Professional Documents
Culture Documents
simplest form of organization and is also known as scalar military, vertical or departmental
organizations. Under this organization the line of authority flows vertically from top to bottom.
There is a single head of the organization who commands the whole affairs. The chief
executive holds the authority and he delegates it to the subordinates and the subordinates
further delegate the authority to their subordinates and it reaches to the bottom.
It can easily be explained to workers. They have no confusion in their authority. responsibility
and roles.
(ii) Shirking of responsibility is not possible under this form of organization because the
responsibility is fixed at each level of hierachy. Everyone knows to whom he is responsible and
who os responsible to him. In this way discipline is maintained in the organization.
(iii) Unification of authority, control and fixed responsibility ensure quick and prompt decision
making possible.
(iv) This form has the advantage of flexibility The adjustment and changes can easily to made
with the changing conditions due to unified control and fixed responsibility.
(v) It follows the principle of scalar chain. The executive head at the top of the line is
responsible for the acts of line personnel the commands the whole line and greater control,
discipline and better direction is possible.
To overcome these problems IBM responded in several ways. For one major tasks were assigned
and authority delegated to lower levels resulting in what might be considered mini IBM
companies. Personal computers, for examples, were combined with the typewriter division.
Similarly the midrange computer group was combined with the large main frame computer
unit. Although the main frame computer instill the market leader, its market share has been
ending, for some of its computing functions are now carried out by midsize computers.
C. Making Staff work Effective:-
(i) Understanding Authority Relationships:-
Managers must understand the nature of authority relationships if they
want to solve the problems of line and staff. As long as managers regard line and staff as
groups of people or groupings of activities confusion will result, Line and staff are authority
relationships and many jobs have elements of both.
(ii) Making Line Listen to staff:-
If staff counsel and advice are justifiable at all, it is because of the need for assistance either
from experts or from those freed from more pressing duties to give such assistance.
They are usually based on traditional domination or charismatic domination in the sense of Max
Weber's tripartite classification of authority.
[edit]Bureaucratic structures
Weber (1948, p. 214) gives the analogy that “the fully developed bureaucratic mechanism
compares with other organizations exactly as does the machine compare with the non-
mechanical modes of production. Precision, speed, unambiguity, … strict subordination, reduction
of friction and of material and personal costs- these are raised to the optimum point in the strictly
bureaucratic administration.”[5] Bureaucraticstructures have a certain degree of standardization.
They are better suited for more complex or larger scale organizations. They usually adopt a tall
structure. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns
and Stalker[6] distinction between mechanistic and organic structures. It is not the entire thing
about bureaucratic structure. It is very much complex and useful for hierarchical structures
organization, mostly in tall organizations.
[edit]Post-bureaucratic
The term of post bureaucratic is used in two senses in the organizational literature: one generic
and one much more specific [7]. In the generic sense the term post bureaucratic is often used to
describe a range of ideas developed since the 1980s that specifically contrast themselves with
Weber's ideal type bureaucracy. This may include total quality management, culture
management and matrix management, amongst others. None of these however has left behind
the core tenets of Bureaucracy. Hierarchies still exist, authority is still Weber's rational, legal type,
and the organization is still rule bound. Heckscher, arguing along these lines, describes them as
cleaned up bureaucracies [8], rather than a fundamental shift away from bureaucracy. Gideon
Kunda, in his classic study of culture management at 'Tech' argued that 'the essence of
bureaucratic control - the formalisation, codification and enforcement of rules and regulations -
does not change in principle.....it shifts focus from organizational structure to the organization's
culture'.
Another smaller group of theorists have developed the theory of the Post-Bureaucratic
Organization.[8], provide a detailed discussion which attempts to describe an organization that is
fundamentally not bureaucratic. Charles Heckscher has developed an ideal type, the post-
bureaucratic organization, in which decisions are based on dialogue and consensus rather than
authority and command, the organization is a network rather than a hierarchy, open at the
boundaries (in direct contrast to culture management); there is an emphasis on meta-decision
making rules rather than decision making rules. This sort of horizontal decision making
by consensus model is often used in housing cooperatives, other cooperatives and when running
a non-profit or community organization. It is used in order to encourage participation and help
to empower people who normally experience oppression in groups.
