Management Principle and Application Unit 3 : Organising Notes For 3rd Semester As per CBSE New syllabus - Guwahati University | The Treasure Notes

SHORT TYPE QUESTIONS & ANSWERS 1. What is organisation? Ans: Organisation is a structural framework of duties and responsibilities to be performed..
Management Principle and application 3rd Semester,Guwahati University,


  • Concept and process of organising - An overview, Span of management, Different types of authority (line, staff and functional), Decentralisation, Delegation of authority.
  • Formal and Informal Structure; Principles of Organising; Network Organisation Structure.



Unit 3- Organising 


1. What is organisation?

Ans: Organisation is a structural framework of duties and responsibilities to be performed by the people working in the various departments, thus attaining the predetermined business goals through organization.

2. What is span of control?

Ans: The concept of span of control refers to the number of subordinates who are directly reporting to a superior. It also refers to the number of subordinates who can be effectively and efficiently supervised directly by a manager or superior.

3. What is authority?

Ans: Responsibility without authority is meaningless. Authority is the right vested in a managerial position, which enables the manager occupying that managerial position to command subordinates, to take decisions and to use organizational resources all for the purpose of facilitating and ensuring the attainment of enterprise objectives.

4. What is Responsibility?

Ans: Responsibility is the reverse of authority. It is the obligation or duty or liability owed by a subordinate to the superior for the proper and efficient discharge of the job; for which authority has been granted to the former i.e. the subordinate. 

5. What is Accountability?

Ans: Accountability is the obligation of a subordinate to report back to his superior that the job entrusted to him has been completed. When an individual gets authority from his superior, he becomes obliged to render an account of how he has used his authority.

6.What is formal organisation?

Ans: An organisation, by definition, is always formal i.e. deliberate. The group of individuals without being moulded into an organization is merely a mob or a crowd-incapable of attaining anything useful. An organization is not assumed by any individual of his/her own accord; but is carefully and deliberately assigned to the individual by the management matching the abilities and skills of the individual with requirements of the job.

7. What is informal organisation?

Ans: Informal organisation refers to the relationship between people in an organisation based not on planned structure for taking up the activity. It is generally based on personal attitudes, prejudices likes and so on. People works here not on the basis of procedures and regulations but on some taste, culture etc. Informal organisation not created but they appear at their own in a natural way in the formal organisation.

8. What do you mean by organisation structure?

Ans: An organisation structure is a framework of authority and responsibility relationships between various positions in the organisation and also clarifies who reports to whom. It is generally shown on an organisation chart. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organizational goals.

9. What is delegation?

Ans. According to O.S. Hiner, 'Delegation takes place when one person gives another the right to perform work on his behalf and in his name and the second person accepts a corresponding duty or obligation to do what is required of him.

10. What is centralisation?

Ans. Centralisation is the kind of delegation of power where power to take decision vests in one person at the top. According to H. Fayol, 'Everything that goes to increase the importance of subordinate's role is decentralisation, everything which goes to reduce it is centralisation.

11. What is scalar principle?

Ans: The chain of command or line of authority from the top to the bottom of the organizational hierarchy should be such that every subordinate knows who has delegated authority to him and to whom matters beyond his authority must be referred. Decision-making should follow the established chain of authority. The limits of authority within which subordinates can exercise initiative should be clarified.

12. What is organisation chart?

Ans. Organisation chart is a diagrammatic presentation of relationship in an enterprise. According to Terry, "Organisation chart is a diagrammatical form which shows important aspects of an organization including major functions and their respective relationships, the channel of supervision and relative authority of each employer who is in charge of each respective function.

13. What is decentralisation of authority?

Ans: Decentralisation of authority means the dispersal of decision making power at lower levels of management. The aim of decentralisation is to grant all the authority to make a particular division or department autonomous. It enables each department to decide on all matters concerning the department expect those matters which need to be left to the top management.

In the words of Louis Allen, "Decentralisation refers to the systematic efforts to delegate to the lowest levels of authority except that which can only be exercised at the central point."

14. Define functional organisation

Ans. Functional organisation was developed by F.W. Taylor. In functional organisation, the task of management and direction of subordinates should be divided according to the type of work involved. All activities are grouped according to certain functions like production, marketing, finance etc. and are put under the charge of different persons 

15. Define and explain organisation as a process.

Ans: Organisation as a process because organisation is concerned with arranging in a logical and orderly manner the activities of all the employees. It specifies how the duties are to be divided among the departments and the employees. It creates relationship of one job to another and lays down the scope or limits of authority and responsibility of each job. It also provides for achieving co-ordination between the activities of various individuals, and department.

Organising involves the following steps: 

(i) Identifying and division of work.

(ii) Creation of departmentation 

(iii) Assignment of duties.

(iv) Establishing authority-Responsibility relationships. 

16. Explain organisation as a structure.

Ans: An organisation structure is a framework of authority and responsibility relationships between various positions in the organisation and also clarifies who reports to whom. It is generally shown on an organisation chart. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organisational goals.

