Organization is a process of welding together a frame work of positions which can be used as a management tool for the most effective pursuit of the goals of an enterprise. It is regarded as one of the most fundamental function of the management because in organization, the work is divided and a structural plan is prepared; The position of an organization can be compared to that of a human body. As human body is divided into different system like digestive system, nervous system, vascular system and the respiratory system.
All these systems function under the control of nervous system. Similarly in organization there are various departments and each department performs different functions but all these departmental functions are co-ordinated to attain the organizational end. Organization is a management process by which people, functions and physical factors are brought together to form a manageable unit.
Organization is a group of people who are co-operating under the direction of leadership direction of leadership for the accomplishment of a common end.
The above definitions of organization tells us the following features.
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It is a function of the management.
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It consists of a group of individuals which may be large or small.
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The group of individuals work under the direction of executive leadership.
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It establishes definite relationship between the divided units.
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It is established for the attainment of common objective.
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Organization structure refers to the system of staff organization because every staff in the organization must know his status and position in the organization. There are four forms of organisation like, line organisation, functional organisation, line and staff organization and committee form of organization. Line organization is the oldest and simplest form of organisation. In this form of organisation a superior exercises direct supervision over a subordinate. In functional organization the management is divided into various major functions. Thus specialists services are given by functional organization. The line and staff organization is a combination of both line and functional organization. In committee form of organisation, committees are formed which help in management process.
Functional system refers to a system of organisation in which functional departments are created at all levels to deal with the problems of the business. The management is divided into number of functions like purchasing, selling, production, financing, personnel and research and development. The credit for the growth of functional organization can be traced back to Taylor who is regarded as the father of scientific management. In this form of organization authority does not flow from top to bottom as it is found in line organisation.
In this the entire organisation is divided into different sections and each section is in the charge of a specialist who has a complete control over his function. He is regarded as functional manager. According to Taylor production function is separated from office function. The clerical aspects of functions are handled by four persons like time and cost clerk, instruction card clerk, route clerk and shop disciplinarian.
In framing the structure of functional organisation, the following points are to be kept in mind.
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(a) The inter-related functions are allotted to each department.
(b) An activity is allotted to each functional department.
(c) An activity allotted to each department can-not be allotted to another departments.
(d) Functional authority is confined to functional advice.
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(e) It provides expert service at each functional department.