Types of organization. Basic management and can be used in principles and practices of management

1. TYPES OF
ORGANISATION

2.  o Organisation is designed on the basic of
principles of labour and span of management.
The success of the organisation depends upon
the experience and competence of the officers of
the organisation. Nature, scale and size of the
business are the normal factors which determine
forms of internal organisation. The following
common types of organisation find a place in
the structure of internal organisation.

3. o Line, Military or scalar
organisation
o Functional organisation
o Line and staff organisation
o Committee organisation
o Project organisation
o Matrix organisation
o Freeform organisation

4. o Line organisation is the simple and oldest
type of organisation followed in an
organisation. Under line organisation,
each department is generally a complete
self-contained unit.
o A separate person will look after the
activities of the department and he has
full control over the department.

5. o The same level executives do not give or receive
orders amongst themselves. But they receive
orders from their immediate boss and give orders
to their subordinates. Hence, all the heads are
responsible to the general manager, the general
manager, in turn, is responsible to the
shareholders who are the owners.
o This type of organisation is followed in the army on
the same pattern. So, it is called military
organisation. Under type of organisation, the line of
authority flows from the top to bottom vertically. So

6. o It consists of direct vertical relationships.
o Authority flows from top-level to level
to bottom level.
o Departmental heads are given full
freedom to control their departments.
o Each member knows from whom he
would get orders and to whom he
should give his orders.

7. o A senior member has direst command
over his subordinates.
o Operation of this system is very easy.
o Existence of direct relationship
between superiors and
subordinates.
o The superior takes decisions within the
scope of his authority

8. Advantages and
Disadvantages of
Line Organisation
Advantages of line organisation Disadvantages of line organisation
1. Simplicity 1. Lack of specification
2. Division of authority and
responsibility
2. Over loading
3. Unity of control 3. Lack of initiative
4. Speedy action 4. Scope for favoritism
5. Discipline 5. Dictatorial
6. Economical 6. Limited communication
7. Co-ordination 7. United administration
8. Direct communication 8. Subjective approach
9. Flexibility 9. Instability
10. Lack of co-ordination

9. o This type of organisation is suitable to small
size business units.
o Where the activities are of routine nature
or machine based.
o If the business activities are service mined.
o Where the number of persons working is
small
o The business operation is simple in nature.
o A business unit which has straight
methods of operations.

10.  o Under line organisation, a single person is in
charge of all the activities of the concerned
department. The person in charge finds it
difficult to supervise all the activities efficiently.

11.  o The reason is that the person does not
have enough capacity and required training.
Under functional organisation, various
specialists are for various functions
performed in an organisation. These
specialists will attend to the work which is
common to different functions of various
departments. Workers, under functional
organisation, receive instructions from
various specialists.

12. o The need for functional organisation
arises out of:
o The complexity of modern and large-
scale organisation
o A desire to use the specialization in full
and;
o To avoid the work-load of line managers
with complex problems and decision-
making

13. o The work is divided according to
specified functions.
o Authority is given to a specialist to give
orders and instructions in relation to
specific function.
o Functional authority has right and power
to give command throughout the line
with reference to his specified area.

14. Characteristics of functional
organisation
o The decision is taken only after making consultations with the
functional authority relating to his specialized area.
o The executives and supervisors discharge the responsibility of
functional authority.
- Route clerk
- instruction card clerk
- time and cost clerk
- Gang boss
- Speed boss
- Inspector
- Repair boss
- Disciplinarian

15. Advantages and
Disadvantages of
Functional Organisation
Advantages of
functional
organisation
Disadvantages of
functional organisation
o Benefit of specialization
o Application of expert knowledge
o Reducing the work load
o Efficiency
o Adequate supervision
o Relief to line executive
o Co-operation
o Economy
o Flexibility
o Mass production
o Complex relationship
o Discipline
o Over specialization
o Ineffective co-ordination
o Speed of action
o Centralization
o Lack of responsibility
o Increasing the overhead
expenses
o Poor administration
o Suitability of functional
organisation

16. o The line officers have authority to take
decisions and implement them to achieve
the objectives of the organisation.
o The line officers may be assisted by the
staff officers while framing the policies
and plans and taking decisions
organisation.

17.  o The authority flows from top level to the
lower level of the organisation through the
line officers while the staff officers attached
to the various departments advise the
departments. The staff officers are not in a
position to compel the line officers to follow
the advice by them. Each department is
headed by a line officer who exercises full
authority regarding the planning.

