The Effects of Organizational Structure in the Management of Organization

THE EFFECTS OF ORGANIZATIONAL STRUCTURE IN THE MANAGEMENT OF ORGANIZATION(A CASE STUDY OF LIFE VEGETABLE OIL, NNEWI)

Organization is defined in a number of ways in the study of management. It can refer to the structure of relationships among the individuals.

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A less static approach regards organization as a process or as an element of management concerned with the range or growth of the structure.

Organizations are primarily complex of goals to seek the waits which in order to survive must accomplish the secondary tasks e.g. They must maintain their internal system to co-ordinate the human side of the enterprise and must adapt to and shape the external environment.

According to Koonts and Coonel (1926) organizations suggest the following steps.

  1. Establishment of enterprise objectives
  2. Formulation of derivatives
  3. Identification and classification of the activities necessary.
  4. Grouping these activities in the light of the human and material resources available.
  5. Delegating to the head of each group to the authority.
  6. Typing this grouping horizontally and vertically through authority relations and information system.

The above statement can be described as organization as the act or process of organizing.

The organizational structure is the basic framework within which the executive decision making behaviour occurs. The quality and nature of the decision made are influenced by the nature of the structure.

Organizational as an element of management is concerned with the grouping of activities in such a manner that enterprise objectives are attained.

The assignment of these enterprise to appropriate department and the provision for authority, delegation and co-ordinations are all embracing.

MOONEY AND REILEY (1939) defined organization as an forms of every human association for the attainment of common purpose.

They visualize it is a process of relating specific duties of functions to a coordinated. While ALLEN (1958) defined organization as the plan by which a group of people pool their efforts towards designation objectives through definition and division of the activities, responsibilities and authority.

According to Bernard (1968) organization is seen as one of the system comprise within a co-operative system. The one which is implicit in the phrase co-operation of two or more person is called an organization.

It is important to know that, in order to accomplish any goals, activities must be grouped logically and authority should be granted so that conflicts do not occur.

 

  • DIVISIONS OF ORGANIZATION

Organization can be divided into two parts. Formal and informal organization.

FORMAL ORGANIZATION: Is defined as the network of communication in an enterprise. It is officially channel through which information passes.

A formal organization has a well defined structure that may be describe it’s authority, power, accountability and responsibility relationships. Formal organization has clearly specific jobs for every member. The hierarchy of objectives of the formal organization is explicitly stated status, prestige, pay rent and order pre-requisites are well ordered and controlled, formal organizations are durable and planned because of their emphasis on order, they are relatively inflexible.

Membership in the formal organization is gamed consciously at a specific time and usually openly. Examples of formal organization include educational institutional, local, state, federal government, medium and large scale business concerns.

INFORMATION ORGANIZATION: On the other hand cannot be represented on an organizational chart. Small group, working together form ideas and the attitudes. The attitudes of the individual groups could help or hinder the organizations goal to the extent that the attitudes are subordinated to the purpose of the enterprises. Informal organizations are loosely organized, flexible defined and spontaneous membership can be obtained either consciously or unconsciously and the timing of a person’s membership often difficult. Some examples of the informal organizations are peer group, disc of dinner party an accident rescue group to mention but a few of them. When the relationships and activities of informal organization become defined and structured, they can be converted to formal one’s likewise, when he defined the structured relationship, informal organization are not enforced or are become informal organization.

ALLEN (1958) defined the formal organization as a system of well defined job bearing a definite measures of authority, responsibility and accountability. The whole consciously designed to enable people of the enterprise to work most effectively together accomplishing their objectives. The formal organization is characterized by being well defined bound by delegation and reliably stable.

ALLEN (1958) sees informal organization as the haphazard groups, clique and random association that take place and their member do not have definite goals or rule but there is always in term to the root of opinions attitude inclinations and feeling that are common their members.

According to Bernard (1968) the vitality of organization has in the willingness the individuals to the contribute forces to the co-operative system.

This willingness required the belief that the purpose can be carried out, a faith that diminishes to the available to point as it not infact in process of being attained. Hence when effectiveness cease the willingness to contribute disappears.

