1) What is division of labour?
It is concerned with dividing the total work into a
number of processes each of which will be performed by different individuals.
2) What is meant by organization structure?
An organization structure explains the positions and
official relationships between the various individuals working in an
organization.
3) What is formal organization?
Formal organization is created for the
accomplishment of the enterprise objectives. It provides official relationship
between the individuals. It has well established rules and procedures.
4) Why is line organization called military
organization?
Here, the superior at the top makes decision and
communicates his decisions and assigns certain work to his immediate
subordinate. There is a vertical flow of authority.
5) What is an adhoc committee?
It is a temporary committee that is created for a
specific purpose. As soon as the purpose has been accomplished, the committee
stands dissolved.
6) Define authority.
Authority
is an official right of a person to do and make things happen in an
organization.
7) Define power.
Power is the capacity of a person to act and
influence others. A person gets power by his intelligence, knowledge, skill and
personal traits.
8)
Define delegation.
The process of delegation involves the determination
of results expected, assignment of task, delegation of authority for the
accomplishment of these tasks.
9)
What is responsibility?
Responsibility is the duty of the subordinate to
whom some work has been assigned by a superior to perform the task required.
10)
What do you mean by decentralization?
Decentralization of authority is the extent to which
power and authority are delegated to lower levels in an organized structure.
SECTION-B (Explanatory
Type Questions)
1)
Distinguish between authority and power
Authority
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Power
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Way
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of
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It
is the formal
right given to a
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It
is the personal
ability to
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rights
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manager
to make decisions
or to
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influence others or events.
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command.
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Roles
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Authority
is the right
given to a
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Power is the ability of a person
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manager to achieve the objectives
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or
a group to
influence the
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of the organization.
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beliefs
and actions of
other
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people.
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Direction
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It flows in the downward direction
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It can flow in any direction.
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of an organization.
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|||
Legitimate
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Authority
is always official
in
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Power
need not be
official in
|
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nature; hence, it is legitimate.
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nature;
therefore it need not
be
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||
legitimate.
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2)
Distinguish between authority and responsibility.
Authority
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Responsibility
|
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Authority is the power or right to
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Responsibility is the state or fact
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Definitions
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give orders,
make decisions, and
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of having
a duty to
deal with
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enforce obedience.
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something, or of having control
|
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over someone.
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||
Basically
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It is power.
|
It is a duty.
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Main
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Here, orders and commands play a
|
Here, duties and obedience play
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functions
|
vital role.
|
a vital role.
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Time
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It
stays for a
longer period as
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It
gets completed with
the
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duration
|
compared to responsibility.
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completion of the task so it has a
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shorter period.
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||
It flows downwards.
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It flows upwards.
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Flow
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Delegation
|
It can be delegated to others.
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It cannot be delegated.
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Example
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The
right of a
manager to
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The obligation of a subordinate
|
command his subordinates.
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to complete an assigned work.
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3. Explain
the features of formal and informal organization?
Features of Formal
organisation:
(1)
The formal organizational structure is created
intentionally by the process of organizing.
(2)
The
purpose of formal organisation structure is achievement of organizational goal.
(3)
In
formal organizational structure each individual is assigned a specific job.
(4)
In formal organisation every individual is
assigned a fixed authority or decision-making power.
(5)
Formal
organizational structure results in creation of superior-subordinate relations.
(6)
Formal
organizational structure creates a scalar chain of communication in the
organisation.
Features of informal organisation:
(1)
Informal organizational structure gets created
automatically without any intended efforts of managers.
(2)
Informal organizational structure is formed by the
employees to get psychological satisfaction.
(3)
Informal organizational structure does not follow
any fixed path of flow of authority or communication.
(4)
Source of information cannot be known under
informal structure as any person can communicate with anyone in the
organisation.
(5)
The existence of informal organizational structure
depends on the formal organisation structure.
4) Explain Line Organisational Structure:
A line organisation has only
direct, vertical relationships between different levels in the firm. There is
only line departments-departments directly involved in accomplishing the
primary goal of the organisation. For example, in a typical firm, line
departments include production and marketing. In a line organisation authority
follows the chain of command.
illustrates a single line organizational
structure.
Features:
Have only
direct vertical relationships between different levels in the firm.
Advantages:
1.
Tends to simplify and clarify authority,
responsibility and accountability relationships
2.
Promotes
fast decision making
3.
Simple
to understand.
Disadvantages:
1.
Neglects specialists in planning
2.
Overloads
key persons.
Some of the advantages of
a pure line organisation are:
(i)
A line structure tends to simplify and clarify
responsibility, authority and accountability relationships. The levels of
responsibility and authority are likely to be precise and understandable.
(ii)
A
line structure promotes fast decision making and flexibility.
(iii)
Because line organisations are usually small,
managements and employees have greater closeness.
However, there are some disadvantages also. They
are:
(i)
As
the firm grows larger, line organisation becomes more ineffective.
