SWOT Analysis

It is the analysis of the strength, weakness, opportunities and threats. Through SWOT analysis a company can make a conscious, deliberate, and systematic effort to identify opportunities that can be profitability exploited. Regular SWOT analysis facilitators the generations of ideas.

Departmentation

Grouping of activities is an essential step in designing organizational structure. Grouping of activities into departments, divisions or other homogeneous units is termed as departmentation . It is the process of grouping of tasks into jobs, the combining of jobs into effective work groups and the combining of groups into identifiable segments or departments.

Need and Advantages of Departmentation

The departmentation aims at

i. Specialization of activities for efficient performance

ii. Simplifying the task of management within a workable span

iii. Maintaining Co-ordination and control of the various activities.

The main advantages can be summed up as;

Departmentation facilitates the top management to concentrate on important managerial functions. It will improve efficiency in management, fixation of accountability, specialization, expansion, autonomy, and better control.

Process Involved in Departmentation

The various steps involved in departmentation are:

i. to identify task or duties ;

ii. to analyze details of each task ;

iii. to describe the functions or to group similar activities ;

iv. to entrust the grouped activities to departmental heads ; and

v. to define the authority and responsibility of departmental heads.

Dangers of Departmentation

Although departmentation is very essential for the efficient running and control of a business, there are a few dangers of departmentation which should be taken care of while assigning and grouping of activities.

1. Dividing the business house into various departments makes the co-ordination of various activities very difficult. To achieve individual efficiency , one department may work against the interest of another department thus reduces the overall profitability of the business as a whole.

2. Departmentation will create difficulty in communication between other departments and makes planning and control more difficult

3. Departmentation increases the levels of management and creates more gap between top management and workers.

Factors influencing Assigning of Activities

The following factors are to be taken into consideration while assigning activities into departments:
1. Specialization: While assigning activities into departments care must be taken to ensure that the benefits of specialization are achieved.

2. Control: One of the primary aims of departmentation is to facilitate control. Departments should be so created as to fix clear responsibilities for enabling effective control.

3. Co-ordination: There should be some agency to co-ordinate the activities of various departments. A central body should act as a co-ordinating body.

4. Key Activities: There are certain activities which are very crucial. Such activities should be placed in separate division.

5. Emphasis on Local Conditions: While assigning activities proper emphasis should be given to local conditions at the places concerned like the personality of the individuals who may be given the responsibilities, the attitude of the people etc.

6 Economy: Another important factor to be considered while creating separate departments is the expense involved and economy in its operations.

Methods or Basis of Departmentation

1. Departmentation By Function : Under this method departments are created on the basis of specific functions to be performed.(Eg: Finance department, Production dept. etc)
2. Product wise Departmentaion: In this method every major product is organized as a separate department. This type of departmentation is followed in large scale organization. (Eg: Metal division, Plastic Division etc)
3. Customer wise Departmentation: A business concern provides specialized services to different classes of customers through different departments.(Eg: Services provided to whole salers, retailers etc.
4. Departmentation by Territory or Geographical Departmentation: Territorial departmentation is very useful to large scale enterprises whose activities are geographically spread over a wider area.( Eg: Northern Region, Southern Region)
5. Departmentation by Process or Equipment: In this method activities are grouped on the basis of production processes or equipment involved. This is generally used in manufacturing enterprises and at lower level organizations. (Eg:A printing press may consist of composing, proof reading, printing , and binding departmentation )
6. Composite or combined Departments : Big enterprises follow a composite or combination of several methods. Usually functional departmentation is used at top level while product or territorial departmentation is used for sales department.
7. Departmentaion by Time : It consists of grouping the activities on the basis of time of their performance (Eg: A factory operating on twenty four hours may hav three departments each for morning , day and night shifts)
8. Departmentation by Number: under this method activities are grouped on the basis of by certain number of persons. (Eg: In army, soldiers are grouped into Battalion, Company, and Regiment etc.)

Organisation Manuals

An Organisation Manual provides and supplements additional details to the information supplied by organization chart. It is a ready reference available for the members defining the scope of authorities and responsibilities of management positions. An organizational manual provide uniformity and consistency in the procedure and practices. It also help in delegation of authority and management by exception.

