Karnataka 2nd PUC Business Studies Notes Chapter 5 Organising
→ Meaning: Organizing is the process of identifying, grouping the work to be performed, delegating authority & responsibility, establishing a relationship & purpose for the people to work most efficiently together to achieve the objectives.
→ Definition: To organize a business is to provide it with everything useful to its functioning – raw materials, machines, tools, capital and personnel.
→ Importance: Effective administration, Optimum Utilization of resources; Clarity in work relationship, Benefit of Specialization, Expansion & Growth, Development of personals, Adoption to the change.
→ Organising Process: It involves 4 stages
- Identification & Division of work
- Assignment of duties
- Establishment of reporting relationship.
→ Organization Structure: It is system which defines the frame work with in which the managerial and operating functions are performed in an enterprise.
→ Types of organizational structure: Functional structure & Divisional Structure. Functional structure: Grouping the jobs based on similar nature and organizing them different departments is known as functional structure.
→ Divisional Structure: Grouping the activities on the basis of product is known as divisional Structure.
→ Formal Organization: Formal organization is one which has a system of well defined Positions, Authority, responsibility, Policies, Principles etc.
→ Informal Organization: Informal organization refers to the relationship between the people in the organization based on the personal attitude, prejudices, likes & dislikes etc.
→ Delegation: Delegation is the process of transferring authority from a superior to his subordinate.
→ Elements of delegation: Authority, Responsibility, & Accountability.
→ Authority: It is the power to command employees and instruct them to perform a job.
→ Responsibility: It is the obligation of a subordinate to perform the assigned duty.
→ Accountability: It means being answerable for the final results.
→ Importance of delegation: Delegation of authority is necessary for the smooth functioning of a business. Effective management can lead to
- effective management
- Employee development
- Better coordination
- Quick decision making
- Basis for management Hierarchy
- Facilitate Growth.
→ Centralization of Authority: It refers to the concentration of authority of decision making by top level managers is called centralization.
→ Decentralization of authority: It refers to the transfer of authority to take decisions to the lower levels of organization.
→ Importance of Decentralization:
- Reduces work load,
- Quick Decision Making
- Relief to top facilitates growth
- Facilitates growth.
- Development of executives.