Shree sadgurudev shri Ranchhoddasji bapu

Home science and

Lt. M.J.Kundaliaya Eng.medium COMMERCE
and BBA college,Rajkot.

Subject -: business organization and management -1

By Prof. S.K.VAGH
 CONTENT
Unit Name of the units Marks

1 EMERGING OPPORTUNITIES IN INDIAN BUSINESS (20 MARKS)

2 MANAGEMENT (20 MARKS)

3 PLANNING (15 MARKS)

4 ORGAINIZING (15 MARKS)

 Organizing

• Someone is rightly said that “Management is the brain of the business,

while organising is the body of the business”
• The key to success business is organising. The structure creat for such
system is called organisation .
• The management formulates the policy while the organisation implement
it.
• Organising is a “process of defining the essential relationships among
people, tasks and activities in such a way that all the organisation’s
resources are integrated and coordinated to accomplish its objectives
efficiently and effectively”. — Pearce and Robinson
• (i) A Structure, and
• (ii) A Process.
 As a structure
• Organising is a set of relationships that defines vertical and horizontal
relationships amongst people who perform various tasks and duties. The
organisational task is divided into units, people in each unit (departments)
are assigned specific tasks and their relationship is defined in a way that
maximises organisational welfare and individual goals. The relationship
amongst people is both vertical and horizontal.
• As vertical relationships, the authority-responsibility structure of people
at different levels in the same department is defined and as horizontal
relationships, authority-responsibility structure of people working in
different departments at same levels is defined.
• Organisation structure specifies division of work and shows how different
functions or activities are linked; to some extent it also shows the level of
specialisation of work activities. It also indicates the organisation’s
hierarchy and authority structure, and shows its reporting relationships.
— Robert H. Miles
• Organising as a structure is a network of relationships
(authority-responsibility structure) amongst all those who are
part of the organisation, working at any level in any
department. It defines relationships between jobs at various
levels and people working at those jobs. It emphasises more
on positions than people.
 As a process
• While the structure designs the system and its sub-systems, process
defines the way this structure is designed. Structure is the static
concept that establishes relationships amongst various components
of the organisation. It first designs the component and then
establishes relationships amongst these components.

• These relationships are by and large permanent. They do not

change frequently unless disturbed by external environmental
forces. Process is the dynamic concept that redefines the structure
whenever required. It defines change in the system over time.

• While the structure defines how the work of the organisation will
be divided into various positions, groups and departments, process
defines the sequence of which the structure is designed. It defines
relationships amongst people in such a way that organisational
goals are achieved efficiently.
 As a process, organising consists of two processes

• (1) Differentiation,
• (2) Integration.

• Differentiation means division of work into smaller units and

its assignment to individuals according to their skills and
abilities.
• Integration refers to coordination of different activities
towards a common goal. It provides unity of action towards
organisational activities
 Definition
• Koontz and o’donnell
– Organising involves the grouping of activity necessary to accomplished
goals and plans. The assignment of this activity to appropriate
departments and the provision for authority delegation and
coordination.

• G.R.terry
– Organising is the effective behavioural relationship among person so
that they may work together efficiently and gain personal satisfaction
in doing selected task under given environmental condition for the
purpose of achiving some goals or objectives.
 Essential elements

1. Organisation allocates functions, authority and responsibility among

person for the accomplishment of the objectives

2. It determines inter relationship among employees.

3. It determines inter relationship between one function ad another and

one department to another .

4. Determines the work group and distributes among departments.

 Characteristics of organising
• Specialization and division of work. The entire philosophy of
organization is centered on the concepts of specialization and
division of work. The division of work is assigning responsibility for
each organizational component to a specific individual or group
thereof. It becomes specialization when the responsibility for a
specific task lies with a designated expert in that field. The efforts of
the operatives are coordinated to allow the process at hand to
function correctly. Certain operatives occupy positions of
management at various points in the process to ensure
coordination.

• Orientation towards goals. Every organization has its own purposes

and objectives. Organizing is the function employed to achieve the
overall goals of the organization. Organization harmonizes the
individual goals of the employees with overall objectives of the
firm.
• Composition of individuals and groups. Individuals form a group
and the groups form an organization. Thus, organization is the
composition of individual and groups. Individuals are grouped into
departments and their work is coordinated and directed towards
organizational goals.
• Continuity. An organization is a group of people with a defined
relationship in which they work together to achieve the goals of
that organization. This relationship does not come to end after
completing each task. Organization is a never ending process.
• Flexibility. The organizing process should be flexible so that any
change can be incorporated easily. It ensures the ability to adapt
and adjust the activities in response to the change taking place in
the external environment. The programs, policies and strategies
can be changed as and when required if the provision for flexibility
is made in the organizing process.
Characteristics of an Ideal Form of Organization

• These are the factors any business should consider before

choosing their form of organization. After consideration of
these factors the business should be able to make an
appropriate and informed decision.

1] Ease of Formation

The ideal situation would be very easy formation of the

chosen form of organization. The legal formalities, paperwork
etc are very limited. And the cost and time involved should
also be minimal
2] Raising Capital/Finances
• Every business needs to raise capital at the beginning. So the form
of organization you choose must consider the amount of capital
you need to raise.
• If the capital needed is huge, then your chosen ideal form of
organization must provide security and assurance to the investors.
They will also want transparency and return on their investment.
• On the other hand if the capital needed is reasonable then other
factors should be considered. Like the ownership of the business
must not be unnecessarily dilute. And there must be scope for
future development and expansion requiring further financing
3] Nature of Liability
• Liability of the parties involved in the business can be limited
or unlimited. In terms of risk, an ideal form of organization
will have limited liability. So the liability of the owners is only
limited to their contribution of the capital. Their personal
assets cannot be attached in case of the business going
bankrupt.
• On the other hand some forms of organization have unlimited
liability. And the owners are liable even beyond their
contribution to the company. So their personal assets and
wealth can be in danger. This is not an ideal situation.
4] Scope of Control
• In an ideal form of organization, the control will be with the
owners of the firm. The management and ownership of a
business must go hand in hand. If the owners cannot take
independent decisions then the business will suffer.
5] Continuity and Stability
• Stability and continuity is essential for the success of any
business. So the chosen form of organization must provide
both. Also this will allow the owners to plan for the future and
carry out their long term plans without interruption or
disturbance
6] Flexibility
• Every business functions in a very complex and dynamic
business environment. So it becomes essential that they can
be flexible in their operations to adapt and succeed in this
changing environment. So an ideal form of organization will
provide this flexibility.

7] Secrecy
• Some businesses require secrecy about their records and
processes. Other businesses will not suffer if there is
transparency. So accordingly the owners must chose the form
of organization that suits them best.
8] Lawful Business

• This is a given. The choice of business must be legal. There can be no

illegal activities or transactions and the form of organization you chose
should safeguard this

9] Just and proper distribution of authority and responsibility

• proper attention should be given to the all works – smaller or big work.
• the distribution of rights authority and duties should be clearly done .
• Responsibility should not be entrusted without rights
• The rights and responsibility should be according to their capacity and
qualification.
• Proper arrangement of co ordination in whole organisation should be
there.
 Thank you
Next topic is guideline principles of organising