Types of Organisation
According to different
methods of distribution of authorities and responsibilities, the organisation
are of following types: 1. Line or Scalar Organisation 2. Functional
Organisation 3. Line and Staff Organisation 4. Line, Staff and Functional
Organisation 5. Committee Organisation.
1. Line or Scalar Organisation:
This type of organisation business
activities are divided into three groups, namely finance, production and sales. Each of this department is
sub-divided into certain self-contained departments, i.e., sections.
Each departmental head has sole control
over his section and has full authority to select his labour, staff, purchase
of raw materials, stores and to set the standards of output, etc. Foreman of
each shop trains new men and supervises the quality of output.
In such a system superior exercises a
direct authority over his subordinates who become entirely responsible for
their performance to the commanding superior. No operation is under two bosses:
The following is the chart of line
organisation:
As in this organisation, the flow of
authority moves from top to bottom in vertical lines, therefore, this is also
called line or scalar organisation.
Advantages:
1. A clear-cut division of authority and
responsibility, hence no scope of shifting the responsibility.
2. Strong in discipline.
3. It permits quick decisions.
4. As responsibility of each individual
is fixed, hence faults can be easily and quickly known.
5. Everybody from top to bottom remains
busy like a machine and hence total cost of product will be less.
6. It is simple to understand.
7. Flexible and able to extend or
contract.
Disadvantages:
1. It requires different departmental
heads to be expert in their respective functions, hence lack of specialisation.
2. Departmental heads are over-burdened
with various routine jobs, hence no time for further expansion and planning.
3. Certain people become key points and
they are loaded maximum with work.
4. Chances of accidents, wastage of
material and labour are more because of insufficient knowledge of all the work
by one man.
5. Chances of delay in reaching the
orders of General Manager or any other departmental head upto the workers and,
therefore, possibility of distortion, due to long channel.
6. Over-burdened foreman may not be able
to give sufficient time for each job and will cause wastage and error.
7. It has no means of rewarding good
workers.
Applications :
1. Such organisations are suitable for
factories of small and medium size, in which subordinate and operational staff
is not too much.
2. Suitable for continuous process such
as sugar, paper, oil refining, spinning and weaving industries etc.
3. Suitable where labour problems are not
difficult to solve.
4. Suitable where automatic plants are
used.
2. Functional Organisation
The difficulties in finding all round
qualified man to be foreman in the line organisation are overcome with this
type of organisation. He is replaced by various functionalised people.
This system is advantageous because each
supervisor is specialised in a particular field and he attends to one factor in
all the departments.
In this, specialised
people like chemists, purchasers, engineers, designers etc. are employed under
the production superintendent and everybody is supposed to give his
functionalised advice to all other foreman (bosses) and workers. Every foreman
(boss) will go to individual worker for his related function.
Advantages:
1. Due to specialisation quality of work
is better.
2. This system provides more specialised
knowledge and guidance to individual workers through experts.
3. It helps mass production by
standardisation and specialisation.
4. If any operation needs improvement, it
can be improved even upto the last moment.
5. Considerable expansion of the factory
is possible.
6. Since for every operation expert
guidance is there, hence wastage of material will be minimum which will reduce
prime cost.
7. Unnecessary overloading of
responsibilities will not be there, as was in the case of line organisation.
8. No special knowledge of workers is
required as the instructions are supplied by drawing and experts.
Disadvantages:
1. It is complicated from control point
of view as every functionalized expert feels himself to be superior than the
other and there is no one-man control over the workers. Therefore, it makes
discipline problem difficult to solve among lower level.
2. By employing high waged experts, the
total cost of job may become high.
3. As line workers will not be using
their skill, their initiative cannot be utilised.
4. Shifting of responsibility is
possible.
5. The failure of any of the expert will
largely affect the production because, if any expert tells wrong operation,
there is no other body to correct him. This will result in large wastage of
material.
6. Proper co-ordination of the work of
different departments is required but it is difficult to maintain as everybody
is working individually.
Application:
In practice a pure functionalised system
is rarely found. In fact, a factory where responsibilities are divided on a
functional basis, line relationship may also exist. This is suitable for large
manufacturing concerns which are capable of expansion in future.
3.
Line and Staff Organisation:
In a firm of large size operating on big
scale, managers cannot give careful attention to every part of management. They
are unable to think and plan. They are busy with ordinary task of production
and selling. Hence ‘Some Staff is deputed to do other works like investigation,
research, recording, planning and advising to managers.
Thus staff brings specialisation by
assisting the line officers. The line maintains discipline and stability. Staff
provides expert information and helps to improve the overall efficiency. Thus
the staffs are ‘thinkers’ while lines are ‘doers’.
Advantages:
1. It is a planned specialised system.
2. Quality of product will be better.
3. Wastage will be less.
4. Expert knowledge is available.
5. Sufficient time is available to general
manager for future planning and expansion.
6. Discipline problem is solved because
of line relationship.
Disadvantages:
1. Sufficient expert knowledge and
guidance is not available as compared with functional type.
2. Lack of responsibility among higher
levels and hence the discipline as a whole will be poor.
3. The overhead cost of product may rise,
because of high salaried staff.
4. The slackness of any section or
department will largely affect whole working.
Application:
Now-a-days this type of organisation is
preferred for medium and large scale industries, depending upon internal
structure, nature of productive activities and span of business area. It is
applied in automobile industries and other intermittent nature of industries.
4. Line, Staff and Functional Organisation:
Because of scientific methods, enough
market competition and complications in the business, to obtain a sound
system, the combination of line, staff and functional type of organisation is
required.
In this system the workers are kept under
the direct control of foreman.
The inspector will have the proper
authority to control the quality and he can directly order the workman as in
the functional organisation.
In the staff relationship, there may be research
department for the analysis of raw materials, semi-finished and finished
products to withstand market competition.
In this way all the three are combined
together.
Application:
Now-a-days this pattern is followed by
all government and private concerns, in which much complicated processes or
operations are involved, i.e., in big chemical plants, electricity boards,
steel plants and other huge undertakings.
5. Committee Organisation (Project Type):
A committee is a group of persons formed
for the purpose of giving advice on certain important problems, which cannot
usually be solved by an individual. It helps by pooling the thoughts of several
persons on problems involving several functions and offered for criticism.
Therefore, now-a-days many large companies add a network of committees to the
line and staff organisation.
These committees may be either
“Permanent” sometimes referred to as standing committees or they may be
organised to serve a temporary function only. Examples of committees are
Research Committee, Co-ordination, and Advisory Committee, Purchase Committee,
Education Committee etc.
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