FORMS OF ORGANISATION

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 organization 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. According to the different practices of distributing authority and responsibility among he members of the enterprise, several types of organisation structure have been evolved. They are:

  1. Line organisation
  2. Line and Staff organisation
  3. Functional organisation
  4. Committee organisation

Line Organisation

This is the simplest and the earliest form of organisation. It is also known as "Military", "traditional", "Scalar" or "Hierarchical" form of organisation. The line organization represents the structure in a direct vertical relationship through which authority flows.

Under this, the line of authority flows vertically downward from top to bottom throughout the organisation. The quantum of authority is highest at the top and reduces at each successive level down the hierarchy. All major decisions and orders are made by the executives at the top and are handed down to their immediate subordinates who in turn break up the orders into specific instructions for the purpose of their execution by another set of subordinates. A direct relationship of authority and responsibility is thus established between the superior and subordinate. The superior exercises a direct authority over his subordinates who become entirely responsible for their performance to their commanding superior. Thus, in the line organisation, the line of authority consists of an uninterrupted series of authority steps and forms a hierarchical arrangement. The line of authority not only becomes the avenue of command to operating personnel, but also provides the channel of communication, coordination and accountability in the organisation.

Prof. Florence enunciates three principles which are necessary to realise the advantages of this system and the non-observance of which would involve inefficiency.

  1. Commands should be given to subordinates through the immediate superior; there should be no skipping of links in the chain of command.
  2. There should be only one chain. That is, command should be received from only one immediate superior.
  3. The number of subordinates whose work is directly commanded by the superior should be limited.

Chart showing a line organisation

Chart showing a line organisation

Advantages or merits of line organisation

  1. It is the easiest to establish and simplest to explain to the employers.
  2. It fixes responsibility for the performance of tasks in a definite manner upon certain individuals.
  3. There is clear-cut identification of authority and responsibility relationship. Employees are fully aware of the boundaries of their job.
  4. It is most economical and effective.
  5. It makes for unity of control thus conforming to the scalar principle of organisation.
  6. It ensures excellent discipline in the enterprise because every individual knows to whom he is responsible. The subordinates are also aware of the necessity of satisfying their superior in their own interests.
  7. It facilitates prompt decision-making because there is definite authority at every level.
  8. As all the activities relating to one department or division are managed by one executive, there can be effective coordination of activities.
  9. This system is flexible or elastic, in the sense that, as each executive has sole responsibility in his own position and sphere of work, he can easily adjust the organisation to changing conditions.
  10. Under this system, responsibility and authority are clearly defined. Every member of the organisation knows his exact position, to whom he is responsible and who are responsible to him. Because of the clear fixation of responsibility, no person can escape from his liability.

Disadvantages or demerits of line organisation

  1. With growth, the line organisation makes the superiors too overloaded with work. Since all work is done according to the wishes of one person alone, the efficiency of the whole department will come to depend upon the qualities of management displayed by the head of that department. If therefore, something happens to anefficient manager, the future of the department and of the concern as a whole would be in jeopardy.
  2. Being an autocratic system, it may be operated on an arbitrary, opinionated and dictatorial basis.
  3. Under this system, the subordinates should follow the orders of their superior without expression their opinion on the orders. That means there is limited communication.
  4. There may be a good deal of nepotism and favouritism. This may result in efficient people being left behind and inefficient people getting the higher and better posts.
  5. The line organisation suffers from lack of specialised skill of experts. Modern business is so complex that it is extremely difficult for one person to carry in his head all the necessary details about his work in this department.
  6. Line organisation is not suitable to big organisations because it does not provide specialists in the structure. Many jobs require specialised knowledge to perform them.
  7. If superiors take a wrong decision, it would be carried out without anybody having the courage to point out its deficiencies.
  8. The organisation is rigid and inflexible.
  9. There is concentration of authority at the top. If the top executives are not capable, the enterprise will not be successful.

Prof. Florence, sums up the inefficiencies of the line organisation system under three heads-

  1. Failure to get correct information and to act upon it;
  2. red-tape and bureaucracy;
  3. Lack of specialised skill or experts… while commands go down the line under the hierarchical system information is supposed to be coming up the line.

In spite of these drawbacks, the line organisation structure is very popular particularly in small organisations where there are less number of levels of authority and a small number of people.

Line and Staff Organisation

In line and staff organisation, the line authority remains the same as it does in the line organisation. Authority flows from top to bottom. The main difference is that specialists are attached to line managers to advise them on important matters. These specialists stand ready with their speciality to serve line mangers as and when their services are called for, to collect information and to give help which will enable the line officials to carry out their activities better. The staff officers do not have any power of command in the organisation as they are employed to provide expert advice to the line officers. The combination of line organisation with this expert staff constitutes the type of organization known as line and staff organisation. The 'line' maintains discipline and stability; the 'staff' provides expert information. The line gets out the production, the staffs carries on the research, planning, scheduling, establishing of standards and recording of performance.

