Organizing is the process of identification and grouping of activities, assigning duties and delegating authority to the managers, allocating necessary resources and establishing coordination among individuals and department of an organization with a view to attain its objectives.




The process of organising consists of the following steps –


  1. Identification of activities: Every enterprise is created with a specific purpose. Based on this, the activities involved can be identified. For example, in a manufacturing firm, producing goods and selling them are the major activities in addition to routine activities like, paying salary to employees; raising loans from outside, paying taxes to the government etc. and these activities vary when the organisation is a service concern or a trading firm.


  1. Grouping of activities: Once activities are identified, then they need to be grouped. They are grouped in different ways. The activities which are similar in nature can be grouped as one and a separate department can be created. For example – activities undertaken before sale of a product, during the sale of the product and after the sale of the product can be grouped under the functions of a marketing department. Normally, all activities of a manufacturing unit can be grouped into major functions like purchasing, production, marketing, accounting and finance, etc. and each function can be subdivided into various specific jobs.



  1. Assignment of Responsibilities: Having completed the exercise of identifying, grouping and classifying all activities into specific jobs, they can be assigned to individuals to take care of.


  1. Granting authority: On the basis of responsibilities given to specific individuals, they are also to be given the necessary authority to ensure effective performance.


  1. Establishing relationship: This is a very important job of management as everybody in the organisation should know as to who he/she is to report, thereby establishing a structure of relationships. By doing so, relationships become clear and delegation is facilitated.




Organization structure is a network of formal authority relationships among people within which behaviour and activities of people are regulated for the accomplishment of organizational objectives.


Forms of Organizational Structure


  • Line Organization


  • Pure Line: – Activities at a particular level are same, every employee performs by & large the same type of work.


  • Departmental Line: – Whole work divided into functional Departments. Each Department works as a self-sufficient unit under the supervision & direction of a department manager who himself work under the immediate boss.


  • Line and Staff Organization


It is one that has line managers with direct vertical relationships between different levels in the organization in addition to the specialist responsible for advising and assisting the line managers.


  • Functional Organization


According to this, Line authority is channelized through the staff specialists. In such an organizational structure, Line authority runs through many functional experts who have authority to issue orders in their respective areas of specialisation.


  • Project Organization


It is a temporary structure designed to accomplish a specific task or project with the help of specialists drawn from different functional departments within the organization.



  • Matrix OR Grid Organization


It is permanent Organizational Structure designed to accomplish specific project or result by using using teams of specialists drawn from different functional departments within the organization.It is a combination of project organization and functional organization.


  • Committee Organization


It is a group of 2 or more appointed, nominated or elected persons to consider, discuss decide, recommend or report on some issue or matter assigned to it.



Informal & Formal Organization


Formal organisation refers to the officially established pattern of relationships among departments, divisions and individuals to achieve well-defined goals and is a consciously designed structure of roles.


Informal organisations on the other hand, refers to relationship between individuals in the organisation based on personal attitudes, likes and dislikes and originates to meet their social and emotional needs and develops spontaneously.




The active process of entrustment of a part of work or responsibility and authority to another and the creation of accountability for performance is known as delegation. Thus, there are three elements of delegation as follows-


  • Assignment of Responsibility: This is also known as entrustment of duties. Duties can be divided into two parts: one part, that the individual can perform himself and the other part, that he can assign to his subordinates to perform.


  • Granting Authority: Authority refers to the official powers and position required to carry on any task. When duties are assigned to subordinates then the required authority must also be conferred to him


  • Creating Accountability: The delegatee is fully answerable to his superior for performance of the task assigned to him. Thus, the superior ensures performance through accountability by his subordinate.





Decentralisation refers to a systematic effort to delegate authority at all levels of management and in all departments. This shifts the power of decision making to lower level under a well considered plan.

Decentralisation has number of benefits. Firstly, it reduces the workload of the top level management. Secondly, it motivates the employees and gives them more autonomy. It promotes initiative and creativity. It also helps employees to take quick and appropriate decisions. In this process, the top management is freed from the routine jobs and it enables them to concentrate on crucial areas and plan for growth.


Distinction between Delegations and Decentralisation


Decentralisation is not same as delegation. The points of differences are –

  • While delegation is the process of assigning responsibility and authority and thereby creating accountability; decentralisation is the ultimate outcome of planned delegation.
  • Delegation of authority takes place between the manager and his subordinates while decentralisation involves the entire organisation, and is between top management and divisions/departments.
  • Delegation is done to speed up the work and is essential in trace; while decentralisation is optional and is usually done in large scale organisations.
  • In case of delegation the responsibility and authority delegated may be withdrawn by the delegator; which is not so easy in case of decentralisation.


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