BBA Business Ethic Organising Notes

BBA Business Ethic Organising Notes

BBA Business Ethic Organising Notes:-


Meaning and Definition

The process of organizing involves establishing an intentional structure of roles for the staff at all levels of hierarchy in the organization. It is the function of identifying the required activities, grouping them into jobs, assigning jobs to various position holders, and creating a network of relationships, so that the required functions are performed in a coordinated manner, leading to the accomplishment of desired goals.

According to Koonts O Donnel, “Organizing involves the grouping of activities necessary to accomplish goals and plans, the assignment of these activities to appropriate departments, and the provision of authority delegation and Co-ordination.”

According to GR Terry, “Organizing is the establishment of effective behavioral relationship among persons so that they may work together effectively and gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or objectives.”

Steps in Organizing

The logical sequence of steps in organizing is mentioned below:- 1. Establishing objectives 2. Designing Plans and Policies 3. Identifying specific activities 4. Grouping activities according to available resources 5. Delegating the authority necessary to perform the activities. 6. Tying the groups together through authority relationships and communication.

Functions of Organisation

The following are the important functions of the organization

  1. Determination of activities:- It includes the deciding and division of various activities required to achieve the objectives of the organization. The entire work is divided into various parts and subparts.
  2. Grouping of activities:- Here, identical activities are grouped under one department.
  3. Allotment of duties to specified persons:- For effective performance, the grouped activities are allotted to specified persons.
  4. Delegation of authority:- Assignment of duties should be followed by a delegation of authority. It is difficult to perform the duties effectively if there is no authority to do it.
  5. Defining relationship:- When a group of people is working together for a common goal, it is necessary to define the relationship among them in clear terms.
  6. Coordination of various activities:- The delegated authority and responsibility should be coordinated by a responsible person.
Principles of Organisation

The following are the important principles to be followed by management for the success of an organization.

  1. Principle of definition:- It says that it is necessary to define and fix the duties, responsibilities, and authority of each work. In addition to that, the organizational relationship of each worker with others should be clearly defined.
  2. Principles of Objectives:- The objectives of different departs should be geared to achieve the main objective of the organization.
  3. Division of work:- A work should be assigned to a person according to his educational qualifications, experience, skill, and interest. It will result in attaining specialization in a particular area.
  4. Principles of continuity:– It is essential that there should be a reoperation of objectives, re-adjustment of plants, and provision of opportunities for the development of future management. This process is taken over by every organization periodically.
  5. Principles of Span of Control:– These principles determine the number of subordinates a superior can effectively manage.
  6. Principles of Exception:- Here, all the routine decisions are taken by the subordinates; senior managers will only deal with exceptional matters. It is known as management by exception.
  7. Principles of flexibility:– The organizational setup should be flexible to adjust to the changing environment of business.
  8. Principles of Unity of Direction:– All departmental goals are tuned to achieve a common goal. So there should be coordination of all the activities.
  9. Principles of Balance:– There are several units functioning separately under an organizational setup. So, it is essential that the sequence of work should be arranged scientifically.
  10. The scalar principle:- Says that each and every person should know who is his superior and to whom he is answerable.
  11. Principle of efficiency:- The work should be completed with minimum members, in less time, with minimum resources, and with the right time.
  12. Delegation of Authority:- Authority should be delegated to the subordinate for the successful completion of the assigned job.
  13. Principles of responsibility:- Each person is responsible for the work completed by him.So the responsibility of the subordinates should be clearly defined.
  14. Principles of Uniformity:- The work distribution should be in such a manner that there should be an equal status and equal authority and powers among the same line officers.
  15. Simplicity and Accountability:- The structures of the organization should be simple and the higher authorities are accountable for the acts of their subordinates

Classification of Organization

  1. Formal Organisation:- It is an organizational structure that clearly defines the duties, responsibilities, authority, and relationship as prescribed by the top management. It represents the classification of activities within the enterprise, indicates who reports to whom, and explains the vertical flow of communications which connects the chief executive to the ordinary workers.
  2. Informal Organisation:- It is an organizational structure that establishes the relationship on the basis of the likes and dislikes of officers without considering the rules, regulations, and procedures. Friendship, mutual understanding, and confidence are some of the reasons for the existing informal organization.
Differences between formal and informal Organisation

