Page 116 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes Objectives

After studying this unit, you will be able to:
Explain the meaning and process of organisational design and organisational structure

State the importance and kinds of organisational structure
Discuss the principles of organisation

Introduction

Organising as a function of management involves division of work among people whose efforts
must be co-ordinated to achieve specific objectives and to implement pre-determined strategies.
Organisation is the foundation upon which the whole structure of management is built. It is the
backbone of management. After the objectives of an enterprise are determined and the plan is
prepared, the next step in the management process is to organise the activities of the enterprise
to execute the plan and to attain the objectives of the enterprise. The term organisation is given
a variety of interpretations. In any case, there are two broad ways in which the term is used.
In the first sense, organisation is understood as a dynamic process and a managerial activity
which is necessary for bringing people together and tying them together in the pursuit of
common objectives.
When used in the other sense, organisation refers to the structure of relationships among
positions and jobs which is built up for the realisation of common objectives.

7.1 Organising – The Process

Organisation is the process of establishing relationship among the members of the enterprise.
The relationships are created in terms of authority and responsibility. To organise is to harmonise,
coordinate or arrange in a logical and orderly manner. Each member in the organisation is
assigned a specific responsibility or duty to perform and is granted the corresponding authority
to perform his duty. The managerial function of organising consists in making a rational division
of work into groups of activities and tying together the positions representing grouping of
activities so as to achieve a rational, well coordinated and orderly structure for the
accomplishment of work. According to Louis A Allen, "Organising involves identification and
grouping the activities to be performed and dividing them among the individuals and creating
authority and responsibility relationships among them for the accomplishment of organisational
objectives." The various steps involved in this process are:
1. Determination of Objectives: It is the first step in building up an organisation. Organisation
is always related to certain objectives. Therefore, it is essential for the management to
identify the objectives before starting any activity. Organisation structure is built on the
basis of the objectives of the enterprise. That means, the structure of the organisation can
be determined by the management only after knowing the objectives to be accomplished
through the organisation. This step helps the management not only in framing the
organisation structure but also in achieving the enterprise objectives with minimum cost
and efforts. Determination of objectives will consist in deciding as to why the proposed
organisation is to be set up and, therefore, what will be the nature of the work to be
accomplished through the organisation.

108 LOVELY PROFESSIONAL UNIVERSITY