1. Meaning and process of organising
Organising arranges the work, people, resources and authority needed to carry out plans. It answers: what jobs are needed, how are they grouped, who does each, and who reports to whom.
Steps
- Identification and division of work into manageable jobs.
- Departmentalisation: grouping related jobs into units (by function, product or region).
- Assignment of duties to people suited by skill and training.
- Establishing reporting relationships, so that authority and communication lines are clear.
| Step | What Utsav Events (imagined, Guwahati) does |
|---|---|
| Identify and divide work | Lists venue booking, decoration, catering, sound, guest management and billing as separate jobs |
| Departmentalise | Forms three units: Venue and Décor, Food, and Client Services |
| Assign duties | Gives Food to a trained chef and Client Services to an experienced coordinator |
| Reporting relationships | Unit staff report to unit heads; unit heads report to the owner |
Key terms
- Organising
The management function of grouping work, assigning it and fixing authority relationships to carry out plans.
- Departmentalisation
Grouping similar or related jobs into units such as departments or divisions.
2. Importance of organising
- Benefits of specialisation: repetitive work on one job builds skill and speed.
- Clarity in working relationships: who reports to whom is fixed.
- Optimum utilisation of resources: no duplication, no idle resources.
- Adaptation to change: the structure can be modified as conditions change.
- Effective administration: clear jobs remove confusion.
- Development of personnel: delegated work lets people grow; managers get time for innovation.
- Expansion and growth: new products, branches or units can be added smoothly.
| Importance | In one line |
|---|---|
| Benefits of specialisation | Repeating one kind of job builds skill and speed |
| Clarity in working relationships | Everyone knows whom to report to |
| Optimum utilisation of resources | No overlap of jobs, no idle resources |
| Adaptation to change | The structure can be adjusted when conditions change |
| Effective administration | Clear jobs remove confusion and duplication |
| Development of personnel | Delegated work lets people grow; managers find time for new ideas |
| Expansion and growth | New products, branches or units can be added in an orderly way |
| Organisation structure | Meaning |
|---|---|
| What it is | The framework of jobs, departments and authority relationships within which work is done |
| Shown by | An organisation chart |
| Related idea | Span of management: the number of subordinates one superior can manage well, which shapes the levels of the structure |
| Two common forms | Functional and divisional |
Key terms
- Organisation structure
The framework of jobs, departments and authority relationships within which work is done, shown in an organisation chart.
3. Functional and divisional structures
Functional structure: jobs grouped by function (production, marketing, finance, HR). Suits a large firm with one product line or closely related products needing specialists. Merits: specialisation, little duplication, easy training, close control. Limits: departmental goals over firm goals, hard coordination, conflicts, narrow outlook.
Divisional structure: jobs grouped by product; each division has its own functions. Suits a firm with many distinct products. Merits: varied skills for division heads, accountability for profit, quick decisions, easy expansion. Limits: conflicts over resources, duplication and high cost, divisional self-interest.
| Basis | Functional | Divisional |
|---|---|---|
| Grouping | By function | By product |
| Specialisation | Functional | Product |
| Responsibility for results | Hard to fix for overall results | Division head answerable for profit |
| Cost | Economical | Costly (duplication) |
| Growth | Harder to add products | Add a new division easily |
Key terms
- Functional structure
A structure in which jobs are grouped by the major functions of the business.
- Divisional structure
A structure in which the firm is split into product divisions, each with its own functions.
4. Formal and informal organisation
Formal organisation is designed by top management: written rules, defined positions, authority from position, communication through the scalar chain. Merits: easy to fix responsibility, no overlap, stability. Limits: slow decisions, rigidity, neglect of social needs.
Informal organisation arises from social interaction: no written rules, authority from personal qualities, communication in any direction (grapevine). Merits: fast communication, social needs met, supports formal organisation. Limits: rumours, resistance to change, group norms that may clash with goals.
Both exist together; good managers use informal channels to support formal goals.
| Basis | Formal | Informal |
|---|---|---|
| Origin | Created by management | Arises from interaction |
| Authority | From position | From personal qualities |
| Communication | Scalar chain | Any direction |
| Nature | Rigid | Flexible |
| Purpose | Organisational goals | Social needs of members |
Key terms
- Formal organisation
The official structure of positions, rules and authority designed by management.
- Informal organisation
The network of personal and social relationships that develops among employees.
- Grapevine
The informal channel through which news spreads quickly in any direction.
5. Delegation
Delegation is the downward transfer of part of a superior's authority to a subordinate to perform a task. It is compulsory in any organisation, because no manager can do everything alone.
Elements
- Authority: right to command and decide; flows downward; limited by rules and laws.
- Responsibility: obligation to perform the task; flows upward.
- Accountability: answerability for the outcome; flows upward; cannot be delegated.
Authority should match responsibility. Importance: effective management, employee development, motivation, growth, basis of the hierarchy, better coordination.
| Importance of delegation | How |
|---|---|
| Effective management | Managers are freed for important work |
| Employee development | Subordinates learn and grow |
| Motivation | Trust raises confidence |
| Growth | Trained people can run new units |
| Basis of hierarchy | Authority relationships form the levels of management |
| Better coordination | Clear authority, responsibility and accountability |
Key terms
- Authority
The right of a person in a position to give orders and take decisions.
- Responsibility
The obligation of a subordinate to perform the assigned duty.
- Accountability
Answerability for the final outcome; it cannot be delegated.
6. Decentralisation
Decentralisation is the systematic spreading of decision-making authority to all levels of management, with only key decisions kept at the top. It is an optional policy decision; a balance with centralisation is always needed.
Importance: develops initiative, develops managerial talent, quick decision-making, relief to top management, facilitates growth, better control.
Delegation vs decentralisation: compulsory vs optional; more control vs more freedom; a process vs the result of a policy; narrow vs wide scope; reduces burden vs increases autonomy of lower levels.
| Basis | Delegation | Decentralisation |
|---|---|---|
| Nature | Compulsory act | Optional policy |
| Freedom of action | Superior keeps more control | More freedom at lower levels |
| Status | A process | Result of a policy |
| Scope | Narrow: one superior and subordinate | Wide: all levels |
| Purpose | Reduce the manager's burden | Increase autonomy of lower levels |
| Importance of decentralisation | How |
|---|---|
| Develops initiative | Lower managers learn to decide on their own |
| Develops managerial talent | Prepares people for higher posts |
| Quick decision-making | Decisions are taken close to the action |
| Relief to top management | Time for strategy and growth |
| Facilitates growth | Units work with autonomy and can be added |
| Better control | Each unit's results can be judged |
Key terms
- Decentralisation
Delegation of authority extended systematically to all levels as a matter of policy.
- Centralisation
Keeping decision-making authority mainly with top management.
Exam tips
Common mistakes
- Mixing up the steps of organising, or treating assignment of duties as departmentalisation.
- Choosing a divisional structure only because the firm is big: look for several distinct products.
- Saying accountability can be delegated (it cannot), or that authority flows upward (it flows down).
- Treating decentralisation as a single act: it is a policy covering all levels.
How marks are usually awarded
- 1 mark: one correct option, or a concept named.
- Case parts: quote the line and name the concept.
- 3 marks: three points with brief explanation (about 50–80 words).
- 5 marks: five clear points or bases (about 80–120 words); differences state both sides on each basis.