Organisation structures2

UNIT-II
ORGANISATION AND DESIGNING
OF ORGANISATION STRUCTURES
INTRODUCTION:
“Management is a process involving planning,
organizing, directing and controlling human efforts
to state of objectives in an organization.”
The second phase of management process is
organizing, which basically involves analysis of
activities to be performed for achieving
organizational objectives, grouping these activities
into various division, departments and sections so
that these can be assigned to various individuals
and delegating them appropriate authority so that
they are able to carry on their work effectively.
CONCEPT OF ORGANISATION AND
ORGANISING:
In management literature, sometimes the term
organisation and organizing are used inter
changeably because the term organisation is used in
many ways. But it is not correct organisation is
different from organising. Organising is one of the
functions of management where as organisation
refers to the institution where in the functions of
management is performed.
Organising is a process of –
 Determining, grouping and structuring the
activities.
 Creating rules for effective performance at
work.
 Allocation necessary authority and
responsibility.
 Determining detailed procedures and
systems for different problems areas such as
coordination, communication motivation
etc.
The ultimate result of organising is organisation. In
other words, organising function ends with creating
a structure of relationships.
FORMAL AND INFORMAL
ORGANISATION:
Formal organisation refers to the structure of well-
defined jobs, each bearing a definite authority,
responsibility and accountability.
CHARACTERISTICS:
• Organisation structure is designed by the top
management to fulfill certain requirements.
• Coordination among members and their
control are well specified through process,
procedures rules etc.
• Organisation concentrates more on the
performance of jobs and not on the
individuals performing the jobs.
Informal organisation refers to the natural
grouping of people on the basis of some
similarity in an organisation. “It refers to people
in group associations at work, but these
associations are not specified in the blue print of
the formal organisation, the informal
organisation means natural grouping of people in
the work situations”.
CHARACTERISTICS:
• Informal organisation is a natural out come
at the work place.
• Informal organisation is created on the
basis of some similarity among its members.
The basis of similarity may be age, place of
origin, caste, religion, liking/disliking etc.
• Membership is an informal organisation is
voluntary.
• Behavior of members of the informal
organisation is coordinated and controlled by
group norms and not by the norms of formal
organisation.
Organisation Principles
Traditional organisation theorists developed
certain principles of organisation as guided to
thinking in organising. These principles are
intended for universal application to all
enterprises and cooperative efforts in different
fields. The most important of these principles
can be listed under the following heads:
• Consideration of Objectives
• Combination of Line and Staff
Functions
• Division of Labour or Specialisation
• Departmentation
N. Durga Chaintay Prasad M.Com, M.B.A(site) Management Science Note 1

• Decentralisation
• Principle of Scalar Chain
• Principle of Span of control
• Principle of Unity of Command
• Principle of Balance
• Principle of Flexibility
• Authority and Responsibility
Consideration of Objectives
Objectives are helpful in determining the activities
and the structure itself. Once objectives are clearly
defined, the organiser can conveniently proceed to
group activities, delegate authority to individuals to
whom activities have been assigned, and coordinate
their efforts for better results.
Combination of Line and Staff Functions
Organisation structures are usually of line, staff and
functional types. Line structure is part of every
organisation. The staff and functional types are
modifications of the structure. Staff and functional
structures never exist from a combination with line
structure.
Division of Labour or Specialisation
F.W. Taylor applied Division of labour principle at
the operation level and displayed how efficiency
could be increased by breaking down jobs into
single repetitive tasks performed on specialised
tools.
Departmentation
Departmentation is concerned with grouping the
various activities into separate administrative units.
It implies grouping of activities and employees into
departments.
Decentralisation
This principle is having greater importance in the
organisation, especially to large enterprises. One
important implication of decentralisation is
delegation of broad authority and decision making
power to the semi-autonomous units.
Principle of Scalar Chain
The vertical dimension of organisation structure
consists of levels of authority arranged in a
hierarchy from the chief executive at the top to the
first line supervisor at the bottom. In organisations,
the scalar chain rep[resents graduations of
distributed authority.
