Business Studies Part I
Business Studies Part II

Organsing: Importance

Performance of the organising function can pave the way for a smooth transition of the enterprise in accordance with the dynamic business environment. The significance of the organising function mainly arises from the fact that it helps in the survival and growth of an enterprise and equips it to meet various challenges. In order for any business enterprise to perform tasks and successfully meet goals, the organising function must be properly performed. The following points highlight the crucial role that organising plays in any business enterprise:

  1. Benefits of specialisation: Organising leads to a systematic allocation of jobs amongst the work force. This reduces the workload as well as enhances productivity because of the specific workers performing  a specific job on a regular basis. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialisation.
  2. Clarity in working relationships: The establishment of working relationships clarifies lines of communication and specifies who is to report to whom.  This removes ambiguity in transfer of information and instructions. It helps in creating a hierarchical order thereby enabling the fixation of responsibility and specification of the extent of authority to be exercised  by an individual.
  3. Optimum utilization of resources: Organising leads to the proper usage of all material, financial and human resources. The proper assignment of jobs avoids overlapping of work and also makes possible the best use of resources. Avoidance of duplication of work helps in preventing confusion and minimising the wastage of resources and efforts.
  4. Adaptation to change: The process of organising allows a business enterprise to accommodate changes in the business environment. It allows the organisation structure to be suitably modified and the revision of inter-relationships amongst managerial levels to pave the way for a smooth transition. It also provides much needed stability to the enterprise as it can then continue to survive and grow inspite of changes.
  5. Effective administration: Organising provides a clear description of jobs and related duties. This helps to avoid confusion and duplication. Clarity in working relationships enables proper execution of work. Management of an enterprise thereby becomes easy and this brings effectiveness in administration.
  6. Development of personnel: Organising stimulates creativity amongst the managers.  Effective delegation allows the managers to reduce their workload  by assigning routine jobs to their  subordinates.  The  reduction in workload by delegation is not just necessary because of limited capacity of an individual but also allows the manager to develop new methods and ways of performing task.

  1. Delegation of authority is the concept used by Aman Chadha in the above case which helped him in focusing on objectives.
    Delegation of authority is the process of granting of authority to the subordinates to operate within prescribed limits.
  2. The four points of importance of delegation of authority are described below:
    • Effective management: It helps the managers to function more efficiently as they get more time to concentrate on important matters. Freedom from doing routine work provides them with opportunities to excel in new areas.
    • Employee development: By empowering the employees, they are given more opportunities to utilise their talent and this may help them to become better leaders and decision makers in future.
    • Motivation of employees: Delegation also has psychological benefits as helps in building the self-esteem of an employee and improves his confidence and work performance. When a superior entrusts a subordinate with a task, it is not merely
      the sharing of work but involves trust on the superior’s part and commitment on the part of the subordinate. Thus, delegation may give rise to latent abilities in the subordinates.
    • Facilitation of growth: With the increase in the competence of the employees, an organisation tends to gain in many ways. The growth and expansion of the firm becomes easy as the capable workforce is ready to take greater responsibilities.