18. o Personal staff
o Specialized staff
o General staff
assistant

19. o The staff officers assist the line officers in
the planning of business activity.
o The board of directors frames the policies of
the business on the basis of recommendations
given by the staff officers.
o The managers can get the advice from the staff
officers regarding the selection. ‘training’
placement and remuneration fixation the
personnel

20. o The staff officers give regarding the method of
improving the product, the technique of reducing
the cost of production, increasing the profits of the
concern.
o The staff officers prescribe the procedures to be
followed by the line officers in the execution of
policies and programs.
o Staff officers of a department help the manager in
the preparation of budget of the department.
o the staff officers may be called to solve the
administrative problems encountered by the line
officers in general.

21. o The staff officers have only theoretical
academic knowledge but not practical
knowledge.
o The staff officers go beyond their sphere of
activity and assume that they have line
officer’s authority.
o Much of the advice given by the staff
officers is impractical
o Since the staff officers unnecessary
increases the paperwork of the line officers.

22. o The staffs give advice without considering
the nature of business as a whole.
o Staff officers are very much interested
in becoming line officers of the
organisation rather than impairing
advice to them.

23. o Both line officers and staff officers should
clearly understand the nature of relationship
prevailing between them.
o A separate staff member should be appointed to
bring about co-operation between the line
officers and staff officers.
o The line officers should be encouraged to use the
advice of staff officers.
o Only qualified persons should be selected and
placed as staff officers.

24. o The staff officers should be convinced by the
line officers if their advice is not accepted
o The responsibility for results could be fixed on
both line officers and staff officers
o Only experienced persons alone should be
promoted as line executives..
o Remove the fear of the line officers and staff
officers whether the new ideas of advice would
be properly put into use or not.

25. Advantages of line and staff organisation Disadvantages of line and staff
organisation
Facilitates to work faster and better If powers are not defined then get confusion
Specialization is attained Line officers may reject advice without
any reason for their action
Enables to utilize experience and advice Staff officers are not responsible if
favorable results are not obtained.
Officers can take sound advice Difference between line and staff officers
will defeat the very purpose of
specialization
New technology or procedure can be
introduced without any dislocation
Line officers blame staff officers for
unfavorable results and want to get rewards
for favorable results
Promotes efficient functioning of line officers
Very good opportunity is made available to
young person to get training

26. o “ACommittee as a group of persons
either appointed or elected who are to
meet for the purpose of considering
matters assigned it”
Types of committee
o Advisory committee problem solving
committees
o Fast-finding committee

27. o Collect the necessary information from
different sources and arrange the
information orderly.
o The collected information is critically
analyzed.
o Draft a detailed report containing
the recommendations for the
purpose of implementation.
o Formulate the standard of performance for
the purpose of evolution of actual
performance in future.

28. Recommendations for efficient functioning of a
committee
Selection of
subject
matter
Committee
Role of
chairman
Preparation
for a meeting
Clear Objective
Role of
committee
Size of the
committee
Selection of
meeting
Follow up
evolution

29. o The project organisation idea was
developed after the second war.
o A project organisation can also be the
beginning of an organisation cycle. The
project may become a long term or
permanent effort that eventually
becomes a program or branch
organisation

30. o The Success of the project organisation
depends upon the co-ordination of
activities
o There is a grouping of a activities for
each project. It leads to the introduction
of a new line of a authority.

31. o The professionals are deputed for the project. But
there is an assurance of continuous work for the
professional in a project organisation.
o The decision is taken in the project organisation
under pressure of the top controls the staff in an
organisation.
o The top management does not extend its full co-
operation for the effective functioning of the project
organisation. Some hindrance may be caused by
the top management.

32.  o “Any organisation that employs a multiple
command structure but also related support
mechanisms and an associated organizational
culture and behavior pattern” The matrix
organisation may be followed where a large of
small projects have to be managed.

33. o The principle of chain of command is not
followed in the matrix organisation. A project
manager should give his report to more than
one superior.
o There should be an agreement among the
managers regarding the authority of utilizing
the available resources. The term resources
include physical resources, financial resources
and human resources.

34. Merits and Demerits of Matrix
organisation
Merits of
Matrix
organization
Demerits of
matrix
organization
o Achievement of
objectives
o Best utilization
of resources
o Appropriate structure
o Flexibility
o Motivation
o Personal development
o Complex relationship
o Struggle for power
o Excessive, emphasis
on group decision-
making
o Arising conflict resolution
o Heterogeneous

35. o This type of organisation is formed
whenever a need arises to form an
organisation, for achieving a particular
object. it will be dissolved after achieving
the object of the organisation. The free
form organisation resembles the project
and matrix organisation. It otherwise
called organic or ratio organisation.