What is Organizing in Management?
Definition:
Organizing involves the establishment of an international structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part of it; the grouping of these activities, the assignment of such groups of activities to the manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationship, horizontally and vertically, in the organization structure.
Importance of Organizing Function
- Specialization - Organizational structure is a network of relationships in which the work is divided into units and departments. This division of work is helping in bringing specialization in various activities of concern.
- Well defined jobs - Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their qualifications, skill and experience. This is helping in defining the jobs properly which clarifies the role of every person.
- Clarifies authority - Organizational structure helps in clarifying the role positions to every manager (status quo). This can be done by clarifying the powers to every manager and the way he has to exercise those powers should be clarified so that misuse of powers do not take place. Well defined jobs and responsibilities attached helps in bringing efficiency into managers working. This helps in increasing productivity.
- Co-ordination - Organization is a means of creating co-ordination among different departments of the enterprise. It creates clear cut relationships among positions and ensure mutual co-operation among individuals. Harmony of work is brought by higher level managers exercising their authority over interconnected activities of lower level manager.
Authority responsibility relationships can be fruitful only when there is a formal relationship between the two. For smooth running of an organization, the co-ordination between authority- responsibility is very important. There should be coordination between different relationships. Clarity should be made for having an ultimate responsibility attached to every authority. There is a saying, “Authority without responsibility leads to ineffective behavior, and responsibility without authority makes person ineffective.” Therefore, co-ordination of authority- responsibility is very important.
- Effective administration - The organization structure is helpful in defining the jobs positions. The roles to be performed by different managers are clarified. Specialization is achieved through division of work. This all leads to efficient and effective administration.
What is Organizing in Management – Nature
The nature of organizing is discussed below:
1. Division of Labour:
According to Fayol, work of all kinds must be subdivided and assigned to a number of persons. This helps to make the work being carried out in a simpler and efficient manner. It, thus, leads to specialization and increases employees’ efficiency. By repeating a small part of work the individual acquires speed and accuracy in its performance. This principle holds true for technical as well as managerial tasks.
2. Coordination:
Different persons are assigned for different functions and yet all these functions have only one aim i.e. accomplishment of the enterprise’s objectives.
To this end, an organization has to adopt adequate methods to ensure that there is proper coordination of the different activities performed at various work points. This means establishment of correct and adequate relationships between an employee and his work; one employee with another; and one department or sub-department with another.
3. Social System:
All parts of the organizational system are interdependent. Each part affects and is influenced by any other part and also in turn by the system as a whole. An organization is a social system. Its activities are governed by social and psychological laws. People working in an organization are influenced in their actions and behavior by their social and psychological needs.
Two aspects of an organizational social system are the formal or official and the informal or unofficial. The organization's social system is dynamic, in the sense that inter-personal and group relationships within it, keep on changing and are not dormant.
4. Objectives:
Any organization structure is bound together by the pursuit of specific and well-defined objectives. In fact, as objectives cannot be accomplished without an organization, an organization cannot exist for long without objectives and goals.
5. Cooperative Relationship:
An organization ensures cooperative relationships among the members of the group. It cannot be constituted by one person. It requires at least two or more persons. The organization is a system that helps in creating meaningful relationships among persons both vertical and horizontal.
6. Well-Defined Hierarchy:
Hierarchy acts as a line of communication, as well as command, and shows the pattern of relationships among people. Hierarchy of organisation refers to the positioning of people from the highest level to the lowest rank in the organisation. It also helps to define authority and responsibility attached to each position/person.
7. Communication:
Although every organisation has its own channels and methods of communication. For success in management, effective communication is vital. This is because management is concerned with working with others and unless there is a proper understanding between people, it cannot be effective. The channels of communication may be formal, informal, downward, upward, or horizontal.
What is Organizing in Management – 8 Main Features
The features of organizing are stated as here under:
1. Division of work – The total work should be divided into many parts for the effective performance of the work. Each part of the work is to be performed by one person or a group of persons. In this way, the division of work results in the creation of specialized persons.
