forms of organization
TRANSCRIPT
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ORGANIZATION STRUCTURE
Pattern of Relationships
In Which Parts or Components Interrelated
Prescribes Relationships among Activities
and Positions
Relationships among People in the
Organization
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FORMS OF ORGANIZATION
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LINE ORGANIZATION
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LINE ORGANIZATION
SHAREHOLDERSI
BOARD OF DIRECTORSI
CHIEF EXECUTIVEI
MANAGER I
FACTORY SUPERINTENDENTI
FOREMAN FOREMAN FOREMAN FOREMAN
worker worker worker worker
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LINE ORGANIZATION1. Oldest And Simplest Form
2. Also known as Scalar Organization, Military
Organization, Vertical Organization, Departmental
Organization
3. Direct Authority is Exercised By Superior Over
Subordinates
4. Flow Of Authority Is Downwards in a straight line
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1. Simplicity
2. Fixed Responsibility
3. Better Control
4. Quick Decision
5. Flexibility
MERITS
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DEMERITS
1. Overloading
2. Lack Of Specialization
STAFF/FUNCTIONAL ORGANIZATION
Managing Director
Production manager
Marketing Manager
Sales OfficerAdvertising
Officer
Market Research
Officer
Finance manager
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FUNCTIONAL OR STAFF ORGANIZATION
1. Single authority is done away with and multiplicity
of authority is introduced
2. Authority does not flow downwards from the top in
a straight line
3. Authority is diffused
4. Boss issues orders pertaining to specialized function
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5. The worker is responsible and answerable to all his
superiors from whom he takes orders and
instructions for each of his specialized jobs
6. Authority here is divided and does not flow from
one but from many in a diffused manner
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MERITS
• Division Of Labour And Specialization
• Improved Efficiency
• Better Understanding
• Benefits of Large Scale Production
• Comparatively More Elastic
• Better Industrial Relation And Mutual Cooperation
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DEMERITS
• Multiplicity Of Authority
• Problem Of Coordination
• Fixation Of Responsibility Difficult
• Workload Increased
• Unsuitable For Small And Medium Enterprises as
compared to Line Organization
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LINE & STAFF ORGANIZATION
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LINE AND STAFF ORGANIZATION• Two Sets Of Staff Is At Work
1. ADVISORY STAFF –Staff Executive
2. SERVICE STAFF –Line Executives
• Increase In Work Of Executive Requires Services Of
Specialists
• Advice Is Provided To Line Managers By Staff Personnel
• Staff Personnel Have Right To Recommend
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MERITS
• Combination Of Both Forms
• Specialization And Complete Standardization Of
Work
• Expert Services Are Available
• Quick And Correct Decision
• Increase In Efficiency
• Increase In Productivity And Profitability
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DEMERITS• Lack Of Responsibility
• Possibility Of Dispute over a minor issue cannot be
ruled out
• Advice Rendered Is Generally Ignored
• Specialists Feel Isolated And often Neglected
• Costly Form Of Organization
• Not Suitable For Medium And Small Sized Enterprises
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COMMITTEE FORM OF ORGANIZATION
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COMMITTEE FORM OF ORGANIZATION
• Functions Of Whole Enterprise Divided Into
Departments
• No departmental head is empowered to take a
decision on his own
• Constituted consisting of a few department heads
for a specific purpose
• Constituted In Big Enterprises
• Decision Making Body
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• Each Department Assisted By Committee
• Chief Executive is sometimes The
Coordinator/Convener Of All Committees
• He assumes the role of a leader
• The Coordinator/Convener helps in arriving at a
candid decision acceptable to all
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MERITS
• Advantages Of Group Decision
• Advantages Of Expert Advice, Experience And
Knowledge
• Fair And Better Control With Agreement Of All
• Advantages Of Coordinated Effort
• Better Communication
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DEMERITS
• Expensive Device—sessions last long, takes much time,
energy and money
• Compromising Attitude—follow path of least resistance
• Irresponsible Character—joint responsibility means no
responsibility
• Dominance Of A Few—stronger personality becomes
dominant
• Suppression Of Ideas—some members become inactive
results in bitterness, discontent
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PROJECT ORGANIZATION
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PROJECT ORGANIZATION
MANAGING DIRECTOR
Sports Goods
Division
Hosiery Division
Production Sales Finance
Plastics Division
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PRODUCT/PROJECT ORGANIZATION• Company Manufacturing Wide Range Of Products
• Products Are Different From Each Other In Terms Of
Technology, Raw Material And Manufacturing Process
• Company Revolves Around Individual Products and
Product range
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ADVANTAGE
• Main advantage is it facilitates optimal utilization of
specialized machinery and technological processes
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DISADVANTAGE
• Duplication Of Managerial Manpower
• Leading To Higher Costs
TOP MANGEMENT
PRODUCT A
PRODUCTB
PRODUCT D
PRODUCT C
FINANCE
PRODUCTION
MARKETING
PERSONNEL
MATRIX ORGANIZATION
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MATRIX ORGANIZATION
• Combination Of Project And Functional Organization
• Usually created for executing a project which
requires services of functional man as well as
specialist knowledge
• Operates Under Dual Authority
• A person is accountable to two bosses, one his usual
boss and other his boss for duration of the project