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TYPES OF ORGANISATION

Introduction
o Organisation is designed on the basic of principles of
labour and span of management. The success of the
organisation depends upon the experience and
competence of the officers of the organisation.

o Nature, scale and size of the business are the normal


factors which determine forms of internal organisation.
The following common types of organisation find a place
in the structure of internal organisation.
Introduction

o Line, Military or scalar organisation


o Functional organisation
o Line and staff organisation
o Committee organisation
o Project organisation
o Matrix organisation
o Freeform organisation
Line Organisation
o Line organisation is the simple and oldest type
of organisation followed in an organisation.
Under line organisation, each department is
generally a complete self-contained unit.

o A separate person will look after the activities


of the department and he has full control over
the department.
Line Organisation
o The same level executives do not give or receive orders
amongst themselves. But they receive orders from their
immediate boss and give orders to their subordinates.
Hence, all the heads are responsible to the general
manager, the general manager, in turn, is responsible to
the shareholders who are the owners.

o This type of organisation is followed in the army on the


same pattern. So, it is called military organisation. Under
type of organisation, the line of authority flows from the
top to bottom vertically. So it is called line organisation.
Characteristics of line organisation

o It consists of direct vertical relationships.


o Authority flows from top-level to level to
bottom level.
o Departmental heads are given full freedom to
control their departments.
o Each member knows from whom he would
get orders and to whom he should give his
orders.
Characteristics of line organisation

o A senior member has direct command over


his subordinates.
o Operation of this system is very easy.
o Existence of direct relationship between
superiors and subordinates.
o The superior takes decisions within the scope
of his authority
Advantages of line organisation Disadvantages of line organisation
Advantages and Disadvantages
1. Simplicity 1. Lack of specification of
2. Division of authority and Line Organisation
responsibility 2. Over loading

3. Unity of control 3. Lack of initiative

4. Speedy action 4. Scope for favoritism

5. Discipline 5. Dictatorial

6. Economical 6. Limited communication

7. Co-ordination 7. United administration

8. Direct communication 8. Subjective approach

9. Flexibility 9. Instability

10. Lack of co-ordination


Suitability

o This type of organisation is suitable to small size


business units.
o Where the activities are of routine nature or
machine based.
o If the business activities are service mined.
o Where the number of persons working is small
o The business operation is simple in nature.
o A business unit which has straight methods of
operations.
Functional organisation

o Under line organisation, a single person is in


charge of all the activities of the concerned
department. The person in charge finds it
difficult to supervise all the activities
efficiently.
Functional organisation
o The reason is that the person does not have
enough capacity and required training. Under
functional organisation, various specialists are for
various functions performed in an organisation.
These specialists will attend to the work which is
common to different functions of various
departments. Workers, under functional
organisation, receive instructions from various
specialists.
Functional organisation

o The need for functional organisation arises


out of:
o The complexity of modern and large-scale
organisation
o A desire to use the specialization in full and;
o To avoid the work-load of line managers with
complex problems and decision-making
Characteristics of functional organisation

o The work is divided according to specified


functions.
o Authority is given to a specialist to give orders
and instructions in relation to specific
function.
o Functional authority has right and power to
give command throughout the line with
reference to his specified area.
Characteristics of functional organisation
o The decision is taken only after making consultations with the
functional authority relating to his specialized area.

o The executives and supervisors discharge the responsibility of


functional authority.
- Route clerk
- instruction card clerk
- time and cost clerk
- Gang boss
- Speed boss
- Inspector
- Repair boss
- Disciplinarian
Advantages of functional Disadvantages of functional
organisation organisation

Advantages and Disadvantages


o Benefit of specialization o Complex relationship of
o Application of expert knowledge o Discipline
Functional Organisation
o Reducing the work load o Over specialization
o Efficiency o Ineffective co-ordination
o Adequate supervision o Speed of action
o Relief to line executive o Centralization
o Co-operation o Lack of responsibility
o Economy o Increasing the overhead expenses
o Flexibility o Poor administration
o Mass production o Suitability of functional
organisation
Line and staff organisation

o The line officers have authority to take


decisions and implement them to achieve the
objectives of the organisation.

o The line officers may be assisted by the staff


officers while framing the policies and plans
and taking decisions organisation.
Line and staff organisation

o The authority flows from top level to the lower


level of the organisation through the line officers
while the staff officers attached to the various
departments advise the departments. The staff
officers are not in a position to compel the line
officers to follow the advice by them. Each
department is headed by a line officer who
exercises full authority regarding the planning.
Types of staff

o Personal staff

o Specialized staff

o General staff assistant


Functions of staff officers
o The staff officers assist the line officers in the
planning of business activity.

o The board of directors frames the policies of the


business on the basis of recommendations given by
the staff officers.

