NCERT Textbook - Organising Commerce Notes | EduRev

Commerce : NCERT Textbook - Organising Commerce Notes | EduRev

Created by: Nipuns Institute
 Page 1


ORGANISING ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within reach. One of 
India’s largest IT solutions providers, Wipro T echnologies, is taking 
on the likes of IBM and Accenture in its effort to be included among 
the largest and most successful technology services companies in the 
world.
Currently Wipro employs 45,000 people at a growth rate 
of 30 percent annually over the coming years. “I don’t see 
growing to 150,000 or 200,000 people as an insurmountable 
challenge,” said Premji, Chairman, Wipro. He believes that if 
companies such as Accenture could grow by 20,000 people in 
two years, Wipro’s growth projections are not impossible. 
Restructuring Wipro was considered the most important 
step in becoming a global giant, driven by the goal towards 
improved customer-orientation.
During the past few months, Wipro separated itself into 
several subsidiaries by product line: telecommunications, 
engineering, financial services, etc. Each subsidiary brings in 
about $300 million in annual earnings and is self-sufficient with 
their own accounting books, personnel and administrative 
functions. 
Wipro shifted from a centralised to decentralised 
management system. All responsibilities for growth lay with 
the management of each entity. 
“We tried to de-layer the organisation and empower 
our business leaders with a much higher degree of growth 
responsibility,” said Premji. “We removed an entire layer [of 
executives]”. 
Between 2002 and 2003, Wipro acquired two IT consulting 
firms to break into the U.S. market. Wipro is also moving 
from a service provider to a product developer. Today, it 
partners with other companies to develop IT products to gain 
experience and achieve name recognition.
Way T o Go, Wipro! Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra for 
Epoch Times Washington D.C. May 01, 2006
LEARNIN G 
OBJECTIVES
After studying this chapter 
you should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance 
of organising;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
functional organisation;
n 	 Explain the meaning, 
advantages  and 
disadvantages of 
divisional organisation;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
formal and informal 
organisation;
n 	 Distinguish between 
formal and informal 
organisation;
n 	 Explain the concept 
of delegation and 
decentralisation;
n 	 Describe the importance 
of delegation and 
decentralisation; and
n 	 Distinguish between 
delegation and 
decentralisation.
2015-16(21/01/2015)
Page 2


ORGANISING ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within reach. One of 
India’s largest IT solutions providers, Wipro T echnologies, is taking 
on the likes of IBM and Accenture in its effort to be included among 
the largest and most successful technology services companies in the 
world.
Currently Wipro employs 45,000 people at a growth rate 
of 30 percent annually over the coming years. “I don’t see 
growing to 150,000 or 200,000 people as an insurmountable 
challenge,” said Premji, Chairman, Wipro. He believes that if 
companies such as Accenture could grow by 20,000 people in 
two years, Wipro’s growth projections are not impossible. 
Restructuring Wipro was considered the most important 
step in becoming a global giant, driven by the goal towards 
improved customer-orientation.
During the past few months, Wipro separated itself into 
several subsidiaries by product line: telecommunications, 
engineering, financial services, etc. Each subsidiary brings in 
about $300 million in annual earnings and is self-sufficient with 
their own accounting books, personnel and administrative 
functions. 
Wipro shifted from a centralised to decentralised 
management system. All responsibilities for growth lay with 
the management of each entity. 
“We tried to de-layer the organisation and empower 
our business leaders with a much higher degree of growth 
responsibility,” said Premji. “We removed an entire layer [of 
executives]”. 
Between 2002 and 2003, Wipro acquired two IT consulting 
firms to break into the U.S. market. Wipro is also moving 
from a service provider to a product developer. Today, it 
partners with other companies to develop IT products to gain 
experience and achieve name recognition.
Way T o Go, Wipro! Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra for 
Epoch Times Washington D.C. May 01, 2006
LEARNIN G 
OBJECTIVES
After studying this chapter 
you should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance 
of organising;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
functional organisation;
n 	 Explain the meaning, 
advantages  and 
disadvantages of 
divisional organisation;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
formal and informal 
organisation;
n 	 Distinguish between 
formal and informal 
organisation;
n 	 Explain the concept 
of delegation and 
decentralisation;
n 	 Describe the importance 
of delegation and 
decentralisation; and
n 	 Distinguish between 
delegation and 
decentralisation.