Types of Manual

1. Policy Manual: This manual contains policy decisions, resolution and guidelines given by the management. It gives the scope and limitations within which various policies should operate.

2. Organisation Manual: This manual gives a detailed account of the organization. The authority and responsibility of every person is given in detail to avoid confusion and conflicts among various persons.

3. Rules and Regulations Manual: It contains various rules and regulations followed in the company. The employees get information about working conditions, admissible holidays, procedure for getting leaves sanctioned, the facility and procedure for availing medical facilities, the use of canteen, library etc.

4. Departmental Manual: Separate manuals are prepared for different departments. A departmental manual gives full details about the working of a department.

Advantages of Organisation Manuals

1. Written Information: The organization Manual provides written record of every important policy, decisions and procedure. There will be no confusion about authority and responsibility.
2. Helpful in day-to-day working: The detailed rules and regulations specified in the manual helps employees to understand the working of the enterprise.
3. Avoiding Conflicts: The clear cut authority responsibility relationship among various persons provided by the organization manual helpful to avoid conflicts and duplication of work
4. Quick Decisions: When all directions and instructions are available in writing then decision taking becomes quick.

Drawbacks of Organisation Manuals

1. It is Expensive: The preparation of manual is very expensive. So small scale concerns cannot even afford them.
2. It is Time Consuming: The preparation of Manuals is a very time consuming process. Moreover, these requires a constant review which again takes too much time.
3. Rigidity: When written guides, instructions and procedures are available then there is hardly any scope for variation. One has to follow prescribed procedures to complete a task so there is no scope for discretion and initiative.

Organisational Charts

ORGANISATIONAL CHARTS

Organizational Charts are diagrammatic presentation of relationships in an enterprise. The Functions and their Relationships, the channel of Authority etc. are depicted in an Organizational Charts. George Terry defines an organizational chart as “a diagrammatical form which shows important aspects of an organization, including the major functions and their respective relationships, the channel of supervision and the relative authority of each employer who is in charge of each respective function.”

Organistional Charts can be divided into (i) Master Charts and (ii) Supplementary Charts. The Master Chart shows the whole formal organizational structure while supplementary chart shows the details of relationships, authority and duties within the prescribed area of department.

Types of Organisation Charts

There are Three ways in which organization Charts can be shown

1. Vertical 2. Horizontal 3. Circular

(i)Vertical or Top to Bottom : In this chart the major functions are shown at the top and subordinate functions in successive lower positions. Here the scalar levels run Horizontally and functions run vertically. The supreme authority is shown at the top and lowest authority at the bottom

(ii)Horizontal or Left to Right : In this chart the highest positions are shown on the left side and the authority level decreasing when moving to the right. Here the scalar levels in a vertical position and functions horizontally.

(iii)Circular : In circular charts the centre of the circle represents the position of supreme authority and the functions radiate in all directions from the centre. The higher the position of authority, the nearer they are to the centre and the lesser the position of authority, more distant they are from the centre.

Principles of Organisational Charts

While framing organizational charts following principles should be kept in mind

(i) The Top Management should faithfully follow the line of authority while dealing with the subordinates. Any attempt to bye pass the same will make it meaningless.

(ii) The chart should define line of position. The lines of different individuals should be so defined so that there is no overlapping and no two persons should be given the same position.

(iii) The undue concentration of duty at any point should be avoided

(iv) The organizational charts should not be influenced by personalities

(v) The organizational chart should be simple and flexible.

Advantages of Organization charts

1. Organization chart is a managerial tool , and it helps in specifying authority and responsibility of every position and results in smooth working conditions
2. It will avoid Overlapping and duplication of duties. If anything happens it can be rectified immediately.
3. The organizational charts will help in pointing out the faults, deficiencies, dual command etc. The management will be able to take remedial action in case of certain situations.
4. It will helpful for new entrants to understand easily the different levels of authority and responsibility.
5. The organization charts act as a guide for the decision makers.

Limitations

The organization charts suffers from various drawbacks:

1. The organization charts show the relationship of different positions and not the degree of authority and responsibility.
2. The chart only depicts the formal organizational relationship whereas informal organization is as useful as formal organization. Informal organization greatly helps management in knowing the reactions of the people and is an important channel of communication.
3. The chart shows the organizational position and status at different levels. It may lead to negative motivation and affects team work.