Definition of Organization
The word ‘organization’ is used to denote
the construction of the organization or the result of the administrative
structure. Organization should, therefore, mean only ‘designing’ the
administrative machine. Urwick (1944) defines organization as “determining what
activities are necessary to any purpose and arranging them in groups which may
be assigned to individuals.”
Other definitions given by various scholars
are as follows:
Organization: Is the form of every human
association for the attainment of a common purpose” (Mooney 1947). Organization:
Is the arrangement of personnel for facilitating the accomplishment of some
agreed purpose through allocation of functions and responsibilities” (White
1948).
Organization structure is a pattern of
interrelated posts connected by line of delegated authority.
Organization is the formal structure of
authority through which work sub-divisions are arranged, defined and
coordinated for the defined objectives” (Gulick, 1937).
Meaning of Organization
However, in common usage the term organization
means the act of putting things in working order. In public administration this
term is used in three different ways. In the first place, it used as the act of
designing the administrative structure in such a way that Mr. “X” is seen as a
great organizing leader. In the second sense, it is used as designing and
building the structure.
In the third sense, the term refers to
administrative structure itself, as when we speak of the organization of the
government of Japan, USA and UK. Some thinkers like Urwick confine the use of
the term ‘organization’ to the first meaning. But many other thinkers, like
Gladden, Pfiffner, Simon, etc. do not approve of this view and are of the
opinion that Urwick has missed the human aspect of organization (Ekator, 2003).
Nature of Organization
1.
Rules and regulations: Every
organization is governed by a set of rules and regulations for the orderly
functioning of people.
2.
Division of labor: The
work needed to accomplish the goals is divided into a number of functions and
sub-functions. These, functions are organized in the form of departments. Each
department is headed by a specialist. Such a division of function on specialty
basis infuses specialization.
3.
Communication: There
is free flow of communication through various official channels among the
people across various departments. Most of the communication is in a written
form. However, grapevine communication is also in vogue.
4.
Group: It is people who constitute the dynamic
element of an organization. They work in groups in the various departments of
an organization.
5.
Authority structure: There
is an arrangement of positions into graded series. Such an arrangement creates
a series of superior and subordinate relationships called chain of command.
Authority and responsibility associated with various positions are defined.
6.
Coordination: The
diverse efforts of various functional departments are integrated towards the
common objective through the process of coordination.
7.
Environment: No
organization is functioning in a vacuum. Social, political, economic and legal
factors exert influence on the environment. Beside it is influenced by internal
factors like materials, machines, level of technology, economic resources,
human resources, etc.
8.
Common goal: The
main reason for the existence of an organization is to accomplish some common
goals. The structure of the organization is bound by a common purpose.
Characteristics of Organizations
Nearly all organizations have certain basic
characteristics.
There are five basic characteristics of an organization.
They are as follows:
1.
Membership: Most organizations comprise of a group of
persons. Spiers writes that in the case of organizations, knowledge of
belonging is a necessary criterion, and membership is nearly always voluntary,
in that people are free to withdraw. He mentioned certain exceptions, e.g. the
state, or enforced membership of a military organization.
2.
Organizations are consciously purpose: Organizations are there to
do something positive for their members, for society, or for both. Political
parties contest elections and try to get control of government, business organizations
produce goods, religious organizations save souls and minister to people
spiritual needs, etc.
3.
Formal structure: A very prominent feature of organizational
life is the phenomenon of formal structure. Formal structure means the
definition of functions in an organization and their arrangement into a total
pattern. According to Spiers, the essence of formalism is that functions are
defined primarily in relation to one another and persons are considered as
fulfilling these functions.
4.
Value system or Ideology: Spiers argues that all organizational
life implies some reasonably coherent value system. The existence of such
ideologies is equally observable in administrative and the political sphere.
These ideologies affect the life and structure of organizations.
5.
Corporate status: Organizations almost always have some legal
status by which they can be treated as social and legal entities, irrespective
of the persons who might be said to inhabit them.
Importance objectives of organization
Below
are the importance objectives of an organization:
1. To Administer Economy in Production: Any company aims at reducing its cost of production. Similarly any commercial undertaking aims at a reduction of its operating cost. An effective and fruitful organization also aims at a reduction on cost of production, distribution or operation to justify its very existence.
