Organising
Organising is the process of defining and grouping activities, assigning duties, delegating authority and coordinating work to implement plans. The exam tests structure, delegation, centralisation and decentralisation.
Core rules
- A formal structure is deliberately designed and shown by the organisation chart; an informal structure arises from social interaction and can help communication but may spread rumours.
- Functional structure groups by function, such as marketing or finance; divisional structure groups by product, customer or territory.
- Delegation has three elements: authority (right to command), responsibility (duty to perform) and accountability (answerability). Authority can be delegated; responsibility and accountability cannot.
- Centralisation keeps decision authority at the top; decentralisation disperses it to lower levels. Decentralisation is not the same as delegation: it is organisation-wide.
Worked example
A growing firm has two distinct product lines with separate customers and technologies. A functional structure would split marketing and production by function but blur product accountability. A divisional structure gives each product a manager responsible for its own sales and costs. If the lines are truly distinct, divisional structure is the better fit; if they share one technology and market, functional structure avoids duplication.
Traps
Do not say responsibility can be delegated. Do not treat informal organisation as always harmful. Do not confuse delegation with decentralisation. Span of management is the number of subordinates reporting to one superior, not the number of levels.