17. Define organisation as a group activity. 

Ans: Organisation is a process of identifying and grouping the activities of the enterprise. The total work of the organisation is grouped into major functional activities and each such functional activity is further sub-divided into different jobs. Grouping of activities is essential because entire work cannot be done by one individual. Each job consist of certain related tasks to be carried out by the job holder. Grouping of activities is carried out to do all work systematically and to facilitate specialisation in the organisation. This would increase the efficiency of the firm.

18. What is centralisation of authority?

Ans: Centralisation refers to the systematic reservation of authority at the top level in the organisation. It refers to concentration of decision making authority. In centralised organisation top management has the absolute authority for making almost all the decision. It is generally successful in small-scale enterprises where proprietor is able to devote proper time for every activity. With the expansion of business the control becomes difficult and the need for decentralisation arises.

19. Give five guidelines for effective organization. 

Ans: Five guidelines for effective organisation are namely -

(i) Plan the structure (of organisation) 

(ii) Improve members' understanding through charts and manuals.

(iii) Balance centralization and decentralization.

(iv) Avoid granting of authority without responsibility and vice-versa. 

(v) Avoid line-staff conflicts, at all costs.

20. What are the four important types of organisation? 

Ans: The four important types of organisation are:

(i) Line organisation

(ii)Functional organisation

(iii) Line and staff organisation

(iv) Committee form of organisation.

21. What are the three basic elements of delegation?

Ans: The three basic elements of delegation

(i) Designment of responsibility

(ii) Grant of authority

(iii) Creation of accountability.

22. Write six factors responsible for the emergence of informal organisation.

Ans: Six factors responsible for the emergence of informal organisation are:

(i) Desire to socialize with others.

(ii) Necessity for exchanging information.

(iii) To release boredom caused by modern specialization.

(iv) Need for collective action against the high-handedness of management.


1.What are the different complaints of line managers against staff ?

Ans: Line managers have the following complaints against staff: 

(a) Staff officers claim credit for programmes which are successful but do not want to share responsibility for their future. The blame for unsuccessful tasks is thrust on line managers even though they act on the advice of the staff.

(b) Staff officers are more theoretical than practical. They tend to give advice, which has not been tested earlier. They emphasize their field of specialization without giving much thought to the overall interest of the company.

(c) Staff officers do not remain contended by giving advice only. They try to persuade the line for implementing whatever they have suggested. They trespass their field of activity and enter the area meant for line people.

(d) Though staff officers are well qualified and have good knowledge of their field but try to dominate line officers. They feel themselves superior to line officers. This type of tendency creates conflicts and friction between line and staff officials

2. What are the differences between centralisation and decentralisation?

Ans. The differences between centralisation and decentralisation are as follows:

(i) Size and complexity of organisation : In case of bigger concerns, there is a need to decentralise authority to lower levels in the organisation. When concern is small then centralisation will be useful.

(ii) Communication system: When communication system is good, then top management can control the operations and centralisation is preferred. While, if communication system is slow and ineffective then decentralisation should be used.

(iii) Competence of personnel : When competent personnel are available in the organisation, then power should be delegated to various levels.

In case of incompetent persons, decision making should be retained at higherevel. 

(iv) Spread of activities: If a business has different plants or unitss.situatedat different places then decentralisation will be essential. While finance function should be centralised in such a business to ensure effective control over assets and capital expenditure.

3. What are the steps or elements in the process of delegation? 

Ans: The following elements are involved in delegation :

(1) Determining the result expected: The first step in delegation process is the determination of results expected from a position or subordinate. Assignment of task will be meaningful only when the subordinate clearly understands the results that he has to achieve. 

(ii) Assignment of duty : People in the organisation are assigned jobs and duties. It means that superior asks to subordinate to perform a particular work within a given period of time. Duties can be described in terms of functions or in terms of goals and results.

(iii) Grant of authority: In order to enable the subordinate to discharge their duties effectively, he must be granted proper authority. The subordinate can only perform the work when he has authority required for accomplishing task.

(iv) Creation of accountability: Accountability is the obligation to carry out responsibility and exercise authority in terms of performance standard established. It means holding an individual answerable for final results. The subordinates is held accountable to the superior.

4. Distinguish between centralisation and decentralisation of authority. 

Ans: Following are the distinguish between centralization and decentralization:

(i) Centralisation means that the authority for most decisions are concentrated at the top of the managerial hierarchy. But decentralization requires such authority to be dispersed by extension and delegation through are levels of management. 

(ii) Centralisation is possible only in case of small organisation. On the otherhand decentralization is essential in large big organization.

(iii) Under centralisation, middle and lower level managers are not empowered, so in these level decision can be taken. But under decentralization system, middle and lower level managers can taken necessary decision. 

(iv) Under centralisation system, almost control power is reserved by the top management. But in case of decentralization system necessary powers and authorities are granted to the middle and lower level managers.

(v) Under centralisation, creativity and innovative power among middle and lower level managers are not emerged. But the decentralization system can increase the creativity and innovation power among the middle and lower level managers. 

5. Explain in brief any six points which highlight the importanceof decentralisation in an organisation.

Ans: The importance of decentralisation would be clear by examining its advantages to an organisation:

The advantages of decentralisation are as follows:

(i) Reduction of workload of higher level executives : Since authority is delegated to the lower levels, the top management is relieved of taking operational decision. It needs to concentrate on corporate planning and control and coordination of the activities of different departments.