2. Achieving organizational objective – There is a need for coordination among the employees in the organization. The division of work is done keeping in view the overall objectives of the organization. The organizing process is framed in such a way so as to achieve organizational objectives smoothly.
3. Authority-responsibility structure – The position of each of the executives is defined with regard to the extent of authority and responsibility vested in him to discharge his duties. Organizing arrangements for the delegation of authority and responsibility. It tries to bring harmony, authority, and responsibility.
4. Grouping of activities – Activities are needed to be grouped on a certain well-defined basis such as function, product, customer, process, territory, etc. This grouping process is called departmentation. It helps in achieving the benefits of specialization and administrative control.
5. Scalar (step-by-step) principle – Authority is delegated from the upper level to the lower level and the responsibility flows from the lower level to the upper level of the organizational hierarchy. Provision is to be made for the accountability of the assigned duties. Each employee of an organization must know where his accountability lies.
6. Installing a sound communication system – The success of management depends upon an effective system of communication. It helps the management by providing information about the duties, responsibilities, authority, positions, and jobs. Coordination can be maintained among various related departments by making the exchange of information on a regular basis.
7. Flexibility – The organizing process should be flexible so that any change can be incorporated as and when required. It ensures the ability to adapt and adjust the activities in response to the change taking place in the external environment. The programs, policies, and strategies can be changed as and when required if the provision for flexibility is made in the organizing process.
8. Coordination – Coordination ensures the unity of action in the realization of a common objective. It is an arrangement of a group effort to achieve organizational goals. Coordination of different personnel and departments are needed for ensuring higher efficiency and effectiveness.
Difference Between Formal and Informal Organization
Comparison Chart
| BASIS FOR COMPARISON | FORMAL ORGANIZATION | INFORMAL ORGANIZATION |
|---|---|---|
| Meaning | An organization type in which the job of each member is clearly defined, whose authority, responsibility and accountability are fixed is formal organization. | An organization formed within the formal organization as a network of interpersonal relationship, when people interact with each other, is known as informal communication. |
| Creation | Deliberately by top management. | Spontaneously by members. |
| Purpose | To fulfill, the ultimate objective of the organization. | To satisfy their social and psychological needs. |
| Nature | Stable, it continues for a long time. | Not stable |
| Communication | Official communication | Grapevine |
| Control mechanism | Rules and Regulations | Norms, values and beliefs |
| Focus on | Work performance | Interpersonal relationship |
| Authority | Members are bound by hierarchical structure. | All members are equal. |
| Size | Large | Small |
Definition of Formal Organization
By the term formal organisation, we mean a structure that comes into existence when two or more people come together for a common purpose, and there is a legal & formal relationship between them. The formation of such an organisation is deliberate by the top level management. The organisation has its own set of rules, regulations, and policies expressed in writing.
The basic objective of the establishment of an organisation is the attainment of the organization’s goal. For this purpose, work is assigned, and authorities are delegated to each member and the concept of division of labor and specialization of workers are applied and so the work is assigned on the basis of their capabilities. The job of each is fixed, and roles, responsibilities, authority, and accountability associated with the job is clearly defined.
In addition to this, there exists a hierarchical structure, which determines a logical authority relationship and follows a chain of command. The communication between two members is only through planned channels.
Types of formal organization structure
- Line Organization
- Line and Staff Organization
- Functional Organization
- Project Management Organization
- Matrix Organization
Difference Between Formal and Informal Organization
An organization is a collection of people who work together to attain specified objectives. There are two types of organization structure, which can be formal organization and informal organization. An organisation is said to be a formal organisation when the two or more two persons come together to accomplish a common objective, and they follow a formal relationship, rules, and policies are established for compliance, and there exists a system of authority.
On the other end, there is an informal organisation which is formed under the formal organisation as a system of social relationship, which comes into existence when people in an organisation, meet, interact and associate with each other. In this article excerpt, we are going to discuss the major differences between formal and informal organisation.
