Organising and Departmentation

Organising

Organising is the process of defining and grouping activities and establishing authority relationships among them to attain organizational objectives.

"Organisation is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently" - Louis A. Allen

Importance of Organising

· Organising helps Organisations to reap the benefit of specialization.

· Organising provides for Optimum utilization of resources.

· Organising helps in Effective administration.

· Organising channels for Expansion and growth.

· Organising achieves co-ordination among different departments.

· Organising creates scope for new change.

Organising Process

1 Division of work: The first process of Organising includes identification and division of work which shall be done in accordance with the plans that are determined previously.

2 Departmentation: once the work of identifying and dividing the work has been done those are similar are to be grouped.

3 Linking departments: When the process of departmentation was completed, linking of departments has to be done so that those departments operate in a co-ordinated manner which gives a shape to overall organisation structure.

4 Assigning Duties: On completion of departmentation process assigning duties i.e. defining authority and responsibilty to the employees on the basis of their skills and capabilities has to be done, which in consequence magnifies efficiency with regard to their work.

5 Defining hierarchal structure: Each employee should also know from whom he has to take orders and to whom he is accountable/responsible.

Organisation Structure

Organisation structure is the pattern of relationships among various components or parts of the organisation which prescribes the relations among various activities and positions. An effective structure will result in increased profitability of the enterprise. whenever an enterprise grows in size or complexity it needs an adequate organisation structure.

Line Organisation Structure: Hierarchy derived from a scalar process. Organisation is quite simple in understanding and implementation. this does not offer scope for specialization.

Line and Staff Organisation Structure: Staff personnel generally specialists in their fields advice line managers to perform their duties. Staff personnel have right to recommend, but have no authority.

Functional Organisation: Grouping of activities on the basis of functions required for the achievement of ultimate objectives.

Divisional Organisation Structure: Several fairly self-contained autonomous units were created. Each unit was headed by a manager and is directly accountable to the organisation.

Departmentation:

The process of dividing activities into units and subunits is referred to as departmentation. The term departmentation is used in a generic sense n is not only confined to the creation of such units as are called departments, but it includes divisions, sections and jobs also.

Dividing up work calls or identification of total activities and classification of such activities into units and subunits. There are three bases for primary grouping of activities at the second level of the organization just below the top level. Units at the second level are commonly called departments when business functions are adopted as the pattern of grouping activities. Such units go by the name of divisions when either products manufactured or territories are adopted as the means of classifying activities. 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 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 co-ordination 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

Bases of departmentation

1. Functions. Important enterprise functions provide the usual basis for classifying activities into departments. Manufacturing, marketing, finance, personnel, accounting and engineering are the typical functions of an industrial enterprise, and departments ma be established on the basis of such functions. But all these functions are not alike in importance from the business point of view. Marketing and manufacturing are the basic functions of an industrial concern, and others are regarded as service functions because they exist for supporting the main functions of the business. Accordingly, basic and main functions must be given a higher organizational status than the status enjoyed by service functions. Furthermore, the size, nature and volume of business have an important say in creating departments. A small business may not require so many departments, and it may be put under the manufacturing departments, viz. marketing, manufacturing and finance. Purchasing, engineering and accounting may be put under the manufacturing department, and accounting under finance. Conversely, large-sized enterprises may be required to create more units than this classification of functions warrants. For example, marketing department may be split into three separate ones like sales, advertising, and market research & product design. This type of departmentation is known by fictionalization.

2. Products. Products manufactured may be adopted for division as well as for sub division purposes. When there are several product lines an each product line consists of a variety of items, functional classification fails to give balanced emphasis on each product. Slow-moving and outdated products may be given greater attention at the cost of growing ones. For the sake of expansion and development of their products, many large enterprises have created more or less autonomous, self-sufficient products divisions based on either one single product or a group of related products. A gigantic structure with separate product lines is usually laid on this pattern of departmentation which is technically called divisionalization. With favourable product and market characteristics, divisionalization become the only choice available to large-sized enterprises. 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.

3. Territories. Like the products basis, geographical regions are adopted for main division as well as for subdivision purposes. Units that are located at physically dispersed areas are made so many self-contained divisions of the organization. Apart form this divisionalization, marketing activities are very often subdivided on the basis of geographical areas.

It has almost the same advantages and disadvantages as are to be found in the case of departmentation by products. There are two special advantages of this pattern of grouping activities. Being nearer to the market and becoming familiar with local conditions, this classification help to cater to the needs of local people more satisfactorily. In addition, the economy in transport cost, the local supply of raw materials or services and the convenience of supervision make a significant contribution towards the lower cost of operation.

4. Customers. This basis of classification is widely followed in subdividing activities of the marketing department. To give individual attention to diverse groups of buyers in the market, sales activities are often split into several parts. When the products are offered to an extensive market through numerous channels and outlets, it has the special merit of supplying goods in accordance with the peculiar needs of customers. Sales being the exclusive field of its application, co-ordination 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.

5. Processes. The manufacturing activities may be subdivided on the basis of their processes of production. Similar machines are grouped into separate sections that are utilized for a distinct operation of the job. For example, lathe machine, drill machine, grinding machine and milling machine are placed in each distinct unit. In office work also, this basis of grouping activities has become common, e.g., filing department, mail handling department and duplicating department. Cost and economy considerations urge the use of electronic office equipments and other costly machine on the basis of this subdivision. It is, however, not a suitable basis to be utilized in any mass production arrangement.