To affect economy in the whole organizational structure is
a main task of an organization economy affected results into cheaper
availability of goods to the ultimate consumer.
Even if the price of the commodity is not
reduced due to some reason or the other; the quality improves, the workers get
more wages and the profitability increases. Society stands benefited. Return on
investment goes up ultimately leading to larger savings.
R. Davis opines that, the mission of the
business organization is to acquire, produce and distribute certain values. The
business objective, therefore, is the starting point for business thinking. The
primary objectives of a business organization are always those of economic
values with which we serve the customer.
2. To Serve the Society: Any
organization aims at:
(a) Service of the society
(b) Service of the enterprise
of which it is one of the part.
From service to the society it
gains:
(i) Recognition
(ii) Strength
(iii) Stimulus.
Society needs goods at proper time, of
standard quality, in adequate quality, at a cheaper rate and regularly. An organization
ensures the society that it would not be lacking. Social gain should be the
main aim of any organization. If the organization deviates from this
goal certainly it is not going to stand benefited for a longer period since it
is the society which helps an organization, management and enterprise to grow
in structure. Goodwill is a gift given by the society to the enterprise and on
its own will the society can withdraw it even without a moment’s notice.
3. To Economies the Use of Available Resources: Though in India men are in
abundance and other resources are scarce. But the use, of both should be economized
in order to guard against the future non-availability of resources. If this
happens because of non-judicious and un-planned use of resources then future
generation is not going to forgive us. For this reason also-economic use of
available resources is desirable.
4. To Establish Healthy Relations between Labor and Capital: Human relations and behavioral
sciences form the basis of any organizational structure today. A capital labor
harmonious relation may help in attaining the objectives of the enterprise
quickly and honestly. Prosperity to both is ensured by good, relations.
Profitability and productivity both increase.
In India the capital and labor a not at their
mutual best. Though we talk of ‘workers sector’ but we have made no sincere
efforts in this direction. We have not been able to develop even harmonious
relations between the two. A developing country like India can ill afford this
situation. We have to find out some way out for better relations and effective
achievement of the objectives of the company.
Types of Organizations
Maurice Spier (1975) mentions five types of organizations.
These are: firms engaged in goods production: In this category are included:
i. Business firm engaged in goods
production: In this category are included those forms which may not produce
goods but are concerned with the provision of services, e.g. newspaper
agencies.
ii. Those organizations that handle the
administration of public services under this category are, the government
Ministries/departments created to this laws and regulations of a country.
iii. Other types of organizations are the
religious organizations: According to Spier, these are among the most
influential bodies in terms of numbers.
iv. Private political organizations such as
political parties: These include the pressure groups or interest groups. The
main activity of these groups is to mobilize and represent the opinions of
members. v. Military organization, i.e. armies. These organizations are geared
towards welfare activities.
Functions of organization
1. Co-Ordination of Various
Activities: The delegated authority and responsibility
should be co-ordinate by the Chief Managerial Staff. The reason is that there
must be a separate and responsible person to see whether all the activities are
going on to accomplish the objectives of the organization or not.
2. Grouping of Activities:
The
next function of organization is that the identical activities are grouped
under one individual or a department. The activities of sales such as
canvassing, advertisements and debt collection activities are grouped under one
department i.e., sales department.
3. Delegation of Authority:
Assignment
of duties or allotment of duties to specified persons is followed by delegation
of authority. It will be very difficult for a person to perform the duties
effectively, if there is no authority to do it. While delegating an authority,
responsibilities are also fixed. Thus, the Production Manager may be delegated
with the authority to produce the goods and fixed with the responsibility of
producing quality goods.
4. Allotment of Duties to
Specified Persons: In order to ensure effective performance, the
grouped activities are allotted to specified persons. In other words, the
purchasing activities are assigned to the Purchase Manager; the production
activities are assigned to Production Manager; the sales activities are
assigned to Sales Manager and the like. Besides, adequate staff members are
appointed under the specified persons. The specified persons are specialized in
their respective fields. If there is any need, appropriate training would be
provided to such persons.
5. Defining Relationship:
When
a group of persons is working together for a common goal, it becomes necessary
to define the relationship among them in clear terms. If it is done, each
person will know who is his boss, from whom he has to receive orders and to
whom he is answerable. In another sense, each boss should know what authority
he has and over which person.