An organization is a collection of people who work together to attain specified objectives. There are two types of organization structure, which can be formal organization and informal organization. An organisation is said to be a formal organisation when the two or more two persons come together to accomplish a common objective, and they follow a formal relationship, rules, and policies are established for compliance, and there exists a system of authority.
On the other end, there is an informal organisation which is formed under the formal organisation as a system of social relationship, which comes into existence when people in an organisation, meet, interact and associate with each other. In this article excerpt, we are going to discuss the major differences between formal and informal organisation.
Definition of Formal Organization
By the term formal organisation, we mean a structure that comes into existence when two or more people come together for a common purpose, and there is a legal & formal relationship between them. The formation of such an organisation is deliberate by the top-level management. The organisation has its own set of rules, regulations, and policies expressed in writing.
The basic objective of the establishment of an organisation is the attainment of the organization’s goal. For this purpose, work is assigned, and authorities are delegated to each member and the concept of division of labor and specialization of workers are applied and so the work is assigned on the basis of their capabilities. The job of each is fixed, and roles, responsibilities, authority, and accountability associated with the job are clearly defined.
In addition to this, there exists a hierarchical structure, which determines a logical authority relationship and follows a chain of command. The communication between two members is only through planned channels.
Types of formal organization structure
- Line Organization
- Line and Staff Organization
- Functional Organization
- Project Management Organization
- Matrix Organization
By the term formal organisation, we mean a structure that comes into existence when two or more people come together for a common purpose, and there is a legal & formal relationship between them. The formation of such an organisation is deliberate by the top-level management. The organisation has its own set of rules, regulations, and policies expressed in writing.
The basic objective of the establishment of an organisation is the attainment of the organization’s goal. For this purpose, work is assigned, and authorities are delegated to each member and the concept of division of labor and specialization of workers are applied and so the work is assigned on the basis of their capabilities. The job of each is fixed, and roles, responsibilities, authority, and accountability associated with the job are clearly defined.
In addition to this, there exists a hierarchical structure, which determines a logical authority relationship and follows a chain of command. The communication between two members is only through planned channels.
Types of formal organization structure
- Line Organization
- Line and Staff Organization
- Functional Organization
- Project Management Organization
- Matrix Organization
Line organisation
Line organisation: Line organisation is the oldest and simplest method of administrative organisation. According to this type of organization, the authority flows from top to bottom in a concern. The line of command is carried out from top to bottom. Persons having the greater decision–making authority are placed at the top, and those having the least decision–making authority are at the bottom. In between, there are other levels of management, such as intermediate and supervisory.
Line executives are the people who are directly involved in the basic activities of an organisation.
Types of Line organisation
Line organisation can be of two types:
1. Pure line organisation and
2. Departmental line organisation
1. Pure line organisation: In a pure line organisation, at any given level of work, all the individuals perform the same type of work.
2. Departmental line organization: In a departmental line organization, there is a chief executive at the top, under him, there is a number of departments each headed by a departmental manager.
Merits of Line organisation
Simple: A-line organisation is easy to establish. There are no complications in defining the relationships.
Clear division of authority and responsibility: Each individual has his area of authority clearly indicated. He also wants to know that he is responsible for his work performance.
Unity of control: Employees are given orders by only one superior and hence a subordinate does not want to carry out the orders of a number of superiors.
Speedy action: Decisions can be made and executed promptly due to unity of command and clear division of authority and responsibility.
Flexibility: Each executive understands his role and responsibility and makes a suitable adjustment to realize the goals set for him.
Line and Staff organisation
Merits of Line and Staff Organisation
Expert advice: Line executives and through them the enterprise as a whole, benefit a great deal from the expert advice and guidance provided by the staff officers.
Relief to line executives: Staff executives carry on a detailed analysis of each important managerial activity. Hence line executives do not have to undertake a specialized investigation of each problem - situation, for which they may not always be competent.
