Management theories, Organizational structure, concepts, types, functions

Question 1

Name six theories you know and what they focus on

Answer 1

Classical Theorists
•Focus on the job and management functions to determine the best way to manage in all organizations.
Focus on the job and structure of the firm

Behavioral Theorists
•Focus on people to determine the best way to manage in all organizations.
Focusing on people to make them productive in an attempt to develop a single best way to manage in all organizations

Management Science Theorists
•Focus on the use of mathematics to aid in problem solving and decision making.
•Mathematical models are used in the areas of finance, management information systems (MIS), and operations management.

Systems Theory
•Focuses on viewing the organization as a whole and as the interrelationship of its parts (subsystems) or departments rather than the individual parts.
•Sociotechnical Theory
•Focuses on integrating people and technology.
•Contingency Theory
•Focuses on determining the best management approach for a given situation. Uses a theory or a combination of theories that best meets the given situation
(These last three theories are integrative theories)

Question 2

Under classical theorists we have two subsets name them and state three people each who contributed to these theories and what they contributed

Answer 2

Scientific Management
•Best way to maximize job performance
•Fredrick Winslow Taylor
•Father of Scientific Management

• Frank and Lillian Gilbreth
• Work efficiency
• Henry Gantt
• Work scheduling

Administrative Theory
•Henri Fayol
•Father of Modern Management
•Principles and functions of management
•Max Weber
•Bureaucracy concept(hierarchy in administration)
•Chester Barnard
•Authority and power in organizations
•Mary Parker Follett
•Worker participation, conflict resolution, and shared goals

Question 3

state three people each who contributed to the behavioral theory and what they contributed
Which theory under behavioral theory is mostly used

What is an organization

An organization is both a structure and a process. True or false
What is organizational structure and process

organization’s formal structure is depicted in its organizational chart that provides a “blueprint,” depicting formal relations, functions and activities. True or false

Answer 3

Human Relations Movement (later, the Behavioral Science Approach)
•Elton Mayo
•Hawthorne studies
•Abraham Maslow
•Hierarchy of needs theory
•Douglas McGregor
•Theory X and Theory Y

The theory X and theory Y

organization is a group of people working together, under formal and informal rules of behavior, to achieve a common purpose.
•Organization also refers to the procedures, policies, and methods involved in achieving this common purpose.

Organizational structure refers to the lines of authority, communication, and delegation; these could be can be:
•formal
•informal.
It is The specification of the jobs to be done within an organization and the ways in which those jobs relate to one another
•Organizational process refers to the methods used to achieve organizational goals.

Question 4

What is an organizational chart
What are the building blocks of an organizational structure and explain them
What is centralization

Answer 4

Organizational Charts
–Clarify structure and show employees where they fit into a firm’s operations
–Show the chain of command, or reporting relationships, within a company

Specialization
–Division of work: job specialization
•Departmentalization
–Product, process, functional, customer, or geographic
•Establishment of a decision-making hierarchy
–Distributing authority:
•Delegation: assigning tasks
•Centralization: upper management retains authority. It is a process where the concentration of decision making is in a few hands.
•Decentralization: lower-level managers make decisions

Question 5

What are responsibility,authority,delegation and accountability as concepts of organizations

Answer 5

Responsibility- is the obligation to do, to the best of one’s ability, the task that has been assigned, or delegated. In any organization, responsibility begins with the overall objective of the organization. For example, for nurses in a hospital, service or patient care is the responsibility.

2. Authority- the right of decision and commands. An individual with authority has the right to make decisions about his or her own responsibilities. Responsibility and authority are delegated down the scalar chain.
3. Delegation- is the process of assigning duties or responsibilities along with corresponding authority to another person. Authority must be delegated with the responsibility.
4. Accountability- is answering to someone for what has been done. It is related with responsibility.

Question 6

What are the characteristics of flat and of tall organizational structure

Answer 6

Flat Organizational Structure
–Common in decentralized organizations
–Fewer layers of management
–Rapid communication
–Wide spans of control

•Tall Organizational Structure
–Common in centralized organizations
–Multiple layers of management
–Slower communication
–Narrower spans of control

Question 7

What is a formal organization

Answer 7

This is one which refers to a structure of well-defined jobs each bearing a measure of authority and responsibility.
•It is a conscious determination by which people accomplish goals by adhering to the norms laid down by the structure.
• This kind of organization is an arbitrary set up in which each person is responsible for his performance.
•Formal organization has a formal set up to achieve pre- determined goals.

