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(c) Functional organisation implies grouping of a activities on the basis of functions

Delegation is the transfer of authority from superior to subordinate, entrustment of responsibility and creation of accountability for performance.

Informal organisation is a network of personal and social relations which are not established or required by the formal organisation but arising spontaneously due to people associating themselves with one another.

Advantages of Informal Organisation:

(i) It leads to faster spread of information as well a quick feedback.

(ii) It fulfils the social needs of the members.

(iii) It contributes towards fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

Disadvantages of Informal Organisation:

(i) It leads to spread rumours.

(ii) It may lead to wards resistance to change. 

(iii) It pressurizes members to conform to group expectations which may be against organisational interest.

Its essence is to get decisions implemented.

Division of Labour.

Informal Organisation: It is a network of social relationships that arise out of personal interaction among the employees of organization beyond their officially defined roles.

Advantages:

(1) It leads to faster spread of information as well towards a quick feedback.

(2) It fulfills the social needs of the members.

(3) It contributes towards fulfillment of organisational objectives by compensating for inadequacies in the formal organisation.

a. Delegation of authority

b. Decentralisation.

Correct option is a. Both Assertion (A) and reason (R) are true.

(Decentralisation must always be balanced with centralisation in areas of major policy decisions.)

Yes, I do agree with this statement. It can be clarified with the help of advantages of formal organisation and limitations of informal organisation.

Advantages of Formal Organisation:

i. Easy to Fix Accountability: Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

ii. No Overlapping of Works: In the formal organisation, everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

iii. Unity of Command Possible: It is possible to observe the principles of unity of command in view of the presence of scalar chain of authority.

Limitations of Informal Organisation: Following are the limitations of Informal Organisation:

i. It creates Rumours: All the persons in an informal organisation talk carelessly and sometimes a wrong thing is conveyed to the other person which may bring in horrible results.

ii. It resists Change: This organisation resists change and lays stress on adopting the old techniques.

iii. Pressure of Group Norms: In this organisation, people are under pressure to observe group norms. Sometimes the people assembled in informal group lose sight of their objective and all decide to oppose their superiors unanimously. Such a situation adversely affects productivity.

Yes, I do agree with this statement. It can be clarified with the help of advantages of informal organisation and limitations of formal organisation.

Advantages of Informal Organisation: Following are the advantages of Informal Organisation:

i. Effective Communication: In the absence of any definite course, it is an effective system of communication. Messages can be quickly conveyed from one place to another with the help of this system.

ii. Fulfills Social Needs: In the informal organisation, people having similarity of thoughts and ideas form a group of their own. All the people in the group stand by one another in all the organisational or personal matters.

iii. Fulfills Organisational Objectives: In the informal organisation, the subordinates put their ideas before the superiors without any fear or hesitation. It helps the superiors to understand their difficulties and immediate solution of the problem is sought out. Since the problems are easily solved it becomes easier to achieve the objectives of the organisation.

Limitations of Formal Organisation:

i. Delay in Work: Every activity is bound by rules which causes unnecessary delay in the completion of work.

ii. Lack of Initiative: In this organisation, the employees have to do what they are asked to do and they do not have a chance of some independent thinking. This, therefore, kills initiative.

iii. Mechanisation of Relations: The relationship of all the people are defined. This leaves no chance of any mutual interplay and thus the knowledge of other people and their experience cannot be exploited.

Meaning: It refers to the organisation structure which is designed by the management to accomplish a particular task.

Advantages:

i. Easy to Fix Accountability: Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

ii. No Overlapping of Works: In the formal organisation, everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

Limitations:

i. Delay in Work: Every activity is bound by rules which causes unnecessary delay in the completion of work.

ii. Lack of Initiative: In this organisation, the employees have to do what they are asked to do and they do not have a chance of some independent thinking. This, therefore, kills initiative.

The following are the main limitations of divisional organisation structure:

1. Conflicts between Divisional Heads: Every divisional head wants to establish his supremacy. To satisfy ego each demands maximum resources for his division. This situation leads to conflicts among the various divisional heads.