2015-16(21/01/2015)
Organising 113
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number  
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work 
into attainable tasks, empowering 
the workforce to accomplish these 
tasks etc., need to be understood 
and dealt with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, that 
organising plays a significant role in 
implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner that 
allowed customer orientation to dominate 
over other goals and diversified on the 
basis of product lines. It also modified 
the relationships within the management 
hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties can  
be eliminated. Not only is this impo­
rtant for productive cooperation 
between the personnel but also for 
clarification of extent of authority, as 
well as responsibility for results and 
logical grouping of activities. 
Meaning Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
2015-16(21/01/2015)
Page 3


ORGANISING ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within reach. One of 
India’s largest IT solutions providers, Wipro T echnologies, is taking 
on the likes of IBM and Accenture in its effort to be included among 
the largest and most successful technology services companies in the 
world.
Currently Wipro employs 45,000 people at a growth rate 
of 30 percent annually over the coming years. “I don’t see 
growing to 150,000 or 200,000 people as an insurmountable 
challenge,” said Premji, Chairman, Wipro. He believes that if 
companies such as Accenture could grow by 20,000 people in 
two years, Wipro’s growth projections are not impossible. 
Restructuring Wipro was considered the most important 
step in becoming a global giant, driven by the goal towards 
improved customer-orientation.
During the past few months, Wipro separated itself into 
several subsidiaries by product line: telecommunications, 
engineering, financial services, etc. Each subsidiary brings in 
about $300 million in annual earnings and is self-sufficient with 
their own accounting books, personnel and administrative 
functions. 
Wipro shifted from a centralised to decentralised 
management system. All responsibilities for growth lay with 
the management of each entity. 
“We tried to de-layer the organisation and empower 
our business leaders with a much higher degree of growth 
responsibility,” said Premji. “We removed an entire layer [of 
executives]”. 
Between 2002 and 2003, Wipro acquired two IT consulting 
firms to break into the U.S. market. Wipro is also moving 
from a service provider to a product developer. Today, it 
partners with other companies to develop IT products to gain 
experience and achieve name recognition.
Way T o Go, Wipro! Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra for 
Epoch Times Washington D.C. May 01, 2006
LEARNIN G 
OBJECTIVES
After studying this chapter 
you should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance 
of organising;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
functional organisation;
n 	 Explain the meaning, 
advantages  and 
disadvantages of 
divisional organisation;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
formal and informal 
organisation;
n 	 Distinguish between 
formal and informal 
organisation;
n 	 Explain the concept 
of delegation and 
decentralisation;
n 	 Describe the importance 
of delegation and 
decentralisation; and
n 	 Distinguish between 
delegation and 
decentralisation.
2015-16(21/01/2015)
Organising 113
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number  
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work 
into attainable tasks, empowering 
the workforce to accomplish these 
tasks etc., need to be understood 
and dealt with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, that 
organising plays a significant role in 
implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner that 
allowed customer orientation to dominate 
over other goals and diversified on the 
basis of product lines. It also modified 
the relationships within the management 
hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties can  
be eliminated. Not only is this impo­
rtant for productive cooperation 
between the personnel but also for 
clarification of extent of authority, as 
well as responsibility for results and 
logical grouping of activities. 
Meaning Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
2015-16(21/01/2015)
114 Business Studies
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
to be utilised for achieving specified 
objectives.
Organising can be defined as  
a process that initiates impleme­ ntation of plans by clarifying jobs  
and working relationships and 
effectively deploying resources for 
attainment of identified and desired 
results (goals).
