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Unit 7: Organising
7.2.4 Exercising Choice Notes
Organisations are an invention of man. They are contrived social systems through which groups
seek to exert influence or achieve a stated purpose. People choose to organise when they recognize
that by acting alone they are limited in their ability to achieve. We sense that by acting in concert
we may overcome our individual limitations.
When we organise we seek to direct, or pattern, the activities of a group of people toward a
common outcome. How this pattern is designed and implemented greatly influences effectiveness.
Patterns of activity that are complementary and interdependent are more likely to result in the
achievement of intended outcomes. In contrast, activity patterns that are unrelated and
independent are more likely to produce unpredictable, and often unintended results.
The process of organisation design matches people, information, and technology to the purpose,
vision, and strategy of the organisation. Structure is designed to enhance communication and
information flow among people. Systems are designed to encourage individual responsibility
and decision making. Technology is used to enhance human capabilities to accomplish
meaningful work. The end product is an integrated system of people and resources, tailored to
the specific direction of the organisation.
7.3 Organisation Structure
An organisation structure shows the authority and responsibility relationships between the
various positions in the organisation by showing who reports to whom. Organisation involves
establishing an appropriate structure for the goal seeking activities. It is an established pattern
of relationship among the components of the organisation. March and Simon have stated that-
"Organisation structure consists simply of those aspects of pattern of behaviour in the organisation
that are relatively stable and change only slowly." The structure of an organisation is generally
shown on an organisation chart. It shows the authority and responsibility relationships between
various positions in the organisation while designing the organisation structure, due attention
should be given to the principles of sound organisation.
7.3.1 Significance of Organisation Structure
1. Properly designed organisation can help improve teamwork and productivity by providing
a framework within which the people can work together most effectively.
2. Organisation structure determines the location of decision-making in the organisation.
3. Sound organisation structure stimulates creative thinking and initiative among
organisational members by providing well defined patterns of authority.
4. A sound organisation structure facilitates growth of enterprise by increasing its capacity
to handle increased level of authority.
5. Organisation structure provides the pattern of communication and coordination.
6. The organisation structure helps a member to know what his role is and how it relates to
other roles.
7.3.2 Determining the Kind of Organisation Structure
According to Peter F Drucker-"Organisation is not an end in itself, but a means to the end of
business performance and business results. Organisation structure is an indispensable means;
and the wrong structure will seriously impair business performance and may even destroy it.
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