Delegation of authority is necessary in all types of organizations. Reasons can be seen through the importance.
The importance of delegation of authority may be outlined as follows :
1. Reduced workload of managers : Delegation of authority permits a manager to share his workload with his subordinates. By passing on the routine work to the subordinates, the manager is able to concentrate on more important aspects of his subordinates and is able to concentrate on policy matters and decision-making. This would increase his effectiveness.
2. Effective management : The manager who delegates authority can perform much more than the one who does not. This is because the manager can get some work done by his subordinates and is able to concentrate on policy matters and decision-making. This would increase his effectiveness.
3. Motivation of employees : Delegation implies grant of authority to the subordinates along with responsibility for work. A result, subordinates have a sense of recognition. They are motivated to work for higher performance. They do their job to the best of their abilities and skills.
4. Employee development : As a result of delegation, employees get more opportunities to utilize their talent. It allows to develop those skills which will improve their career prospects. It makes them better leaders and decision makers. Thus, delegation helps by preparing better future managers.
5. Facilitates organizational growth : Delegation helps in the expansion of an organisation by providing a ready work force to take up leading positions in new ventures. Trained and experienced employees are able to play significant roles in the launch of new projects for organizational growth.
6. Quick decision-making : The subordinates are granted sufficient authority to take decisions. They need not go to their superiors again and again for taking decisions concerning the routine matters. This increases the speed of decision-making.

Authority can be delegated but responsibility cannot. Delegation does not mean abdication. The manager shall still be accountable for the performance of assigned tasks. The manager cannot escape from the responsibility for any default or mistake on the part of his subordinates. Thus irrespective of the extent of delegated authority, the manager shall still be accountable to the same extent as before delegation. 

Centralisation is used, as top level manager has complete authority of decision-making and retains all powers.

Centralisation of authority refers to systematic and consistent retention or concentration of authority for decision-making at top or higher levels of management. An organisation is said to be centralised, when top management retains absolute authority for making almost all decisions on the functioning of the organisation, all decisions on specific matters are taken by one or a few managers at the top level.

In such an organisation, very little authority is delegated to managers at middle and lower levels. They have to depend on the top management for instruction and guidance in their day-to-day activities. They are expected to show no initiative and freedom in their day-to-day activities. The top management exercises strict supervision and control over all the activities in the organisation.

The organising function of management helps in bringing administrative efficiency in the following ways:
(i) It leads to the elimination of overlapping and duplication of activities.
(ii) It enables people to work as a team.
(iii) It brings clarity in working relationships, thereby ensuring proper execution of work.

A functional structure is an organizational design that groups similar or related jobs together. 
1. functional structure in formed by grouping together the entire work to be done into major functional department.
2.  All deptt are report to a coordinating head
3.  These dept may further be divide into sections.
Advantages/Merits
1. Specialisation : A functional structure leads to occupational specialization since emphasis is placed on specific functions. this promotes efficiency in utilization of manpower as employee perform similar tasks within a department and are able to improve performance.
2. Efficiency : It helps in increasing managerial and operational efficiency and this results in increased profit.
3. Minimises costs : It leads to minimum duplication of efforst which results in economies of scale and thus lowers cost.
4. Better control and coordination : It promotes control and coordination within a department because of similarity in the tasks being performed.
i. Proper attention : It ensures that different functions get due attention.
5. Ease in training employees : In makes training of employees easier as the focus is only on a limited range of skills.
Disadvantages/Demerits
1. Functional empires : A functional structure places less emphasis on overall organizational objectives than the departmental objectives. Such practices may lead to functional empires wherin the importance of a particular function (or department) may be overemphasised.
2. Problems in coordination : Pursuing departmental interests at the cost of organizational interests can also hinder the interaction between two or more departments. It may lead to problems in coordination among different departments.
3. Conflict of interests : A conflict of interests may arise among departments when the interests of two or more departments are not compatible.
4. Inflexibility : It may lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective and thus have difficulty in appreciating any other point of view.