Training of young staff executives: A-line and staff organizations offer an opportunity to young staff executives to acquire expertise in their respective fields of activity.
Demerits of Line and Staff Organisation
Confusion: It may not always be possible to determine the pattern of authority relationships between line and staff executives, which might create confusion.
Expertise not aided by authority: Staff executives may be experts in their fields of activity but they only have an advisory role. They lack the authority to implement their advice.
Centralization: In a line and staff organization, line executives alone have the power to make and execute decisions. Thus it tends towards centralization of authority in a few hands.
Demerits of Line organisation
Lack of specialization: Line executives are responsible for both planning and execution of the work assigned to them which amounts to too much relying on the capacity and capability of individual executives.
Overburdening of key men: An executive with line authority has complete control over his unit and he is solely responsible for the performance of his subordinates. This places a great burden on an individual.
Limited communication: A-Line organisation does not usually provide communication from the subordinate i.e. upward communication. This hinders the creativity and capacity for independent thinking of the employee as they develop the habit of working as per orders of their superiors.
Subjective approach: A-line executive has a monopoly over the decision – making and he is not obliged to seek advice or listen to line organization.
Functional organization
Merits of Functional Organisation
Application of expert knowledge: Functional organization promotes logical division of work and leads to specialization at every work point.
Efficiency: Since the worker at each point concentrates on fewer activities, he acquires proficiency in his area of work.
Relief to line executives: Functional organization results in a big relief to line executives, since instruction from specialists flows directly to lower levels, line executives do not have to worry about the routine technical problems faced by workers.
Mass Production: Functional organization leads to specialization and standardization which results in an increase in production.
Economy: With each activity being in-charge of a number of specialists, there is no need to have well-trained line executives at each work point.
Demerits of Functional Organisation
Complex relationships: Functional organisation leads to too many cross-relationships between persons and departments. Since a worker is placed under the charge of a number of bosses, he finds it difficult to link up the different and conflicting orders received from them.
Ineffective Coordination: Difficulty in the determination of the limits of authority in the case of each specialist creates coordination problems.
Centralization: Decision-making on part of the workers is very limited because of the availability of several specialists to guide and direct them at each work point.
Advantages of Formal Organisation:
1. Systematic Working:
Formal organisation structure results in systematic and smooth functioning of an organisation.
2. Achievement of Organisational Objectives:
The formal organizational structure is established to achieve organizational objectives.
3. No Overlapping of Work:
Informal organization, structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.
4. Co-ordination:
Formal organizational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
The formal organizational structure clearly defines the superior-subordinate relationship, i.e., who reports to whom.
6. More Emphasis on Work:
The formal organizational structure lays more emphasis on work than interpersonal relations.
1. Systematic Working:
Formal organisation structure results in systematic and smooth functioning of an organisation.
2. Achievement of Organisational Objectives:
The formal organizational structure is established to achieve organizational objectives.
3. No Overlapping of Work:
Informal organization, structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work.
4. Co-ordination:
Formal organizational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
The formal organizational structure clearly defines the superior-subordinate relationship, i.e., who reports to whom.
6. More Emphasis on Work:
The formal organizational structure lays more emphasis on work than interpersonal relations.
Disadvantages of Formal Organisation:
1. Delay in Action:
While following scalar chain and chain of command actions get delayed informal structure.
2. Ignores Social Needs of Employees:
Formal organizational structure does not give importance to the psychological and social needs of employees which may lead to demotivation of employees.
3. Emphasis on Work Only:
Formal organizational structure gives importance to work only; it ignores human relations, creativity, talents, etc.
Definition of Informal Organization
Informal organization refers to the relationship between people in the organization based on personal attitudes, emotions, prejudices, likes, dislikes, etc. An informal organisation is formed within the formal organisation; that is a system of interpersonal relationships between individuals working in an enterprise, that forms as a result of people meeting, interacting, and associating with one another. The organisation is created by the members spontaneously, i.e. created out of socio-psychological needs and urge of people to talk. The organisation is featured by mutual aid, cooperation, and companionship among members.