Since the life of organizations depends upon the organizations efficiency, we can say that organization depend on the motive of individuals and inducement with which the organization can satisfy the individual.  For an objective purpose to motivate and maintain the co-operative action of the contributions i.e. must be one that is beloved by the contributors to determine the purpose of the organization.

So it becomes an essential duty of the executive to calculate this belief in the real existence of such common purpose in the contributors.

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Organizational efficiency which is another prerequisite for   organizational structure survival is the organizational ability to satisfy the expectations of the devout great alternation and sometimes great expense of the money to non – economic inducement because they are indispensable to fundamental efficiency and effectiveness in many cases.

Formal organization single or complex is always impersonal system. We find a purpose, the co-ordinating and unifying principle. We find them necessary for personal willingness and effectiveness and efficiency maintaining the integrity of purpose and the continuity of the reconsidered contributions.

According to SISK (1973) organization is the arranging of the part of the organization. These parts that the administrator organizes are work, people and systems.

EZEOCHA (1989) stated that organization arise  when any group of people come together to strive towards a common purpose.

Management handbook defined organization as the mean’s by which all groups of enterprises are given socially acceptable purpose and made capable of efficient operation a school is an organization whose main objective include the promotion of knowledge and the development of certain attitude among it’s members.

  • NATURE AND SCOPE OF MANAGEMENT

Management is as old as humanity, during the prehistoric era when man was purely nomadic and lived mainly from hunting and scavenging, he had to manage the limited resources he had. When man settled life, aggregation started and there was the need to plan mobilize and manage people for common interest and service.

The term management is used in different ways. First, it is used in reference to co-operate leadership and secondly as an activity broadly speaking management involves activities engaged in and which are intended to allocate scarce resources towards numerous insatiable ends. In reference to co-operate leadership, management is used to connot a body of people who assume a joint responsibilities for formulating, interpreting and implementing the broad polices of an organization. Such organization might to be a private business concern as an educational institution, a public co-operation or charitable homes. Thus, we have school management committee the management of Nigeria air ways, the management of Ekenedilichukwu motors Ltd etc. In thus sense, management becomes synonymous with caretaker, directors overseers, managers, who collectively constitute a body separate and distinct from the owners of the organization.

As an activity, the term management refers to the act, process or manner of directing, conducting or carrying on the affairs and operations of the business organization. This is the popular concept of management, it comprises a set of inter-related and inter-dependent functions. It sees as management as a method a skill, an art and a process of getting things done. It also sees such method and process as capable of being identified and analyzed, evaluated, studied and acquired through learning. In this case, people manage something and since everybody manages something management can be viewed as an all embracing context.

Definition of management according to Thersuf  (1977) defined management as the process of allocating an organizations input (human and material) through planning organizing, directing and controlling for the purpose of producing output (goods and services) desired by it customers so that organizations objective are accomplished in the process work is performed with and through organization personnel in an ever changing business environment. The above definition includes the essential feature of some school of management thought. First it sees management as an act of organization design which is the process of determining the appropriate organization structure. This is the rational system that thinking the approach about an organization. It also classified management activities into those of the planning, organizing, co-ordinating and controlling the management as decision making, getting thing done through working with people and using scare resources. This should that the quantitative approach and behavioural school of thought.

The important of management cannot be over emphasized modern society has developed through the creation of specialized institution or organizations which provide the goods and services to their desires. This institutions are guided and directed by the decision of one or more person called managers. Management therefore contribute to the separation of power from the authority by allowing these specialized skills to management the affair of owner who may not be talented enough and may not have the managerial skills. These manager thus allocated the scarce resources to alternative and competing ends. By so doing the management thus contributes to the division of labour and creation of standard role.

Management helps in co-ordinating the means ends relationship. It makes provision for jobs and services and coordinates and transforms the human, physical and material resources into tangible products.

 

  • THE CONCEPT OF ORGANIZATIONAL STRUCTURE     

Organization structure is the arrangement of the organization into units and management positions between which are defined the relationships involving the exercise of authority and communication of the instructions and information. It is the organizational structure that precedes the role assignment in other words; it is structure that determines the number of the management positions. Then the next thing is filling in these position with right caliber of personnel (role assignment) most organizations have the vertical and pyramidal structure.