6. Determination of Activities:
It
includes the deciding and division of various activities required to achieve
the objectives of the organization. The entire work is divided into various
parts and again each part is sub-divided into various sub-parts. For example,
the purchase work may be divided into requisition of items, placing of an
order, storage and so on.
Principle of organization
The work can be completed
in time whenever a technique or a principle is adopted. So, the success or
failure of an organization depends upon the principles to be followed in the organization.
The principles of organization may be termed as an instrument used by the organization.
Some experts like Taylor, Fayol and Urwick have given the principles of organization.
1. Principle of Objective:
The enterprise should set up
certain aims for the achievement of which various departments should work. A
common goal so devised for the business as a whole and the organization is set
up to achieve that goal. In the absence of a common aim, various departments
will set up their own goals and there is a possibility of conflicting
objectives for different departments. So there must be an objective for the
organization.
2. Principle
of Specialization: The organization should be
set up in such a way that every individual should be assigned a duty according
to his skill and qualification. The person should continue the same work so
that he specializes in his work. This helps in increasing production in the
concern.
3. Principles of
Co-ordination: The
co-ordination of different activities is an important principle of the
organization. There should be some agency to co-ordinate the activities of
various departments. In the absence of co-ordination there is a possibility of
setting up different goals by different departments. The ultimate aim of the
concern can be achieved only if proper co-ordination is done for different
activities.
4. Principle of Authority
and Responsibility: The
authority flows downward in the line. Every individual is given authority to
get the work done. Though authority can be delegated but responsibility lies
with the man who has been given the work. If a superior delegates his authority
to his subordinate, the superior is not absolved of his responsibility, though
the subordinate becomes liable to his superior. The responsibility cannot be
delegated under any circumstances.
5. Principle
of Definition: The
scope of authority and responsibility should be clearly defined. Every person
should know his work with definiteness. If the duties are not clearly assigned,
then it will not be possible to fix responsibility also. Everybody’s
responsibility will become nobody’s responsibility. The relationship between
different departments should also be clearly defined to make the work efficient
and smooth.
6. Span of Control: Span of control means how many
subordinates can be supervised by a supervisor. The number of subordinates
should be such that the supervisor should be able to control their work
effectively. Moreover, the work to be supervised should be of the same nature.
If the span of control is disproportionate, it is bound to affect the
efficiency of the workers because of slow communication with the supervisors.
7. Principle
of Balance: The principle means that assignment of work should be such that every
person should be given only that much work which he can perform well. Some
person is over worked and the other is under-worked, then the work will suffer
in both the situations. The work should be divided in such a way that everybody
should be able to give his maximum.
8. Principle of
Continuity: The
organization should be amendable according to the changing situations. Everyday
there are changes in methods of production and marketing systems. The
organization should be dynamic and not static. There should always be a
possibility of making necessary adjustments.
9. Principle
of Uniformity: The
organization should provide for the distribution of work in such a manner that
the uniformity is maintained. Each officer should be in-charge of his
respective area so as to avoid dual subordination and conflicts.
10. Principle
of Unity of Command: There
should be a unity of command in the organization. A person should be answerable
to one boss only. If a person is under the control of more than one person then
there is a like-hood of confusion and conflict. He gets contradictory orders
from different superiors. This principle creates a sense of responsibility to
one person. The command should be from top to bottom for making the
organization sound and clear. It also leads to consistency in directing,
coordinating and controlling.
11. Scalar
Principle: This
principle refers to the vertical placement of supervisors starting from top and
going to the lower level. The scalar chain is a pre-requisite for effective and
efficient organization.
12. Principle of
Simplicity: The
organizational structure should be simple so that it is easily understood by
each and every person. The authority, responsibility and position of every
person should be made clear so that there is no confusion about these things. A
complex organizational structure will create doubts and conflicts among
persons. There may also be over-lapping’s and duplication of efforts which may
otherwise be avoided. It helps in smooth running of the organization.
13.
Principle of Efficiency: The organization should be able
to achieve enterprise objectives at a minimum cost. The standards of costs and
revenue are pre-determined and performance should be according to these goals.
The organization should also enable the attainment of job satisfaction to
various employees.