Principle of Span of control
The idea of span of control is related to the
horizontal dimension of an organisation
structure. Span of control refers to the number of
subordinated reporting directly to the executive.
Principle of Unity of Command
A business organisation must have a single head
in who all authority and responsibility is
concentrated. One employee should receive
orders from one superior only. There should not
be losses to one subordinate because it will lead
to divided responsibility and escapism.
Principle of Balance
This principle implies that each area and
function of an enterprise should operate with
equal effectiveness in making its allotted
contribution to total purpose. The idea of
balance applies to organsiation structures as well
as to functions and process.
Principle of Flexibility
Organisation is created to accomplish certain
goals. Both the environment and the individuals
comprising the organisation are constantly in
flux. To cope with these changes and yet reacfh
its objectives, an organisation must be sufficient
amount of flexibility.
Authority and Responsibility
Authority may be defined as the power to make
decisions which guide the actions of another. It
is a relationship between two individuals, one
superior, other subordinate
Responsibility is defined as that obligation of an
individual to carry out assigned activities to the
best of his ability. It is not merely duty that is
assigned but an obligation that the duty is
performed
SPAN OF MANAGEMENT
The grouping of activities to create various
departments presents another problem, that is,
how many individuals should be placed under
one superior. This problem is related to the
horizontal dimension of an organisation
structure. It is called Span of Control, Span of
Supervision. It refers to the number of
subordinates that should be placed under single
superior. The number of subordinates who report
to superior has two important implications.

• It determines the complexity of individual
manager job.
• It determines the shape or configuration of
the organisation.
The classical writers suggest that between 3 to 8
subordinates as ideal depending up on the level of
management.
Determination of Span of Management
V.A.Gracuna a French management consultant has
suggested a mathematical formula to fix the number
of subordinates.
He classified superior and subordinate relationship
into the following:
 Direct single relationship.
 Direct group relationship.
 Cross relationships.
Direct single relationship:-
Direct single relationships arise from the direct
individual contacts of the superior with his
subordinates.
Ex:- A,B,C are subordinates to X
Here three single relationships.
Direct group relationships:-
Direct group relationships arise between the
superior and subordinates in all possible
combinations. Thus the superior may consult his
subordinates with one or more combinations.
Ex:-A with B,B with C,A with C, etc..
Cross relationships:-
Cross relationships arise because of mutual
interaction of subordinates working under the
common superior , such as A and B,B and C,A and
C,C and A etc.. The relationship is quite different
between A and B than B and A from management
point of view because the type of interaction will be
different in both cases.
Gracuna suggest that most ideal span for a manager
is 6 subordinates with 222 relationships. He was
given formulae to find out various relationships
with varying number of subordinates being n, the
number of various relationships will be as follows
Direct single relationship= n
Direct group relationships= n(2n-1
-1)
Cross relationships= n(n-1)
Total relationship=n(2n
/2+n-1)
This formula suggests that while the number of
subordinates increases in geometrical
progression.
Types of Span
Types of Span is divided into two types
• Wider Span
• Narrow Span
Wider Span of management lead to flat
orgnisation whereas narrow span of management
result in term orgnisation structure.
A narrow span leads to many levels in
the organisation and thus require a large number
of managers. This is team leads to larger
expenses in the form of executive remuneration.
Narrow spans also reduce opportunities for
management development. Too many levels
hardly allow for delegation of any real authority
and greatly limit the supervisor to a very few
activities at lower levels. Supervision of too
many people as the other hand can also to
trouble. Supervision will become less effective
because the manager will not have sufficient
time and energy to attend to each of his
subordinates.
Factors The basic idea behind limiting the span
of management is to enable a manager top
manage his subordinates effectively. It is
important for specifying the span of
management. The factors are
• Capacity of superior
• Capacity of subordinate
• Nature of work
• Degree of decentralization
• Degree of planning
• Communication technique
• Use of staff assistance
• Supervision from others
Capacity of Superior:
Each manager has different ability and capacity
in respect of such factors as leadership, decision
making, control and communication etc.

