OCM 3 Marks Each

• The benefits of matrix management are mostly enjoyed by the employees as they can gather dual support from the product manager and the functional manager both. Thus knowledge, effort, skill and work all are taken care of.
• The available resources are more efficiently used when this structure is implemented. The resources are not stagnated either as they can be shared among the ongoing projects. This reduces the cost also.
• The flow of information is smooth in all directions
• All the departments involved coordinate with each other and thus miscommunication does not occur.
• With more than one manager in place, the employees have to take decisions autonomously sharpening their decision-making skill.
• Both lateral coordination and specialization are encouraged.

• The structure is overtly complex; not all employees are comfortable working here.
• The dual authority may pose many problems in terms of complexity. Employees may often get confused about whom to approach as the higher authority.
• If any of the managers showcase ineffectiveness in management, miscommunication my follow
• It is more expensive than other organizational structures.
• If there is a lack of communication between the managers or there is internal competition between them, conflicts are bound to occur leading to the failure of achieving organisational objectives.

• During delegation of work, the person who has been delegated the power and work is accountable for this work to the higher authorities.
• He needs to provide proper explanation and follow reporting process to the top level management.
• The delegated person may be having the powers to get the work done by others but finally the responsibility of getting the work done rests with the upper level administrators only.
• This means if the delegated work is not done as planned, the person who has delegated cannot put the blame on the shoulder of the person to whom the work was delegated. Hence, a task may be delegated but not the accountability.

• In business terminology, ‘power’ refers to giving orders and also to see to it that the orders are followed.
• Person having power has right to make decisions and execute tasks. This leads to smooth functioning of management and administration.
• However, when the size of the organization becomes large, it becomes difficult .for the upper level administrators to conduct all work on their own and execute all their powers on own. Hence, they assign some work to their assistants.
• By delegating power to the lower level, the upper level administrators get free from such works that can be performed by junior level staff. This helps the upper level people to focus upon their core tasks i.e. policy making.
• This increases efficiency of the management and organizing.

• During delegation of work, the person who has been delegated the power and work is accountable for this work to the higher authorities.
• He needs to provide proper explanation and follow reporting process to the top level management. This is known as accountability.
• The delegated person may be having the powers to get the work done by / others but finally the responsibility of getting the work done rests with the upper level administrators only.
• Hence the middle level authority holders i.e. the ones who are delegated the power should take care to ensure that the work is properly done by the lower level staff.
• The middle level authority holder cannot free himself from his responsibility of getting work done. Note that this accountability flows from lower level to upper level i.e. the lower level is accountable to the middle level and middle to upper level.
• This accountability cannot be passed on. For example, the Accounts Officer may give the work of writing accounts to his accountant but when the accounts are written, it is the Accounts Officer who has to check the accuracy of the work done and not the Accountant.

• According to Louis Allen, “Delegation of authority means assignment of responsibility and power to the subordinates by creating accountability for effective performance.”
• He also says that “Delegation of power is such kind of process in which the administrator gives a part of the powers to his helpers along with duties, and the helpers, with the help of others, for the purpose of work performance, accepts such powers consciously.”

• The system of giving power to the other person for doing a particular task is called delegation of power.
• For example, marketing managers are given power to incur necessary expenditure in their work area, appointment of employees, take disciplinary actions against the employees, etc.

• Decentralization cannot be adopted in very small units, especially because the business secrets cannot be maintained.
• Sometimes when common policies are not implemented or if co-ordination is not maintained properly, decentralization becomes unsuccessful.

• According to Henri Fayol, “To assign powers to the superiors, to enable distribution of work, and to include in decision making process is called decentralization.”
• Whether to opt for centralization or decentralization largely depends of the size of the unit and the approach of the administrators.
• Small sized organization can have centralized powers but generally large sized organizations should have decentralized form of management for successful organizing.
• Under decentralization not all but some major powers such as executive powers are given by the upper level administrators to the lower level.

