Organization Structures 3.

1 Definitions: Organization is the structural frame work of duties and responsibilities required of personnel in performing various functions with a view to achieve business goals. Organization Chart is a graphical representation of the structural relationship among the different functions (departments) and positions (Persons) in an enterprise. 3.2 Advantages of organization charts: 1. Shows the relationship among the employees. 2. Shows the flow of authority of various persons. 3. Shows the various departments and their functions. 3.3 Principles of Organization: 1. 2. 3. 4. 5. 6. 7. 8. 9. 3.4 Consideration of objectives Relationship of basic components of the organization Responsibility and authority Span of control Division of work Effective delegation communication Line and staff relationship Balance, stability and flexibility

Types of organization Structures: 1. Line Organization 2. Functional or staff Organization 3. Line and Staff Organization

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Line Organization ( Scalar organization ) 1. It is characterized by direct lines of authority flowing from the top to bottom 2. The lines of responsibility flows from bottom to top 3. The business activities are divided into different departments and put under the control of departmental heads 4. Departmental head directs and controls one or more managers : Managers control supervisors or foremen : foremen control a group of workmen. 5. No operation is under two bosses. 6. This is also known as military type of organization. GM

Finance Manager

Sales Manager Manager

Head, Production Manager

Personnel Manager Manager Manager Manager Manager foreman workmen foreman workmen

Foreman workmen

Foreman workmen

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Line Organization chart Merits: 1. Simple to understand and operate 2. Well defined authority and responsibility 3. Better coordination 4. Effective communication 5. Economical 6. Quick decisions Demerits: 1. Excess work for the heads 2. Lack of specialization 3. Lack of coordination among departments 4. Distortion of communication

7. Unity of command 8. Effective supervision 9. Executive development 10. Flexibility 11. Strong discipline 5. Lack of initiative 6. Favoritism 7. Instability 8. No means of rewarding good workers

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Application: 1. For small and medium factories 2. For continuous process industries such as sugar, paper, refineries etc. 3. For automotive plants. 4. For concerns where labor problems are less and easy to handle.

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Functional organization: F.W Taylor developed the concepts of functional Organization and it is also known as Taylors functional organization. 1. The difficulty in finding all round qualified persons to work in line organization is overcome by this type of organization. 2. The person in-charge of a function is a specialist in it and brings out the best in him self. 3. The supervisory functions are divided into Two groups. 1. Office Specialist 2. Shop floor specialist. 1. Route clerk 1. Gang boss 2. Instruction clerk 2. Speed boss 3. Time & cost clerk 3. Repair boss 4. Disciplinarian 4. Inspector Advantages: 1. Specialization 5. Relief to top executives 2. Increase in efficiency 6. Economy of operations 3. Scope for growth 7. Better supervision 4. Flexibility 8. Democratic control Disadvantages: 1. Conflict in authority 5. Poor discipline 2. Lack of coordination 6. Expensive 3. Difficulty in fixing responsibility 7. Group rivalries 4. Delay in taking decisions Application: 1. Due to many disadvantages this form is obsolete. However modified versions are in use. 2. Suitable for medium and large manufacturing concerns. 3. Expanding industries.

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Works manager

Office
Instructi on

Shop floor

Route Clerk

Clerk

Time Clerk

Disciplinarian & cost clerk

Gang Boss

Speed Boss

Repair

Inspector

Boss

Workmen Functional Organization Chart

Workmen

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Line and Staff Organization 1. It is a happy blending of line and functional organization. 2. The line executives retain their executive authority and control over the work of their subordinates. 3. The staff executives are attached to the line managers to advise them on the matters related to their specialized field. 4. The final decision remains with the line executives whether to accept and implement the recommendations of the staff or not. 5. The line officers have authority and are responsible for the accomplishment of the objectives. 6. Staff officers have responsibility and authority for providing advice and service to the line officers in the attainment of the objectives. Advantages: 1. 2. 3. 4. 5. 6. 7. 8. Specialization without affecting the unity of command No confusion in authority and responsibility Better discipline Growth and expansion Line executives are relieved from some burden Better quality Quick action Enjoys the advantages of both Line and Functional organizations 4. Ineffective staff 5. Lack of coordination 6. Expensive

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Disadvantages: 1. Conflicts between line and staff personnel 2. Lack of responsibility for staff members 3. More dependence on staff

BOD Secretary Legal adviser

GM
AM IE foreman workmen Pur.M Superintendant foreman workmen WM SM Superintendant foreman Workmen PM Design engr. foreman Workmen

Line and staff organization

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Line, staff and Functional Organization 1. As regards to discipline and output are concerned, the workers are kept under direct control of foreman. 2. As regards the quality, the inspector has the proper authority to control the quality and he can directly order the workmen. 3. As staff relationship, there may be research department for the analysis of the materials, semi-finished and finished products.

GM Research Engineer Works Manager IE

Foreman

Foreman

Inspector

Workmen

Workmen

Organization chart