o The managers can get the advice from the staff


officers regarding the selection. ‘training’ placement
and remuneration fixation the personnel
Functions of staff officers
o The staff officers give regarding the method of improving
the product, the technique of reducing the cost of
production, increasing the profits of the concern.
o The staff officers prescribe the procedures to be followed
by the line officers in the execution of policies and
programs.
o Staff officers of a department help the manager in the
preparation of budget of the department.
o the staff officers may be called to solve the
administrative problems encountered by the line officers
in general.
Arguments of staff officers against line
officers
o The staff officers have only theoretical academic
knowledge but not practical knowledge.
o The staff officers go beyond their sphere of activity
and assume that they have line officer’s authority.
o Much of the advice given by the staff officers is
impractical
o Since the staff officers unnecessary increases the
paperwork of the line officers.
Arguments of staff officers against line
officers
o The staffs give advice without considering the
nature of business as a whole.

o Staff officers are very much interested in


becoming line officers of the organisation
rather than impairing advice to them.
Solution to the conflict between line officers
and staff officers
o Both line officers and staff officers should clearly
understand the nature of relationship prevailing
between them.
o A separate staff member should be appointed to bring
about co-operation between the line officers and staff
officers.
o The line officers should be encouraged to use the advice
of staff officers.
o Only qualified persons should be selected and placed as
staff officers.
Solution to the conflict between line officers
and staff officers

o The staff officers should be convinced by the line


officers if their advice is not accepted
o The responsibility for results could be fixed on both
line officers and staff officers
o Only experienced persons alone should be promoted
as line executives..
o Remove the fear of the line officers and staff officers
whether the new ideas of advice would be properly
put into use or not.
Advantages of line and staff organisation Disadvantages of line and staff
organisation
Facilitates to work faster and better If powers are not defined then get
confusion
Specialization is attained Line officers may reject advice without
any reason for their action
Enables to utilize experience and advice Staff officers are not responsible if
favorable results are not obtained.
Officers can take sound advice Difference between line and staff officers
will defeat the very purpose of
specialization
New technology or procedure can be Line officers blame staff officers for
introduced without any dislocation unfavorable results and want to get
rewards for favorable results
Promotes efficient functioning of line
officers
Very good opportunity is made available
to young person to get training
Committee organisation

o “A Committee as a group of persons either


appointed or elected who are to meet for the
purpose of considering matters assigned it”

Types of committee
o Advisory committee problem solving committees

o Fast-finding committee

o Action committee
Functions of a Committee
o Collect the necessary information from different sources
and arrange the information orderly.

o The collected information is critically analyzed.

o Draft a detailed report containing the recommendations


for the purpose of implementation.

o Formulate the standard of performance for the purpose of


evolution of actual performance in future.
Size of the Preparation
Clear Objective
committee for a meeting

Selection of
meeting
Role of
Committee
chairman
Follow up

Selection of
evolution Role of
subject
committee
matter
Project organisation

o The project organisation idea was developed


after the second war.

o A project organisation can also be the beginning


of an organisation cycle. The project may become
a long term or permanent effort that eventually
becomes a program or branch organisation
Features of project organisation

o The Success of the project organisation


depends upon the co-ordination of activities

o There is a grouping of a activities for each


project. It leads to the introduction of a new
line of a authority.
Drawbacks of Project Organisation
o The professionals are deputed for the project. But there
is an assurance of continuous work for the professional
in a project organisation.

o The decision is taken in the project organisation under


pressure of the top controls the staff in an organisation.

o The top management does not extend its full co-


operation for the effective functioning of the project
organisation. Some hindrance may be caused by the top
management.
Matrix organisation

o “Any organisation that employs a multiple


command structure but also related support
mechanisms and an associated organizational
culture and behavior pattern” The matrix
organisation may be followed where a large of
small projects have to be managed.
Conditions for effective matrix
organisation
o The principle of chain of command is not followed in
the matrix organisation. A project manager should
give his report to more than one superior.

o There should be an agreement among the managers


regarding the authority of utilizing the available
resources. The term resources include physical
resources, financial resources and human resources.
Merits and Demerits of
Matrix organisation
Merits of Matrix Demerits of matrix
organization organization

o Achievement of objectives o Complex relationship


o Best utilization of o Struggle for power
resources o Excessive, emphasis on
o Appropriate structure group decision-making
o Flexibility o Arising conflict resolution
o Motivation o Heterogeneous
o Personal development
Free form organisation
o This type of organisation is formed whenever a
need arises to form an organisation, for achieving a
particular object. it will be dissolved after achieving
the object of the organisation. The free form
organisation resembles the project and matrix
organisation. It otherwise called organic or ratio
organisation.

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