Key Points

Organising is the process that initiates the implementation of plans by clarifying jobs and working relationships, and effectively deploying resources to achieve goals.

The process involves four key steps: Identification and division of work, Departmentalisation, Assignment of duties, and Establishing reporting relationships.

Organising is important as it leads to benefits of specialisation, clarity in working relationships, optimal use of resources, adaptation to change, and effective administration.

Organisation structure is the framework that specifies the relationships between people, work, and resources, within which managerial and operating tasks are performed.

Span of management refers to the number of subordinates that can be effectively managed by a superior. It determines the levels of management in the structure.

This structure groups jobs of a similar nature under functions like production, marketing, and finance. It is suitable for large organisations requiring a high degree of functional specialisation.

This structure is composed of separate business units or divisions, each focusing on a specific product line. It is suitable for companies with multiple products.

The formal organisation is the structure of authority and responsibility deliberately designed by management to accomplish a particular task. Its features are specified in rules and procedures.

The informal organisation is the network of social relationships among employees that arises spontaneously from personal interaction at work, not from management design.

Delegation is the downward transfer of authority from a superior to a subordinate. It is a necessary act for a manager to reduce workload and focus on important matters.

Delegation has three key elements: Authority (the right to command), Responsibility (the obligation to perform a task), and Accountability (being answerable for the final outcome).

Authority flows downwards from superior to subordinate. Responsibility and accountability both flow upwards from subordinate to superior.

Delegation is important for effective management, employee development, motivation, and organisational growth. It also establishes the superior-subordinate relationship.

Decentralisation refers to the systematic delegation of authority throughout all levels of the organisation. Decision-making authority is pushed down the chain of command.

An organisation is centralised when decision-making authority is retained by higher management. It is decentralised when such authority is delegated to lower levels.

Decentralisation develops initiative among subordinates, prepares future managers, enables quick decision making, provides relief to top management, and facilitates growth.

Delegation is a compulsory act of sharing tasks with an immediate subordinate, while decentralisation is an optional policy decision to disperse authority across the entire organisation.