The authority by which the staff performs these functions is delegated by the line and the performance must be acceptable to the line before action is taken.

Line and staff Organisation

Line and staff Organisation

Types of Staff

The staff position established as a measure of support for the line managers may take the following forms:

  1. Personal Staff: Here the staff official is attached as a personal assistant or adviser to the line manager. For example – Assistant to managing director.
  2. Specialised Staff: Such staff acts as the fountainhead of expertise in specialised areas like R & D, personnel, accounting etc. For example-R & D Staff
  3. General Staff: This category of staff consists of a set of experts in different areas who are meant to advise and assist the top management on matters called for expertise. For example—Financial advisor, technical advisor etc.

Features of line and staff organisation

  1. Under this system, there are line officers who have authority and command over the subordinates and are accountable for the tasks entrusted to them. The staffofficers are specialists who offer expert advice to the line officers to perform their tasks efficiently.
  2. Under this system, the staff officers prepare the plans and give advise to the line officers and the line officers execute the plan with the help of workers.
  3. The line and staff organisation is based on the principle of specialisation.

Advantages or merits of line and staff organisation

  • It brings expert knowledge to bear upon management and operating problems.
  • Thus, the line managers get the benefit of specialised knowledge of staff specialists at various levels.
  • The expert advice and guidance given by the staff officers to the line officers benefit the entire organisation.
  • As the staff officers look after the detailed analysis of each important managerial activity, it relieves the line managers of the botheration of concentrating on specialized functions.
  • Staff specialists help the line managers in taking better decisions by providing expert advice. Therefore, there will be sound managerial decisions under this system.
  • It makes possible the principle of undivided responsibility and authority, and at the same time permits staff specialisation. Thus, the organisation takes advantage of functional organisation while maintaining the unity of command.
  • It is based upon planned specialisation.
  • Line and staff organisation has greater flexibility, in the sense that new specialized activities can be added to the line activities without disturbing the line procedure.

Disadvantages or demerits of line and staff organisation

  • Unless the duties and responsibilities of the staff members are clearly indicated by charts and manuals, there may be considerable confusion throughout the organization as to the functions and positions of staff members with relation to the line supervisors.
  • There is generally a conflict between the line and staff executives. The line managers feel that staff specialists do not always give right type of advice, and staff officials generally complain that their advice is not properly attended to.
  • Line managers sometimes may resent the activities of staff members, feeling that prestige and influence of line managers suffer from the presence of the specialists.
  • The staff experts may be ineffective because they do not get the authority to implement their recommendations.
  • This type of organisation requires the appointment of large number of staff officers or experts in addition to the line officers. As a result, this system becomes quite expensive.
  • Although expert information and advice are available, they reach the workers through the officers and thus run the risk of misunderstanding and misinterpretation.
  • Since staff managers are not accountable for the results, they may not be performing their duties well.
  • Line mangers deal with problems in a more practical manner. But staff officials who are specialists in their fields tend to be more theoretical. This may hamper coordination in the organisation.

Functional Organisation

The difficulty of the line organisation in securing suitable chief executive was overcome by F. W. Taylor who formulated the Functional type of organisation. As the name implies, the whole task of management and direction of subordinates should be divided according to the type of work involved. As far as the workman was concerned, instead of coming in contact with the management at one point only, he was to receive his daily orders and help directly from eight different bosses; four of these were located in the planning room and four in the shop. The four specialists or bosses in the planning room are:

  1. Route Clerk
  2. Instruction Card Clerk
  3. Time and Cost Clerk
  4. Shop disciplinarian.

The four specialists or bosses at the shop level are:

  1. Gang Boss
  2. Speed Boss
  3. Inspector
  4. Repair Boss
  • The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it.
  • The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work.
  • The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper returns of work from them.
  • The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.
  • The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal motions in the quickest and best way.
  • The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers.
  • The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around him and his machines.
  • The Inspector: To show to the worker how to do the work.

The chart showing functional foremanship

chart showing functional foremanship

It was F. W. Taylor who evolved functional organisation for planning and controlling manufacturing operations on the basis of specialisation. But in practice, functionalization is restricted to the top of the organisation as recommended by Taylor.

Features of functional organisation

The features of functional organisation are as follows:

  1. The work of the enterprise is divided into different functional departments and the different functional departments are placed under different specialists.
  2. The functional specialist has the authority or right to give orders regarding his function whosesoever that function is performed in the enterprise.
  3. Under this system, the workers have to receive instructions from different specialists.
  4. If anybody in the enterprise has to take any decision relating to a particular function, it has to be in consultation with the functional specialist.
  5. Under this system, the workers have to perform a limited number of functions.