(ii)
Improved
speed and flexibility may not offset the lack of specialized knowledge.
(iii)
Managers
may have to become experts in too many fields.
(iv)
There is a tendency to become overly dependent on
the few key people who an perform numerous jobs.
5. Explain Staff or Functional Authority
Organisational Structure?
The jobs or positions in an
organisation can be categorized as:
(i)
Line position:
A position in the direct chain of
command that is responsible for the achievement of an organization’s goals and
A position
intended to provide expertise, advice and support for the line positions.
The line officers or managers have
the direct authority (known as line authority) to be exercised by them to
achieve the organizational goals. The staff officers or managers have staff
authority (i.e., authority to advice the line) over the line. This is also
known as functional authority.
An organisation where staffs
departments have authority over line personnel in narrow areas of
specialization is known as functional authority organisation.
Illustrates a staff or functional authority organizational structure.
In the line organisation, the line
managers cannot be experts in all the functions they are required to perform.
But in the functional authority organisation, staff personnel who are
specialists in some fields are given functional authority (The right of staff
specialists to issue orders in their own names in designated areas).
The principle of unity of command
is violated when functional authority exists i.e., a worker or a group of
workers may have to receive instructions or orders from the line supervisor as
well as the staff specialist which may result in confusion and the conflicting
orders from multiple sources may lead to increased ineffectiveness. Some staff
specialists may exert direct authority over the line personnel, rather than
exert advice authority (for example, quality control inspector may direct the
worker as well as advise in matters related to quality).
While this type of organizational
structure overcomes the disadvantages of a pure line organizational structure,
it has some major disadvantages:
They are: (i) the potential
conflicts resulting from violation of principle of unity of command and (ii)
the tendency to keep authority centralized at higher levels in the
organisation.
SECTION-C (Essay type
questions)
1) Explain
the advantages and disadvantages of Decentralization
Advantages of Decentralization
• Decentralization reduces
the workload of top executives.
• It
improves job satisfaction and morale of lower level managers by satisfying
their needs for independence, participation and status.
• Decision making is
quicker.
• It
facilitates growth and diversification. As each product division is given
sufficient autonomy for innovation and creativity.
• It gives
opportunity to subordinates to exercise their own judgment. They develop
managerial skills which will be useful to the organisation in the longer run.
• Decentralization
requires wider span of control and fewer levels of organisation. It speeds up
communication.
• Decentralization
increases the administrative expenses and each division or department has to be
sufficient in terms of physical facilities and trained personnel.
• As each
department or division enjoys substantial autonomy it might lead to
co-ordination problems.
• There
might be lack of uniformity and inconsistent procedures as each department
might have the authority to formulate its own policies and procedures.
Disadvantages of Decentralization
• Decentralization
increases the administrative expenses and each division or department has to be
sufficient in terms of physical facilities and trained personnel.
• As each
department or division enjoys substantial autonomy it might lead to
co-ordination problems.
• There
might be lack of uniformity and inconsistent procedures as each department
might have the authority to formulate its own policies and procedures.
2) Explain the advantages and
disadvantages of centralization.
Advantages of Centralization
• Effective utilization of
talents of the top management.
• It reduces
co-ordination problems as a unifying force integrates all operations.
• It allows
the development of a strong co-ordinates top management team.
• There is
uniformity of policies and plans across the organisation.
• Centralization
organisations are best suited where resources and information has to move
swiftly, especially in emergencies.
• Duplication of functions
and facilities is minimized which in turn reduces costs.
• Due to the
fact that all decisions are made at the top it might result in delays in
decision-making and communication.
• Centralized power and
authority might be abused.
• Doesn’t
give an opportunity to lower level managers/supervisors to develop their
managerial skills.
• Centralized organisation
faces the problem of lower motivation levels among workforce.
• The
success of organisation depends on the competence of top executives which might
be quite risky.
• Due to the
fact that all decisions are made at the top it might result in delays in
decision-making and communication.
•
Centralized
power and authority might be abused.
• Doesn’t
give an opportunity to lower level managers/supervisors to develop their
managerial skills.
•
Centralized
organisation faces the problem of lower motivation levels among workforce.
• The
success of organisation depends on the competence of top executives which might
be quite risky.
3. Explain Committee and
project type of Organization Structure?
Committee
Organisational Structure Features:
Committee Organizational
Chart
Committees are advisory bodies.
They are usually appointed to advise organizations. Examples of committees
include; parent teachers associations and student councils which are committees
within a school organization. Committees usually delegate certain duties to
sub-committees. For example, an executive committee may appoint a finance
committee to advise it on financial matters. Note that an element of the line
organization exists in the committee organization as all sub-committees are
responsible to the executive committee.
(a)
Formed for managing certain problems/situations
(b) Are temporary decisions.
Advantages:
1.
Committee decisions are better than individual
decisions
2. Better interaction between
committee members leads to better co-ordination of activities
3. Committee members can be
motivated to participate in group decision making.