Informal Organisation

Formal  Organisation

1.It is created deliberately 1. It is spontaneous.
2.Authority flows from top to bottom 2. Informal authority flows from top to bottom or horizontally.
3. It is created for a technological purpose 3. It arises from man‘s quest for social satisfaction
4. It is permanent and stable 4. There is no such permanent nature and stability
5. It gives importance to terms of authority and function. 5. It gives importance to people and their relationships.
6. It arises due to delegation of authority 6. It arises due to the social interaction of people
7. Duties and responsibilities of workers are given in writing 7. No such written rules and duties.
8. Formal organization may grow to the maximum size 8. Informal organization tends to remain smaller.



The organization is designed on the basis of principles of division of labor and span of management. The success of the organization depends upon the competence and efficiency of the officers. It is necessary to chalk an outline of authority among the people working in an organization.

Types of Organizational Structure

A brief explanation of the important types of organizations is given below


Under Line organization, each department is generally a completely self-contained unit. In this type of organization, the line authority flows from top to bottom vertically. It clearly identifies authority, responsibility, and accountability at each level, departmental heads are given full freedom to control their department. This type of organization is followed in the army on the same pattern. So, it is also called a military organization.

Features of Line organization

  1. It consist of vertical direct relationship
  2. Authority flows from top to bottom
  3. Operations of this system is very easy.
  4. It facilitate to know from whom one should get orders and to who one should give orders
  5. Existence of direct relationship between superiors and subordinates
  6. The superior will take decisions within the scope of his authority.

In this type of organization, Line officers have authority to make decisions and implement them, but the staff officers will assist them while taking decisions. The function of staff officers is only an advising one. They should advise and helpline managers to take proper decisions. In the fast-developing industrial world, the line officers are not in a position to acquire all the technical knowledge, which is necessary for taking the right decisions. That gap may be bridged with the help of staff officers. The staff officers may be experts in a particular field.

Features of Line and Staff Organisation
  1. Authority flows from top to bottom
  2. Line Officers will take decisions on the basis of suggestions given by staff officers
  3. Staff officers have no power to make decisions and no control over subordinates.
  4. The workers get the instructions only from the line officers

Advantages of Line and Staff Organisation:

  1. A line officer can make sound decisions on the basis of proper advice from the staff officer.
  2. The workload of line officers would be reduced to some extent,
  3. It promotes the efficient functioning of the line officers
  4. The principles of unity of command are followed in the line and staff organization.
  5. A very good opportunity is made available to the young person to get training.
  6. It facilitates the workers to work faster and better.
  7. It enables the organization to effectively utilize the staff officer‘s experience and advice. Disadvantages of Line and Staff Organisation
  8. If the powers of authority is not clearly defined , it will lead to confusion though out the organization.
  9. The line officers may reject the advice from staff officers without assigning any reason.
  10.  The staff officers may under estimate the powers of line officers.
  11. The staff officers are not involved in the actual implementation of the program.
  12. The staff officers are not responsible if favorable results are not obtained.
  13. The difference of opinion between line officers and staff officers will defeat the very purpose of specialization.
  14. The line officers may misunderstand the advice given by staff officers.

In this type of organization, specialists are appointed in top positions throughout the organization. Various activities of the enterprise are classified according to functions and functional heads will give directions relating to his functions. Workers, under functional organization, receive instructions from various specialists.

Characteristics of Functional Organisation

  1. The work is divided according to specified functions.
  2. Authority is given to specialists to give orders and instructions in relation to specific functions.
  3. The decision is taken only after making consultations with the functional authority relating to his specialized area.
  4. The executives and supervisors discharge the responsibilities of functional authority.

The following points will explain the benefits of a functional organization.

  1. The benefit of specialization:- In this type of organization, each work is performed by a specialist. It helps to enhance the efficiency of the organization.
  2. Reducing workload:- Each person is expected to look after only one type of work. It reduces the unnecessary work allotted to them.
  3. Relief to line executives:- Under functional organization, the instructions are given by the specialists directly to the actual workers. Hence, the line executives do not have any problem regarding the routine work.
  4. Mass production:- Large-scale production can be achieved with the help of specialization and standardization.
  5. Flexibility:- Any change in the organization can be introduced without any difficulty.

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