•The organization structures is consciously designed to enable the people of the organization to work together for accomplishing the common objectives of the enterprise •Organization structure concentrates on the jobs to be performed and not the individual’s who are to perform jobs. •In a formal organization, individuals are fitted into jobs and positions and work as per the managerial decisions. Thus, the formal relations in the organization arise from the pattern of responsibilities that are created by the management. •A formal organization is bound by rules, regulations and procedures. •In a formal organization, the position, authority, responsibility and accountability of each level are clearly defined. •Organization structure is based on division of labor and specialization to achieve efficiency in operations. •A formal organization is deliberately impersonal. The organization does not take into consideration the sentiments of organizational members. •The authority and responsibility relationships created by the organization structure are to be honored by everyone. •In a formal organization, coordination proceeds according to the prescribed pattern. Advantages of formal organization: The formal organization structure concentrates on the jobs to be performed. It, therefore, makes everybody responsible for a given task. •A formal organization is bound by rules, regulations and procedures. It thus ensures law and order in the organization. •The organization structure enables the people of the organization to work together for accomplishing the common objectives of the enterprise Disadvantages or criticisms of formal organization: •The formal organization does not take into consideration the sentiments of organizational members. •The formal organization does not consider the goals of the individuals. It is designed to achieve the goals of the organization only.
•Informal organizations are based on common taste, problem, language, religion, culture; etc.it is influenced by the personal attitudes, emotions, whims, likes and dislikes etc. of the people in the organization. Benefits of Informal organization: It blends with the formal organization to make it more effective. •Many things which cannot be achieved through formal organization can be achieved through informal organization. •The presence of informal organization in an enterprise makes the managers plan and act more carefully. •Informal organization acts as a means by which the workers achieve a sense of security and belonging. It provides social satisfaction to group members. •An informal organization has a powerful influence on productivity and job satisfaction. •The informal leader lightens the burden of the formal manager and tries to fill in the gaps in the manager's ability. •Informal organization helps the group members to attain specific personal objectives. •Informal organization is the best means of employee communication. It is very fast. •Informal organization gives psychological satisfaction to the members. It acts as a safety valve for the emotional problems and frustrations of the workers of the organization because they get a platform to express their feelings. •It serves as an agency for social control of human behavior. DIFFERENCES BETWEEN FORMAL AND INFORMAL ORGANIZATION: Formal Organization Informal Organization 1. Formal organization is established with the explicit aim of achieving well-defined goals. 1. Informal organization springs on its own. Its goals are ill defined and intangible. 2. Formal organization is bound together by authority relationships among members. A hierarchical structure is created, constituting 2. Informal organization is characterized by a generalized sort of power relationships. Power in informal organization has bases other than
•It ensures better customer service •Unprofitable products may be easily determined •It assists in development of all around managerial talent •Makes control effective •It is flexible and new product line can be added easily. Disadvantages: •It is expensive as duplication of service functions occurs in various product divisions •Customers and dealers have to deal with different persons for complaint and information of different products. c) CUSTOMERDEPARTMENTATION: Advantages: •It focused on customers who are ultimate suppliers of money •Better service to customer having different needs and tastes •Development in general managerial skills Disadvantages: •Sales being the exclusive field of its application, co-ordination may appear difficult between sales function and other enterprise functions.