Decentralization:
The delegation of power from upper to lower level in orderly manner is known as decentralization of power.

• Miscommunication and ineffective managing can result in employee dissatisfaction and low morale.
• Prolonged issues may cause the organization to experience high employee turnover.
• Matrix organizational structure is expensive to maintain.
• A company’s overhead cost typically increases because of the need for double management.

• Matrix organization is a modern form of organization, which has two different types of structures.
  One is the functional structure which forms the part of decision making. The second is the technical problems solution based structure which is called project structure. The combination of both these structures results in matrix organization.
• Moreover, in matrix organization, the organization gets the benefits of specialized work as well as that of project management.
• Hence, matrix organization is multi-faced structure.

• In the formal organizational structure individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the organization. This network of social and friendly groups forms another structure in the organization which is called informal organizational structure.
• The members while doing the formal work also interact at social level, bring their own values and assumptions during work discussion.
• The members of informal organization develop friendship, alliances, trusted sources of information and share preferences on how work should be done.
• This makes achieving the goals easily and in a harmonious manner.
• Owing to several benefits the organization gets, it accepts informal organization.

1. Formal structure: The administrators form the formal structure very cautiously to achieve the desired goals.
2. Lacking flexibility: In this kind of structure, the position assigned to the employees generally cannot be changed or altered. So, this structure is not flexible.
3. Delegation of power from upper to lower level: The delegation of power is done by superior officer and it flows from upper level to lower level.
4. Large size: Formal organization structure is a large size structure.
5. Particular relations: Since the formal organization is formed with proper method, the relations among the employees are particularly formed.
6. Communication: Communication is done only through a formal method. There is no scope for informal communication.

• In order to achieve the predefined goals, the formal structure of relationship established among persons and work is called formal organization.
• Linear organization and functional organization are types of formal organization.
• In formal organization, necessary powers are given to enable the person to perform certain kind of responsibilities.
• The organization also clarifies matters related to delegation of authority among superior officers.

• Linear organization is the most simple and ancient type of organization.
• Linear organization is more favourable if the organization is of small size, the work area is limited and the problems of control and discipline are also limited.
• In such types of organization there is a unity of command which follows from top to bottom.
• These characteristics are quite suitable even for organizations which are pretty small size. As a result, linear organization is most commonly found organizational structure.

• Linear organization flows from top to bottom with top having unlimited powers and bottom level, minimal.
• Linear organization gives more importance to department than work. This is the greatest limitation of linear organization structure.
• Linear organization does not have scope for specialized work because the stress is more on departments and less on functions.
• The administrators and officers in one unit have to perform many several types of tasks. Naturally, all of them are not experts in all the types of works.

1. Linear Organization
2. Functional Organization
3. Formal Organization
4. Informal Organization
5. Matrix Organization

• By looking at the structure of the organization one can know the type of organization.
• What structures will the business follow depends on the nature, size and responsibilities of business unit and its classification.

• In a business unit, after preparing the list of functions, the works that are similar in nature are classified and similar functions are placed together. Then the division of work is done accordingly. This is called departmentalization.
• For example, work related to purchase is put under purchase department, work related to sales is put under sales department, work related to finance is put under accounts department and Sb on.

• According to Peter F. Drucker, “The lack of proper formation of organization cannot sustain for longtime. Hence, the unit slowly gets destroyed.”
• Organizing gives a proper direction and flow to the business unit.
• Goals, roles, responsibilities and authorities are clearly understood by all the . employees if organizing is done properly.
• It is therefore necessary to see that organizing done by following proper steps and that the functional relations are established in proper manner.

1. Goal oriented activity
2. Planning based
3. Delegation of authority and responsibilities
4. Gives importance to human element

• The structure formed in order to enable delegation of authority and responsibility towards the people actively engaged for common goal is known as organizing. Organizing is also called arrangement.
• For smooth and effective administration and management there should be proper organization in the unit.
• Most of problems of management arise due to ineffective organization in the management.
• Proper organizing can enable the unit to achieve its goals that too in desired time. It also enables optimum use of resources, time, energy and money.