StepS in the p roceSS of StepS in the p roceSS of 
o rganiSing o rganiSing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will 
result in mass confusion. However, 
if one student supervises the work 
by grouping students, dividing the 
work, assigning each group their 
quota and developing reporting relat­
ionships among them, the job will be 
done faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division of 
work: The first step in the process 
of organising involves identifying 
and dividing the work that has 
to be done in accordance with 
previously determined plans. The 
work is divided into manageable 
activities so that duplication can 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising Definition of Organising
2015-16(21/01/2015)
Page 4


ORGANISING ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within reach. One of 
India’s largest IT solutions providers, Wipro T echnologies, is taking 
on the likes of IBM and Accenture in its effort to be included among 
the largest and most successful technology services companies in the 
world.
Currently Wipro employs 45,000 people at a growth rate 
of 30 percent annually over the coming years. “I don’t see 
growing to 150,000 or 200,000 people as an insurmountable 
challenge,” said Premji, Chairman, Wipro. He believes that if 
companies such as Accenture could grow by 20,000 people in 
two years, Wipro’s growth projections are not impossible. 
Restructuring Wipro was considered the most important 
step in becoming a global giant, driven by the goal towards 
improved customer-orientation.
During the past few months, Wipro separated itself into 
several subsidiaries by product line: telecommunications, 
engineering, financial services, etc. Each subsidiary brings in 
about $300 million in annual earnings and is self-sufficient with 
their own accounting books, personnel and administrative 
functions. 
Wipro shifted from a centralised to decentralised 
management system. All responsibilities for growth lay with 
the management of each entity. 
“We tried to de-layer the organisation and empower 
our business leaders with a much higher degree of growth 
responsibility,” said Premji. “We removed an entire layer [of 
executives]”. 
Between 2002 and 2003, Wipro acquired two IT consulting 
firms to break into the U.S. market. Wipro is also moving 
from a service provider to a product developer. Today, it 
partners with other companies to develop IT products to gain 
experience and achieve name recognition.
Way T o Go, Wipro! Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra for 
Epoch Times Washington D.C. May 01, 2006
LEARNIN G 
OBJECTIVES
After studying this chapter 
you should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance 
of organising;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
functional organisation;
n 	 Explain the meaning, 
advantages  and 
disadvantages of 
divisional organisation;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
formal and informal 
organisation;
n 	 Distinguish between 
formal and informal 
organisation;
n 	 Explain the concept 
of delegation and 
decentralisation;
n 	 Describe the importance 
of delegation and 
decentralisation; and
n 	 Distinguish between 
delegation and 
decentralisation.
2015-16(21/01/2015)
Organising 113
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number  
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work 
into attainable tasks, empowering 
the workforce to accomplish these 
tasks etc., need to be understood 
and dealt with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, that 
organising plays a significant role in 
implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner that 
allowed customer orientation to dominate 
over other goals and diversified on the 
basis of product lines. It also modified 
the relationships within the management 
hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties can  
be eliminated. Not only is this impo­
rtant for productive cooperation 
between the personnel but also for 
clarification of extent of authority, as 
well as responsibility for results and 
logical grouping of activities. 
Meaning Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
2015-16(21/01/2015)
114 Business Studies
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
to be utilised for achieving specified 
objectives.
Organising can be defined as  
a process that initiates impleme­ ntation of plans by clarifying jobs  
and working relationships and 
effectively deploying resources for 
attainment of identified and desired 
results (goals).
StepS in the p roceSS of StepS in the p roceSS of 
o rganiSing o rganiSing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will 
result in mass confusion. However, 
if one student supervises the work 
by grouping students, dividing the 
work, assigning each group their 
quota and developing reporting relat­
ionships among them, the job will be 
done faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division of 
work: The first step in the process 
of organising involves identifying 
and dividing the work that has 
to be done in accordance with 
previously determined plans. The 
work is divided into manageable 
activities so that duplication can 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising Definition of Organising
2015-16(21/01/2015)
Organising 115
be avoided and the burden of 
work can be shared among the 
employees.  
 (ii) Departmentalisation: Once 
work has been divided into small 
and manageable activities then 
those activities  which are similar 
in nature are grouped together. 
Such sets facilitate speciali­ sation. This grouping process 
is called departmentalisation. 
Departments can be created 
using several criteria as a basis. 
Examples of some of the most 
popularly used basis are territory 
(north, south, west etc.) and 
products (appliances, clothes, 
cosmetics etc).