(ii) Quick decision-making : In decentralisation, decisions are taken at the level where problems are faced. This speeds up the process of decision making.

(iii) Motivation of personnel : Decentralisation is a means of empowerment of the lower levels. The employees at the lower level who have power to take decisions enjoy psychological satisfaction and feel motivated.

(iv) Growth and diversification : Decentralisation facilities diversification of business activities. The business firm can create new departments or divisions to handle new products and services.

(v) Initiative and creativity: When employees are given greater degree of authority or authority, they get an opportunity to take initiative. They come out with innovative ideas for the benefit of the organisation. 

(vi) Better co-ordination: The top management can give sufficient attention to the coordination of the activities of different divisions. Coordination within each division is the responsibility of the respective divisional managers who are granted sufficient autonomy.

7. Write about the Types of span of control

Ans: The span of control can be of two types i.e. wide span of control and narrow span of control: 

(a)Wide span of control: Wide span of control means a manager can supervise and control effectively a large number of persons at a time It is because shorter span of control leads to rise in number of steps or levels in vertical chain of command which leads to tall organization. Wide span of control has features as it leads to maximized communication, better supervision; better co-ordination; suitable for routine and easy jobs, prompt response from employees; less overhead cost of supervision and greater ability to respond to environmental changes. A wide span of control results in an organization that has relatively few levels or steps of management which can be termed as flat or horizontal organization. Wide span of control is suitable when people are competent, prefer low supervision and tasks are similar and standardized. Simon pleads for wider span of control. It is because shorter span of control leads to rise in number of steps or levels in vertical chain of command which leads to tall organization. This makes vertical communication difficult and indirect. Wider span of control leads to maximized communication.

(b) Narrow span of control: When the work and authority is divided amongst many subordinates and a manager supervises and controls a small group of people, then narrow span of control exists. It adds more layers or levels of management and so leads to tall organization. Main features of narrow span of control are as specialization work can be achieved; work which is complex and requires tight control and supervision, there narrow span of control is helpful; messages can be distorted; co ordination is difficult to achieve; communication gaps can come; more overhead cost of supervision and no quick response to environmental changes. When the span of control is narrow'then the structure of the organization is tall and there may be ineffective, inaccurate and incomplete communication which could lead to decreased morale, increased executive payroll and red-tapism.

8. What are the characteristics of organization? 

Ans: Following are the main characteristics of organization:

(a) Two or More persons: An organization is a system of co-operative relationships of two or more persons. The group may be large or small. An organization may be formal or informal but it must consist of at least two persons or more.

(b) Common Objectives: An organization exists to achieve some common objectives. It is not an end in itself but a means to attain common objective. The group of people contributes their efforts towards the attainment of the objectives. The success and failure of an organisation is measured in terms of attainment of its objectives.

(c) Division of Work: The total work of the organization is divided among different persons to improve the efficiency of work. When work is divided and assigned to individuals, they need to be organized in groups and bound by authority relationships.

(d)Communication: People who form the organization are in position to communicate each other through set communication network Without proper communication network, there will be delay in exchanging their views, thoughts and facts that may cause wastage of time, money and material as well as inefficiency.

(e) Co-operative Efforts: The members of an organization must have willingness to co-operate objectives. Managers establish co-operative relationships both horizontally and vertically among the members of the organization. The success of an organization depends on the co-operation of the members. S Rules and Regulations: Rules and regulations lay down authority and responsibility among the members. These rules and regulations ensure systematic working of the organization.

(g) An on going process: Organizing is a process, which involves a series of sequential steps to be performed from determination of objectives to the accomplishment of objective. It is not a one-time process undertaken by members, rather it is a continuous or an ongoing process, which requires the management to keep bringing about changes in the way, an organization works

(h) Chain of command or Hierarchy of Authority: Authority always passes to the lowest level of management from the top level. Consequently all the subordinate managers become responsible to their respective superior managers. Thus in every organisation, there exists authority. responsibility relationship.

12.What are the different principles of organizations?

Ans: Different principles of organization are discussed below - 

(a) Consideration of unity of objectives: The objective of the undertaking influences the organization structure. The organization structure. The organization is a mechanism to achieve our goals. Objectives must be clearly defined for the entire enterprise, for each department and even for each position in the organization structure.

(b) Specialization: Greatest output can be obtained when each person concentrates on doing the thing for which he/she is best qualified. Effective organization must include specialization. Precise division of work facilitates specialization. However, each area of specialization must be inter-related to the total integrated system by means of co-ordination of all departments and activities.

(c) Co-ordination : Organization involves division of work among people whose efforts must be co-ordinated to achieve common goals. Co-ordination expresses the principles of organization in toto; nothing less. Co-ordination is the orderly arrangement of group effort to provide unity of action in the pursuit of common purpose. Co-ordination aims at higher efficiency and effectiveness.

(d) Scalar Principle: It points out clear unbroken line of authority. It is also called chain of command. The line of authority flows from the highest executive to the lowest managerial level and the chain of command should be broken. It should be short i.e. we should have few levels of management.