•Specialized sales staff may become idle with the downward movement of sales to any specified group of customers d)GEOGRAPHICDEPARTMENTATION: Geographic departmentation is the process of grouping activities on the basis of territory. If an organization's customers are geographically dispersed, it can group jobs based on geography. For example, the organization structure of Coca-Cola Ltd has reflected the company’s operation in various geographic areas such as Central North American group, Western North American group, Eastern North American group and European group. Advantages: •Help to cater to the needs of local people more satisfactorily. •It facilitates effective control •Assists in development of all-round managerial skills Disadvantages: •Communication problem between head office and regional office due to lack of means of communication at some location •Coordination between various divisions may become difficult. •Distance between policy framers and executors •It leads to duplication of activities which may cost higher. e) PROCESS DEPARTMENTATION:
All of the needs are structured into a hierarchy and only once a lower level of need has been fully met, would a worker be motivated by the opportunity of having the next need up in the hierarchy satisfied. For example a person who is dying of hunger will be motivated to achieve a basic wage in order to buy food before worrying about having a secure job contract or the respect of others. A business should therefore offer different incentives to workers in order to help them fulfill each need in turn and progress up the hierarchy. Managers should also recognize that workers are not all motivated in the same way and do not all move up the hierarchy at the same pace. They may therefore have to offer a slightly different set of incentives from worker to worker. c) Frederick Herzberg’s motivation-hygiene theory: Frederick has tried to modify Maslow’s need Hierarchy theory. His theory is also known as two-factor theory or Hygiene theory. He stated that there are certain satisfiers and dissatisfies for employees at work. Intrinsic factors are related to job satisfaction, while extrinsic factors are associated with dissatisfaction. He devised his theory on the question: “What do people want from their jobs?” He asked people to describe in detail, such situations when they felt exceptionally good or exceptionally bad. From the responses that he received, he concluded that opposite of satisfaction is not dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily make the job satisfying. He states that presence of certain factors in the organization is natural and the presence of the same does not lead to motivation. However, their non-presence leads to de-motivation. In similar manner there are certain factors, the absence of which causes no dissatisfaction, but their presence has motivational impact. Examples of Hygiene factors are: Security, status, relationship with subordinates, personal life, salary, work conditions, relationship with supervisor and company policy and administration. Examples of Motivational factors are: Growth prospectus job advancement, responsibility, challenges, recognition and achievements. d) Victor Vroom’s Expectancy theory:
Disadvantages: Takes long time to take decisions Danger of pseudo participation c) Laissez-Faire Style: This French phrase means “leave it be” and is used to describe a leader who leaveshis/her colleagues to get on with their work. The style is largely a "hands off" view that tends tominimize the amount of direction and face time required. Advantages: No work for the leader Frustration may force others into leadership roles Allows the visionary worker the opportunity to do what they want, free from interference Empowers the group Disadvantages: It makes employees feel insecure at the unavailability of a manager. The manager cannot provide regular feedback to let employees know how well they aredoing. Managers are unable to thank employees for their good work. The manager doesn’t understand his or her responsibilities and is hoping the employeescan cover for him or her. LEADERSHIP THEORIES: The various leadership theories are A) Great Man Theory: Assumptions,
be frustrated. Like wartime leaders, however, given the right situation they come into their own and can be personally responsible for saving entire companies. COMMUNICATION: Communication is the exchange of messages between people for the purpose of achieving common meanings. Unless common meanings are shared, managers find it extremely difficult to influence others. Whenever group of people interact, communication takes place. Communication is the exchange of information using a shared set of symbols. It is the process that links group members and enables them to coordinate their activities. Therefore, when managers foster effective communication, they strengthen the connections between employees and build cooperation. Communication also functions to build and reinforce interdependence between various parts of the organization. As a linking mechanism among the different organizational subsystems, communication is a central feature of the structure of groups and organizations. It helps to coordinate tasks and activities within and between organizations. DEFINITION: According to Koontz and O'Donnell, "Communication, is an intercourse by words, letters symbols or messages, and is a way that the organization members shares meaning and understanding with another". THE COMMUNICATION PROCESS Communication is important in building and sustaining human relationships at work. Communication can be thought of as a process or flow. Before communication can take place, a purpose, expressed as a message to be conveyed is needed. It passes between the sender and the receivers. The result is transference of meaning from one person to another. The figure below depicts the communication process. This model is made up of seven parts :(1) Source, (2) Encoding, (3) Message, (4) Channel, (5) Decoding, (6) Receiver, and (7)Feedback.