4. Group discussion may lead
to creative thinking.
Disadvantages:
1.
Committees may delay decisions, consume more time
and hence more expensive.
2.
Group
action may lead to compromise and indecision.
3.
‘Buck
passing’ may result.
4. Explain the Project
Organisational Structure:
A project organisation is a
temporary organisation designed to achieve specific results by using teams of
specialists from different functional areas in the organisation. The project
team focuses all its energies, resources and results on the assigned project.
Once the project has been completed, the team members from various cross
functional departments may go back to their previous positions or may be assigned
to a new project. Some of the examples of projects are: research and
development projects, product development, construction of a new plant, housing
complex, shopping complex, bridge etc.
illustrates a
project organisational structure.
Importance of Project
Organisational Structure:
Project organizational
structure is most valuable when:
(i) Work is defined by a
specific goal and target date for completion.
(ii) Work is unique and
unfamiliar to the organisation.
(iii)
Work is complex having independent activities and
specialized skills are necessary for accomplishment.
(iv) Work is critical in terms
of possible gains or losses.
(v) Work is not repetitive in
nature.
Committee Organisational
Structure Features:
(a)
Formed for managing certain problems/situations
(b) Are temporary decisions.
Importance of Project
Organisational Structure:
Project organizational
structure is most valuable when:
(i) Work is defined by a
specific goal and target date for completion.
(ii) Work is unique and
unfamiliar to the organisation.
(iii)
Work is complex having independent activities and
specialized skills are necessary for accomplishment.
(iv)
Work is critical in terms of possible gains or
losses.
Characteristics of project
organisation:
1. Personnel
are assigned to a project from the existing permanent organisation and are
under the direction and control of the project manager.
2.
The project manager specifies what effort is
needed and when work will be performed whereas the concerned department manager
executes the work using his resources.
3. The
project manager gets the needed support from production, quality control,
engineering etc. for completion of the project.
4.
The authority over the project team members is
shared by project manager and the respective functional managers in the
permanent organisation.
5.
The services of the specialists (project team
members) are temporarily loaned to the project manager till the completion of
the project.
6. There may
be conflict between the project manager and the departmental manager on the
issue of exercising authority over team members.
7.
Since authority relationships are overlapping with
possibilities of conflicts, informal relationships between project manager and
departmental managers (functional managers) become more important than formal
prescription of authority.
8. Full and free
communication is essential among those working on the project.
5) Explain Matrix
Organisational Structure:
It is a permanent organisation
designed to achieve specific results by using teams of specialists from
different functional areas in the organisation. The matrix organisation is
illustrated in Exhibit 10.8.
Feature:
Superimposes a horizontal set of
divisions and reporting relationships onto a hierarchical functional structure
Advantages:
1.
Decentralised decision making.
2. Strong product/project
co-ordination.
3. Improved environmental
monitoring.
4. Fast response to change.
5. Flexible use of resources.
6. Efficient use of support
systems.
Disadvantages:
1.
High administration cost.
2.
Potential
confusion over authority and responsibility.
3.
High
prospects of conflict.
4.
Overemphasis
on group decision making.
5.
Excessive
focus on internal relations.
This type of organisation is often
used when the firm has to be highly responsive to a rapidly changing external
environment.
In matrix structures, there are
functional managers and product (or project or business group) managers.
Functional manager are in charge of specialized resources such as production,
quality control, inventories, scheduling and marketing. Product or business
group managers are incharge of one or more products and are authorized to
prepare product strategies or business group strategies and call on the various
functional managers for the necessary resources.
6) Explain the features of
Informal Organisation:
An informal organisation is the
set of evolving relationships and patterns of human interaction within an
organisation which are not officially presented. Alongside the formal
organisation, an informal organisation structure exists which consists of
informal relationships created not by officially designated managers but by organizational
members at every level. Since managers cannot avoid these informal
relationships, they must be trained to cope with it
The informal organisation
has the following characteristics
(i)
Its members are joined together to satisfy their
personal needs (needs for affiliation, friendship etc.)
(ii) It is continuously
changing:
The informal organisation
is dynamic.
(iii)
It
involves members from various organizational levels.
(iv)
It
is affected by relationship outside the firm.
(v)
It has a pecking order: certain people are
assigned greater importance than others by the informal group.
Even though an informal organizational
structure does not have its own formal organizational chart, it has its own
chain of command:
Benefits of Informal Organisation:
(i)
Assists in accomplishing the work faster.
(ii)
Helps
to remove weakness in the formal structure.
(iii)
Lengthens
the effective span of control.
(iv)
Compensation
for violations of formal organizational principles.
(v)
Provides
an additional channel of communication.
(vi)
Provides
emotional support for employees.
(vii)
Encourages
better management.
Disadvantages of informal
organisation:
(i)
May work against the purpose of formal
organisation.
(ii) Reduces the degree of
predictability and control.
(iii) Reduces the number of
practical alternatives.
(iv) Increases the time
required to complete activities.
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