After reading this article you will learn about:- 1. Meaning of Organising 2. Process of Organising 3. Importance 4. Principles.

Meaning of Organising:

Organising is a “process of defining the essential relationships among people, tasks and activities in such a way that all the organisation’s resources are integrated and coordinated to accomplish its objectives efficiently and effectively”. — Pearce and Robinson

Organising is, thus:

(i) A Structure, and


(ii) A Process.

As a structure:

Organising is a set of relationships that defines vertical and horizontal relationships amongst people who perform various tasks and duties. The organisational task is divided into units, people in each unit (departments) are assigned specific tasks and their relationship is defined in a way that maximises organisational welfare and individual goals. The relationship amongst people is both vertical and horizontal.

As vertical relationships, the authority-responsibility structure of people at different levels in the same department is defined and as horizontal relationships, authority-responsibility structure of people working in different departments at same levels is defined.


Organisation structure specifies division of work and shows how different functions or activities are linked; to some extent it also shows the level of specialisation of work activities. It also indicates the organisation’s hierarchy and authority structure, and shows its reporting relationships. — Robert H. Miles

Organising as a structure is a network of relationships (authority-responsibility structure) amongst all those who are part of the organisation, working at any level in any department. It defines relationships between jobs at various levels and people working at those jobs. It emphasises more on positions than people.

As a process:

While the structure designs the system and its sub-systems, process defines the way this structure is designed. Structure is the static concept that establishes relationships amongst various components of the organisation. It first designs the component and then establishes relationships amongst these components.


These relationships are by and large permanent. They do not change frequently unless disturbed by external environmental forces. Process is the dynamic concept that redefines the structure whenever required. It defines change in the system over time.

While the structure defines how the work of the organisation will be divided into various positions, groups and departments, process defines the sequence of which the structure is designed. It defines relationships amongst people in such a way that organisational goals are achieved efficiently.

As a process, organising consists of two processes:

(1) Differentiation,


(2) Integration.

Differentiation means division of work into smaller units and its assignment to individuals according to their skills and abilities. Integration refers to coordination of different activities towards a common goal. It provides unity of action towards organisational activities.

It involves:

(i) Identification of work,


(ii) Grouping of work into smaller groups,

(iii) Assigning work to every individual at every level in every department,

(iv) Defining its authority and responsibility, and

(v) Establishing relationships amongst people to make them contribute towards organisational goals in an integrated manner.


Organisation structure and process are not independent concepts. They are complementary to each other. Once the organisation process is defined, organisation structure is the end result or outcome of that process. Organisation structure is the result of organisation process. Organisation is, in fact, a structured, on-going process that defines how to achieve defined goals.

Process of Organising:

The process of organising involves the following steps:

(i) Determination of Objectives:

Every organisation is established for some objective or goal. Various tasks are determined to achieve this goal. For example, if the organisation is established to export goods, it determines the nature and type of goods to be exported, sources from where raw material will be obtained, countries where goods will be exported, co-ordinate with foreign buyers etc. Determining the workload of the organisation is the first step in the process of organising.

(ii) Division of Activities:

Since one person cannot manage all the activities, total task is broken into smaller units and assigned to members. Work is assigned according to qualification and ability of every person.


Division of work leads to specialisation which has the following benefits:

(a) Greater output:

Adam Smith illustrated a study where one person could manufacture 20 pins a day if he worked alone. Production of pin was broken into sub-activities where each person carried out the following specialised tasks: Drawing out the wire – straightening the wire – cutting the wire – grinding the point – polishing it – putting the pin head and so on. It was observed that as against 20 pins produced by one person in a day, division of work and its specialisation enabled 10 people to produce 48, 000 pins in a day — watch the wonders of specialisation!

(b) Efficiency:

Performing the same task over and over again increases skill and efficiency of the workers.

(c) Facilitates training of less-skilled workers:


Since the complex task is broken into smaller units, less-skilled workers can be trained to carry out those activities.

(iii) Grouping of Activities:

After the work is assigned to people, those performing similar activities are grouped in one department. Various departments like sales, finance, accounting etc. are filled with people having different skills and expertise but performing similar activities. Grouping of activities into departments is called departmentalisation and every department is governed by a set of rules, procedures and standards.

