Organising
Planning tells you WHERE to go. Organising builds the vehicle that gets you there. Without organising, even the best plan remains ink on paper — no one knows who does what, who reports to whom or how decisions are made. This chapter covers the organising process, both types of organisational structure (Functional and Divisional), Formal vs Informal organisations, and the critical concepts of Delegation and Decentralisation — all essential topics for CBSE board exams and CUET.
After Planning Comes Organising — Building the Machine
Imagine a film director who has a brilliant script (plan). Now she must assemble the cast, assign each actor a role, create a shooting schedule, hire the crew, set up the studios and ensure the lighting director does not interfere with the cinematographer. This is organising — converting a plan into a human system capable of executing it. Without organising, ten talented people might all try to do the same thing while leaving other critical tasks undone. Organising brings structure to human effort.
5.1 Meaning and 5.2 Definition of Organising
What is Organising?
Organising is the process of identifying and grouping work to be performed, defining and delegating authority and responsibility, and establishing relationships so that people can work together most effectively to achieve the organisation's objectives.
Louis Allen: "Organisation 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."
Koontz: "To organise is to group activities necessary to attain objectives, to assign each group to a manager with authority necessary to supervise it, and to provide co-ordination horizontally and vertically in the enterprise structure."
5.3 Process of Organising (4 Steps)
Identification and Division of Work
The total work required to achieve organisational objectives is identified and divided into smaller, manageable activities. Each activity is defined clearly so it can be assigned to one person or team. This prevents duplication of effort and ensures every required task is covered. Example: To run a school, work is divided into: teaching, administration, accounts, library, sports, counselling etc.
Departmentalisation (Grouping of Activities)
Similar or related activities are grouped together into departments. This grouping enables specialisation — people performing similar work together develop deeper expertise. Departments can be formed by function (Marketing, Finance, HR, Production), product, geography, customer type etc. Example: All sales activities grouped into Sales Department; all accounting activities into Finance Department.
Assignment of Duties (Staffing the Structure)
Once departments are formed, specific duties and tasks within each department are assigned to specific individuals. The right person must be matched to the right job based on their qualifications, skills and experience. Clear assignment removes ambiguity about who is responsible for what.
Establishing Reporting Relationships
Who reports to whom must be clearly defined. This step creates the hierarchy — the chain of command. Authority flows down (superiors give orders) and accountability flows up (subordinates report results). Clear reporting relationships prevent confusion, conflict and gaps in communication. This step establishes the organisational structure.
5.4 Significance / Importance of Organising
Benefits of Specialisation
Organising groups similar activities and assigns them to specialists. When people focus on a narrow range of tasks, they develop deep expertise and perform with greater efficiency and accuracy. Example: A dedicated legal team is far more effective than expecting each department to handle its own legal issues.
Clarity in Working Relationships
A clear organisational structure defines who reports to whom, who has authority over what and who is responsible for which outcomes. This clarity prevents conflict, ambiguity and duplication of effort.
Optimum Utilisation of Resources
When work is properly divided and assigned, human, financial and physical resources are used efficiently — no person is idle, no resource is wasted and no critical activity is uncovered. Organising is fundamentally about efficient resource allocation.
Adaptation to Change
A well-organised structure makes it easier to adapt when the environment changes. Departments can be restructured, authority can be redistributed and new roles can be created without disrupting the whole organisation.
Effective Administration
With clear hierarchy, defined roles and established procedures, administration becomes more systematic and professional. Management can focus on strategic planning rather than day-to-day confusion about who does what.
Development of Personnel
Delegation within an organised structure gives subordinates the opportunity to take on responsibilities, make decisions and develop new skills. This systematic career development is possible only in a well-organised environment.
Expansion and Growth
An organisation with a strong structure can scale — adding new products, new markets and new geographies — without losing control. The organisational structure is the backbone that supports growth.
5.5 Organisational Structure and 5.6 Span of Management
Organisational Structure
An organisational structure is the formal system that defines how activities such as task allocation, coordination and supervision are directed toward the achievement of organisational aims. It specifies: (i) Division of work and specialisation, (ii) Hierarchy and chain of command, (iii) Reporting relationships and coordination mechanisms, (iv) Centralisation or decentralisation of authority.
Span of Management (Span of Control)
Span of management refers to the number of subordinates that a manager can effectively supervise. It directly determines the shape of the organisational structure:
Narrow Span
Fewer subordinates per manager (typically 4–6). Results in a tall (vertical) hierarchy with many management levels. Enables closer supervision and better communication between manager and subordinates. But creates more management layers, higher costs and slower decision-making.
Wide Span
More subordinates per manager (typically 8–15+). Results in a flat (horizontal) hierarchy with fewer management levels. Faster communication and decision-making. But each manager is stretched thin and individual supervision is less intensive.
5.8 Types of Organisational Structure
Type A: Functional Structure
In a functional structure, the organisation is divided into departments based on the FUNCTIONS performed (Marketing, Finance, Production, HR, R&D etc.). All people doing marketing work are in the Marketing Department, all finance people in Finance Department and so on.