Still other theorists are developing a resurgence of interest in complexity theory and
organizations, and have focused on how simple structures can be used to engender
organizational adaptations. For instance, Miner et al. (2000) studied how simple structures could
be used to generate improvisational outcomes in product development. Their study makes links
to simple structures and improviseal learning. Other scholars such as Jan Rivkin and Sigglekow[9],
and Nelson Repenning [10] revive an older interest in how structure and strategy relate in dynamic
environments.
[edit]Functional structure
Employees within the functional divisions of an organization tend to perform a specialized set of
tasks, for instance the engineering department would be staffed only with software engineers.
This leads to operational efficiencies within that group. However it could also lead to a lack of
communication between the functional groups within an organization, making the organization
slow and inflexible.
Also called a "product structure", the divisional structure groups each organizational function into
a division. Each division within a divisional structure contains all the necessary resources and
functions within it. Divisions can be categorized from different points of view. One might make
distinctions on a geographical basis (a US division and an EU division, for example) or on
product/service basis (different products for different customers: households or companies). In
another example, an automobile company with a divisional structure might have one division for
SUVs, another division for subcompact cars, and another division for sedans.
Each division may have its own sales, engineering and marketing departments.
[edit]Matrix structure
The matrix structure groups employees by both function and product. This structure can combine
the best of both separate structures. A matrix organization frequently uses teams of employees to
accomplish work, in order to take advantage of the strengths, as well as make up for the
weaknesses, of functional and decentralized forms. An example would be a company that
produces two products, "product a" and "product b". Using the matrix structure, this company
would organize functions within the company as follows: "product a" sales department, "product
a" customer service department, "product a" accounting, "product b" sales department, "product
b" customer service department, "product b" accounting department. Matrix structure is amongst
the purest of organizational structures, a simple lattice emulating order and regularity
demonstrated in nature.
Among these matrixes, there is no best format; implementation success always depends on
organization's purpose and function.
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An organization can be structured in many different ways, depending on their objectives. The
structure of an organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities such as the branch, department, workgroup and individual.
Organizational structure affects organizational action in two big ways. First, it provides the
foundation on which standard operating procedures and routines rest. Second, it determines
which individuals get to participate in which decision-making processes, and thus to what extent
their views shape the organization’s actions.[2]
Accounting is basically the system of making records, verifications and reporting of value of
assets, liabilities, expenses and income in the accounts books. The transactions are posted
chronologically to record changes in value of assets and liabilities.
On the other hand, Finance refers to the time, money and risk associated with a specific
business. Finance is different because it works on the accounting information to predict future
trends or to make decisions about the future.
Accounting is basically the system of making records, verifications and reporting of value of
assets, liabilities, expenses and income in the accounts books. The transactions are posted
chronologically to record changes in value of assets and liabilities.
On the other hand, Finance refers to the time, money and risk associated with a specific
business. Finance is different because it works on the accounting information to predict future
trends or to make decisions about the future.
Accounting relates to preparation of accounting records, preparation, analysing and
interpretation of financial statements.
The study of finance consists of the study of money and capital markets (macroeconomics),
investments (management of personal and business portfolios), and managerial finance, the
actual management of the firm.
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Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the
art of recording, classifying, and summarizing in a significant manner and in terms of money,
transactions and events which are, in part at least, of financial character, and interpreting the
results thereof."[4]
Managerial finance is the branch of the finance that concerns itself with the managerial
significance of finance techniques. It is focused on assessment rather than technique.
The difference between a managerial and a technical approach can be seen in the questions one
might ask of annual reports. One concerned with technique would be primarily interested in
measurement. They would ask: are moneys being assigned to the right categories? Were
generally accepted accounting principlesGAAP followed?
This book introduces corporate financial management, based on the basic capital budgeting
framework and the time value of money. It focuses on theoretical formulations and correct
application of financial techniques that will help improve managerial and financial decisions. Based
on fundamental principles of accounting and finance like time value of money and after-tax cash
flows, it introduces readers to real-world constraints and complexities in the two fields.
Written in a simple and accessible manner, this book can be read by students of finance and
accounting courses, business professionals and general public alike.