(e) Responsibility: Authority should be equal to responsibility i.e. cach manager should have enough authority to accomplish the task. Similarly, the responsibility of the superior for the acts of his subordinate is absolute.

(f) Efficiency: The organization structure should enable the enterprise to attain objectives with the lowest possible cost-money cost as well as human cost. An efficient organisation structure operates without wanting its scarce resources. It permits maximum use of its human resources and talents.

13. Explain the different steps of organization process.

Ans: The process of organizing involves the following sequence or steps:

(a) Determination of Objectives: An organization is established for the purpose of attainment of some objective or goal. For the achievement of this goal, it is necessary to first determine the overall tasks of the organisation. The determination, of total workload of an organisation is the first step in the process of organizing.

(b) Determining Activities: The first step in organizing is to identify and define the activities to be performed, to achieve predetermined objectives. The activities required will depend upon the nature and size of the enterprise.

(c) Grouping Activities: Once activity is defined, the next step is classify them into manageable units so that these can be assigne individuals. Grouping of activities is called departmentation. Relate similar activities are grouped in the same department or division. Each division or department may be subdivided into sections. While grouping activities, the following factors should be kept in mind:

(i) There should be maximum possible 'specialization' so that work is performed efficiently.

(ii) Grouping of activities should facilitate 'Co-ordination among different department. 

(iii) There should be 'economy' in the administrative expenditure. 

(iv) It should be easy to exercise control' over the performance of individuals.

(v)Adequate 'attention should be paid to each and every activity. 

(vi) The 'nature of activities' should be considered.

(vii) The number, needs, preferences and limitations of employees should be taken into account.

(d) Assigning Duties: The various groups of activities are allotted to different individuals. While assigning activities, their abilities and aptitudes should be duly considered. Each person should be given a specific job best suited to him and he should be made responsible for its performance.

(e) Delegating Authority: Mere assignment of duties is not enough unless each individual is given the authority to perform the assigned task. An individual cannot perform his duty without getting the rights and powers to do it.

(f) Determining Relationships: It is also necessary to determine the relationships between the individuals. Therefore, organizers should determine who is the boss and who are his subordinates, who is accountable to whom etc. This will create chain of command or managerial hierarchy in the organization.

(g) Allocating Resources: An organization cannot work effectively without adequate resources. The next logical step therefore, is to allocate resources needed at all the levels of the organization.

(h)Setting co-ordinated system: The ultimate step in the process is set co-ordination mechanism in the organisation. Co-ordination hanism is essential because in enables organization members to keep it on the goals and reduce inefficiency and harmful conflicts.

14. Discuss various nature of organization

Ans: Various nature of organization is discussed below:

(a) It is static concept: - Organization refers to the structure of relationships among positions and jobs, which are created for the realization of the set objectives. In this, the static sense of the term organisation is concerned with the building, developing and maintaining a structure of working relationships so as to achieve the objectives of an enterprise.

(b) It is a Dynamic Process: - Organization is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.

(c) Structure of Relationships: - Organization is a system of well defined tasks and duties assigned to different people along with the delegation of formalized authority, responsibility and accountability. This results in a system of formal structure of organization. Constant interaction amongst individuals give rise to social interrelationships also and subsequently there arises a structure of informal organization.

(d) Encourages teamwork: Since the early times, people always lived in groups. With increase in the size of these groups, it was not possible for one person to accomplish the organizational task alone. The work, therefore, got divided among different individuals and each individual co-ordinated his activity with that of the other. This required the organization of the group to work towards the achievement of goals.

(e) Foundation of Management: The success of any business organization is based upon its sound organisation. The validity of soundness of any business organization is not open to any kind of questioning. In fact, clear definition of jobs of the organization; their division amongst various members with clear identification of their authority and responsibility is the basic foundation of successful management. Unless there is clarity of who is responsible to whom, no management can function effectively.

(f) Goal-oriented: Whether it is a business or a non-business organisation, it is always set-up for the accomplishment of a specific objective of profit or service. It is only for the successful achievement of this goal that all the organizational activities are divided amongst members, departments are created, the work of different departments is co-ordinated and a continuous monitoring of the various activities is done. The entire process of organization is, thus, a goal oriented process.

(g) Adaptive to change: Though the organization structure is created to provide stability to the activities of members, it is also open to change. Any change in the environment, internal or external, has to be incorporated into the existing organization structure so that it can effectively carry out its functions.

(h) Situational: No structure of organization can be designated as the best. Depending upon the nature of activities, size of the organization and nature of inter-relationships amongst people, the organization structure also varies.


Also Read

Unit - 1 Introduction 

Unit - 2 Planing 

Unit - 3 Organising 

Unit - 4 Staffing and Leading 

Unit - 5 Controlling


15. Explain the various factors affecting span of management.

Ans: Various factors affecting span of control are discussed below (a) Superior Related Factors: The number ofsubordinates that a manager can supervise effectively is significantly determined by his own personal qualities. Important among them are: (i) has abilities and competence(ii) supervisory style, and (iii) delegation of authority.

(i) Abilities and competence: The number of subordinates a manager can effectively supervise depends on his own abilities and competence.