Question 8

What is an informal organization

Answer 8

It refers to a network of personal and social relationships which spontaneously originates within the formal set up.
•Informal organizations develop relationships which are built on likes, dislikes, feelings and emotions.
•The network of social groups based on friendships can be referred to as informal organizations.
•There is no conscious effort made to have informal organization. It emerges from the formal organization and it is not based on any rules and regulations as in case of formal organization.

Question 9

What is the relationship between formal and informal organizations

Answer 9

Relationship between Formal and Informal Organizations
•Both formal and informal organization are important.
•Formal organization originates from the set organizational structure and informal organization originates from formal organization.
•For an efficient organization, both formal and informal organizations are required. They are the two phases of a same concern.
•Formal organization can work independently. But informal organization depends totally upon the formal organization.
•Formal and informal organization helps in bringing efficient working organization and smoothness in a concern.
•Within the formal organization, the members undertake the assigned duties in co-operation with each other.
•They interact and communicate amongst themselves. Therefore, both formal and informal organizations are important.
•When several people work together for achievement of organizational goals, social tie ups tends to built and therefore informal organization helps to secure co-operation by which goals can be achieved smooth. Therefore, we can say that informal organization emerges from formal organization.

Question 10

All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management.
•According to Allen, “Centralization” is the systematic and consistent reservation of authority at central points in the organization
True or false
What is the implication of centralization
What is decentralization
Why is decentralization not the same as delegation

Answer 10

1. Reservation of decision-making power at top level.
2. Reservation of operating authority with the middle level managers.
3. Reservation of operation at lower level at the directions of the top level.
4. Important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level.

It is a systematic delegation of authority at all levels of management in the organization.
•In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern.
•Rest of the authority may be delegated to the middle level and lower level of management.
•According to Allen, “Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points.

Decentralization is not the same as delegation. In fact, decentralization is all extension of delegation. Decentralization pattern is wider in scope and the authorities are diffused to the lowest most level of management.

Question 11

What are the seven implications of decentralization

Answer 11

There is less burden on the Chief Executive as in the case of centralization.

2. In decentralization, the subordinates get a chance to decide and act independently which develops skills and capabilities. This way the organization is able to process reserve of talents in it.
3. In decentralization, diversification and horizontal can be easily implanted.
4. In decentralization, concern diversification of activities can place effectively since there is more scope for creating new departments. Therefore, diversification growth is of a high degree.
5. In decentralization structure, operations can be coordinated at divisional level which is not possible in the centralization set up.
6. In the case of decentralization structure, there is greater motivation and morale of the employees since they get more independence to act and decide.
7. In a decentralization structure, co-ordination to some extent is difficult to maintain as there are lot many department divisions and authority is delegated to maximum possible extent, i.e., to the bottom most level delegation reaches.

Question 12

What is the difference between centralization and decentralization

Answer 12

Centralization versus Decentralization
•In a highly centralized organization, the chief executive makes most decisions. Decentralization is the allocation of responsibility and authority for management decisions downward through the chain of command.
•In centralized, decisions made at the apex of the organization takes longer period of time than decisions made at the lower levels. Therefore, highly centralized organizations are slow in adapting to major changes. Lower-level workers become passive, unenthusiastic and mechanical.
•The executive who will not permit supervisors to select staff, determine staff schedule, institute working improvements, evaluate goal achievement, and recommend policy change deprive middle managers of opportunities for professional growth.
•Decentralization of responsibility leads to improved employee morale. When middle managers are given responsibility for decision-making, they in-turn make still further, empowering staffs to formulate unit level work plans, policies and procedures.
•As job responsibility and autonomy increase, so does job satisfaction. It improves staff nurse moral and retention. The head’s tasks in a decentralized organization are similar to a nursing director task in a highly centralized organization.