(iv) Define Authority and Responsibility:

Every department is headed by a person responsible for its effective functioning. Departmental heads are appointed to carry out the activities of their respective departments. It is ensured that competence of departmental head matches job requirements of the department.

Every head has authority to get the work done from his departmental members. He delegates responsibility and authority to members of his department. This creates a structure of relationships where every individual knows his superiors and subordinates and their reporting relationships.

(v) Co-Ordination of Activities:

When departments work for their objectives, there may develop inter-departmental conflicts which can obstruct the achievement of organisational goals. For example, finance department wants to cut the costs but the marketing department needs additional funds to market its products; this conflict can be resolved through co-ordination so that all departments share the common resources optimally. Work can be coordinated by defining relationships amongst various departments and people working at different positions.

(vi) Reviewing and Re-organising:

There is constant appraisal of the organising process so that changes in the structure can be made consequent to changes in the environmental factors. Constant appraisal and re-organisation is an integral part of the organising process.

Importance of Organising:

Organising is important for the following reasons:

(i) Facilitates Administration:


Top managers cannot perform all the organisational tasks as they will be overburdened to concentrate on strategic matters. It is essential that part of the workload is shared by middle and lower level managers. Top executives will be relieved of managing routine affairs and concentrate on effective administration.

The basic elements of organising (division of work, grouping of activities, distribution of authority and coordination) facilitate better administration by the top management.

(ii) Growth and Diversification:

A well-organised institution is adaptive to change and responsive to growth and diversification. It can multiply its operations.

(iii) Creates Synergies:

Division of work provides the benefits of synergies, that is, total task achieved by a group of people is more than the sum total of their individual achievements. People coordinate their tasks in the same and different departments. This gives the benefit of ‘one plus one makes eleven.’

(iv) Establishes Accountability:

When every person knows his superiors and subordinates, the organisation can function efficiently. Establishing limitations in the area of operations defines people’s accountability to their immediate boss which gears the organisation towards its broader goals.

(v) Optimum Use of Technology:


It is the age of technological developments. Organisations not having well-developed technology will not be able to compete in the market. Well-organised structures enable the organisations to optimally use and update their technology and remain competitive in the dynamic market conditions.

(vi) Facilitates Communication:

Communication is the essence of organisation. Efficiency of organisation depends upon how well organisational members communicate with each other. A well-designed system of communication (vertical and horizontal) is facilitated through effective organising efforts of top executives.

(vii) Facilitates Creativity:

Creativity means creating something new. It develops new ways of doing the things. A sound organisation enables the top management to improve the ways of doing things by delegating routine affairs to people down the scalar chain. It creates a sense of achievement amongst managers that provides moral boost for further creative thinking.

(viii) Improves Inter-personal Relationships:

A sound organisation structure ensures that workload is divided into well-defined jobs and assigned to people according to their abilities and skills. Placing the right person at the right job ensures job satisfaction and morale boost of employees. This improves inter-personal relationships amongst people working in the organisation.

(ix) Facilitates Coordination:

Well-defined objectives and plans can fail if organisational activities are not coordinated in a unified direction. A well designed organisation structure promotes order and system in its activities. It coordinates work of people at different levels in different departments.

People work along pre-defined dimensions and harmonies individual goals with organisational goals, internal organisational environment with the external environment and financial resources with non-financial resources.

(x) Facilitates Teamwork:


Though people are responsible for specific tasks assigned to them, they work collectively as a team and optimise the use of scarce organisational resources to achieve the organisational goals. Organisation, thus, facilitates teamwork. Rather than viewing organisational goals from personal perspectives, they view them from group perspectives. Organisational goals satisfy individual goals.

(xi) Facilitates Control:

Organisation provides sound direction to activities and ensures that people work according to plans. This facilitates control and promotes organisational goals. Objectives are determined and regular feedback ensures conformance of actual performance to targeted performance.

(xii) Increase in Output:

Sound organisation divides activities into various departments (production, marketing etc.). These departments specialise in their tasks and increase organisational output. Specialisation is an important contribution of organisation that promotes higher output.

