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Chapter 1
1.1 Organization
Definition: Organization is a social entity in which two or more people work interdependently through deliberately structured patterns of interactions to accomplish a set of goals.
Organizations are:
As old as human race
Require at least two people interacting with each other
Cooperative efforts
Common objective
Coordination of man, machine and materials
Goal oriented system
Psychosocial system - working in a group
Technological system – using the knowledge and technique
An integration of structured activities, people are working together

System approach applied to organization
Organization in Open system

Importance of an Organization / Why do we need Organization?

Formal and Informal Organization
Informal structure created within an organization
Based on the factors like same language, culture, languages, personal attitudes, same tastes or any other factors
Informal organization exerts a strong influence on employee behaviors, if management can understand its nature, it can contribute to organization’s productivity
Are formed informally within the organization, by socializing and interpersonal relationships within the individuals over the breaks, or other social functions
Not necessarily formed to accomplish the organization goals, rather formed to fulfill the social activities
An informal leader is chosen within the informal organization who can have greater power than the formal leader over getting things done in the organization

Principles of Organization For an organization to run smoothly, following principles can be used
Division of Work
Refers to subdivision of work into separated jobs assigned to different people

Authority and Responsibility
Authority is the right to decide, to direct others, to take action, to perform certain duties in achieving the organizational goals
Responsibility is an obligations to perform work activities

Span of Control
Total number of workers per

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