Organising: Concepts, Structures, and Delegation Summary

Project Objective: Wipro Technologies, led by Premji, restructured to improve customer orientation and compete globally with IBM and Accenture.
Restructuring Actions: Separated into subsidiaries by product line (telecommunications, engineering, financial services, etc.) earning approximately $300\,\text{million}$ in annual earnings each.
Management Shift: Moved from a centralised to a decentralised system; removed an entire layer of executive management to empower business leaders.

Definition: Organising is a process that initiates implementation of plans by clarifying jobs and relationships.
- Louis Allen: The process of identifying and grouping work, defining and delegating responsibility, and establishing relationships.
- Theo Haimman: The process of defining Enterprise activities and establishing authority relationships.
Four-Step Process:
1. Identification and Division of Work: Dividing work into manageable activities to avoid duplication.
2. Departmentalisation: Grouping similar activities by criteria such as territory (North, South) or products (Cosmetics, Appliances).
3. Assignment of Duties: Allocating jobs to members based on skills and competencies.
4. Establishing Authority and Reporting Relationships: Creating a hierarchy where every individual knows who to take orders from and to whom they are accountable.

Specialisation: Repetitive performance of specific tasks enhances productivity.
Clarity in Relationships: Clarifies lines of communication and specifies responsibility.
Optimum Utilisation of Resources: Avoids duplication and minimises wastage of material, financial, and human resources.
Adaptation to Change: Allows structures to be modified to accommodate dynamic environmental shifts.
Effective Administration: Provides clear job descriptions to avoid confusion.
Development of Personnel: Delegation allows managers to innovate; strengthens subordinates' potential.
Expansion and Growth: Enables diversification into new product lines and geographical territories.

Span of Management: The number of subordinates that can be effectively managed by a superior; determines management levels.
Functional Structure:
- Basis: Jobs grouped by functions (e.g., Production, Marketing, Purchasing).
- Advantages: Occupational specialisation, better control, and easier training.
- Disadvantages: Functional empires (ignoring overall goals), coordination problems, and inter-departmental conflicts.
Divisional Structure:
- Basis: Jobs grouped by product lines (e.g., Cosmetics, Garments, Footwear).
- Advantages: Product specialisation, accountability for profits, and easier expansion.
- Disadvantages: Inter-divisional fund conflicts and increased costs due to duplication of functions.

Formal Organisation: Designed by management for goal achievement; defined by rules, procedures, and a clear scalar chain.
- Pros: Fixed responsibility and stability.
- Cons: Procedural delays and limited recognition of creativity.
Informal Organisation: A network of social relationships arising spontaneously (Keith Davis).
- Pros: Fast information spread and fulfillment of social needs.
- Cons: Potential for rumors and resistance to management changes.

Delegation: The downward transfer of authority (Louis Allen).
- Authority: Right to command; flows downward.
- Responsibility: Obligation to perform duty; flows upward.
- Accountability: Answerability for outcome; cannot be delegated; flows upward.
Decentralisation: Delegation of authority throughout all levels of the organisation.
- Centralisation: Retaining decision-making at the top.
- Importance: Develops initiative, enables quick decisions, and provides relief to top management.

ONGC: Transitioned in the $1990s$ from functional groups to an "asset-based" structure recommended by McKinsey to resolve organisational atrophy and delays.
McNeil Consumer Healthcare (Johnson & Johnson): Uses decentralized management, operating as $190$ smaller companies to maintain agility found in small firms.
History: Robert McNeil opened a drug outlet in $1879$ ; incorporated in $1933$ ; joined Johnson & Johnson in $1959$ .

Think About It: Managers must address potential monotony and absenteeism resulting from repetitive tasks in specialised work.
Exercises: Neha's shoe factory expanding to leather bags is advised to adopt a divisional structure to manage diverse product lines.
Case Analysis: A toy company diversifying into electronic toys should adopt a divisional structure to allow for product-specific expertise.
Management Dilemmas: In a scenario where a foreman is given a target of $200$ units per day without the authority to requisition materials, the manager cannot blame the foreman for failure because authority must match responsibility.