 (iii) Assignment of duties: It is 
necessary to define the work 
of different job positions and 
accordingly allocate work 
to various employees. Once 
departments have been formed, 
each of them is placed under 
the charge of an individual.  
Jobs are then allocated to the 
members of each department in 
accordance to their skills and 
competencies.  It is essential 
for effective performance that a 
proper match is made between 
the nature of a job and the 
ability of an individual. The work 
must be assigned to those who 
are best fitted to perform it well.
 (iv) Establishing reporting 
relation ships: Merely allocating 
work is not enough. Each 
individual should also know 
who he has to take orders from 
and to whom he is accountable. 
The establishment of such clear 
relationships helps to create a 
hierarchal structure and helps 
in coordination amongst various 
departments.
i Mportance of o rganiSing i Mportance of o rganiSing Performance of the organising 
function can pave the way for a 
smooth transition of the enterprise  
in accordance with the dynamic 
business environment. The signifi­
cance of the organising function 
mainly arises from the fact that it 
helps in the survival and growth of 
an enterprise and equips it to meet 
various challenges. In order for 
any business enterprise to perform 
tasks and successfully meet goals, 
the organising function must be 
properly performed. The following 
points highlight the crucial role that 
Your school must have various societies for extra-curricular 
activities like the dramatics society, the quiz club, the economics 
society, the debating society and so on. Observe and list the way 
they have organised their activities using division of labour, chain of 
communication and the levels they have adopted for reporting on 
work. How far is this similar to the process you have read about?
Think About It Think About It
2015-16(21/01/2015)
Page 5


ORGANISING ORGANISING
CHAPTER
5
It’s not quite there yet, but the goal is certainly within reach. One of 
India’s largest IT solutions providers, Wipro T echnologies, is taking 
on the likes of IBM and Accenture in its effort to be included among 
the largest and most successful technology services companies in the 
world.
Currently Wipro employs 45,000 people at a growth rate 
of 30 percent annually over the coming years. “I don’t see 
growing to 150,000 or 200,000 people as an insurmountable 
challenge,” said Premji, Chairman, Wipro. He believes that if 
companies such as Accenture could grow by 20,000 people in 
two years, Wipro’s growth projections are not impossible. 
Restructuring Wipro was considered the most important 
step in becoming a global giant, driven by the goal towards 
improved customer-orientation.
During the past few months, Wipro separated itself into 
several subsidiaries by product line: telecommunications, 
engineering, financial services, etc. Each subsidiary brings in 
about $300 million in annual earnings and is self-sufficient with 
their own accounting books, personnel and administrative 
functions. 
Wipro shifted from a centralised to decentralised 
management system. All responsibilities for growth lay with 
the management of each entity. 
“We tried to de-layer the organisation and empower 
our business leaders with a much higher degree of growth 
responsibility,” said Premji. “We removed an entire layer [of 
executives]”. 
Between 2002 and 2003, Wipro acquired two IT consulting 
firms to break into the U.S. market. Wipro is also moving 
from a service provider to a product developer. Today, it 
partners with other companies to develop IT products to gain 
experience and achieve name recognition.
Way T o Go, Wipro! Way T o Go, Wipro!
Adapted from an article by Heide B. Malhotra for 
Epoch Times Washington D.C. May 01, 2006
LEARNIN G 
OBJECTIVES
After studying this chapter 
you should be able to:
n Explain the concept of 
organising;
n 	 Explain the process of 
organising;
n 	 Describe the importance 
of organising;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
functional organisation;
n 	 Explain the meaning, 
advantages  and 
disadvantages of 
divisional organisation;
n 	 Explain the meaning, 
advantages and 
disadvantages of 
formal and informal 
organisation;
n 	 Distinguish between 
formal and informal 
organisation;
n 	 Explain the concept 
of delegation and 
decentralisation;
n 	 Describe the importance 
of delegation and 
decentralisation; and
n 	 Distinguish between 
delegation and 
decentralisation.