affecting management of subordinates. He should
have capacity in respect of these factors.
Capacity of subordinate:
Capacity of subordinates also affects the degree of
span of management. Efficient and trained
subordinates may discharge their functions more
efficiently without much help of their superior.
They just need broad guidance and rest of the
things can be performed by them. So manager has
to go for wider span. If it is reverse go to narrow
span.
Nature of work:
Nature of work affects the degree of span of
management because different types of work
require different patterns of management and hence
time from superior. If subordinates are performing
similar functions, they require less attention of their
superior and span can be wider. Type of technology
usage also affecting the span of management.
Degrees of Decentralisation:
Centralisation results in manager having less time
to spare for supervising on the other hand, manager
operating under decentralized set-up is relieved of
much of the burden of making programmed
decision and can afford to supervise relatively a
large number of subordinates.
Degrees of planning:
Higher is the degree of plans, particularly standing
plans clearly providing rules, procedures, methods
etc, in doing the work, higher would be the degree
of span of management. In such cases the
subordinates can take actions on their own.
Communication technique
The pattern of communication, it means and media
affect the time requirement in managing
subordinates and consequently span of
management.
Use of staff assistance
Use of staff assistance in reducing the work-load of
managers enables them to manage more number of
subordinates. Many of the managerial functions can
be discharged by these staff personnel on behalf of
the managers, they collect information, process
communication and issue orders and instruction on
behalf of their superior. This process saves time of
managers and the degree of span can be increased.
Supervision from others
It is not very uncommon that a subordinate
receives supervision from several other
personnel besides his direct superior. In such a
case, the work load of direct superior is reduced
and he can supervise more number of
subordinates.
Departmentation
Departmentation is the first real task in
designing an organisation structure is the
identification of activities and to group them
properly. The process of grouping the activities
is commonly known as departmentation. The
term used to denote the departments that result
from departmentation vary a great deal.
Departmentation is useful for
specialisation and fixation of responsibility.
Departmentation helps in the developments of
managers. Development is possible because of
two factors. Focusing on main problems and
identifying training requirements etc. managerial
performance can be measured when the area of
activities can be specified and standards in
respect of these can be fixed Departmentation
provides help in both these areas.
Departmentation concept is arise based
on the organisation functions. These functions
are two types. They are
• Basic functions and
• Secondary functions.
Besides basic and secondary functions, large
organisations may also require some functions to
be performed which will be helpful for the basic
functions. Such functions may be referred to as
staff or service functions which provide help to
basic functions.
In terms of the level at which it is done the
process of departmentation may be divided into
the following three stages
1. Primary departmentation (Initial
break-up of functions into basic
activities)
2. Intermediate departmentation
(creating departments in the middle
levels of the organisation)

3. Ultimate departmentation (i.e. dividing
activities into separate units at the lower
level)
Pattern used in Departmentation:
Several patterns of departmentation are prevalent in
the business world. The most common are grouping
by functions products, territories, process customers
or by time.
• Departmentation By Function
• Departmentation by Product or services
• Grouping by location or Territories
• Departmentation by time
• Grouping by process and equipment
• Grouping by customers
Departmentation by Functions:
If refers to grouping of activities of the
enterprise into major functional departments. With
the growing complexity of administration,
departmentation by function by functions has
become widely accepted and increasing by popular.
Departmentation by functions e.g.
Production, Marketing, Finance and H.R etc. are
the most widely used basis for grouping activities
into administrative units and found in almost every
enterprise at same levels or the other. This is
illustrated in the following figure.
Functional departmentation represents a
very natural and logical way of grouping different
activities of the enterprise. Functional
departmentation facilitates coordination within the
function.
Functional departmentation tends to make
the functional executives so much conscious of
their respective functional areas that the business as
a whole very often remain out of the sight of those
executives.
Departmentation By Product or
Services
When activities associated with each
product or group of closely related products are
combined into relatively autonomous and
integrated units within the overall frame work of
the company, such an organisation is described
as product departmentation. Under this
arrangement an executive is put in charge of all
the activities relating to a product or product line
and enjoys extensive authority over production,
sales, development, service and other functions
pertaining to that particular product, place of
location of product unit is irrelevant here.
