Page 139 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Unit 7: Organising

7.7 Summary Notes

Organisation is the foundation upon which the whole structure of management is built.
It is the backbone of management.

Organising is the process of establishing relationship among the members of the enterprise.
The relationships are created in terms of authority and responsibility.
Informal organisation, which does not appear on the organisation chart, supplements the
formal organisation in achieving organisational goals effectively and efficiently.
Organisation requires the creation of structural relationship among different departments
and the individuals working there for the accomplishment of desired goals.

Organisation structure is primarily concerned with the allocation of tasks and delegation
of authority.
The establishment of formal relationships among the individuals working in the
organisation is very important to make clear the lines of authority in the organisation and
to coordinate the efforts of different individuals in an efficient manner.
The present times are the times of cut throat competition.

To succeed and sustain in this environment of business, it is required for the organisations
to outdo their competition at all points of interaction.
For this purpose, two strategies, those of differentiation and integration are adopted by
different firms.
Differentiation offers niche customers a product or service customized to their needs.
Integration offers varied products under a single entity.

It helps them earn a competitive advantage and develop a loyal customer base.

7.8 Keywords

Differentiation: Approach under which a firm aims to develop and market unique products for
different customer segments. Usually employed where a firm has clear competitive advantages,
and can sustain an expensive advertising campaign. It is one of three generic marketing strategies
that can be adopted by any firm.

Formal Organisation: The formal organisation refers to the formal relationships of authority
and subordination within a company.
Functional Organisation: A functional structure is one that organises employees around skills
or other resources.
Horizontal integration: This type of integration implies to the acquisition of additional business
activities at the same level of the value chain.

Informal Organisation: The informal organisation refers to the network of personal and social
relations that develop spontaneously between people associated with each other.
Manual: A document that carries instructions.

Organisation: An organisation is a social arrangement which pursues collective goals, which
controls its own performance, and which has a boundary separating it from its environment.

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