Advantages
1. Promotes specialisation: Grouping similar functions builds deep functional expertise.
2. Easy supervision: Functional managers supervise staff doing similar work — simpler to monitor quality.
3. Efficient coordination within function: People in same department share knowledge and best practices easily.
4. No duplication of functional effort: One marketing department serves the whole organisation.
5. Economies of scale: Shared functional resources reduce cost.
Disadvantages
1. Inter-departmental conflict: Each function prioritises its own goals; coordination between functions becomes difficult.
2. Difficult to fix product accountability: If a product fails, no single department can be blamed.
3. Slow response: Decisions involving multiple departments require cross-functional approval, slowing response.
4. Functional empires: Departments become inward-looking and resist cooperation with others.
Suitability: Small to medium organisations; single-product companies; stable environments where specialisation matters most. Example: A single-product manufacturing company with departments: Production, Marketing, Finance and HR.
Type B: Divisional Structure
In a divisional structure, the organisation is divided into semi-autonomous divisions based on PRODUCTS (or regions/customer groups). Each division has its own complete set of functional departments (its own Marketing, Finance, Production etc.).
Advantages
1. Product specialisation: Each division focuses entirely on one product — deep product knowledge and customer focus.
2. Fast decision-making: Divisional managers make decisions independently without cross-functional approval.
3. Clear accountability: Each division is a profit centre — accountability for product performance is clear.
4. Facilitates expansion: Adding a new product simply means adding a new division — no disruption to existing operations.
5. Enables diversification: Multiple unrelated products can be managed effectively.
Disadvantages
1. Duplication of resources: Each division has its own marketing, finance and HR — significant duplication and higher cost.
2. Inter-division rivalry: Divisions compete for resources, talent and attention from top management.
3. Higher operating cost: Running duplicate functional teams is expensive.
4. Divisional autonomy risk: Divisional managers may prioritise divisional goals over company interests.
Suitability: Large multi-product organisations; companies pursuing diversification strategies; dynamic environments where speed of response matters. Example: ITC Limited with divisions for Cigarettes, Hotels, Paperboards, Agribusiness and FMCG — each a self-contained business.
Functional vs Divisional Structure — Comparison
| Basis | Functional Structure | Divisional Structure |
|---|---|---|
| Basis of grouping | By function performed (Marketing, Finance, HR) | By product/division (each division self-contained) |
| Specialisation | Functional specialisation (depth in one function) | Product specialisation (focus on one product) |
| Accountability | Difficult to fix for one product | Clear — each division is a profit centre |
| Resource use | Efficient — no duplication of functions | Duplication across divisions — higher cost |
| Decision speed | Slower — cross-functional approvals needed | Faster — divisional manager decides independently |
| Suitable for | Single product, smaller size, stable environment | Multiple products, large size, dynamic environment |
| Example | A textile company with Production, Sales, Finance, HR departments | ITC with separate Cigarettes, Hotels, FMCG divisions |
5.9 Formal and Informal Organisation
Formal Organisation
The formal organisation is deliberately created by management to achieve organisational objectives. It has clearly defined roles, responsibilities, authority relationships and reporting lines. It is governed by official rules, procedures and an organisational chart. Communication flows through official channels. Example: The official hierarchy of a bank — Branch Manager, Assistant Manager, Relationship Officer, Teller — with defined roles and reporting lines.
Informal Organisation
The informal organisation emerges spontaneously from social relationships among employees — it is NOT deliberately created by management. It is based on friendship, common interests, personal relationships and shared experiences. It has no official recognition, no formal chart and no fixed rules. Communication flows through an informal network (the "grapevine"). Example: The lunch group of employees from different departments who discuss company gossip, support each other and sometimes influence decisions informally.
| Basis | Formal Organisation | Informal Organisation |
|---|---|---|
| Origin | Deliberately created by management | Emerges spontaneously from social interactions |
| Purpose | Achieve official organisational objectives | Satisfy social and personal needs of members |
| Authority | Based on official position in hierarchy | Based on personal acceptance and charisma |
| Communication | Official channels — written memos, formal meetings | Informal network (grapevine) — fast but often distorted |
| Rules | Rigid official rules and procedures | No formal rules — norms based on group acceptance |
| Nature | Stable — continues regardless of personnel changes | Dynamic — changes as relationships change |
| Importance | Provides order, control and accountability | Provides social support, faster information flow, fills gaps in formal communication |
5.10 Delegation of Authority and 5.12 Elements of Delegation
What is Delegation?
Delegation is the process by which a manager (delegator) assigns a part of his or her work/authority to a subordinate (delegatee), while retaining overall responsibility for the outcome. The delegator transfers the right to act — not the ultimate responsibility for the result.
5.12 Three Elements of Delegation
Authority
Definition: The right to give orders, make decisions and use organisational resources to carry out an assigned task.
Direction of flow: DOWNWARD — from superior to subordinate.
Can be delegated: YES — a manager can pass authority to a subordinate.
Example: The Sales Manager has the authority to approve discounts up to 10%.
Responsibility
Definition: The obligation of a subordinate to perform the assigned task to the best of their ability.