Product departmentation is illustrated here
Product departmentation enjoy the advantage of
specialized product knowledge and promotes
coordination of different activities connected
with a particular product
Grouping by location or Territories:
When activities of the enterprise are
physically or geographically dispersed,
providing it with local administration desirable
and at times requires in the interest of efficiency
and economy in operations, such an organization
is viewed as territorial departmentation it may be
mention that grouping by location signifies
adaptation to local needs and facilitates prompt
actions.
Departmentation by Time
Most of us are familiar with the “second
shift’ or the night shift concept. When operations
extend far beyond the normal work period of an
individual it may well be spread over certain

shifts. Such a grouping is frequently termed as
departmentation by time. Enterprise engaged in
continuous process e.g. public utilities, restaurants
and many others departmentalize by times as a
normal arrangement. Grouping by time is more
common with production function of the enterprise.
Grouping by process and equipments
Activities may also be grouped into different
departments on the basis of process involved or
equipment used. Such as grouping is usually
resorted to in a manufacturing concern. Thus, a
cotton textile unit may have separate units for
spinning, weaving, dyeing, inspection and shipping.
Better supervision, optimal use of equipments,
specialization and avoidance of investment in
duplication are the important contribution of such
departmentation
Centralisation and Decentralisation
Cenatralisation and decentralisation are not
absolute terms. There are varying degrees to which
authority can be centralised or decentralized. Thus
absolute centralisation or decentralisation implies
no organsiation.
Centralisation:
Centralisation refers to the tendency to
withhold a larger part of formal authority at higher
authorities of management in the hierarchy. Thus
larger number of decision and more important of
them are made by those occupying higher positions
in the organisation.
Advantages of centralisation (Limitation of
Decentralisation)
 Uniformity of policy and procedure can
strictly be enforced since decision and
controls are largely centralised
 Centralisation helps to eliminate
overlapping or duplicated activities and thus
effects sufficient cost savings
 Centralisation helps in fuller utilization of
talents of outstanding executives for
enterprise as a whole
 Centralisation ensures consistency of
operating and uniformity of decision and
consequently, helps retain substantial
control over activities of the enterprise.
Decentralisation:
Decentralisation refers to the systematic effort to
delegate to the lowest levels all authority except
that which can only be exercised at central
points. Decentralisation is concerned with the
placement of authority with reference to
responsibility.
Advantages of Decentralisation (Limitations
of Centralisation)
 Decentralistion makes for quick decision
and by pushing decision making closest
to the situations improve quality of the
decisions.
 Decentralisation helps to improve
effectiveness of managers. Development
of self-reliant managers is encouraged
 Democratization of management.
 Decentralisation provides actual work
experience to a large number of
managers and thus creates a reservoir of
promotable managerial manpower
 Improved morale of personnel is another
great advantage of decentralisation.
Factors determining the Degree of
Decentralisation:
Both centralisation and decentralisation have
their relative merits and limitation.
Decentralisation is not an easy process
Importance and significance of the decision:
One of the significant factors determining the
degree of decentralisation is the costliness of
decision. Normally decisions which are costly
in-terms of money value involved or in-terms of
factors like goodwill and image of the
establishment, employee morale or motivation
tend to be centralised at the upper levels of
management.
Size of the enterprise:
There is no denying the fact that larger the firm,
the more decisions to be made inviting number
of departments and levels, the harder it is to

coordinate them. The size of the orgnisation should
be so determined that department or units are easily
manageable with authority considerably
decentralized.
Management attitude and philosophy:
Decentralisation is largely a question of character
of top executives and their attitude. People with
rational managerial temperament believe
participatory approach and opt of decentralisation.
Control techniques:
Though decentralisation helps quick decision and
enhances individual initiative, proper control
techniques should be adopted to follow policies for
good corporate governance.