2. Duplicity of Functions: The entire set of functions (e.g., production, marketing, financial, personnel, etc.) is required for all divisions. It gives rise to duplicity of efforts among divisions. Hence, resources are misused and cost of operations is unnecessarily increased.

3. Selfish Attitude: Every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude. Consequently, it hits the interest of the concern as a whole.

Decentralisation refers to the situation which exists as a result of systematic delegation of authority throughout the organisation.

Informal organisation is a network of personal and social relations not established by the formal organisation but arising spontaneously due to people associating themselves with one another.

Features of Informal Organisation are:

(a) Origin: It originates within the formal organisation.

(b) Formation: It emerges spontaneously and is not delibelately created by the management.

(c) Behaviour: The standards of behaviour evolve from group norms.

(d) Communication: Independent channels of communication are developed by group members.

(e) Structure: It has no definite structure or form.

Meaning: It refers to the organisation structure which is designed by the management to accomplish a particular task.

Limitations:

i. Delay in Work: Every activity is bound by rules which causes unnecessary delay in the completion of work.

ii. Lack of Initiative: In this organisation, the employees have to do what they are asked to do and they do not have a chance of some independent thinking. This, therefore, kills initiative.

Meaning: It refers to the organisation structure which is designed by the management to accomplish a particular task.

Advantages of Formal Organisation:

i. Easy to Fix Accountability: Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

ii. No Overlapping of Works: In the formal organisation, everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

iii. Unity of Command Possible: It is possible to observe the principles of unity of command in view of the presence of scalar chain of authority.

iv. Easy to Get Goals: Under the formal organisation, it is easy to achieve the goals of the organisation because there is an optimum use of all the material and human resources.

Formal organisation refers to the organisation structure which is designed by the management to accomplish its objectives.

Advantages:

(a) It is easier to fix responsibility since mutual relationships are clearly defined.

(b) It avoids duplication of effort since there is no ambiguity in the role that each member has to play.

(c) It maintains unity of command through an established chain of command.

(d) It leads to the accomplishment of goals by providing a framework for the operations to be performed.

(e) It provides stability to the organisation because there are specific rules to guide behavior of the employees.

Limitations:

(a) It may lead to procedural delays as the established chain of command has to be followed which increases the time taken for decision making.

(b) Poor organisation practices may not provide adequate recognition to creative talent, since it does not allow any deviations from rigidly laid down policies.

(c) It is difficult to understand all human relationship in an enterprise, as it places mole emphasis on structure and work.

Meaning: It refers to the organisation structure which is designed by the management to accomplish a particular task.

Advantages:

i. Easy to Fix Accountability: Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

ii. No Overlapping of Works: In the formal organisation, everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

Formal organisation refers to the organisation structure which is designed by the management to accomplish its objectives.

Advantages:

(a) It is easier to fix responsibility since mutual relationships are clearly defined.

(b) It avoids duplication of effort since there is no ambiguity in the role that each member has to play.

(c) It maintains unity of command through an established chain of command.

(d) It leads to the accomplishment of goals by providing a framework for the operations to be performed.

(e) It provides stability to the organisation because there are specific rules to guide behavior of the employees.

Formal organisation.

Under it every activity is bounded by rules which causes unnecessary delay in work.

Informal organisation.

a. Delay in decision making. b. Does not provide a complete picture

a. Increase in costs 

b. Ignorance organisational interests

a. Inflexibility 

b. Problems in coordination

Following are the disadvantages of divisional organisation structure:

i. Conflicts between Divisional Heads: Every divisional head wants to become a divisional empire. To satisfy their ego, each demands maximum resources for their division. This situation leads to conflicts among the various divisional heads.

ii. Duplicity of Functions: The entire set of functions (e.g., production, marketing, finance, personnel, etc.) is required for all divisions. It gives rise to duplicity of efforts among divisions. Hence, resources are misused and cost of operations is unnecessarily increased.

iii. Selfish Attitude: Every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude. Consequently, it hits the interest of the concern as a whole.

Decentralisation.

Decentralisation.

Functional structure would prove to be most suitable when the size of the organisation is large, has diversified activities and operations require a high degree of specialisation. It promotes control and co-ordination within a department, increased managerial and operational efficiency, results in increased profits.

