CBSE Class 12 Business Studies Organising Notes Set B

Step Involved in the Process of Organising: –
1. Identification and Division of Work: – It involves identification and dividing the total work to be done into specific activities (called jobs) in accordance with previously determined plans. By dividing the work, the burden of work can be shared among the employees. It facilitates specialisation of work & skills. Duplication of work can be avoided by dividing the work into manageable activities.
2. Departmentalisation: – The second step in organising is to combine or group similar or related jobs into larger units, called departments, divisions or sections. They can be grouped on the basis of functions which an organisation undertakes to achieve its objective. For example, departments may be created for manufacturing, marketing, financing etc. Departmentalisation is done to achieve coordination & to facilitate unity of efforts.
3. Assignment of duties: – Once departments have been formed each of them is placed under the charge of an individual called departmental head (e.g., production manager, finance manager etc.) Jobs are then allocated to the members of each department according to their skills and qualifications.
4. Establishing Reporting Relationships: – Merely allocating work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. It helps in coordination amongst various departments.

Importance of Organising: –
1. Benefits of specialisation: – In organising every individual is assigned a part of total work and not the whole task. Due to this division of work into smaller units and repetitive performance leads to specialisation. Thus, organising promotes specialisation which in turn leads to efficient & speedy performance of tasks.
2. Clarity in working Relationship: – It helps in creating well defined jobs and also clarifying the limits of authority and responsibility of each job. The superior, subordinate relationship is clearly defined in organising.
3. Effective Administration: It provides a clear description of jobs and related duties which help to avoid confusion and duplication. Clarity in working relationships enables proper execution of work which results in effective administration.
4. Optimum Utilisation of resources: The proper assignment of jobs avoids overlapping/duplication of work. This helps in preventing confusion and minimising the wastage of resources and efforts.

Types of Organisation Structures
I. Functional Structure: – In functional structure activities are grouped and departments are created on the basis of specific functions to be performed. For example, all the jobs related to production are grouped under production department – Sales to sales department etc.

Advantages:
1. Specialisation – Better division of labour takes place which results in specialisation of functions and its consequent benefits.
2. Coordination is established: – All the persons working within a department are specialist of their respective jobs. It makes the coordination easier at department level.
3. Helps in increasing managerial efficiency: Managers of one department are performing same type of function again and again which makes them specialised and improves their efficiency.
4. Minimises cost – It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.

II. DIVISIONAL ORGANISATION STRUCTURE: Dividing the whole enterprise according to the major products to be manufactured (like metal, plastic, cosmetics etc) in known as divisional organisation structure.
Advantages: –

1. Quick decision making: – Divisional manager can take any decision regarding his division independently which makes decisions quick and effective.
2. Divisional results can be Assessed: – Divisional results (profit/loss) can be assessed easily. On this basis unprofitable division can be closed.
3. Growth and Expansion: – It facilitates growth and expansion as new divisions can be added without disturbing existing departments. Difference between Formal & Informal organisation