Availability of Capable Managers:
Availability of capable executives substantially
determines the nature and extent of dispersal of
authority and responsibility.
External Factors:
External factors like governmental policies,
unionization and union involvement, competitive
situation also exist certain influence as the mode of
decentralisation.
CONCEPT OF ORGANISATION
STRUCTURE:
Organisation structure is the pattern of relationships
among various components or parts of the
organisation. This prescribes the relationships
among various activities and positions. Since these
positions are held by various persons, the structure
is the relationships among people in the
organisation. There are different types. They are
 Line organisation structure
 Functional organisation structure
 Line and Staff Organisation structure
 Committee Organisation structure
 Matrix organisation Structure
 Virtual organisation structure
 Cellular organsiation structure
 Team organsiation structure
 Boundary less organsiation structure
 Inverted pyramid organsiation structure
 Lean & Flat organsiation structure
LINE ORGANISATION STRUCTURE
It is also known as scalar, military, or vertical
organisation and perhaps is the oldest form. In
this form of organisation managers have direct
responsibility for the results: This concept holds
that in any organisation or hierarchy derived
from a scalar process, there must be a single
head who commands it. The line organisation
can be designed in two ways.
1. PURE LINE ORGANISATION:
Under this form, similar activities are performed
at a particular level. Each group of activities is
self – contained unit and is able to perform the
assigned activities without the assistance of
others
2. DEPARTMENTAL LINE
ORGANISATION:
Under this form, entire activities are divided into
different departments on the basis of similarity
of activities. Each department is placed under
one departmental superintendent. All persons in
the department are subject to control by the
departmental head. The basic objective of this
form is to have uniform control, authority and
responsibility.
Line organisation have following characteristics.

• Line authority and instructions are vertical,
that is, they flow from the top to the bottom.
• The unity of command is maintained in a
straight and unbroken line.
• All persons at the same level of organisation
are independent of each other.
• This structure specifies responsibility and
authority for all the positions limiting the area
of action by a particular position holder
Merits of Line of Line organsiation:
1. Simplicity
2. Discipline
3. Prompt Decisions
4. Orderly Communication
5. Easy Supervision & Economical
Simplicity:
This is organisation is quite simple in both
understanding and implementation. Every person is
clear about what is expected of him. one person is
receiving orders and instruction from only one
superior.
Discipline:
Since each position is subject to control by its
immediate superior position, often the maintenance
of discipline is easy, unity of command and unity of
direction foster discipline among the people in the
organisation
Prompt decision:
Most of the decisions in such organsiation are taken
by the superiors concerned, ,this makes the decision
making process easier and less time consuming.
Demerits:
1. Lack of Specialisation
2. Absence of Conceptual Thinking
3. Autocratic Approach
4. Problems of coordination
5. Lack of ground work for subordinates
training
Lack of Specialisation:
The line organisation does not offer scope for
specialisation. A manager has to perform a variety
of functions which may not necessarily be closely
interrelated. The result is that he cannot make a
very valid decision for all requirements in the
organisation.
Absence of conceptual thinking:
The managers in this system do not find time for
conceptual thinking so essential for
organisational growth and development because
they remain quite busy in their day-to-day
managerial problems. Many time a manager
involved non-managerial functions also which
not only hamper their efficiency but leave little
scope, whatever so, for concentrating on long-
term problems of the organisation.
Autocratic approach:
The line organsiation is based upon autocratic
approach. The line of authority being direct,
demands high level of obedience on the part of
initiative on their part. This may also result into
one-way communication, that is only downward.
Problems of coordination:
Coordination among various activities and the
departments is achieved through horizontal
relationship, whereas the line organisation
stresses only vertical relationship. Thus there are
acute problems of coordination, particularly in a
large orgnisations.
Suitability:-
It is suitable to small – scale organizations where
the number of subordinates is quite small.
FUNCTIONAL ORGANISATION
STRUCTURE:-
It is the most widely used organization structure
in the medium and large scale organizations
having limited number of products. This
structure emerges from the idea that the
organization must perform certain functions in
order to carry on its operations.
