Organisation Structures

2.0 Introduction
 An organization can be defined as a large group of persons or associations of persons united to achieve a common goal and defining the responsibilities and establishing the relationship with each other employed in the organization. For any business, there are essential requirements such as men, equipment, materials, money, time and management and therefore organization would be the coordination of these resources in such a way that maximum output is achieved at ease with efficiency and at minimum cost.

Though there are no specific rules for the evolution of an organizational structure, be it a client or contracting company, there are certain basic principles which should always be observed such as the dynamic goal of an enterprise, adequate decentralization, unity of command and responsibility, proper channel of communication, legitimate span of control and delineation of authority and responsibility.
An organization should aim at good team building and avoiding conflict amongst line
functionaries on one hand and between line functionaries and staff support on the other. In any organization, organizational effectiveness (Oeff) can be described by the following simple model:Oeff = [(I) (S) (S) (S)] EWhere, I- Individual in an organization
S1 – Organizational structure
S2 – Systems adopted in the organization
S3 – Strategies followed by the organization
E – Environment in which the individual has to work

Though the environment in which a manager has to work can indirectly affect the efficiency of the organization, with proper training of the individuals concerned, with development of a proper organizational structure, with the adoption of appropriate systems and suitable organization strategies, it would be possible to contribute to improvement in effectiveness, in spite of the environment not being so congenial.
 
2.1 Structure of Organisation
 The organizational structure is the network of relationships between the various positions in an organization. Thus, a clear understanding of an organizational structure is helpful in making more frequent detailed adjustments in the organizational arrangements. Most problems occur in organizations due to defects in their structures. Thus to remove such defects and render organization more effective, a systematic and thorough study of its structure must be made. The efficient functioning of an organization is possible only when every member of the organization knows the following facts: The goal of the organization His/her duties and responsibilities Delegation of authority To whom one is responsible Who is to work with whom?

2.2 Types of Organisation Structures
 The distribution system of authority and responsibility in any undertaking amongst its members depends upon the type and magnitude of the work involved. Depending upon the manner in which the authority and responsibility in an undertaking are distributed, the organization setup or structure can be divided into the following three types:
1. Line or military structure
2. Line and staff organization and
3. Functional organization

2.2.1 Line or military organization
 This is the earliest, simplest and most important form of organization. In this type of
organization, authority descends fro the top of the structure to its bottom level through a
downward delegation of authority. All major decisions are taken by the executives at the top and passed on to their immediate subordinates for necessary action at their level. Thus a direct relationship of authority and responsibility is established between the superiors and subordinates as shown in figure 1.

Advantages of line organization

 It‘s simple, economical and easily understood by the employees. Unity of authority and control Provides strong discipline Quick decisions Responsibility is fixed and everybody knows to whom he is answerable It provides effective coordination within each department
Ass site supervisor
G/foreman
F/man brickwk F/man C&J F/man
formwork
F/man
concrete
works
Site supervisor
Charge hands/gang leaders of each trade
Labourers of each trade
Figure 1: Line organisation

Disadvantages

 The top executive tends to be overloaded with work as all decisions have to be taken by
him such that progress of work and its improvement may not be attended to. Generally, there is inadequacy of communication from lower levels upwards though there
is smooth communication from top to bottom. Thus the feed back is not received by top
executives and this affects the progress of the whole work. The loss of one or two capable men may affect badly the whole organization It‘s not possible to take advice from experts, hence all decisions have to be taken by the
person in charge himself As the executives have to deal with different types of problems, expertise is not attained
and Due to long channel of communication from top to bottom, there are chances of delay
and message distortion.

Applications

1. This organization structure is suitable for small and medium size factories in which
subordinate operational staff ratio is not high.
2. It is also suitable where continuous process is required such as in sugar and paper industries,
oil refineries, spinning and weaving mills.
3. Where automatic plants are used
4. Where labour problems are not difficult to solve.

2.2.2 Line and staff organization
 The line organization is not suitable for large and complex enterprises, undertaking the large
constructional works and heavy projects where key men need advice from expert specialists indifferent fields. These specialists are normally staff with long experience. They do not have
authority to command anybody. Their functions mainly are advisory and are not directly
involved in carrying out the major objectives of the enterprise. The ‗line‘ personnel execute the work to fulfil the objectives of the enterprise and maintain discipline and stability while ‗staff‘ provides expert opinion based on long experience; carry out research, planning, scheduling and recording of progress. Figure 2 shows the line and staff relationships.

Advantages

1. The advice of specialists and experts is available at all levels i.e. it‘s a planned and
specialized system2. Quality of products / service is better and wastage is less3. It gives increased economy and efficiency though extra expenditure has to be incurred on
staff personnel [experts].4. As staff personnel do considerable general work, line personnel get sufficient time to
devote to achieve objectives of the company.5. It provides for large variety of jobs, hence better opportunities for the advancement of
employees.6. Discipline problem is solved due to line relationship.

Board of directors

Legal Advisor General Manager Chief Accountant
Production Engineer Production manager Quality control inspector
Supervisors F/man Tool expert
WorkersFigure 2: Line and staff organizationThe relation of each one of staff members is shown at one level. However, advice say from legal advisor may be given not only to the General Manager but also to any other line officer.
 