Question 13

What is line organization

Why is this organization called a scalar organization

Answer 13

It is the oldest and simplest method of administrative organization.
•In this type of organization, the authority flows from top to bottom in a concern.
•The line of command is carried out from top to bottom.
•This is the reason for calling this organization as scalar organization which means scalar chain of command is a part and parcel of this type of administrative organization.
•In this type of organization, the line of command flows on an even basis without any gaps in communication and co-ordination taking place.

Question 14

What are the features of line organization

Answer 14

It is the simplest form of organization.

2. Line of authority flows from top to bottom.
3. Specialized and supportive services do not take place in these organization.
4. Unified control by the line officers can be maintained since they can independently take decisions in their areas and spheres.
5. This kind of organization always helps in bringing efficiency in communication and stability to the organisation.

Question 15

State and explain five advantages and disadvantages of line organization

Answer 15

Advantages of Line Organization

1. Simplest- It is the simplest and oldest method of administration.
2. Unity of Command- In these organizations, superior-subordinate relationship is maintained and scalar chain of command flows from top to bottom.
3. Better discipline- The control is unified and concentrates on one person and therefore, a superior can independently make decisions. Unified control ensures better discipline.
4. Fixed responsibility- In this type of organization, every line executive has got fixed authority, power and fixed responsibility attached to every authority.
5. Flexibility- There is a co-ordination between the top most authority and bottom line authority. Since the authority relationships are clear, line officials are independent and can flexibly take decisions. This flexibility gives satisfaction of line executives.
6. Prompt decision- Due to the factors of fixed responsibility and unity of command, the officials can take prompt decision.

Disadvantages of Line organizatio
Disadvantages of Line Organization
1. Over reliance- The line executive’s decisions are implemented to the bottom. This results in over-relying on the line officials.
2. Lack of specialization- A line organization flows in a scalar chain from top to bottom and there is no scope for specialized functions. For example, expert advices whatever decisions are taken by line managers are implemented in the same way.
3. Inadequate communication- The policies and strategies which are framed by the top authority are carried out in the same way. This leaves no scope for communication from the other end. The complaints and suggestions of lower authority are not communicated back to the top authority. So there is one way communication.
4. Lack of Co-ordination- Whatever decisions are taken by the line officials, in certain situations wrong decisions, are carried down and implemented in the same way. Therefore, the degree of effective co-ordination is less.
5.Authority leadership- The line officials have tendency to misuse their authority positions. This leads to autocratic leadership and monopoly in the concern.

Question 16

What is line and staff organization

Where does the power of command always remain?

Answer 16

This is a modification of line organization and it is more complex than line organization.
•According to this administrative organization, specialized and supportive activities are attached to the line of command by appointing staff supervisors and staff specialists who are attached to the line authority.
•The power of command always remains with the line executives and staff supervisors guide, advice and council the line executives.
•Personal Secretary to the Managing Director is a staff official.

Question 17

What are the features of line and staff organization

Answer 17

There are two types of staff :

1. Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
2. Staff Supervisor- Operation Control Manager, Quality Controller, PRO
3. Line and Staff Organization is a compromise of line organization. It is more complex than line concern.
4. Division of work and specialization takes place in line and staff organization.

whole organization is divided into different functional areas to which staff specialists are attached.
5. Efficiency can be achieved through the features of specialization.
6. There are two lines of authority which flow at one time in a concern:
•Line Authority
•Staff Authority
7. Power of command remains with the line executive and staff serves only as advisers

Question 18

What are the advantages of line and staff organization

Answer 18

Relief to line executives- In a line and staff organization, the advice and counseling which is provided to the line executives divides the work between the two. The line executive can concentrate on the execution of plans and they get relieved of dividing their attention to many areas.

2. Expert advice- The line and staff organization facilitates expert advice to the line executive at the time of need. The planning and investigation which is related to different matters can be done by the staff specialist and line officers can concentrate on execution of plans.
3. Benefit of Specialization- Line and staff through division of whole concern into two types of authority divides the enterprise into parts and functional areas. This way every officer or official can concentrate in its own area.

