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Principles and Practice of Management

Design of Organisation Structure

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Definition

Organisation structure refers to thedifferentiation and integration of activities and

authority, role and relationships in the

organisation.

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Formal Organisation

It refers to the structure of well-defined jobs,each bearing a definite authority,

responsibility, and accountability.

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Informal Organisation

It refers to people in group associations atwork, but these associations are not specified

in the blueprint of the formal organisation.

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Diff. b/w. Formal & Informal OrganisationsOrigin

Purpose

Size

Nature and Number of Groups

Authority

Behavior of Members

Communication

Abolition

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Reasons for Informal Organisation

Desire to socialise with others

Psychological fatigue of routine tasks

Hierarchical control and communication

Various functions of informal organisation

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Working of Informal Organisation

Authority Structure

Leadership

Communication

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Difficulties due to informal orgn.

Resistance to change

Generation of rumour

Role conflict

Conformity

Social costs

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Managing Informal Organisation

Structural Approach

Behavioural Approach

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Need for Formal Organisation structure

Facilitating management action

Encouraging efficiency

Communication

Optimum use of organisational resources

Stimulating creativity

Job satisfaction

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Features of Good Organisation strtucture

Simplicity

Flexibility

Clear line of authority

Application of ultimate responsibility

Proper delegation of authority

Minimum possible managerial levels

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Principles of unity of direction and command

Proper emphasis on staff 

Provision for top management

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Approaches for Organisational design

Process Approach

Result Approach

Decision Approach

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Departmentation

The process of grouping the activities is

commonly known as departmentation.

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Need & Importance of Departmentation

Advantages of specialisation

Fixation of responsibility

Development of managers

Facility in appraisal

Feeling of autonomy

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Bases of departmentation Function

Product

Territory

Process

Customer

Time Alpha numerical

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Choice of bases of departmentation Specialisation

Coordination

Control

Economy

Focus on results

Local conditions Human consideration

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Span of management

It refers to the number of subordinates who

can be managed effectively by a superior.

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Determination of span of management

Direct single relationships

Direct group relationships

Cross relationships

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Factors affecting span of managementCapacity of superior

Capacity of subordinates

Nature of work 

Degree of decentralisation

Degree of planning

Communication techniquesUse of staff assistance

Supervision from others

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Wide or Narrow Span

Tall or Flat Structure