(ii) Supervisory Style: If a manager supervises closely, he can handle a relatively fewer subordinates. On the other hand, if he defines his subordinates tasks and responsibilities clearly, supervises by the 'exception principle' and hold them responsible for results, he can have a wider span of management.

(iii) Delegation of Authority: This is yet another superior related factor that influences span of management. A manager can supervise a relatively larger number of subordinates if he delegates them adequate authority to make their job-related decisions, provides them scope to take initiative and motivates them to take responsibility.

(b) Subordinate Related Factors: The number of subordinates a manager can effectively supervise also depends on the kind of subordinates he has. These subordinate related qualities are their: (i) abilities and competence; (ii) motivation and commitment and (iii) need for autonomy.

(i) Abilities and competence: The abilities and competence of subordinates are a significant factor in influencing the span of management. Subordinates, who are well trained in their job and possess abilities and competence to perform their tasks, need less of their superior's time in problem solving and supervision. This permits a manager to have a wider span of management.

(ii) Motivation and Commitment: Subordinates who are motivated to take initiative and responsibility and to utilize and develop their abilities, need less to their superiors' time.

(iii) Need for Autonomy: Subordinates with high need for autonomy prefer to make most of their decisions themselves, whereas the dependent type take their problems to their superior for decision making and consequently put more demand on his time.

(c) Organizational Factors: A number of organizational factors also influence the span of management. Major among these factors are: (i) nature of tasks; (ii) y location (iii) plans and policies and (iv) objective criteria of performance evaluation and (v) rate of change.

(i) Nature of Tasks: If tasks are simple, repetitive and programmed, it will need less of the supervisor's time to plan, direct and control their performance. Complex and variable tasks need more supervisory time in consultations and decision-making. Moreover, if all or most subordinates of a manager are engaged in the performance of similar or identical tasks, he will have to devote less of his time to their co-ordination and control.

(ii) Geographical Location: If all or most subordinates are located in the same place or in the same building rather than dispersed in different geographical areas, a manager can have a wider span of control.

17. Explain the three types of Authority in organisation.

Ans: Three main types of authority can exist within an organization: Each type exists only to enable individuals to carry out the different types of responsibilities with which they have been charged.

(i)LINE AUTHORITY: The most fundamental authority within an organization, reflects existing superior-subordinate relationships. It consists of the right to make decisions and to give order concerning the production, sales or finance related behaviour of subordinates.

In general, line authority pertains to matters directly involving management system production, sales, finance etc., and as a result with the attainment of objectives. People directly responsible for these areas within the organization are delegated line authority to assist them in performing their obligatory activities.

(ii) STAFF AUTHORITY: Staff authority consists of the right to advise or assist those who possess line authority as well as other staff personnel. Staff authority enables those responsible for improving the effectiveness of line personnel to perform their required tasks.

Line and Staff personnel must work together closely to maintain the efficiency and effectiveness of the organization. To ensure that line and staff personnel do work together productively, management must make sure both groups understand the organizational mission, have specific objectives, and realize that they are partners in helping the organization reach its objectives.

Size is perhaps the most signiti nt factor in determining whether or not an organization will have stafi,sonnel. The larger the organization, the greater the need and ability to employ staff personnel.

As an organization expands, it usually needs employees with expertise in diversified areas. Although small organizations may also require this kind of diverse expertise, they often find it more practical to hire part time consultants to provide it is as needed rather than to hire full time staff personnel, who may not always be kept busy.

(iii) FUNCTIONAL AUTHORITY: Functional authority consists of the right to give orders within a segment of the organization in which this right is normally non existent.

This authority is usually assigned to individuals to complement the line orstaff authority they already possess. Functional Authority generally covers only specific task areas and is operational only for designated amounts of time. It is given to individuals who, in order to meet responsibilities in their own areas, must be able to exercise some control over organization members in other areas.

18. What is line organisation? What are its different features?

Ans: Meaning: Line organization or Scalar organisation is the oldest type of organisation .It is also known as military organisation because it was developed in the army. Line organization is characterized by direct lines of authority flowing from the top to the bottom level of the organizational hierarchy and lines of responsibility flowing in an opposite but equally direct manner. These direct vertical flows of authority and responsibility create superior subordinate relationship or a scalar chain from top to bottom where one person delegates authority to his subordinate and who in turn delegates to his subordinate and so on. The line of authority consists of the uninterrupted series of authority steps.

Features: The basic features of line organisation are as follows __

(i)Ther is a scalar chain from the top to the bottom of the organization.

(ii) There is no provision for staff experts. 

(iii) Orders and instruction flow from a superior directly to his subordinates.

(iv) Each subordinate is directly responsible to his superior for work performance.

(v) Each superior is independent and takes decision in his own area of work.

(vi) Every individual is responsible to his executive only. 

(vii) There is a direct vertical flow of authority and every person is in the chain of direct command.

(viii) Authority is highest at the top and reduces through each successive level down the scalar chain.

(ix) The planning and doing aspects of a job are combined in the same individual.