2015-16(21/01/2015)
Organising 113
Once the plans have been laid down 
and objectives specified therein, the 
next step is to organise resources 
in a manner which leads to the 
accomplishment of objectives. A 
critical issue in accomplishing the 
goals specified in the planning 
process is structuring the work of an 
organisation to adapt to the dynamic 
business environment. The activities 
of an enterprise must be organised 
in such a manner that plans can be 
successfully implemented.
For planning to be fruitful a number  
of considerations like resources that 
will be needed, optimum utilisation 
of the same translation of work 
into attainable tasks, empowering 
the workforce to accomplish these 
tasks etc., need to be understood 
and dealt with properly.
It is evident from the way Wipro 
has moved towards reaching for 
it’s goal of becoming a globally 
successful technology company, that 
organising plays a significant role in 
implementation of plans.
What has Wipro done to become a 
contending force among other global 
giants? Are there lessons to be learnt 
from Wipro’s approach?
Wipro organised itself in a manner that 
allowed customer orientation to dominate 
over other goals and diversified on the 
basis of product lines. It also modified 
the relationships within the management 
hierarchy to suit the goals.
The management function of 
organising ensures that efforts are 
directed towards the attainment 
of goals laid down in the planning 
function in such a manner that 
resources are used optimally and 
people are able to work collectively 
and effectively for a common purpose. 
Thus, it is in the context of effective 
management that the organisation 
function earns due importance. It is 
a means for translating plans into 
action.
The organising function leads to the 
creation of an organisational structure 
which includes the designing of roles 
to be filled by suitably skilled people 
and defining the inter relationship 
between these roles so that ambi­
guity in performance of duties can  
be eliminated. Not only is this impo­
rtant for productive cooperation 
between the personnel but also for 
clarification of extent of authority, as 
well as responsibility for results and 
logical grouping of activities. 
Meaning Meaning Let us take an example to understand 
how organising takes place. Have 
you ever paid attention to how, the 
school fete which you enjoy so much, 
actually takes place? What goes on  
behind the scene to make it the 
desired reality you want? The whole 
activity is divided into task groups 
each dealing with a specific area like 
the food committee, the decoration 
committee, the ticketing committee 
and so on. These are under the 
overall supervision of the official in 
2015-16(21/01/2015)
114 Business Studies
charge of the event. Coordinating 
relationships are established among 
the various groups to enable smooth 
interaction and clarity about each 
group’s contribution towards the 
event. All the above activities are a 
part of the organising function. 
Organising essentially implies a 
process which coordinates human 
efforts, assembles resources and 
integrates both into a unified whole 
to be utilised for achieving specified 
objectives.
Organising can be defined as  
a process that initiates impleme­ ntation of plans by clarifying jobs  
and working relationships and 
effectively deploying resources for 
attainment of identified and desired 
results (goals).
StepS in the p roceSS of StepS in the p roceSS of 
o rganiSing o rganiSing Organising involves a series of steps 
that need to be taken in order to 
achieve the desired goal. Let us try 
and understand how organising 
is carried out with the help of an 
example.
Suppose twelve students work for 
the school library in the summer 
vacations. One afternoon they are 
told to unload a shipment of new 
releases, stock the bookshelves, and 
then dispose of all waste (packaging, 
paper etc). If all the students decide 
to do it in their own way, it will 
result in mass confusion. However, 
if one student supervises the work 
by grouping students, dividing the 
work, assigning each group their 
quota and developing reporting relat­
ionships among them, the job will be 
done faster and in a better manner.
From the above description, the 
following steps emerge in the process 
of organising:
 (i) Identification and division of 
work: The first step in the process 
of organising involves identifying 
and dividing the work that has 
to be done in accordance with 
previously determined plans. The 
work is divided into manageable 
activities so that duplication can 
Organising is the process of identifying and grouping the work to 
be performed, defining and delegating responsibility and authority, 
and establishing relationships for the purpose of enabling people to 
work most effectively together in accomplishing objectives. 
Louis Allen 
Organising is the process of defining and grouping the activities of the 
enterprise and establishing authority relationships among them.
Theo Haimman
Definition of Organising Definition of Organising
2015-16(21/01/2015)
Organising 115
be avoided and the burden of 
work can be shared among the 
employees.  