Advantages of functional organisation

  1. Functional organisation is based on expert knowledge. Every functionary in charge is an expert in his area and can help the subordinates in better performance in his area.
  2. Division of labour is planned not incidental.
  3. As there is not scope for one-man control in this form of organisation, this system ensure co-operation and teamwork among the workers.
  4. This system ensures the separation of mental functions from manual functions.
  5. It helps mass production by standardization and specialization.
  6. This system ensures maximum use of he principle of specialisation at every work point.
  7. As there is joint supervision in the organisation, functional organisation reduces the burden on the top executives.
  8. Functional organisation offers a greater scope for expansion as compared to line organisation. It does not face the problem of limited capabilities of a few line managers.
  9. The expert knowledge of the functional mangers facilitates better control and supervision in the organisation.

Disadvantages or demerits of Functional organisation

  1. It is unstable because it weakens the disciplinary controls, by making the workers work under several different bosses. Thus, functional organisation violates theprinciple of unity of command.
  2. Under this type of organisation, there are many foremen of equal rank. This may lead to conflicts among them.
  3. The co-ordinating influence needed to ensure a smoothly functioning organization may involve heavy overhead expenses.
  4. The inability to locate and fix responsibility may seriously affect the discipline and morale of the workers through apparent or actual contradiction of the orders.
  5. This system is very costly as a large number of specialists are required to be appointed.
  6. A functional manager tends to create boundaries around himself and think only in term of his own department rather than of the whole enterprise. This results in lossof overall perspective in dealing with business problems.
  7. It is difficult for the management to fix responsibility for unsatisfactory results.

Committee form of Organisation

Committee Organisation

Committee organisation as a method of managerial control has very little practical importance, because it is managed by a senior member of the committee only. But the committee organisations are widely used for the purpose of discharging advisory functions of the management. Committees are usually relatively formal bodies with a definite structure. They have their own organisation. To them are entrusted definite responsibility and authority.

According to Hicks, "A committee is a group of people who meet by plan to discuss or make a decision for a particular subject."

According to Louis A Allen, "A committee is a body of persons appointed or elected to meet on an organised basis for the consideration of matters brought before it."

A committee may formulate plans, make policy decisions or review the performance of certain units. In some cases, it may only have the power to make recommendations to a designated official. Whatever may be the scope of their activities, committees have come to be recognised as an important instrument in the modern business as well as nonbusiness organisations.

Objectives of committees

Committees are constituted to achieve one or more of the following objectives:

  • To have consultations with various persons to secure their view-points
  • To give participation to various groups of people
  • To secure cooperation of different departments
  • To coordinate the functioning of different departments and individuals by bringing about unity of directions.

Types of committees

  1. Line committee: If a committee is vested with the authority and responsibility to decide and whose decisions are implemented, it is known as line committee.
  2. Staff committee: If a committee is appointed merely to counsel and advise, it is known as a staff committee.
  3. Formal committee: When a committee is constituted as a part of the organization structure and has clear-cut jurisdiction, it is a formal committee.
  4. Informal committee: An informal committee is formed to advice on certain complicated matters. It does not form part of the organisation structure.
  5. Coordinating committee: It is constituted to coordinate the functioning of different departments.
  6. Executive committee: It is a committee which has power to administer the affairs of the business.
  7. Standing committee: are formal committees that are of permanent character.
  8. Ad hoc committee: They are temporary bodies. It is appointed to deal with some special problem and stops functioning after its job are over.

Advantages or merits of committee type of organisation

  1. A committee is an effective method of bringing the collective knowledge and experience of a number of persons. Therefore, many multi-dimensional and complex problems of modern enterprises, which cannot be solved satisfactorily by individual managers, can be solved by committees.
  2. Committees offer scope for group deliberations and group judgment. Resultsobtained by group deliberation and group judgment are likely to be better than those obtained by individual judgment.
  3. When it is necessary to integrate varying points of view, which cannot conveniently be coordinated by individuals, the committee may be used to bring about coordination.
  4. The management can give representation to the employees in various committees. This will motivate the employees for better performance as they feel that they have a say in the affairs of the organisation.
  5. A committee form of organisation facilitates pooling of authority of individual managers for making some type of decisions of an inter-departmental nature.
  6. A committee form of organisation tends to promote organisational cohesiveness.

Group endeavour, team spirit and collective responsibility are control to the philosophy of committees.

Disadvantages of committee type of organisation

  1. If a manager has an opportunity to carry a problem to a committee, he may take it as a means of avoiding decision-making or to escape the consequences of an unpopular decision.
  2. Sometimes, a committee may not be able to take the needed decision because of the conflicting views of the members.
  3. Committees take more time in procedural matters before any decision is taken. In some cases, slowness seriously handicaps the administration of the organisation.
  4. Committees are an expensive device both in terms of cost and time.
  5. When the committee findings represent a compromise of different viewpoints, they may be found to be weak and indecisive.
  6. No member of a committee can be individually held responsible for the wrong decision taken by the committee.
  7. It is very difficult to maintain secrecy regarding the deliberations and the decisions taken by a committee, especially when there are many members in the committee.

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