• The structure formed in order to enable delegation of authority and responsibility towards the people actively engaged for common goal is known as organizing.
• As per Chester I. Bernard, “The activity conducted by the co-operation of two or more people and their co-ordination is called organizing.”
• As Per Louie Allen, “Organizing is the process of identifying and classifying 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.”

• The reason is that it is not possible that officer has knowledge of all functions and even if he has, the limitations of time will always be there.
• Therefore, each officer does some functions on his own and delegates other functions to other.
• Officers can reduce their workload by delegating authority.
• They can use the time saved for considering growth strategies for future and can concentrate on research function.
• They can increase the reputation of unit by developing public relations by providing necessary expiations and information to various parties connected with the company.
• In modern age, the delegation of authority is used also for availing benefits of labour division and specialization.

• Due to recentralization of power, the employees have the chance to develop have the chance to develop their abilities.
• Due to which they also gain psychological benefits.
• Thus interrelations develop in the unit.
• Due to this right kind of motivation is obtained.

• On account of that they can carry out the job-duty properly and the misuse of authority is avoided.
• On account of proper delegation of authority the activities of each division are performed timely.
• As a result, the functions of co-ordination and control are also eased.
• In short, in the achievement of divisional and organizational goals the contribution of delegation of authority is considered important.

• But when the top managers delegate the authority to take decisions to the officers of each level in respect of their functions, it is called Delegation of authority.
• In short, the Delegation gives the freedom of decisions making to each level.
• Thus, without the Delegation of authority, Delegation of authority is not possible and hence, both are said to be two sides of a dingle coin.
• There is only a thin line of difference between them.

• So, the responsibility to provide leadership and direction to the subordinates also arises.
• The delegator reduces his workload by delegating the work but the accountability to answer the questions in respect of the work lies with him only.
• Thus, due to delegation the leadership skills such as leadership, direction, enthusiasm, co-ordination etc. grow in the person and so the managers for future get prepared.

• On his own because it is not possible to have the knowledge of all these functions with him. And if he tries it, all functions will be delayed.
• But if the authority to take decisions in respect of these functions is delegated to the functional heads, the benefits of their skills and knowledge can be obtained and effective decisions can be made for all divisional functions.
• On the other hand, as the workload of top managers is reduced, they are required to only co-ordinate the divisional functions.
• That is why delegation of authority is considered the base for the success of organisation.

• The activities are done in accordance with division of authority and responsibility among officers and employees.
• Line organization, functional, committee and matrix organization etc.
• Are formal organizations.
• But nowadays an organization based neither on authority and responsibility but an organization based on human group activity.
• There in, the human relation, feeling, relatedness\reference, religious-traditions play an important role.
• Employees show preparedness to work for each other voluntarily.
• Which is considered useful from the viewpoint of continuity of activities and co-ordination.
• Moreover, for the solution of industrial disputes and maintain of discipline also informal organization can be used positively, so its importance has become acceptable.

• Mental stress of employees is reduced
• The authority of management is restrained.
• This organisation complements the accomplishments of objective of formal organisation.
• Risk of rumors being spread.
• Social restrictions on employees are reduced.

• There is a possibility to oppose the change.
• Indiscipline to be encouraged.
• Industrial peace is endangered.
• Risk of rumors being spread.
• Possibility of obstacles being placed in management.

• Different experts are appointed and these experts are advisers and administrative officers also.
• As experts are appointed and these experts are advisers and administrative officers also.
• As experts are to be appointed, they have to be paid high remuneration.
• So, this type of organisation is generally found to be more expensive.