20. What is line and staff organisation? What are its different features?

Ans: Meaning: Line refers to those positions and elements of the organization, which have the responsibility and authority and are accountable for accomplishments of primary objectives. Staff refers to those elements, which have responsibility and authority for providing advice and service to line in attainment of objectives.

According to Louis Allen, Line functions are those, which have direct responsibility for accomplishing the primary objectives of the organization. Staff refers to those elements of the organization that help the line in the attainment of organizational objectives by providing advice and service. Line executives exist to take and execute decisions while staff executives exist to provide specialised knowledge for taking decisions.


(i) There are two types of authorities -Line authority and staff authority. 

(ii)There is a direct chain of command from the chief executive to the lowest level manager.

(iii) Staff experts have the authority to advise, support and serve. Their role is advisory and they donot have the right to take decisions. They cannot directly issue orders and instructions to people in other departments. 

(iv) Activities of specialised natures are separated from the main orbasic activities and groups into separate units. For example, repairs and maintenance, quality control, marketing research, recruitment and training of employees are separately grouped to ensure specialization. (v) Unity of command is maintained, as staff experts do not have line authority except within their own units.

21. What are the different types of Staff? Mention the advantages and disadvantages of line and staff organisation? 

Ans: Staff specialists can be of three kinds as given below:

(a) Personal Staff: Personal staff consists of personal assistants attached to key line executives. Its main function is to assist the line executive in his day-to-day work. For example, private secretary or personal assistant to the managing director is a personal staff member. 

(b) Specialised Staff: Specialised staff includes experts who have specialised knowledge in specific fields such as accounting, purchasing. public relations, engineering, personnel management etc. They provide specialised advice and assistance to all departments in the enterprise. 

(c) General Staff: Such staff positions are created to provide general assistance. Typing section, dispatch section, etc. are examples of general staff. A

 The advantages of line and staff organisation are given as follows -

(a) Planned Specialization: Line and staff organization offers the benefits of systematic specialization. The expert advice of specialists is made available to line executives at all strategic points. This enables higher efficiency in management.

(b) Better Co-ordination: Greater co-ordination becomes possible because staff supplies complete factual data to line executives. 

(c) Sound Decisions: The line officer can take better decisions with the help of information and advice from staff experts. Proper balance among various activities is maintained.

(d)Discipline: The staff does not disturb the scalar chain and unity of command is maintained. As a result, discipline and stability can be maintained in the organization.

(e) Better utilization of personnel: Line executive can concentrate fully on execution of work as the function of investigation and advice is taken over by staff. Departmental managers are not overburdened with technical details.

(f)Opportunity for Advancement: A greater variety of responsible positions exist in line and staff organisation. Therefore, this system offers more opportunity for advancement of personnel. Young staff executives get training in their respective fields.

(g) Greater Flexibility: Line and staff organisation provides greater scope for the growth and expansion of business. The staff component helps in taking care of increasing complexity caused by expansion and environmental charges.

Disadvantages: The disadvantages of line and staff organisation are discussed below

(a) Confusion: Authority and responsibility relationship become more complex and people at lower levels may be confused as to whom they are accountable and how. Relations between line and staff may not always be clear. This may hamper co-ordination.

(b) Line and Staff conflicts: Conflicts between line executives and staff experts are very common. Line managers may ignore staff advice thinking it impracticable. They may overlook staff also because of suspicion or mistrust. An over enthusiastic staff may encroach upon line authority to get its suggestion .

22. Explain the different conflict between Line and staff organisation? Give some remedial measures for resolving this conflict?

Ans: An unfortunate result of the line and staff concept is that it often results into some sorts of conflicts. In fact, there is a continuous warfare, sometimes open and sometimes concealed between them. Conflict arises when any of them fails to appreciate the viewpoint of the other. When a conflict between line and staff arises, both the parties try to explain the causes of conflict in terms of behavior of the other.

A. Grievances of line Against Staff: The important causes of line and staff conflict as reported by line men are discussed below

(i) Staff officers' encroach upon the line authority. They interfere in the work of line managers and try to tell them how to do their work.

(ii) Staff does not know its place and wants to assume line authority. This feeling is generated more where the staff advisor forget his position of have to be helpful rather than being in position to dictate.

(iii) Staff takes full credit for successful programmes and hold line people wholly responsible for unsuccessful schemes.

(iv) The advice of the staff is academic and is devoid of reality. Since they are not involved in the real work situations, their ideas are impractical. 

(v) Staff men generally fair to see the whole picture objectively as they are specialists in their particular areas.

B. Grievance of Staff against Line: The staff advisors have their own arguments against line officers. Some of the often-repeated arguments are as follows..

(i) Line managers generally donot make a proper use of the services of staff specialists. The staff personnel often expect their expert services should be demanded at all levels of the organization. As against this, line managers consult them only as a last resort.

(ii) Staff specialists lack authority to have their ideas implemented This creates frustration among them. 

(iii) Line managers often resist the new ideas given by the staff specialists and are sometimes not prepared to listen to the arguments of staff specialists.

(iv) Line managers reject the advice without giving reasons and this causes resentment and frustration among staff personnel.

(v) Line managers often do not make full use of staff services. They try to sabotage their programmes. 