Functional structure is created by grouping the
activities on the basis of functions required for
the achievement of organizational objectives.
For this purpose, all the functions required are
classified into basic, secondary and supporting
functions according to their nature &
importance.
Functional structure is created by grouping the
activities on the basis of functional required for
the achievement of organisational objectives.
For this purpose all the functions required are
classified into basic, secondary and supporting
functions according to their nature and
importance.

FEATURES:
1) The whole activities of an organisation are
divided into various functions
2) Each functional area is put under the charge
of one executive
3) For any decision, one has to consult the
functional specialist
4) Limited span of control is there.
MERITS DEMERITS
*Planned specialization
*Facilitates large scale
production
*Disciplinary controls
are well defined
*Offers clear career
paths
*calls for more
coordination
*no clear line of
authority
*slow decision making
lack of responsibility
Advantages:
• High Specialisation
• Clarity in functioning
• No duplication
• Satisfactions
• Control and Coordinate
High specialisation:
Functional structure can result into high degree of
specilisation because a department is concerned
only with one aspect of total activities. Thus the
organisation can employ greater variety of skills.
Clarity in Functioning:
Functional structure brings order and clarity in the
ordanisation by prescribing what one is expected to
do. Everyone understands his job clearly which
adds to efficiency
No Duplication:
There is a economy in the use of organisational
resources because various units of the
orgnisation use the centralised resources of a
line, thus, there is no duplication of activities
and processes which save resources.
Satisfaction:
It promotes promotional achievement as a
person is restricted to his own area of
specialisation. Thus, it provides satisfaction to
specialists.
Control and Coordination:
There is high degree of control and coordination
of functions because all work of one kind is
under one manager. Also there is a cleat chain of
command for communication and authoritative
decisions, however, from total organisation’s
point of view; this poses problems in control and
coordination.
Disadvantages of Functional Organisation
Structure:
 Functional organisation structure
essentially generates slow decision
making process because the problem
requiring a decision has to go to various
departments as all of them have
something to say on the matter.
 Functional structure lacks responsiveness
necessary to cope up with new and
rapidly changing work requirements.
 Functional organisation structure offers
usually line and staff conflicts and
interdepartmental conflict.
Suitability:
The establishment of functional organisation
structure becomes necessary as a small
organisation grows and business activity
becomes more and more complete. Top
management will continue to control decision
that involves strategic and coordinative
variables.
LINE AND STAFF ORGANISATION
It refers to a pattern in which staff
specialists advise line managers to perform their

duties. When the work of an executive increases its
performance requires the services of specialists
which he himself cannot provide because of his
limited capabilities on these matters. Such advice is
provided to line managers by staff personnel who
are generally specialists in their fields. The staff
people have the right to recommend, but have no
authority to enforce their preference on other
departments.
FEATURES:-
 This origin structure clearly distinguishes
between two aspects of administration viz.,
planning and execution.
 Staff officers provide advice only to the line
officers; they do not have any power of
command over them.
 The staff supplements the line members.
MERITS:
 It adds functional specialists to the pure line
organisation and thus aims at combining the
merits of the two.
 The stability and discipline of the line
organisation are preserved only the
specialist is added
 It brings expert knowledge to bear upon
management. Functional specialists provide
expert advice to the management on wide-
ranging matters.
 It provides for better placement and
utilization of personnel and leads to more
skill development
DEMERITS
 The line and staff relationship often lead to
numerous frictions and Jealousies
 Line mangers may depend too much on
staff experts and thus lose much of their
judgment and initiatives
 The staff experts may remain ineffective
because they do not get the authority to
implement their recommendation.
Line & Staff Concepts Criticized:
The behaviorists point out how staff
people originally conceived of as helping the
line personnel tend to be regarded as source of
interference than a source of help. Staff
specialists who are most competent to make
decisions relating to their respective areas of
specialty are deprived of the opportunity to do
so. There are also those who suggest that line-
staff concept is obsolete, and have questioned
the wisdom of, what they call slavish adherence
to the line-staff concept.