Disadvantages

 The ‗staff‘ may not succeed in getting their ideas implemented for lack of authority as
they are not vested with any authority. In this system, the duties and responsibilities are difficult to understand which may cause
confusion between line and staff personnel (charts and manuals are required to indicate
clearly duties and responsibilities). The expert advice available is conveyed to workers through line officers which is quite a
lengthy route; there is risk of misinterpretation and misunderstanding given advice. The overhead cost of the product may increase due to high salaries of staff personnel. The slackness of any section will affect the whole working system.
This system is preferred for medium and large scale industries depending upon the internal
structure and nature of production activities-most common in automobile industries.

2.2.3 Functional organization.
 In this type of organization all similar and related workers are grouped together under the charge of one person. The idea is to divide the work in such a manner that each person has to perform a minimum number of functions and he is fully responsible for that aspect of the work. For example a foreman in the materials section would be responsible for the procurement and supply of all types of materials to the workers all sections. Thus in order to perform his functions effectively, he may have to deal with all personnel in the various departments. Thus in a functional organization, a subordinate anywhere in the organization will be commanded directly by a number of supervisors, each having authority in his/her own field.
 
Managing Director
Company secretary General Manager
Personnel Production Finance Materials Marketing
Manager Manager manager manager manager
Administration Prodn superitendant Accountant F/man
section
Foreman clerical staff workers
WorkersFigure 3: Functional organisation

Advantages.

1. Expert advice is available through specialists
2. It enables the division of labour on the basis of specialization of functions and in planned
manner.
3. It enables increased efficiency, as each person has to perform limited number of
functions.
4. Manual work is separated from mental work.
5. It maintains the functional efficiency of each person .
6. It helps in doing work as per specifications.Disadvantages.1. There is no clear cut line of authority.
2. As each subordinate has a number of bosses, it gives rise to disrespect and weakens the
discipline in the organization.
3. Due to overlapping of authority, it is likely to develop friction between different members
of staff.
4. The system is too complicated and is unsuitable, particularly for the lower departments in
the management. This organization is found in government and private sector where much complicated operations are involved as in big chemical plants, steel plants etc.

2.3 Span of Control.
 This is the dissemination of programmes/activities /instructions from top management to lower levels of administration in order to provide effective supervision. Organizational structures exist in all forms, the shape of which normally depends on the type and size. Each person generally has a clear understanding of theirs and others responsibilities in a small firm, but in large firm, employees tend to be unsure of exactly where they fit in and do not ready appreciate other individuals positions regarding line ,lateral, functional or staff relationships. For a sound organization, the span should be short in the number of subordinates over whom a manager has to exercise control. In order to control, coordinate and execute his /her duties efficiently and successfully, a manager is normally not expected to deal with more than eight subordinates at higher level of management but it can be 15-20, at the lower level of management
The span of control within an organization may be one of the two types; shallow line structure deep military line structure

Shallow line structure: this structure tends to be operated within a very small organization
where the entrepreneur (owners/bosses) directs the work and operations of all the employees.
The disadvantage of such a system is that the superior would find it burdensome where the
structure is not only shallow but also very wide, superior being directly responsible for too many
subordinates (figure 4)
Entrepreneur/Boss
Secretary Clerk wages F/man driver Site engineer Estimator
Mason ElectricianFigure 4: shallow line structureSmall businesses use this structure but if the manager is absent, the subordinates may have
difficulty in getting some kind of decision on the problem although it is quick mode of communication.

Deep military structure
 The Managing Director in a company is the all powerful superior with managers; Supervisors etc being in turn is the line managers to subordinates, the more the managers can direct their energies to more important and pressing problems.
Managing Director
General Manager Chief Contracts Manager
Personnel Finance
Safety
Contracts manager A Contracts manager B Plant manager
Site engineer A Site engineer B F/man Transport officer
F/man A F/man B mechanics drivers
WorkersFigure 5: Deep military structure

2.4 Responsibilities, authority and accountability.
 
Managers delegate responsibility but remain responsible. They must either trust subordinates or check the work. However, the more the checks the less the subordinates feel responsible for the work. Managers must have authority over subordinates with in identified legitimate limits will do what their managers instruct them to do (psychological contract).
Authority comes from expert knowledge, formal position and charisma. More also, authority
depends on the ability to give or with hold rewards. Authority must be sufficient to allow a
supervisor to carry out his duties properly; otherwise it will lead to a build up of frustration. One must be given the powers to act and the right to enforce obedience. Responsibility without authority leads to a confused situation and breakdown in discipline. In other words,
responsibility and authority must therefore go hand in hand.

Accountability can never be delegated and there fore accountability to someone in higher
authority for decisions and actions of subordinates is a charge to which managers and supervisors
are subjected. Although organization chart are to illustrate each individuals standing in an
organization, details of each officers responsibilities, immediate supervisors, subordinates,
special duties, limitations and compulsory memberships of c committees must be drawn up.
In general however, the manager /super