Yes, decentralization is an optional policy, yet it is important in the organization.
It refers to a systematic delegation of authority at all levels of management and in all departments of the organisation to take a decision.
Importance of decentralization
1. Develops Initiative Among subordinates
It helps to promote self-reliance and confidence amongst the subordinates.This is because, lower managerial levels have been given freedom to take their own decisions and they learn to depend on their own judgment. It also helps to identify those executives, who have the potential to become dynamic leaders.
2.Develop Managerial Talent for the future
Formal training along with the experience of handling independent assignments helps to create a reservoir of qualified and capable managers, who can take up more challenging positions in the upcoming ventures of the organization.
3. Quick Decision-Making
Under decentralization, authority to make decisions is placed in the hands of those, who are responsible for executing the decisions. Since decisions are taken at levels nearest to the point of execution, there is no delay or distortion of information.
4.Relief to Top Management
It helps to reduce the amount of direct supervision over subordinates by giving them freedom to take a decision and act on their own. This reduces the workload of top executives and they can devote their time and attention to important policy matters.
5. Facilitates Growth
It provides greater autonomy to lower level managers and departmental heads.
This encourages them to function more efficiently to prove their supremacy, and facilitate expansion and growth of the organization.
6. Better Control
It makes it possible to evaluate performance at each level and making the departments accountable for their own results.Feedback is quick and leads to better control.

The process of organising consists of the following steps:
(i) Identification and division of work.
(ii) Departmentalisation.
(iii) Assignment of duties.
(iv) Establishing reporting relationships.
1. Identification and division of work
The first step in the process of organising involves identifying and dividing the work that has to be done in accordance with previously determined plans. Work is divided into manageable tasks, so that duplication can be avoided and workload can be shared among employees.
2. Departmentalisation
Once, work has been divided into small and manageable activities, then those activities which are similar in nature, are grouped together. This process is called departmentalisation. departments can be created on the basis of products, functions and territory. This brings specialisation in operations.
3. Assignment of Duties
Once the departments are created, each department is placed under the charge of an individual, called department head. Then, each job is allocated to an individual, according to his knowledge and skill. There should be a proper match between the nature of jobs and the ability of an individual.
4. Establishing Reporting Relationships
In the organisation, each employee has some authority as well as responsibility. It is necessary that every individual must know whom he has to take orders from and to whom he is answerable. This creates superior-subordinate hierarchy and helps in coordinating various activities in the organisation.

Organisation structure can be defined as a framework within which managerial and operating tasks are performed
1. It specifies the relationship between people, work, and resources.
2. It allows the correlation and coordination among human, physical and financial resources and the enables a business enterprises to accomplish desired goals.

Steps in the Process of Organising
Step 1: Identification and division of work
Step 2: Departmentalisation
Step 3: Assigning of Duties
Step 4: Establishing Reporting Relationship
1. Identification and Division of Work
The first step in the process of organizing involves identifying and dividing the total work to be done into specific activities (called jobs) in accordance with previously determined plans.
Such division of work into jobs is necessary because of the following reasons :
On individual cannot perform the entire work. By dividing the work, the burden of work can be shared among the employees.
1. It facilitates specialization of work and skills.
2. The work is divided into manageable activities so that duplication can be avoided.
2. Departmentalisation
The second step in organizing is to combine or group similar/related jobs into larger units called departments, divisions or sections.
This grouping process is called “Departmentalisation”.
Departments can be created using several criteria as a basis. Examples of some of the most popularly used basis are :
(a) Territory
(b) Products.
3. Assignment of Duties
It is necessary to allocate work to various employees. Once departments have been formed, each of them is placed under the charge of an individual, called departmental head (e.g., production manager, finance manager, marketing manager, etc.) Jobs are then allocated to the members of each department according to their skills and competencies.
4. Establishing Reporting Relationships Merely allocating work is not enough. Each individual should also know from whom he has to take orders and to whom he is accountable. The establishment of such reporting relationships helps in coordination amongst various departments.

Informal organisation