 (ii) Departmentalisation: Once 
work has been divided into small 
and manageable activities then 
those activities  which are similar 
in nature are grouped together. 
Such sets facilitate speciali­ sation. This grouping process 
is called departmentalisation. 
Departments can be created 
using several criteria as a basis. 
Examples of some of the most 
popularly used basis are territory 
(north, south, west etc.) and 
products (appliances, clothes, 
cosmetics etc).
 (iii) Assignment of duties: It is 
necessary to define the work 
of different job positions and 
accordingly allocate work 
to various employees. Once 
departments have been formed, 
each of them is placed under 
the charge of an individual.  
Jobs are then allocated to the 
members of each department in 
accordance to their skills and 
competencies.  It is essential 
for effective performance that a 
proper match is made between 
the nature of a job and the 
ability of an individual. The work 
must be assigned to those who 
are best fitted to perform it well.
 (iv) Establishing reporting 
relation ships: Merely allocating 
work is not enough. Each 
individual should also know 
who he has to take orders from 
and to whom he is accountable. 
The establishment of such clear 
relationships helps to create a 
hierarchal structure and helps 
in coordination amongst various 
departments.
i Mportance of o rganiSing i Mportance of o rganiSing Performance of the organising 
function can pave the way for a 
smooth transition of the enterprise  
in accordance with the dynamic 
business environment. The signifi­
cance of the organising function 
mainly arises from the fact that it 
helps in the survival and growth of 
an enterprise and equips it to meet 
various challenges. In order for 
any business enterprise to perform 
tasks and successfully meet goals, 
the organising function must be 
properly performed. The following 
points highlight the crucial role that 
Your school must have various societies for extra-curricular 
activities like the dramatics society, the quiz club, the economics 
society, the debating society and so on. Observe and list the way 
they have organised their activities using division of labour, chain of 
communication and the levels they have adopted for reporting on 
work. How far is this similar to the process you have read about?
Think About It Think About It
2015-16(21/01/2015)
116 Business Studies
organising plays in any business 
enterprise:
 (i) Benefits of specialisation:  
Organising leads to a systematic 
allocation of jobs amongst the 
work force. This reduces the 
workload as well as enhances 
productivity because of the 
specific workers performing  a 
specific job on a regular basis. 
Repetitive performance of a 
particular task allows a worker 
to gain experience in that area 
and leads to specialisation.
 (ii) Clarity in working relation­
ships: The establishment of 
working relationships clarifies 
lines of communication and 
specifies who is to report to 
whom.  This removes ambiguity 
in transfer of information 
and instructions. It helps in 
creating a hierarchical order 
thereby enabling the fixation of 
responsibility and specification 
of the extent of authority to be 
exercised  by an individual. 
 (iii) Optimum utilization of resou­
rces: Organising leads to the 
proper usage of all material, fin­
ancial and human resources. 
The proper assignment of jobs 
avoids overlapping of work and 
also makes possible the best 
use of resources. Avoidance 
of duplication of work helps 
in preventing confusion and 
minimising the wastage of 
resources and efforts. 
 (iv) Adaptation to change: The 
process of organising allows a 
business enterprise to accom­
modate changes in the business 
environment. It allows the 
organisation structure to be 
suitably modified and the revision 
of inter­relationships amongst 
managerial levels to pave the way 
for a smooth transition. It also 
provides much needed stability 
to the enterprise as it can then 
continue to survive and grow 
inspite of changes.
 (v) Effective administration: 
Organising provides a clear 
description of jobs and related 
duties. This helps to avoid confusion 
and duplication. Clarity in working 
relationships enables proper 
execution of work. Management 
of an enterprise thereby becomes 
easy and this brings effectiveness 
in administration.
 (vi) Development of personnel:
Organising stimulates creativity 
amongst the managers.  Effective 
delegation allows the managers 
to reduce their workload  by 
assigning routine jobs to their 
subordinates.  The  reduction in  
workload by delegation is not 
just necessary because of limited 
capacity of an individual but also 
allows the manager to develop new 
methods and ways of performing 
tasks. It gives them the time to 
explore areas for growth and the 
opportunity to innovate thereby 
2015-16(21/01/2015)
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