C. Resolving the Line-Staff Conflict: In order to achieve cordial relationships between the line and staff people, the following steps are necessary:

(ii) The limits of line and staff authority should be laid down clearly:- It should be made clear that line has the ultimate responsibility for the implementation of various decisions and staff is responsible only for providing advice and service to the line executives.Line managers should act on the advice of staff personnel and if they disagree with their proposals, they should give reasons for that toconvince the staff personnel. 

(iii) Line and staff people should try to understand the orientation of each other. They should try to achieve co-operation for the achievement of enterprise objectives.

(iv) The staff specialists should try to appreciate the difficulties in implementing the new ideas. They should not consider it as a prestige issue if the line managers do not follow sometimes their advice.

23. What is Functional Organisation? Explain its characteristics.

Ans: As the name implies, the whole task of management and direction of subordinates should be divided according to the type of work involved. Really speaking, almost all business concerns have got some sort of functionalisation at the top. For example, most of the business houses have separate departments to look after production sales and the general office. The functional management carries this idea to its logical limit and divides up management into a number of functions. Such as, production, research and development, personnel, purchasing, finance, office management and sales. Each one of these departments would serve the rest of the organization. The personnel department, for example, would recruit, train and deal with the people required for all the other departments The purchasing department would handle purchases on behalf of the entire concern.

Characteristics of Functional Organization: Following are the main characteristic of functional organization:

(a) Functional Specialisation : The organizations work is divided into a number of parts with each part needed by a functional specialist to govern, advise and monitor the work.

(b) Specialists equipped with authority: Specialists in functional organization as against line and staff organization are given a part of line authority and besides giving expert advices, have the power to impose those too.

(c) Large number of subordinates: In comparison to line and staff organization, officers of functional organization have to supervise the work of a large number of subordinates. 

(d) Principle of unity of command ignored: A subordinate has to take instructions from many bosses and is also answerable to all of them leading to confusion, conflicts and difficulty is maintaining coordination in instruction.

24. Explain the advantages and disadvantages of functional organisation.

Ans: The advantages of functional organization are:

(a) Specialisation : This structure helps in achieving the benefits of specialisation of work. The functional incharge as a specialisation of work The functional incharge as a specialist helps to improve the performance of subordinates.

(b)Executive development: This helps the organization to develop executives with the functional specialists.

(c) Work load: This reduces the work load of the top executives. The functional specialists share the supervision function and he concentrates only on his area.

(d) Functional organization offers a greater scope for expansion when compared to the line organization. The introduction of specialists facilitate the line managers to overcome the problem of their limited capabilities.

(e) The functional managers facilitate better control and supervision in the organization.

Disadvantages of functional organization: Functional organization suffers from the following drawbacks 

(a) It violates the principle of unity of command since an employee is accountable to a member of superiors.

(b) The operation of functional organization is too complicated to be easily understood by the workers. They are supervised by a number of losses. This crates confusion in the organization.

(c) This structure develops specialists rather than generalists. This may create problem in succession of top executives.

(d) It reduces the outlook of the managers by narrowing it down to the department and it creates boundaries. This results in loss of overall perspective in dealing with business problems. 

(e) Coordination becomes difficult among functional executives and.there is a delay in decision making due to the movement of specialists. .

25. Explain the advantages and disadvantages of decentralisation.

Ans:-Advantages of Decentralisation :

(i) Motivation of Subordinates: Decentralization improves the level of job satisfaction as well as employee morale, especially amongst the lower level managers. Furthermore, it strives to satisfy the varying requirements for participation, independence, and status. Decentralization also promotes a spirit of group cohesiveness and spirit. 

(ii) Quick Decision Making: Another important pointer in the advantages and disadvantages of decentralization is that decisions are taken and executed by authorized personnel. This, in turn, results in faster and accurate decisions which are well aware of the real scenario.

(iii) Efficient Communication: The wider span of management under decentralization leads to fewer hierarchical level. This makes the communication system more efficient as intimate relationships develop between superiors and subordinates.

(iv) Ease of Expansion : Decentralization can add inertia to the expansion process of a growing business. This might often result in the opening of new business units in varying geographical locations. Decentralization unleashes the fullest potential of the organization and can react easily to area-specific requirements.

(v) Relief to top executives : Top executives can focus more on more on the executive level work like planning and decision making if the lower level employees take all the responsibilities on their own. This relieves their workload which eventually is for the greater good of the organisation.

(vi) Satisfaction of Human needs: Decentralization serves as an important tool for satisfying our basic need of independence, power, prestige, and status. A cadre of satisfied manager is build up by this satisfaction as they feel responsible towards the company's betterment. 

Disadvantages of Decentralization :

(i) Difficult To Co-Ordinate:While talking about the advantages and disadvantages of decentralization, it is imperative to note that substantial autonomy is enjoyed by every single division. This, in turn, makes it difficult to coordinate the overall activity. 

(ii) External Factors: The trade union movement, market uncertainties, and government intervention might make it impossible to benefit the most out of decentralization.

(iii) Narrow Product Lines : Decentralized product lines need to be adequately broad so that autonomous units can flourish within the same. This might not be of much help in small business houses having narrow product lines. Lower levels in the organization also lack competent managers thus adding to the difficulty quotient.

