GSEB Class 12 Organization of Commerce and Management Notes Chapter 4 Organizing

This GSEB Class 12 Organization of Commerce and Management Notes Chapter 4 Organizing covers all the important topics and concepts as mentioned in the chapter.

Organizing Class 12 GSEB Notes

Meaning of Organizing:
The structure formed in order to enable delegation of authority and responsibility towards the people actively engaged for common goal is organizing.

Definition of Organizing:
As per Chester I. Bernard, “The activity conducted by the co-operation of two or more people and their co-ordination is called Organizing.”
According to Louie Allen, “Organizing is the process of identifying and classifying the work to be performed, defining and delegating responsibility and authority, and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.”

Concept of Organizing:
Basically the concept of organizing is linked to group. Where more than one person work together, the structure necessary to accomplish the work effectively is called organizing and it is also termed as an arrangement.

Characteristics of Organizing:

  • Organizing is a goal oriented activity.
  • Organizing is based on planning.
  • Organization is a structure establishing relationship among persons delegating authority and responsibility among people.
  • In organizing human element is important.
  • The organization should be flexible enough to adopt changes suitable to changing business environment.
  • Organization establishes inter-relationship among work, positions or divisions.
  • Monitoring, control and co-ordination are basic requirement for organizing.
  • In organizing with the help of group co-operation group of people may advance towards achievement of goal.
  • Organizing is a specific controlled administrative structure.

Steps for the Process of Organizing:

  • Clarification of Objectives
  • List of Functions
  • Departmentalization of Function
  • To Determine Departmental Position and Abilities,
  • Delegation of Power and Responsibilities,
  • Establishment of Inter-relationship and
  • To Prepare Organizational Chart.

The Structure of Organization:
The structure of organization indicates types of organizations. They are like;

  • Linear Organization
  • Functional Organization
  • Formal Organization
  • Informal Organization and
  • Matrix Organization.

GSEB Class 12 Organization of Commerce and Management Notes Chapter 4 Organizing

Meaning of Linear Organization:
In the organization where the distribution of power and responsibility is in straight line from top to bottom level, it is called linear organization.

Formation of Linear Organization:

  • In this type of organization, entire business unit is classified into different departments. As per each section departmental head is appointed. He is assigned with all the powers and responsibilities of his department. This type of organization is formed based on departments and not as per functions. That is why it is also known as departmental organization.
  • In this type of organization board of directors have the top most authority. They take policy based decisions. The general manager is assigned necessary power from them. He is getting the decisions implemented through departmental heads.

Meaning of Functional Organization:
Keeping in view limitations of linear organization, functional organization came into existence. The organization where in experts with specialized knowledge are given separate responsibilities of respective work of respective department, is called functional organization.

Formation of Functional Organization:
Functional organization gives special importance to work distribution and specialization. The assignment of power and responsibilities are made on the basis of functions and not departments; in this type of organization. For each functions different experts are appointed. These experts are not only advisors but also administrative heads for their respective functions. They are fully responsible for the work assigned to them.

In functional organization (work based organization), the supreme power rests with the Chief Executive Officer. The unit is divided into two parts. For each department their list of functions are determined, their functional departments are decided and then various officers are assigned with respective authority and responsibility.

Meaning of Formal Organization:
In order to achieve the predefined goals, the formal structure of relationship among persons and work is established; which is known as formal organization.

Characteristics of Formal Organization:

  • Formal Structure,
  • Lacking Flexibility
  • Delegation of Power from Upper Level to Lower Level
  • Large Size
  • Particular Relations and
  • Communication.

Meaning of Informal Organization:
When without any conscious objective, to contribute to group results, the structure of internal relations is developed on its own; it is called informal organization. Informal organization is a shadow of formal organization. Hence no proper chart can be prepared for the same.

Characteristics of Informal Organization:

  • Informal Structure
  • Based on Human Relations
  • Ever Changing
  • Universal,
  • Informal Communication
  • Small Size,
  • Lack of Control and
  • Complement to Formal Structure.

Meaning of Matrix Organization:
Matrix organization is a modern type of organization. It has two different types of structure. One is the simple kind of structure which forms part of decision making. The second one is for the solution of technical questions/problems. It is called project structure. The combination of both these result into Matrix Organization.

Design of Matrix Organization:
There is combination found of work based and project based organization. In this organization each project manager is assigned with different type of work responsibilities. For total projects, each project-wise project manager is appointed. Their responsibility is to’ accomplish project timely and successfully. The necessary experts staff is obtained from various sections. They are divided into different teams. On completion of the project they are sent back to their respective sections.

Concept of Decentralization:
The concept of decentralization is very important concept from the view point of authority and responsibility. Directors / managers have to decide on their own whether to keep authority centralized or decentralized. For small sized unit decentralization concept and large sized unit concept of decentralization may become instrumental to success.

GSEB Class 12 Organization of Commerce and Management Notes Chapter 4 Organizing

Meaning of Decentralization:
The delegation of power from upper level to lower level in orderly manner is known as decentralization.

Definition of Decentralization:
According to Henry Fayol, “To assign power to the subordinates, to enable distribution of work and to include them in decision making process is called decentralization.”

Importance of Decentralization:
The success of management mainly depends upon proper delegation of authority and responsibility. Because of limitations of centralization, for proper delegation of authority and responsibility, the concept of decentralization became popular.

Important points of Decentralization:

  • Quick Decisions
  • Less Work Load on Top Level
  • Increased Motivation
  • Development of Managerial Abilities
  • Effective Control and
  • Harmony is created.

Limitations of Decentralization:
Whenever organization is to be formed on small scale, business secret to be maintained very strictly, there is absence of implementation of common policy and there is lack of co-ordination; the decentralization does not succeed.

Meaning of Delegation of Authority:
According to law power (authority) means right to take legal action, while as per business unit authority means right to issue orders and to ensure that it gets implemented.
In common meaning delegation of authority means to assign work to somebody else and to delegate authority to do the respective work.

Definition of Delegation of Authority:
According to Louis Allen, “Delegation of power is such kind of process in which the administrator gives a part of the powers to his helpers along with duties, and the helpers with the help of others, for the purpose of work performance, accepts such powers consciously.”

Importance of Delegation of Authority:

  • Work Efficient Management
  • Development of Employees
  • Motivation
  • Benefit of Specialization
  • Co-ordination and
  • Scope for Expansion.

GSEB Class 12 Organization of Commerce and Management Notes Chapter 4 Organizing

Main Elements of Delegation of Authority:
The following elements are included in Delegation’ of Authority:
1. Entrustment of Responsibility: Responsibility is a duty assignment by top level officer to subordinate for the respective work. The essential part of work assignment is responsibility for accomplishment of some specific work. Because of responsibility the relationship of superior and subordinate gets established. Subordinate is supposed to follow all the duties assigned by the superior. Thus the flow of responsibility is flowing upward from bottom to top direction. With the help of harmony among power and responsibility; proper and efficient organization is created.

2. Conferment of Authority: Power is such a right, with the help of the same, work can be taken from others. For the accomplishment of work assigned by managers to helpers in a better manner, necessary power has to be assigned. Assignment of power flows from upper level to lower level.

3. Creation of Accountability: The immediate superior is responsible for the work executed by subordinate; which is termed as accountability. Accountability cannot be assigned or delegated. For the final result of the respective work the superior remains accountable. Accountability flows from lower level to upper level.

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