Organising Test - 74

Functional structure is adopted by large and diversified organisations where high degree of specialisation is required in functional activities.

Informal organisation does not have systematic working. Source can not be known. It gives more importance to satisfaction of individual interest as compared to organisational interest. Thus it spreads rumours.

Organising leads to proper assignment of jobs which ensures proper usage of materials, financial and human resources, which reduces confusion and wastage of resources.

Functional organisation is formed on the basis of functions or jobs. Example Production deptt includes jobs related to production, the jobs related with marketing to  Marketing deptt, the jobs related with finance to Finance deptt. etc.

Authority arises from formal job positions. It flows from top to bottom. Superior communicates his decisions to subordinates expecting compliance from him as per his directions. Thus it involves right to command.

Formal organization refers to the structure of jobs and positions with defined functions and relationship.

Formal organizations are social systems with well-defined authority structures and explicit rules and goals. Since these organizations are formed to achieve specific purposes, their structure defines the division of labor and delegation of authority among organizational stakeholders.

For delegation to be effective, authority granted must be equal to the assigned responsibility. If authority is more than responsibility then it may lead to misuse of authority and If responsibility is more than authority then the work will not be done effectively.

Divisional structure is formed on the basis of product. It is suitable for those organisations which are large in size and are producing multi products. It provides more autonomy of actions.

Decentralisation refers to distribution of power and authority at every level of management. Thus it increases the role of subordinates and provides them more autonomy.

Rishabh Shoes India Limited is dealing in the manufacturing of shoes and is doing well in the industry. It plans to diversify the product by including manufacturing of sports wears, sports goods and sports equipments. The company will have to adopt divisional structure, because each product is different from one another.