Chapter – 11 TYPES OF ORGANISATION

TYPES OF ORGANISATION
Introduction
Organisation is designed on the basic of principles of labour and span of
management. The success of the organisation depends upon the experience and
competence of the officers of the organisation. Nature, scale and size of the business
are the normal factors which determine forms of internal organisation. The following
common types of organisation find a place in the structure of internal organisation.
1. Line, Military or scalar organisation
2. Functional organisation
3. Line and staff organisation
4. Committee organisation
5. Project organisation
6. Matrix organisation
7. Freeform organisation

Line Organisation
Line organisation is the simple and oldest type of organisation followed in an
organisation. Under line organisation, each department is generally a
complete self-contained unit.
A separate person will look after the activities of the department and he has
full control over the department.
The same level executives do not give or receive any orders amongst
themselves. But they receive orders from their immediate boss and give
orders to their subordinates. Hence, all the heads are responsible to the
general manager, the general manager, in turn, is responsible to the
shareholders who are the owners.
This type of organisation is followed in the army on the same pattern. So, it is
called military organisation. Under type of organisation, the line of authority
flows from the top to bottom vertically. So it is called line organisation.

Characteristics of line organisation

1. It consists of direct vertical relationships.
2. Authority flows from top-level to bottom level.
3. Departmental heads are given full freedom to control their departments.
4. Each member knows from whom he would get orders and to whom he should
give his orders.
5. A senior member has direst command over his subordinates.
6. Operation of this system is very easy.
7. Existence of direct relationship between superiors and subordinates.
8. The superior takes decisions within the scope of his authority

Advantages of line organisation Disadvantages of line organisation

1. Simplicity 1. Lack of specification
2. Division of authority and 2. Over loading
responsibility 3. Lack of initiative
3. Unity of control 4. Scope for favoritism
4. Speedy action 5. dictatorial
5. Discipline 6. Limited communication
6. Economical 7. United administration
7. Co-ordination 8. Subjective approach
8. Direct communication 9. Instability
9. Flexibility 10. Lack of co-ordination
Chapter – 11 TYPES OF ORGANISATION

Suitability
1. This type of organisation is suitable to small size business units.
2. Where the activities are of routine nature or machine based.
3. If the business activities are service mined.
4. Where the number of persons working is small
5. The business operation is simple in nature.
6. A business unit which has straight methods of operations.
Functional organisation
Under line organisation, a single person is in charge of all the activities of the
concerned department. The person in charge finds it difficult to supervise all the
activities efficiently.
The reason is that the person does not have enough capacity and required training.
Under functional organisation, various specialists are for various functions performed
in an organisation. These specialists will attend to the work which is common to
different functions of various departments. Workers, under functional organisation,
receive instructions from various specialists.
The need for functional organisation arises out of:
The complexity of modern and large-scale organisation
A desire to use the specialization in full and;
To avoid the work-load of line managers with complex problems and decision-
making
Characteristics of functional organisation
• The work is divided according to specified functions.
• Authority is given to a specialist to give orders and instructions in relation to
specific function.
• Functional authority has right and power to give command throughout the line
with reference to his specified area.
• The decision is taken only after making consultations with the functional
authority relating to his specialized area.
• The executives and supervisors discharge the responsibility of functional
authority.
o Route clerk
o instruction card clerk
o time and cost clerk
o Gang boss
o Speed boss
o Inspector
o Repair boss
o Disciplinarian
Advantages of functional Disadvantages of functional
organisation organisation
• Benefit of specialization • Complex relationship
• Application of expert knowledge • Discipline
• Reducing the work load • Over specialization
• efficiency • Ineffective co-ordination
• adequate supervision • Speed of action
• Relief to line executive • Centralization
• Co-operation • Lack of responsibility
• Economy • Increasing the overhead expenses
• Flexibility • Poor administration
• Mass production • Suitability of functional
organisation
Chapter – 11 TYPES OF ORGANISATION