According to Ezeocha (1985) the pyramidal structure of the organization as an geometric figures, two ruling dimension governs; the horizontal and vertical. The horizontal dimension represent at each level in the hierarchy, the span of authority. The vertical dimension represent in contrast the line command is measured by the number of “communication centers” through which the directive of the chief executive pass is being transmitted to the working level at the best of pyramid.

According to Markwebel (1920) as the firm expands more specialists and managers are employed. The organization becomes more complex as the management level are more numerous and therefore need to be more closely defined this tend to lead to appointment becoming less personal.

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Detailed rules governing all aspects are departments. Organizations theory aims at the developing framework model and prepositions about organizational variables including functions, structure, decisions, processes, behaviour, relationships and linkages with environmental factors of comparative recent origins, it is not an extension of order theories of management and human relations but a synthesis of behavioural disciplines such as psychology and sociology.

KOONTZ AND DONNEL (1976) stated that organization theory has not yet reached a maturity where it can explain much of the organizational phenomena. It still faces considerable problems in integrating the functional and specialized aspects of administration.

An organization develops structure to carry out it’s functions otherwise it would have no systematic pattern of activities commonly called operations are also structured particularly by the technology and the work flow. Both the external activities and internal activities have to be integrated and this case of managerial structure is developed for this purpose structure is also necessary to allocate rewards, so that members are committed to accomplish the task of the organization.

An organization inevitably become bureaucratic as it grove in complexity. The role of one man becomes impossible in such a large organizations, senior and middle managers are required to exercise discretion on certain jobs. And for the effective decision to be made, it becomes imperative to the employ manager on long term basis.

Again if the management does not become partially bureaucratic, in a complex organizations unlikely to survive in a comparative environment.

According to Simon (1982) a modern approach is to find out new organizations work in practice and then try and generalize about the nature of organization. He went to say that there are four types of organizational structure, namely

  1. Straight line
  2. line and staff
  3. functional and committee

Furthermore, he pointed out that terminology has come to mean the same as line and staff in some areas.

Modern scholars are critical of formal organization structure and behave it creates a feeling of dependency on party of subordinates.

BROWN (1982) Argues for relating the pyramids or hierarchical structure of the organization because some persons are better than others at making decision and as the work becomes more complex there are fewer persons able to deal to deal with more involved problems.

Their features are noted by Brown

  1. Veto appointment of subordinate
  2. Assess their work
  • Transfer them

BROWN (1977) advocated a representative system of manager and shop floor worker’s in the form of workers council for each area. These councils must unanimously agree to the matter relating to duties entitlement of members of company. No action is therefore taken, if one person disagrees. The structure aim is to reduce the conflicts. There is also criticism of this approach to management and although the company’s procedures and record of industrial action in good, this is no indication that this type of organization could be used with similar success else where.

According to Ugbo and Okenwa (2003;100 ) An organizational structure is the organizations official arrangement of roles authority relationship and communication pattern.

Organizational structure according to Stoner (1978) is the framework that holds the various department individual positions and their relationship together, for order and logical arrangement. This organizational structure is often expressed in a chart form. This chart portrays the organizational structure is a diagrammatic forms. The structure of an organization is influenced by many factor which include the size and nature of the organization, its objectives and function, the complexity of the department, the length of the time the organization laws been in existence, its performance or otherwise, the flow of the business throughout the year, the geographical location of the various units of the organization, the autonomy given to divisions/ department/units of the organization and the extent of mechanization/automation. (Denyer and Shaw, 1990). Having the above factor in mind the managers have to ask themselves a number of basis questions before designing an appropriate structure.

  • What is the best basis for dividing up work? By specialist function, product, geography e.t.c.
  • How much specialization should be encouraged? How closely should individuals task be defined in relation to other task?
  • How much standardization of procedure should be encouraged?
  • How much discretion (freedom to act) should be permitted to individuals?
  • What is the best way to achieve co-ordination and integration across the specialisms? (Cole, 2002).

