Organising
Organising creates a framework of roles, relationships, and responsibilities to implement plans. It answers: who does what, who reports to whom, and how are activities coordinated?
Nature and Importance
Organising involves: identifying activities, grouping activities, assigning duties, delegating authority, and establishing relationships. Importance: optimal resource use, facilitates coordination, enables specialisation, establishes accountability, provides growth framework.
Organisational Structure
Defines how activities are divided, grouped, coordinated. Key elements: work specialisation, departmentation, chain of command, span of control, centralisation/decentralisation, and formalisation.
Departmentation
Functional: by function (Marketing, Finance, HR, Production) — most common, promotes specialisation. Divisional/Product: by product line — accountability, flexibility. Geographic: by region. Customer: by customer type (retail vs corporate). Matrix: dual reporting (functional + project) — flexible but confusing.
Authority, Responsibility, Accountability
Authority: right to give orders. Line (direct command), Staff (advisory), Functional (specialised area). Responsibility: obligation to perform tasks. Accountability: answerability for results. Key principle: authority = responsibility.
Delegation
Assigning authority and responsibility while retaining accountability. Steps: define task, select person, communicate expectations, grant authority, monitor, provide feedback. Develops subordinates, frees managers for strategy. Barriers: fear of loss of control, lack of trust. Nepal: family businesses struggle with delegation to professional managers.
Span of Control
Narrow span (3-6): closer supervision, tall structure, higher cost. Wide span (7-20+): less supervision, flat structure, lower cost. Factors: task complexity, subordinate capability, manager ability, standardisation, technology.
Centralisation vs Decentralisation
Centralisation: decisions at top (consistency, control). Decentralisation: decisions at lower levels (speed, local responsiveness, motivation). Nepal’s federal restructuring is decentralisation — moving decisions from Kathmandu to provinces and local governments.
Summary
Organising creates structure for implementing plans through departmentation, authority relationships, delegation, span of control, and centralisation decisions.
Organisational Structure Comparison
| Structure | How It Works | Advantages | Disadvantages | Nepal Example |
|---|---|---|---|---|
| Functional | Grouped by function (Marketing, Finance, HR, Production) | Specialisation, efficiency, clear career paths | Silos, slow response to change, coordination issues | Most Nepali banks (separate departments for loans, deposits, IT) |
| Divisional | Grouped by product, geography, or customer | Accountability, flexibility, focus | Duplication of resources, higher cost | Chaudhary Group (food, cement, hospitality, banking divisions) |
| Matrix | Dual reporting — functional + project managers | Flexibility, collaboration, expertise sharing | Confusion, power struggles, dual authority | IT companies with project teams drawing from functional pools |
Worked Example: Delegation in a Nepali Retail Business
Situation: Ram owns a growing clothing store chain with 3 branches in Kathmandu. He currently makes all decisions himself — purchasing, pricing, staffing, and daily operations for all branches.
Problem: Ram is overwhelmed. Branches are underperforming because he can’t be everywhere. Staff feel disempowered. Growth has stalled — he can’t open a 4th branch while managing the existing three.
Solution through Delegation:
| Task Delegated | Delegated To | Authority Given | Result |
|---|---|---|---|
| Daily operations | Branch managers | Staffing decisions, customer complaints, daily cash management | Faster decisions, happier customers |
| Purchasing | Head buyer | Approve purchases up to Rs 200,000, negotiate with suppliers | Better supplier relationships, bulk discounts |
| Marketing | Marketing assistant | Social media, local promotions within Rs 50,000 budget | More engagement, increased footfall |
What Ram retains: strategic planning, major financial decisions, hiring/firing of branch managers, pricing policy, expansion decisions. Result: Ram now has time to plan a 4th branch. Branch performance improves because local managers respond faster to local conditions. Staff are more motivated with greater responsibility.
Tall vs Flat Structure
| Aspect | Tall Structure | Flat Structure |
|---|---|---|
| Levels | Many management levels | Few management levels |
| Span of Control | Narrow (3-6 reports) | Wide (10-20+ reports) |
| Communication | Slow (many layers to pass through) | Fast (direct access to top) |
| Cost | Higher (more managers) | Lower (fewer managers) |
| Supervision | Close, detailed | Minimal, employees self-manage |
| Employee Autonomy | Low | High |
| Best For | Large, complex organisations | Small, innovative, creative firms |
| Nepal Example | Nepal Government ministries | Nepali startups, small IT companies |
Exam Tips
Tip 1: Draw organisation charts for functional, divisional, and matrix structures — diagrams earn marks. Tip 2: Delegation questions are very common — know the steps, benefits, barriers, and give a practical example. Tip 3: Compare centralisation vs decentralisation with Nepal’s federal restructuring as a real example. Tip 4: Tall vs flat structure comparison with examples is frequently tested. Tip 5: Remember: authority without responsibility leads to misuse; responsibility without authority leads to frustration.