Direction of flow: UPWARD — from subordinate to superior (the subordinate is answerable to the superior for task performance).
Can be delegated: YES — responsibility for performing the task is delegated along with authority.
Example: The subordinate is responsible for completing the assigned sales report by Friday.
Accountability
Definition: The answerability for the final outcome of the task — whether the objective was achieved or not.
Direction of flow: UPWARD — from subordinate to superior.
Can be delegated: NO — NEVER. The delegator remains accountable to their own superior regardless of whether they delegated the task. This is the Principle of Absoluteness of Accountability.
Example: Even if the Sales Manager delegates the report to a team member, the Sales Manager is still accountable to the VP Sales for the report quality.
5.11 Principle of Absoluteness of Accountability
Accountability cannot be delegated. When a manager delegates authority and responsibility to a subordinate, they retain their own accountability to their superiors. The subordinate becomes accountable to the manager; the manager remains accountable to the next level up. This creates a continuous chain of accountability all the way to the top of the organisation. No manager can escape accountability by delegating work.
5.13 Features of Authority, Responsibility and Accountability
| Feature | Authority | Responsibility | Accountability |
|---|---|---|---|
| Nature | Right to command and decide | Obligation to perform | Answerability for outcome |
| Source | Position in hierarchy / delegation | Assigned with task | Created by responsibility |
| Flow direction | Downward (superior to subordinate) | Upward (subordinate to superior) | Upward (subordinate to superior) |
| Can be delegated? | Yes — fully delegatable | Yes — with the task | NO — absolute, cannot be delegated |
| Example | Manager approves leave applications | Team lead responsible for project delivery | Manager still answers to VP for project result |
5.14 Importance of Delegation
Reduces Managerial Workload
By delegating routine tasks to subordinates, managers free up time to focus on strategic planning, critical decisions and high-value activities. Without delegation, managers become bottlenecks — every decision flows through them, slowing everything down.
Develops Subordinates
When subordinates are given authority and responsibility, they develop new skills, gain confidence and prepare for higher positions. Delegation is the most powerful tool for developing the next generation of leaders within the organisation.
Motivates Subordinates
Being trusted with authority and responsibility is deeply motivating. When a manager delegates meaningful work, the subordinate feels valued and important — which increases engagement, effort and job satisfaction.
Facilitates Organisational Growth
As organisations grow, no single manager can personally handle all decisions and tasks. Delegation enables organisations to scale — work can be distributed across a larger number of people without losing coordination or quality.
Improves Decision Quality
Decisions made closer to the point of action are often better decisions — the person actually doing the work understands the specific situation best. Delegation pushes decision-making authority down to where the information is.
Creates Larger Management Span
With effective delegation, a manager can oversee more subordinates — widening the span of management without losing control. This enables flatter, more agile organisations.
5.15 Centralisation and Decentralisation
Centralisation
Centralisation means that decision-making authority is concentrated at the TOP levels of management. Lower-level managers and employees have little autonomy — they must refer decisions upward. The centre (top management) retains control over all important decisions.
When appropriate: Small organisations; situations requiring uniformity of action; crisis management; when top managers have superior expertise or information.
Decentralisation
Decentralisation means dispersal of decision-making authority to all levels of management — lower managers and even employees have the authority to make decisions within their domain without referring upward. It is a systematic and deliberate organisational policy of distributing authority throughout the hierarchy.
When appropriate: Large organisations; geographically spread operations; where speed of local decisions matters; where lower-level staff have better situational knowledge.
5.16 Relation Between Delegation and Decentralisation
Delegation and Decentralisation are related but distinct concepts. Delegation is the mechanism through which Decentralisation is achieved. When delegation of authority occurs systematically at ALL levels throughout the organisation — not just between one manager and one subordinate — it becomes Decentralisation.
| Basis | Delegation | Decentralisation |
|---|---|---|
| Nature | Individual process between one manager and one subordinate | Organisational philosophy / policy applied throughout |
| Scope | Between two specific individuals | Across all levels of the entire organisation |
| Purpose | To reduce the specific manager workload and complete the task | To grant decision-making autonomy to lower management levels broadly |
| Accountability | Delegating manager retains accountability to own superior | Top management retains ultimate accountability |
| Freedom given | Subordinate has limited freedom within delegated task | Lower management has wide freedom in their domain |
| Revocability | Easily revoked by the delegating manager | Requires policy change to reverse — more permanent |
| Relationship | Delegation is a STEP that leads to Decentralisation | Decentralisation is COMPLETE when delegation extends to all levels |
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30 MCQs — Organising
Process, structures, formal/informal organisation, delegation and decentralisation — heavy case focus. Q25–Q30 are CUET-level.
Reason (R): When a manager assigns a task and gives authority to a subordinate, the subordinate becomes fully responsible for the outcome, releasing the manager from any answerability to superiors.
Reason (R): Informal communication (grapevine) spreads rumours and misinformation that disrupt formal operations.
Chapter 5 — Live Quiz
30 questions · Organising · Process, structures, delegation and decentralisation · Instant feedback