• E.g. Purchase function, Production function, Sales function, Publicity function etc.
• Here, different experts are appointed for every function.
• Here small segments are decided upon and handed over to different experts like account officers, quality officer etc.
• Every officer can give orders to every worker of the unit.
• So, here functions have more importance that department.

• Hence, all employees remain connected with on another.
• In this type of organisation, various divisions are created as per various functions e.g. purchase division, sales division, finance division etc.
• The head of each division is held responsible for the activities of this division.
• Supervisors, employees are subordinated to divisional head.
• They are assigned authority in respect of their work.
• This way each person can do his work easily.
• Hence, in view of work division and control line organization is thought more appropriate.

• Even if the various factors affecting business are favorable but if the organisation implementing the activities is inefficient, the maximum utilization of resources will be wasted and it will become difficult to meet production targets.
• As a result, it will be difficult to put in the market timely the right quality of products, the market will be lost and business unit will fail.
• As per opinion of a successful industrialist, if organisation is efficient, the lost factories, transportation vehicles, business-trade and finance can be regained.

• Officers delegate authority to the subordinates, while the accountability moves from the bottom level to the top level management.
• Executives reduce the workload by delegation but it does not reduce the responsibility.
• The answerability i.e. the accountability to the superiors for the success or failure of the job delegated lies with the delegator of authority.
• The chain of accountability moves from employee to supervisor, supervisor to officer, officer to divisional head to general manager.
• Hence, accountability is considered towards top level from the bottom level of management.
• Thus, delegation of authority and the accountability go in opposite directions.

• But on account of it, the workload of top managers increases and so they cannot think of the growth plans for the unit.
• Moreover, the subordinates of officers do not have any authority, so they also cannot engage themselves in any inventive.
• Hence, the growth of company is hindered.
• On account of lack of authority, branch officers cannot exploit the domestic factors and so the profitability of the unit is hampered.

• In fact, while assigning the work, necessary authority also has to be delegated in order that subordinates can perform the work properly,
• Otherwise the work will be interrupted on account of lack of authority.
• Example: ‘A’ person is assigned the responsibility to ensure cleanliness of the office. If the officers have not given authority to expand to that person, due to lack of enough tools, cleanliness will not be maintained.
• On account of lack of requisite authority, employees will fail to perform their duties.
• They become negligent for their duties and hence, the purpose of delegation is not achieved.
• Hence, not only the work but relevant authority should also be delegated.

• Hence, the benefit of labour division is obtained.
• But, Mr. Frederick Taylor, has suggested to classify the functions of foremen into two categories, in his foremanship style of functional organisation.
• Planning division in which procedure/method officer, directing officer, discipline officer, cost officer are included.
• In this method instead of handing over all the functions of production division to one or two foremen, they are assigned to experts concerned.
• So, all activities become effective and benefits of labour division are gained.

• For each division a head is appointed.
• He is given full authority and responsibility of that division, e.g. production division, sales division, finance division, administrative division etc.
• In each of these divisions the various functions related to that division are performed.
• E.g. With production division, the functions purchase, storage of materials, machine maintenance etc.
• Are connected. With the sales division, distribution activities are connected.
• Thus, not on the basis of functions but on the basis of division the activities are divided, hence it is also called divisional organisation.

• The workers of the divisions are assigned job-duties in respect of their work and also authority to perform them.
• E.g. when sales officer is given responsibility to increase the sales, the authority to advertise has to be given.
• If the authority and responsibility are not divided properly,
• Due to lack of requisite authority, employees cannot discharge their duties,
• Excess authority given will be misused,
• If authority is less compared to work assigned, the work will be interrupted,
• Due to lack of authority time, energy and resources are wasted,
• The divisional and business goals will not be achieved easily.
• That is why it is said that balance of authority and responsibility are the base of organisation.
• It cannot exist without it.

• The work distribution is done according to the nature of work.
• An expert is appointed for each kind of work.
• The experts are advisors as well as administrative heads who are fully responsible for the task.

• Diagram of Functional Organization :