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In this article we will discuss about Formal Organisation:- 1. Meaning of Formal Organisation 2. Features of Formal Organisation 3. Elements.
Meaning of Formal Organisation:
In a society the activities that an individual undertakes fall under two broad categories: those which he himself plans and those which are planned for him by others. In both the cases the activities are goal-oriented in the sense that some special purpose is sought to be achieved. There is, however, a significant difference between the two. In the former, no formal authority is created.
In the latter, a formal authority designed to achieve certain purposes is created. The social arrangement in which a group of people plans the activities which others are obliged to participate in is called a formal organisation. For instance, a school or a college is a formal organisation inasmuch as the teachers plan the activities of students in order to teach them. Similarly, all large-scale organisations are formal organisations.
Features of Formal Organisation:
A formal organisation is distinguished by two features:
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(i) The organisational pattern is clearly spelt out in a document which, generally, consists of two parts : the Memorandum of Association embodying the objectives and the Rules and Regulations embodying the rules of management.
(ii) Once organised and formally registered under the law of the land, the formal organisation acquires a legal personality which can sue and be sued in the Court of Law. It can also survive beyond the lives of those who brought into being the formal organisation.
Elements of Formal Organisation:
Three things are generally required in order to plan social activities systematically:
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(a) A theory of how the activities are to be planned in order to achieve the purpose or objective of the organisation;
(b) Resources which can be mobilised for the purpose;
(c) Creation of a clear-cut authority system to direct the activities in a planned manner so as to ensure the achievement of goal of the organisation.
a. The Theory:
No formal organisation can succeed in the absence of a clearly defined set of ideas as to how the activities are to be carried out over a period of time, taking into account the possible changes in the variables in future and the steps to be taken to meet the situation arising out of changed circumstances. Such theorizing is an indispensable step towards planning a large-scale formal organisation.
A theory consists of the following:
(i) A technical-costs theory:
In order to ensure the success of a planned activity, there must be an informed awareness about the required technical resources and costs to be incurred for having those resources. For instance, in teaching the competency of teachers is a sine qua non for success.
Hence the needed technical skill of a teacher has’ to be clearly determined and the cost that has to be incurred in order to enlist the services of a technically qualified teacher should also be ascertained beforehand.
(ii) A market theory:
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A part of the planning process is not simply to ensure the nigh quality of a service, but also to be certain that the service in question has a demand. If, for instance, the best available teachers are recruited to teach a subject which fails to attract students, the entire enterprise falls through.
b. Resources:
All organisations need resources. Resources may be of various kinds. We may think of three kinds of resources – men, money and materials. Men who are involved in the activities of the organisation, directly or indirectly, are to give to the organisation time which they could utilise elsewhere.
The organisation must, therefore, devise ways of utilizing the services of the needed men who may be persuaded to give their time to the organisation rather than to other alternative uses.
Similarly, financial resources which have many other alternative uses must be attracted to the organisation. Finance must be made available if the organisation is to function. Finally, no organisation can achieve anything in the absence of the needed materials. Materials may be a building or a shed, depending on the kind of use.
Materials may also consist of tools, or libraries or means of transport or any other thing specially required for carrying out the activity. The point is that all these materials have alternative uses. Hence, the organisation must ensure that the materials are available to it and not diverted to alternative uses.
It is not enough to have men, money and material for the organisation. There are pulls from alternative uses which may attract these resources away from the organisation. Hence appropriate measures have to be devised so as to repel or neutralize such pulls. This must be an on-going process. Any slight slackening of efforts in this regard may lead to the loss of resources to the organisation.
There is also the problem of obsolescence, depreciation and physical wearing out of materials. These must be periodically replenished.
There is the further problem of putting the resources—men, money and materials—to the best use in order to derive the maximum advantages and minimise cost. The use of the resources should, therefore, “be scheduled, controlled, cost-accounted and directed”. This requires a well-designed administrative structure.
Thus, the resources have to be created in the sense of making them available, defended in the sense of checking diversion to alternative uses, replenished in the sense of replacing old, worn-out materials by new and improved ones, administered in the sense of maximising benefit and minimising loss.
c. The Authority System:
The optimum use of resources demands a well-knit administrative structure, providing for supervision, control and discipline.
The essential elements of such a structure are the following:
(i) To fix responsibility for action taken or not taken is a very important task. It is also a very difficult task. Difficulty is all the greater when activities of the organisation involve delegation of authority on the one hand and taking of responsibility on the other.
For instance, a teacher of a university or a college may be appointed to teach a particular subject on the assumption that he knows the subject and also the best way to put across to the students the essentials of the subject.
After the responsibility to take care of the students is delegated to him and; he undertakes the responsibility, weeks and months may pass without anyone cautioning him that his teaching leaves much to be desired.
In the circumstances, will it be fair to make him wholly responsible for the distressing state of affairs? In the interest of efficient and smooth functions of the organisation, the activities should be so organised as to assign specific responsibility for a specific job, so that no one may be in doubt as to where responsibility lies.
(ii) Supervision of activities is necessary in order to ensure that work progresses according to schedule. Supervision may be of two types: statistical and visual. Statistical supervision refers to the method of supervising or assessing performance on the basis of the relevant statistical data.
The grading of tests in an educational institution is a familiar example of this kind of supervision. A teacher does not keep a watch on his students to find out when, for how many hours and in what manner does the student study. His supervision work is confined to the ‘grades’ the student obtains.
A similar device of measuring performance is also followed in factories in the form of statistical curves. Visual supervision is nothing but our commonsense view of checking performance. In the nature of things, visual supervision is relevant for small-sized organisations and is completely unsuited to large-sized ones.
(iii) Discipline is necessary in every walk of life. An organisation which scores low in terms of discipline is more likely to fail in achieving its goal and vice versa.
The success of an organisation to enforce discipline depends on two factors:
(a) The degree to which the ‘carrot’ and the ‘stick’ (i.e., reward and punishment) are adequate enough to motivate the concerned people,
(b) The degree to which these rewards and punishments are “related in a reliable and precise way to the actual level of performance”.
There are, however, two difficulties in the way of enforcing discipline. In the first place, if there are stronger motivations in comparison with the system of rewards and punishments maintained by the organisation, the organisation may fail to enforce discipline as well as it should.
In India, for instance, attachments to family ties are so strong that factory workers are in the habit of absenting themselves from factory duty and migrating to their villages on festive occasions or during particular seasons.
Migratory labour, which is an anti-diesis of factory discipline, may be explained by the fact that attachment to one’s kith and kin is a greater attraction than the reward offered by the organisation for regular attendance. Secondly, the problem of maintaining discipline arises when rewards are given to those who do not deserve them or when punishments are imposed upon some in the most unwarranted manner.
These things weaken the morale of the members when they see “under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, but time and chance happened to them all”. Justice is not easy to achieve either in a society or in an organisation.