Span of management means that number of employees on whom a superior can successfully put his control. Often, a superior can successfully control 5-6 subordinates.

Organising is the function of management discussed above.

Functional Organisation.

It is an informal organisation. The main features of it are the following:

i. Based on Formal Organisation: This is based on formal organisation where people also have informal relations. (It means first of all the formal organisation is established and then informal organisation is created out of it.)

ii. It has no Written Rules and Procedures: In this organisation, there are no written rules and procedures to govern inter-relationship. But there are group norms which have to be observed.

iii. Independent Channels of Communication: In this organisation relations among different people are not defined because a person at the lowest rank can have direct contact with the person at the highest level. The flow of communication cannot be specified.

Decentralisation is extending delegation to the lowest level Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Decentralisation refers to delegation of authority through all the levels of the organisation.

Decision making authority is shared with lower levels and is consequently placed nearest to the point of action. In other words, decision making authority is pushed down the chain of command. Delegation is the process and decentralisation is the end result, e.g., If the director give the responsibility to production head to complete the target of 20,000 units and authorise him to hire the workers, production head further shares his responsibility with manager to select the worker.

Manager shares his responsibility with supervisors, who are dealing with workers, authorise them to select workers. Here, the responsibility gets distributed at every level. 

That’s why we say systematic delegation leads to decentralisation.

Decentralisation is extending delegation to the lowest level. Decentralisation explains the manner in which decision making responsibilities are divided among hierarchical levels. Decentralisation refers to delegation of authority throughout all the levels of the organisation. Decision making authority is shared with lower levels and is consequently placed nearest to the point of action. In other words, decision making authority is pushed down the chain of command. Delegation is the process and decentralisation is the end result, e.g., If the director give the responsibility to production head to complete the target of 20,000 units and authorise him to hire the workers, production head further shares his responsibility with manager to select the worker. Manager shares his responsibility with supervisors, who are dealing with workers, authorise him to select workers. Here, the responsibility distributed at every level. That’s why we say systematic delegation leads to decentralisation.

Formal Organisation is Impersonal: Under it, personal feelings are ignored and strict discipline is observed. It is not the person but the work that happens to be important.

Informal Organisation is Personal: It is being personal means that under this the feelings of individuals are kept in mind and nothing is imposed upon them.

Yes, the marketing manager is responsible for it.

Here the principle of ‘absoluteness of responsibility’ will apply (By responsibility we mean Responsibility to/Ultimate Responsibility/Accountability). As per this principle, authority can be delegated but accountability is absolute and cannot be delegated. The person who delegates authority remains accountable to his own boss for the work he has delegated to his subordinate. In brief, it can be said that the process of delegation of authority does not relieve the manager of his own accountability.

The divisional organisation structure is suitable in the following situations:

i. where the number of main products is more than one.

ii. where different manufacturing technologies and marketing methods are required.

iii. where the size of the concern is large enough.

Functional organisational structure is most suitable for such type of company. Following are the reasons of it:

i. Benefits of Specialisation: The whole company is divided into many departments on the basis of major activities to be performed. Each department is headed by an expert manager. This results in more and better work being accomplished in much lesser time. Hence, the benefits of specialisation become available.

ii. Coordination is Established: All the persons working within a department are specialists of their respective jobs. It makes the coordination easier at department level.

Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature functions and organising such functions into separate departments such as production, marketing, finance, etc.

Advantages:

(i) Specialization: A functional structure leads to occupational specialization since emphasis is placed on specific functions.

(ii) Efficiency: It helps in increasing managerial and operational efficiency and this result in increased profit.

(iii) Minimises costs: It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.

(iv) Better control and co-ordination: It promotes control and coordination within a department because of similarity in the tasks being performed.

Because of different nature of all the organisations.

‘Responsibility for’ means obligation of a subordinate to complete the assigned job.

It refers to the process of entrusting responsibility and authority, and creating accountability of the person to whom work or responsibility has been handed over.

a. It is easier to fix responsibility 

b. Provides stability to the organisation