Conflicts between Line & Staff:
Ideally, line and staff should work together in
harmony and as an integrated team. But, more
frequently line and staff relations become potent
sources of friction, inefficiency and
organisational ill health. Rivalry between them
very often takes the form of animosity. Both line
and staff have their own view points to offer
relating to this problem.
Line View point:
 Staff undermines line authority
 Staff think in vacuum
 Staff steals Credit
 Staff fails to keep the line informed
 Staff fails to give the sound advice to line
Line personnel enjoy authority to command and
act to achieve enterprise goals. Staff is expected
to give advice. Failure to recognize this and
frequent encroachment by staff over line
authority and prerogatives become the cause of
friction.
Staff Point of View:
 Lack of authority to command line
subordinates
 Resistance to change by the line
 Inability to make proper use of staff
Allured by the special skill and ability in a
particular field the staff is tempted to think that
the solution to the problem recommended by
him is best and needs be enforced on the line

manger. Line is also charged with being short-
sighted and resistant to change
Minimasation of Conflict:
Line and staff are a matter of authority
relationship having a direct bearing upon the
organisational health. If in an organisation, line and
staff work as an integrated team, organisational
efficiency and effectiveness is bound to improve.
But even under the best of circumstances possible
of conflict cannot altogether be eliminated, since
cooperation cannot be forced: rather people be
persuaded to cooperate. Coordination and
cooperation between line and staff can be ensured
under the following conditions.
• Line and Staff should understand their
proper position in the organsiation. Staff
should know that advising the line is their
exclusive function. Similarly a line
executive enjoys authority to common and
is directly responsible for accomplishing
enterprise objectives. Thus, proper
understanding of their respective role and
relationship in the organsiation structure
will go a long way to minimize the conflict
between line and staff
• Line should be educated and encouraged to
use staff effectively
• Staff should realize that resistance to change
is partly natural. They should therefore,
work for overcoming resistance to change.
Staff should work as the assumption that it
has to sell new ideas. Line executive should
be encourage to participate in the proposed
scheme of change
• Staff should realize that it commands
respect and reputation in the organisation
due to its skill and expert knowledge in a
particular field. Thus, staff should
constantly strive to acquire and increase its
proficiency
• Staff should render complete advice on the
problem concerned. They should present
realistic recommendations and solution
based on full consideration of all the
pertinent facts
SUITABILITY:
It can be followed in large organizations where
specialization of activities is required, because it
offers ample opportunities for specialization.
MATRIX ORGANISATION
STRUCTURE
Matrix organisation structure is essentially a
violation of unity of command and therefore,
whole classical concepts related to the principle
of unity of command are violated. Matrix
structure is the realisation of two-dimensional
structure which emanates directly from two
dimensions of authority. Two complementary
structures – pure project structure and functional
structure are merged together to create matrix
organisation structure. It shows many
organisations overlap not only in-terms of
command but also in-terms of common system
but also in terms of whole organisational
processes and behaviour. For example
It is also called project organization. It is a
combination of all relationships in the
organization, vertical, horizontal and diagonal. It
is a mostly used in complex projects. The main
objective of Matrix organisation is to secure a
higher degree of co-ordination than what is
possible from the conventional, organizational
structures such as line and staff.
Design of Matrix Organisation Structure
In matrix organization structure, a project
manager is appointed to co-ordinate the
activities of the project. Personnel are drawn
from their respective functional departments.
Upon completion of the project, these people
may return to their original departments for
further assignment. Thus each functional staff
has two bosses his administrative head and his
project manager. During his assignment to a
project, he works under the coordinative
command of the project manager and he may be
called upon by his permanent superior to
perform certain services needed in the project.
Thus, a subordinate in matrix structure may
receive instructions from two bosses. Therefore
he must coordinate the instructions received
from two or even more bosses. Similarly matrix
superior has to share the facilities with others.
He reports in a direct line to the up, but does not

have a complete line of command below. The
structure is
Merits
1. It offers operational freedom & flexibility
2. It focuses on end results.
3. It maintenance professional Identity.
4. It holds an employee responsible for
management of resources.