Line and staff organisation

The line officers have authority to take decisions and implement them to achieve the
objectives of the organisation. The line officers may be assisted by the staff officers
while framing the policies and plans and taking decisions organisation. The authority
flows from top level to the lower level of the organisation through the line officers
while the staff officers attached to the various departments advise the departments.
The staff officers are not in a position to compel the line officers to follow the advice
by them. Each department is headed by a line officer who exercises full authority
regarding the planning.
Types of staff
1. Personal staff
2. Specialized staff
3. General staff assistant
Functions of staff officers
1. The staff officers assist the line officers in the planning of business activity.
2. The board of directors frames the policies of the business on the basis of
recommendations given by the staff officers.
3. The managers can get the advice from the staff officers regarding the
selection. ‘training’ placement and remuneration fixation the personnel
4. The staff officers give regarding the method of improving the product, the
technique of reducing the cost of production, increasing the profits of the
concern.
5. The staff officers prescribe the procedures to be followed by the line officers
in the execution of policies and programs.
6. Staff officers of a department help the manager in the preparation of budget
of the department.
7. The staff officers may be called to solve the administrative problems
encountered by the line officers in general.
Arguments of staff officers against line officers
1. The staff officers have only theoretical academic knowledge but not practical
knowledge.
2. The staff officers go beyond their sphere of activity and assume that they
have line officer’s authority.
3. Much of the advice given by the staff officers is impractical
4. Since the staff officers unnecessary increase the paperwork of the line
officers.
5. The staffs give advice without considering the nature of business as a whole.
6. Staff officers are very much interested in becoming line officers of the
organisation rather than impairing advice to them.
Solution to the conflict between line officers and staff officers
1. Both line officers and staff officers should clearly understand the nature of
relationship prevailing between them.
2. A separate staff member should be appointed to bring about co-operation
between the line officers and staff officers.
3. The line officers should be encouraged to use the advice of staff officers.
4. Only qualified persons should be selected and placed as staff officers.
5. The staff officers should be convinced by the line officers if their advice is not
accepted
6. The responsibility for results could be fixed on both line officers and staff
officers
7. Only experienced persons alone should be promoted as line executives.
Chapter – 11 TYPES OF ORGANISATION

8. Remove the fear of the line officers and staff officers whether the new ideas
of advice would be properly put into use or not.

Advantages of line and staff Disadvantages of line and line and

organisation staff organisation
Facilitates to work faster and better If powers are not defined then get
confusion
Specialization is attained Line officers may reject advice without
any reason for their action
Enables to utilize experience and advice Staff officers are not responsible if
favorable results are not obtained.
Officers can take sound advice Difference between line and staff officers
will defeat the very purpose of
specialization.
New technology or procedure can be Line officers blame staff officers for
introduced without any dislocation unfavorable results and want to get
rewards for favorable results
Promotes efficient functioning of line
officers
Very good opportunity is made available
to young person to get training

Committee organisation
“A Committee as a group of persons either appointed or elected who are to meet for
the purpose of considering matters assigned it”

Types of committee
a. Advisory committee problem solving committees
b. Fast-finding committee
c. Action committee

Functions of a committee
1. Collect the necessary information from different sources and arrange the
information orderly.
2. The collected information is critically analyzed.
3. Draft a detailed report containing the recommendations for the purpose of
implementation.
4. Formulate the standard of performance for the purpose of evolution of actual
performance in future.

Recommendations for efficient functioning of a committee

1. clear objectives
2. Size of the committee
3. Selection of meeting
4. Role of committee
5. Role of chairman
6. Preparation for a meeting
7. Follow up
8. Evolution
9. Selection of subject matter
Chapter – 11 TYPES OF ORGANISATION

Project organisation
The project organisation idea was developed after the second war.
A project organisation can also be the beginning of an organisation cycle. The project
may become a long term or permanent effort that eventually becomes a programe or
branch organisation.

Features of project organisation

a. The Success of the project organisation depends upon the co-ordination of
activities
b. There is a grouping of a activities for each project. it leads to the introduction
of a new line of a authority.

Drawbacks of project organisation

a. The professionals are deputed for the project. But there is an assurance of
continuous work for the professional in a project organisation.
b. The decision is taken in the project organisation under pressure of the top
controls the staff in an organisation.
c. The top management does not extend its full co-operation for the effective
functioning of the project organisation. Some hindrance may be caused by
the top management.

Matrix organisation
“Any organisation that employs a multiple command structure but also related
support mechanisms and an associated organizational culture and behavior pattern”
The matrix organisation may be followed where a large of small projects have to be
managed.

Conditions for effective matrix organisation

1. The principle of chain of command is not followed in the matrix organisation.
A project manager should give his report to more than one superior.
2. There should be an agreement among the managers regarding the authority
of utilizing the available resources. The term resources include physical
resources, financial resources and human resources.

Merits of matrix organisation Demerits of matrix organisation

• Achievement of objectives • Complex relationship
• Best utilization of resources • Struggle for power
• Appropriate structure • Excessive, emphasis on group
• Flexibility decision-making
• Motivation • Arising conflict resolution
• Personal development • Heterogeneous

Free form organisation

This type of organisation is formed whenever a need arises to form an organisation,
for achieving a particular object. It will be dissolved after achieving the object of the
organisation. The free form organisation resembles the project and matrix
organisation. It otherwise called organic or ratio organisation.