(xiii) Optimum Allocation of Resources:

Organising promotes optimum allocation of resources. Resources are allocated over different departments (production, marketing, personnel etc.) in the order of priority. People are assigned jobs they are best suited for. All activities are assigned to all people in the organisation. There is no duplication of work. Organising, thus, avoids overlapping of activities to ensure that collectively, people working in different departments perform activities that contribute to organisational goals.

Principles of Organising:

Principles are the guidelines that promote managerial thinking and action. Principles help managers in effectively carrying out the organising function.

These principles are as follows:

(i) Principle of Unity of Objectives:


All organisational activities are geared towards organisational objectives. Objectives are framed for each level (top, middle and low) and each functional area. The objectives must be clearly understood by all. They should support each other at each level to attain objectives at higher levels.

(ii) Organisational Efficiency:

Organisational goals should be achieved efficiently. It means optimum (efficient) use of resources, that is, maximum output should be achieved with minimum inputs. The resources should be spread over activities in various functional areas that collectively result in maximum output through their optimum use.

(iii) Division of Labour:

Division of labour means breaking the main task into smaller units. The major task is broken into sub-tasks. This makes each person concentrate on his part of the job and perform it efficiently thereby, increasing the total output. Work should be divided and assigned to workers according to their skills. This leads to specialisation and contributes to organisational output.

(iv) Authority – Responsibility:

Authority and responsibility must go hand-in-hand. Responsibility means obligation to carry out the assigned task. To carry out this task, authority should be delegated to every person. Conversely, given the authority, the tasks assigned (responsibility) should be within the scope of authority. Authority without responsibility will result in misuse of authority and responsibility without authority will result in poor performance.

(v) Delegation:

The total work load is divided into parts. A part is assigned to subordinates and authority is given to efficiently carry out that task. Top managers delegate part of their duties to lower levels and concentrate on important organisational matters. This speeds up the organisational tasks and enables the organisation to grow in the dynamic, competitive business environment.

(vi) Scalar Chain:

Scalar chain is the line of authority running from top to lower levels. Authority flows from top to bottom in this chain and responsibilities flow from bottom to top. This chain promotes communication amongst people at different levels and facilitates decision­ making. Every person in the chain knows his superior and subordinate.

(vii) Span of Control:

Span of control means the number of subordinates that a superior can effectively supervise. Exact number of employees that a manager can supervise cannot be determined. It depends upon competence of managers, nature of work, system of control, capacity of subordinates etc.

However, if manager can supervise less number of workers, there will be more levels in the organisation structure and vice-versa. Supervising few subordinates creates tall structures and supervising large number of workers creates flat structures.

(viii) Unity of Command:

One subordinate should have one boss. People should receive orders from their immediate boss only. This brings discipline and order in the organisation. Receiving orders from two or more bosses can create confusion and indiscipline.

(ix) Balance:

There must be balance between different principles of organising. Balance should be maintained between centralisation and decentralisation, narrow and wide span of control etc.

(x) Flexibility:

Organisation should be flexible. Changes in structure should be made according to changes in the environmental factors.

(xi) Continuity:

Organisation should adapt to the environmental changes for its long-run survival, growth and expansion.

(xii) Exception:

Every matter should not be reported to top managers. Only significant deviations should be reported up the hierarchy. Routine matters should be dealt by middle and lower-level managers. It develops lower-level managers as they deal with simple and routine problems.

(xiii) Simplicity:

Organisation structure should be simple that can be understood by everyone. People can work efficiently in a simple structure as they are clear of various jobs and authority/ responsibility associated with those jobs. A simple structure promotes co-operation, co­ordination and effective communication in the organisation.

(xiv) Departmentation:

It means dividing activities into specialised groups (departments) where each department performs specialised organisational task. All activities of similar nature are grouped in one department headed by the departmental manager. Departments can be created on the basis of geographical locations, customers, products etc.

(xv) Decentralisation:

It means delegation of authority to lowest-level managers. It increases the decision-making authority of lower-level managers and increases organisational efficiency.

(xvi) Unity of Direction:

All activities of similar nature are grouped in one unit (production or marketing), headed by the departmental manager. He directs the efforts of departmental members towards a single objective; the departmental objective.

(xvii) Co-Operation:

All individuals and departments should co-operate and help the organisation achieve its goals. Cooperation leads to teamwork and focus on a unified goal.