Demerits:-
1. It calls for greater degree of coordination,
2. It violates unity of command.
3. Difficult to define authority &
responsibility.
4. Employee may be de motivated.
Suitability
It can be applicable where there is a pressure for
dual focus, pressure for high information
processing, and pressure for shared resources.
Ex:- Aerospace, chemicals, Banking,
Brokerage, Advertising etc..,
COMMITTEE ORGANISATION
A committee does not represent a separate type of
organization like line and staff, or functional. It is
rather a device which is used as supplementary to
or in addition to any of the above types of
organizations. A committee may be defined as a
group of people performing some aspects of
Managerial functions. Thus, a committee is a body
of persons appointed or elected for the
Consideration of specific matters brought before it.
it is having limited scope in activities. Members
of the committee have authority to go into the
details of the problems. This authority is expressed
in terms of one member one vote. It means may be
drawn from various departments.
Definitions:
“A committee consists of a group of people
specifically designated to perform some
administrative work” W.H. Newman
“ A committee is a body of persons appointed or
elected to meet on an organised basis for the
consideration of matters brought before it.
Allen
Objectives:
 To give participation & representation to
different group
 To co-ordinate the activities of different
departments
 To review the performance of certain
units
 To facilitates communication & co-
operation among diverse groups
Types of Committees:
Formal & Informal Committees:
Formal Committees are formulated on the basis
of organisation policies. It is a part of the
organisation. They are shown on the
organisation chart
Informal committees are not formulated by the
management. When any problem is arised in the
organisation the employees informally meet and
discuss about it.
Executive Committee:
Whenever committees are vested with line
authority. They are called executive committees.
They are not only take decision but also enforce
decision. An executive committee has authority
to make & execute decision
Advisory committee:
It will give advice to line heads on certain issues.
These committees have no managerial powers &
cannot exert their views on line executives. They
have only recommendatory role.
Ex: Sales Committee, Finance Committee, Work
Committee etc.
Standing or Adhoc Committee:

It is for indefinite period of time. Adhoc Means
Temporary
Line Committee
It is having administrative power. It help in
planning the company policies. These committees
also direct & control the activities of employees for
achieving organisation goals
MERITS DEMERITS
*Pooling of Knowledge
*Effective co-ordination
is available
*Effective
Communication
*Motivation through
participation of
employees
*Slow decisions
*Most Expensive
*Difficult to maintain
secrecy
*Compromise
Boundary Less Organization:-
Problems with traditional organizational
structures:-
1. Slow/poor in responding customer
requirement.
2. Failure to get things to done.
3. Customer/vendor has a hard time dealing
with the organization.
4. Lack of flexibility to changing mission
needs/rapidly changing World
What are the boundaries?
 Vertical: Boundaries between layers
within an organization.
 Horizontal: Boundaries which exist
b/w organizational departments.
 External: Barriers between the
organization and the outside world.
(Customers, suppliers other govt.
committees).
 Geographic: Barriers among
organization units located in
different countries.
Problem:-isolation of innovative practices &
ideas.
What is boundary less Organisation?
It may be defined as an organisation structure
that can avoid all the barriers (vertical,
horizontal, external, geographic) much more
permeable than they are now;
Boundary less organisation allows free flow of
ides/information / resources throughout the
organisation and into others.
A boundary less organisation is the opposite of a
bureaucracy with numerous barriers and
division. In contrast, the organisation without
boundaries offers interaction and networking
among professionals inside and outside the
organisation. The organisation model is fluid and
highly adaptive, much like an open system in
biology.
Jack Welch, former CEO of General Electric,
stated his vision for the company as a
“boundary-less company”. By this he meant an
“open, anti-parochial environment, friendly
toward the seeking and sharing of new ideas,
regardless of their origin.” The purpose of this
initiative was to remove barriers between the
various departments as well as between domestic
and international operations. To reward people
for adopting the “integration model,” bonuses
were awarded to those who not only generated
new ideas but also shared them with others.

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