Chapter 5: Organising

The following steps are involved in the process of organising:

1. The first step that is involved in organising is identifying the number of activities and accordingly dividing them as per the plan. Actions are taken as per the defined objectives. Having a clear division of work keeps duplicity at bay.

2. Actions that were fixed earlier are now arranged in groups based on similarity. This ensures that the department specialising in the work has access to it.

3. The next step in organising is assigning the roles and responsibilities to the person best suited for the job. Work is allocated as per the skills of the members.

4. The next part of organising is the presence of a hierarchy in an organisation. It is very helpful when a person is aware of his immediate superior. A defined organisation structure helps in ensuring the successful functioning of the activities of the organisation.

Delegation is the process of transferring authority and responsibility to subordinates in an organisation. The following are the elements of an organisation:

1. Delegation provides an individual with the power to direct or command a subordinate. This enables them to make decisions regarding what needs to be done and who will be doing that. The chain of command starts from the top level of management and ends at the lower level of management. As authority is delegated, it helps in maintaining discipline and obedience.

2. Responsibility is the part where the subordinate has to adhere to the given task. The duty provided should be performed by the subordinate properly. The responsibility of a subordinate is towards their superior.

3. The superior must be accountable for the outcome of the work that has been assigned by them to their subordinate. The superior should keep track of the work done by the subordinate and must see that it is done satisfactorily.

The network of relations that is created from the social interactions taking place outside of the office is called an informal organisation. It traces its origin from formal organisations and is not created at will by management. These relationships are built on friendship that develops between co-workers. It supports formal organisations in the following ways:

1. A free flow of communication is established in an informal organisation which leads to communication channels outside the organisation. In this way, communication spreads easily and assists the formal organisation.

2. In informal organisations, people develop good bonding among themselves and thus towards the organisation. It helps in increasing coordination among the members and also promotes mutual trust and respect. The result of such bonding is it lowers the level of conflict.

3. Informal organisations help in fulfilling organisational objectives. Managers can get to know about the workers’ issues and ask for suggestions on improving the work conditions. Happy workers will be more contributing towards an organisation.

4. It helps in building a harmonious work environment by encouraging cooperation among workers and managers. A peaceful work environment is more productive.

5. An informal organisation helps in increasing efficiency among the workers. The workers understand their importance and actively contribute towards organisational growth.

Any organisation, regardless of its size, will find it difficult to function properly, either as centralised or decentralised, because there needs to be a balance between the two systems in order to make the best possible utilisation.

In centralisation, the decision-making capacity or authority is restricted to the people sitting at the top level of management. All the decisions regarding the organisation are taken by the top-level management. In stark contrast to this system, decentralisation works by delegating the decision-making capacity to the managers at a lower level. There is a distribution of decision-making capabilities which is spread evenly.

For an organisation to perform at its best, it has to follow a mix of centralisation and decentralisation. A growing organisation cannot rely on centralisation to manage all the functions. It would slow down the decision-making process for the organisation. Hence, a decentralised system helps ease the load on decision-making. Also, an organisation cannot let all the decisions be made by the lower level management, as it will be a risk to the integrity of the organisation.

Therefore, there should be a balance between centralisation and decentralisation in an organisation.

Decentralisation and delegation are similar in nature. Both are about transferring responsibility and authority. In the case of delegation, authority is shared among two individuals, i.e., superior delegating authority to subordinate, whereas in decentralisation, the authority is shared at multiple levels. Therefore, it can be said that the act of delegating authority at each level of management promotes decentralisation, while the act of decentralisation helps promote delegation at the lowest level.

The organisation structure that Neha can follow is the divisional organisation structure. Under this system, there will be separate departments which will take care of different products. There will be separate personnel for managing the departments.

The divisional structure is recommended for the following reasons:

1. Each department will have a head, who will be accountable for the overall performance of the department. The performance of individual departments can be determined easily; the best and worst performers can be identified, and necessary steps can be taken.

2. Decision-making will be quick as each department has a specialist to manage it.

3. Having a divisional structure allows for adding more divisions without impacting the functions of the organisation.

No, in this case, the production manager cannot blame the foreman as he was provided with responsibility, but he was not given authority. With responsibility, there should be an authority also, which is essential for a task to complete.