14. Principle of Exception: This principle states
that top management should interfere only when something goes wrong. If the
things are done as per plans then there is no need for the interference of top
management. The management should leave routine things to be supervised by
lower cadres. It is only the exceptional situations when attention of top
management is drawn. This principle relieves top management of many
botherations and routine things. Principle of exception allows top management
to concentrate on planning and policy formulation. Important time of management
is not wasted on avoidable supervision.
Problems of organization
The
problems of organization from its start to later stages of growth have been outlined
by two authorities as follows:
1. At the start, to create a new organizational
system
2. Thereafter to survive
3. Then to stabilize
4. To earn a good reputation
5. To achieve uniqueness;
6. To earn respect and appreciation.
Major problems in administrative
of an organization are indicated below:
1. How to integrate personal needs with organizational
goals
2. How to distribute power and authority
3. How to develop mechanism capable of
reducing intra-organizational conflicts
4. How to ensure effective adaptation to
changes in the environment
5. How to assure vitality and growth and
prevent delay
Analysis
of Organizations
Spiers (1975) describes six
such ways of looking at these organizations:
1. Organization
as machines: The most basic of all approaches to the
study of organizations assumes that organizational behavior can be considered
broadly in mechanistic terms. That is to say, the organization is considered to
be most usefully described in terms of machines.
According to Spiers, if one
supposes that organizations can, in some sense, be perceived as machines, the
following consequences ensue. First, the conception of organization as a system
of interrelated parts predisposes one to think that coordination is a primary
task in the evaluation of organizational behavior. Second, this necessitates
the definition of functions in relation to work to be done, both for separate
parts of the organization, and for interrelated parts. Third, behavior and activity
are viewed primarily in term of their work coordination. Fourth, unsatisfactory
circumstances are viewed in the same mechanical sense, i.e. as functional
problems rather than any other way.
2. Organizations
as needs and responses: There are certain thinkers who give
more emphasis to structure and function in the interpretation of organizational
behavior. The functionalist approach mainly concentrates on needs and responses
to needs.
He defines needs in terms of
the "goals" or "purposes" of:
(a) Individuals
(b) Groups within organization
(c) Organization as a whole
(d) A group wider than the organization
but less than society
(e) Society itself.
3. Organization
as societies: This analysis closely resembles the
functionalist approach. It views organization as a miniature society. The
functionalists believe that the central problem for society as a whole is the
reconciliation of varying needs and interests of its members. The social
functionalism, as it may be called, points out the prior necessity of a shared
value system in order that such reconciliation may take place. The broad
administrative consequence of this kind of approach is that there is a
predisposition to see the organization not simply as a system of relatively
discrete and interrelated parts but as a community of people. The structure of
this community is analogous to the structure of society at large. This
conception aids in understanding the internal life of an organization.
4. Organization
and individual persons: Instead of seeing organizations as
elements in society-wide systems, this approach concentrates on the experience
of the individual member. This human relations approach stresses the need for organizations
to make provision for the adjustment of individual psychological needs as
expressed through small group relationships, to the wider needs of an organization’s
behavior.
5. Organization
and the technological core: There are some theorists who give
importance to the concept of socio-technical system. This means that in any organization,
there is always a kind of technological core. In administration, the work
processes of routine information systems could be regarded as the technological
core. They state that the consideration of internal technology must have
certain important consequences for administrative action. First attention is
shifted to the physical environment of the work process; secondly, the
conception of the person and his physical environment leads to much more
flexible possibilities to see that changing technology or even the technical
expression of changing economic circumstances may have psychological effects because
of its impact on the system.
6. Organization
as Culture: This theory states that the activities of
persons in organizations cannot be understood apart from meanings given to them
by the persons themselves, colleagues, supervisors and official; goals which
chiefly condition their actions and relationships.
The main impact of this
cultural approach is that individuals and groups are seen as constrained, not
by formal structures or even beliefs, but by roles and expectations, personally
conceived, which in turn determine norms in an essentially relative fashion.
Secondly, it is assumed
that the organizational change and possibilities for change have to take
account of these roles and expectations. Next, it diverts attention towards the
exploration of internal subcultures and subtle cultural factors which determine
norms and attitudes to work, authority, and types of organization.