(iv) Expensive : In decentralisation, every employee takes responsibility for the better of the organisation so they work harder to achieve all the organisational objective. In return, they have to be paid more which sometimes proves to be very expensive for the company.

26. Explain the different steps of the process of delegation authority.

Ans: The process involves the following four steps: 

(a) Determining the Results Expected: The first step in delegation process in the determination of results expected from a position or subordinate. Assignment of task will be meaningful only when the subordinate clearly knows what results he has to achieve. Moreover, it helps in deciding the adequate amount of authority to be delegated to a subordinate. To make the delegation effective, the expected result must be determined.

(b) Assignment of Duty: People in the enterprise are assigned tasks or duties i.e. the superior indicates what the subordinates are exactly to do. Duties can be described either in terms of functions or goals and results. When we say that Mr. Y's duty is to operate a machine for producing a particular article, we express the duty in terms of function. But if we say that Y's duty is to produce 5 articles during 8 hours by operating a machine, we express his duty in terms of a target or a goal. Expressing duty in terms of goals while delegating is better of the two, because it provides psychological satisfaction to the subordinates.

(c) Grant of Authority : If the assigned duty is to be discharged by the subordinate effectively, he must be granted proper authority. As the total work of manager cannot be delegated, authority delegation also need not be dull in any situation. It does not indicate power over people. Authority is an essential element in any modern enterprise. When, the question of delegation arises, the manager should be clear as to what rights are associated with the task that is to be delegated

(d) Creation of Obligation or Accountability: Delegation implies accountability from subordinates to the superior. Subordinates" performance must always be measured and appraised by the supervisor. In accepting a delegated task, a subordinate gives his promise to do his best in carrying out his duties. Duty can be delegated, authority can be delegated but it is not the same with accountability. Duties and authority always flow downwards but accountability always flows upward from the subordinate to the superior. Because of this accountability the manager must keep for him some reserved authority and duties for regulating and controlling the course of work undertaken by his subordinates.

27. Discuss the importance of delegation.

Ans: When the size of an organization expands, a manager alone cannot do all the work himself. He has to share his work and authority with others. An executive can extend his personal capacity through delegation of authority. Delegation is the means by which a manager can get results through others.

The main advantages of delegation are as follows: 

(a) Relief to Top Executives : Delegation reduces the burden of work on senior executives. By transferring routine work to subordinates, a manager can concentrate on important policy matters. He can, therefore, make better use of his valuable time and ability.

(b) Scalar chain: Delegation of authority creates a chain of superior subordinates relationships among managers. It provides meaning and content to managerial jobs. It also directs and regulates the flow of authority from top to the bottom of organisation. 

(c) Specialization: Through delegation an executive can assign jobs to his subordinates according to their abilities and experience. In this way, he can obtain the benefits of division of work.

(d) Quick decisions: When authority is delegated, lower level employees can take decisions quickly without consulting senior executive. Subordinates are better in touch with local conditions and can take more practicable decisions within the policy framework laid down by top management.

(e) Motivation: Delegation provides a feeling of status and importance to subordinates. Their independence and job satisfaction increases due to the authority they enjoy. They become more willing to work hard and achieve the targets laid down by higher authorities. Thus, delegation promotes a sense of initiative and responsibility among employees.

(f)Executive Development: Delegation gives an opportunity to employees to learn decision-making and leadership skills by exercising authority. It helps to improve the quality of personnel at lower levels.

(g) Growth and Diversification: It is the quality of managerial talent improves, the organisation can face the future challenges better. It can grow and expand to a bigger size It can also undertake new types of business activities. 

28. What is the various principle of delegation of authority? 

Ans: The basic principles of delegation are given below

(a) Principle of Functional Definition: Before delegating authority, the functions or duties of the subordinates should be defined in clear and precise terms. Every subordinate must fully understand the nature and significance of his job, its relationship with other jobs and the limits of his authority.

(b) Principle of Delegation by Results Expected: The nature and extent of authority delegated to a subordinate should be consistent with the results expected of him. The manager should first define the objectives and should delegate authority in such a manner as to accomplish the desired objectives.

(c)Principle of Unity of command: Every subordinates should be under the command of one superior. A person cannot serve two or more masters effectively. When an employee is asked to get orders and instructions from more than one manager, he gets confused and his loyalty gets divided between different bosses. Therefore, dual subordination should be avoided.

(d) Principle of Absoluteness of Responsibility: The responsibility of a subordinate to his superior is absolute and it cannot be delegated. When a person delegates his authority, he remains ultimately responsible for performance. Every executive is responsible to his superior not only for his own acts but also for the acts of his subordinates.

(e) Principle of Parity of Authority and Responsibility: According to this principle, authority and responsibility should go hand in hand. Whenever a subordinate is given authority, he should be held responsible for doing the task properly. Similarly, if a subordinate is to be held responsible for a job, adequate authority to perform it should be given to him.


Also Read

Unit - 1 Introduction 

Unit - 2 Planing 

Unit - 3 Organising 

Unit - 4 Staffing and Leading 

Unit - 5 Controlling

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