Advantages of Line and Staff Organization

4. Better co-ordination- Line and staff organization through specialization is able to provide better decision making and concentration remains in few hands. This feature helps in bringing bringing co-ordination in work as every official is concentrating in their own area.
5. Benefits of Research and Development- Through the advice of specialized staff, the line executives, the line executives get time to execute plans by taking productive decisions which are helpful for a concern. This gives a wide scope to the line executive to bring innovations and go for research work in those areas. This is possible due to the presence of staff specialists.
6. Training- Due to the presence of staff specialists and their expert advice serves as ground for training to line officials. Line executives can give due concentration to their decision making. This in itself is a training ground for them.
7. Balanced decisions- The factor of specialization which is achieved by line staff helps in bringing co-ordination. This relationship automatically ends up the line official to take better and balanced decision.
8. Unity of action- Unity of action is a result of unified control. Control and its effectivity take place when co-ordination is present in the concern. In the line and staff authority all the officials have got independence to make decisions. This serves as effective control in the whole enterprise.

Question 19

What are the disadvantages of line and staff organization

Answer 19

Costly- In line and staff concern, the concerns have been to maintain the high remuneration of staff specialist. This proves to be costly for a concern with limited finance.
2. Assumption of authority- There is power struggle as the line officials feel they are in charge of affairs.
3. Staff steals the show- In a line and staff concern, the higher returns are considered to be a product of staff advice and counseling.
Lack of understanding- In a line and staff organization, there are two authority flowing at one time. This results in the confusion between the two. As a result, the workers are not able to understand as to who is their commanding authority. Hence the problem of understanding can be a hurdle in effective running of the bussiness.
5. Lack of sound advice- The line official get used to the expertise advice of the staff. At times the staff specialist also provide wrong decisions which the line executive have to consider. This can affect the efficient running of the enterprise.
6. Line and staff conflicts- Line and staff are two authorities which are flowing at the same time. The factors of designations, status influence sentiments which are related to their relation, can pose a distress on the minds of the employees. This leads to minimizing of co-ordination which hampers a concern’s working.

Question 20

What is a functional organization

Functional authority remains confined to functional guidance to different departments. What does this help in ?
The concept of functional organization was suggested by who? And what did he recommend ? Give and example of what he recommended

Answer 20

It is type of business structure that organizes a company into different departments based on areas of expertise.
•These departments serve as functional units and are overseen by functional managers or department heads.
•This is an organization in which we can define as a system in which functional department are created to deal with the problems of business at various levels.
•

This helps in maintaining quality and uniformity of performance of different functions throughout the enterprise.
•The concept of Functional organization was suggested by F.W. Taylor who recommended the appointment of specialists at important positions.
•For example, the functional head and Marketing Director directs the subordinates throughout the organization in his particular area.
•This means that subordinates receive orders from several specialists, managers working above them.

Question 21

What are the features of functional organization

Answer 21

The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations.

2. Complex form of administrative organization compared to the other two.
3. Three authorities exist- Line, staff and function.
4. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the function whenever the function is performed throughout the enterprise.
5. Principle of unity of command does not apply to such organization as it is present in line organization.

Question 22

What are the advantages of functional organization (state and explain)

Answer 22

Specialization- Better division of labour takes place which results in specialization of function and it’s consequent benefit.

2. Effective Control- Management control is simplified as the mental functions are separated from manual functions. Checks and balances keep the authority within certain limits. Specialists may be asked to judge the performance of various sections.
3. Efficiency- Greater efficiency is achieved because of every function performing a limited number of functions.
4. Economy- Specialization compiled with standardization facilitates maximum production and economical costs.
5. Expansion- Expert knowledge of functional manager facilitates better control and supervision.

Question 23

What are the disadvantages of functional organization

Answer 23

Confusion- The functional system is quite complicated to put into operation, especially when it is carried out at low levels. Therefore, co-ordination becomes difficult.

2. Lack of Co-ordination- Disciplinary control becomes weak as a worker is commanded not by one person but a large number of people. Thus, there is no unity of command.
3. Difficulty in fixing responsibility- Because of multiple authority, it is difficult to fix responsibility.
4. Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not agree on certain issues.
5. Costly- Maintainance of specialists staff of the highest order is expensive for a concern.

Question 24

What is Matrix structure

And what are the advantages and disadvantages

Answer 24

Organized along two dimensions, instead of just one, by combining, for example, functional and divisional structures
–Advantages:
•Highly flexible, focused on a single problem, access to resources and expertise
–Disadvantages:
•Loss of command and control, lack of accountability, impermanent existence