There are no simple answers to these questions management has to exercise their judgment to the configuration for their particular situation. This is because the organization structure, which operates successfully in a medium sized business in a group of companies with branches located in various places around the country. One thing is certain; there is no idea organization structure. A good manager should know what is implied by good organization, he should always seek to evolve the best that is the most suited to the work his office. His task is to develop an organization structure that will facilitate the flow of work which will provide the information service required by management, which will give a whole and this make the most effective contribution possible to the fulfillment of co-operate objectives.

 

  • TYPES OF ORGANIZATIONAL STRUCTURE

There are four types of organization structure vize line and staff, functional and committee organization. Line organization this is type of organization consist of direct vertical relationships connecting the positions of the relationship those above and below. These line relationships are the channels through which responsibilities and authority flows from the top management to the lowest subordinate, thus responsibility is greatest at the top and reduced at each successive level down the organization.

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Line structure forms a basis framework for the whole organization. The other types of structure are modification of it, and must rely on it for authority action. McFarland (1979) showed the line of the authority as basic in organization and representing the ultimate authority to command, direct, at, decide, approve or disapprove, direct or indirectly the activities of an organization or unit of organizations. It directs others and requires them to conform to decision. But this right is not absolute, for all authority must operate within the limits of the delegation and must carryout the appropriate responsibility.

Line organization has the great advantage of being simple direct and makes for speed in decision making, there is not doubt about fixing responsibility for work at different levels and it gives clear indication of lines of communication since department heads are solely responsible of their particular sections of concern there may be a lack of co-ordination of the work of the various department unless an overall planning has been made. It may also tend to breed empire building.

Line and staff structure – this type of structure is used when time need experts advice or detailed information to be able to make appropriate decision that will help to achieve organization goals. Line and staff is the modification of the line structure. The line structure consists of department headed by experts, who assist with the line e.g. legal department, personnel management authority.

However, the authority is limited by the absence of the right to command or direct because its main activities consist of advertising or services which cut across several units of the business. Its most serious fault is that of causing confusion for want precise definition of duties.

Functional structure: functional structure is common in large organization because of the complexities of organizational life. Here work is arranged according to the types of activities with experts placed in charge of the different aspects of concern to ensure that their activities are dealt with uniformly throughout the organization. This type of organization makes use of specialization and makes coordination better.

A person’s special skills are available to the entire organization are not restricted by arbitrary departmental boundaries.

An example is a research department, which could require other sections of the organization to follow it’s orders. The main difference between line and staff and functional structure is that the latter confers upon it’s holders the right to command in matter pertaining to that function and across departmental lines (Hutchinson, 1971).

The main disadvantages of these structure is that it make for multiple responsibilities for multiple supervisors which can create conflict in boss subordinate relationship. Employees may find, there are “too many bosses”. It can also add to overheads with no corresponding contribution to efficiency.

Committee organization, it is a group of people drawn from different department to bring together their experience. Skills resources and team work to discuss and solve some organizational problems.

TREWATHA (1975) defined committee as a group of organizational members change with responsibility for solve a specific problem or accomplishing specific task.

In the same vein, Filley and House (1969) said, it is a special type of meetings, characterized by a limited membership, a specific task or goal, a designated leader and an implicit or explicit plan of action, there are two type of committee in the organization temporary or adhoc committee with specific assignment, examples are works committee, budget committee the other is the standing or permanent committee and it is a permanent feature of the top level of an organization. Examples are boards of directors, etc the use of committee is a well known technique for co-ordination in organization. Ndukwe U and Chuke  (2003)

 

  • SUMMARY OF LITERATURE REVIEW

Organization can never be in existence with human being it will be human being that will form any organization whether formal and informal but the formal is well structured their function well defined decision making  has its ways coming from the managers of each units to their subordinate while the informal are just associate bodies that are loosely organization they are not well structured and the goals and functions are not well structured and the goals and functions are not well defined like the formal organization.

But all these are just a achieve one aim or the other. But the way organization is structured has a lot to do with the effectiveness and efficiency in that organization. In other words, it is the structure of an organization that determines the number of management positions.

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