch. In order to understand the structure and relations
prevailing in the branch, we posed certain questions to the employees.
From our survey we find that the organisation follows a structure similar to
that prescribed in the modern theory of organisations. Moreover it
possesses flexibility and a wide span of control. However the only area of
concern is its attitude towards change and if the company can rectify this
then it could improve its functioning. Thus through this project we are able
to study an organisation and understand the impact of structure and
relations on the success of an organisation

77

BIBLIOGRAPHY
The books and the websites that we have
referred to for this project are:
(1)www.wikipedia.com
(2)www.eurojournals.com
(3)www.knowledge-hub.com
(4) www.learnmanagement2.com
(5) www.managementstudyguide.com

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