In an informal organisation, there are no defined channels of communication, and so members can interact with other members freely. They work together in their individual capacities and are not professional.
There is no defined set of rules and regulations that govern the relationship between members. Instead, it is a set of social norms, connections, and interaction. The organisation is personal i.e. no rules and regulations are imposed on them, their opinions, feelings, and views are given respect. However, it is temporary in nature, and it does not last long.
Informal organization refers to the relationship between people in the organization based on personal attitudes, emotions, prejudices, likes, dislikes, etc. An informal organisation is formed within the formal organisation; that is a system of interpersonal relationships between individuals working in an enterprise, that forms as a result of people meeting, interacting, and associating with one another. The organisation is created by the members spontaneously, i.e. created out of socio-psychological needs and urge of people to talk. The organisation is featured by mutual aid, cooperation, and companionship among members.
In an informal organisation, there are no defined channels of communication, and so members can interact with other members freely. They work together in their individual capacities and are not professional.
There is no defined set of rules and regulations that govern the relationship between members. Instead, it is a set of social norms, connections, and interaction. The organisation is personal i.e. no rules and regulations are imposed on them, their opinions, feelings, and views are given respect. However, it is temporary in nature, and it does not last long.
Advantages of Informal Organisation:
1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster spread of communication.
2. Fulfills Social Needs:
Informal communication gives due importance to the psychological and social needs of employees which motivate the employees.
3. Correct Feedback:
Through informal structure, the top-level managers can know the real feedback of employees on various policies and plans.
Strategic Use of Informal Organisation. The informal organisation can be used to get benefits in the formal organisation in the following way:
1. The knowledge of informal groups can be used to gather the support of employees and improve their performance.
2. Through the grapevine important information can be transmitted quickly.
1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster spread of communication.
2. Fulfills Social Needs:
Informal communication gives due importance to the psychological and social needs of employees which motivate the employees.
3. Correct Feedback:
Through informal structure, the top-level managers can know the real feedback of employees on various policies and plans.
Strategic Use of Informal Organisation. The informal organisation can be used to get benefits in the formal organisation in the following way:
1. The knowledge of informal groups can be used to gather the support of employees and improve their performance.
2. Through the grapevine important information can be transmitted quickly.
Disadvantages of Informal organisation:
1. Spread Rumours:
According to a survey, 70% of information spread through the informal organisational structure are rumors which may mislead the employees.
2. No Systematic Working:
Informal structure does not form a structure for the smooth working of an organization.
3. May Bring Negative Results:
If an informal organisation opposes the policies and changes of management, then it becomes very difficult to implement them in the organisation.
4. More Emphasis on Individual Interest:
Informal structure gives more importance to satisfaction of individual interest as compared to organizational interest.
1. Spread Rumours:
According to a survey, 70% of information spread through the informal organisational structure are rumors which may mislead the employees.
2. No Systematic Working:
Informal structure does not form a structure for the smooth working of an organization.
3. May Bring Negative Results:
If an informal organisation opposes the policies and changes of management, then it becomes very difficult to implement them in the organisation.
4. More Emphasis on Individual Interest:
Informal structure gives more importance to satisfaction of individual interest as compared to organizational interest.
What is Organizing in Management – 5 Important Steps: Determination of Objectives, Enumeration of Activities, Classification of Activities, and a Few Others
Various steps involved in this process are:
Step # 1. Determination of Objectives:
Any business is established or started by entrepreneurs to achieve some objectives. These objectives must be clearly stated so as to understand the very purpose and existence of the business. Depending on the objectives the work to be done is decided and it is divided into groups and they are organized in an orderly way. It is to say that organizations are built around objectives; hence deciding the objectives is the first step in building up an organization.
Step # 2. Enumeration of Activities:
The work of an industrial concern is divided into essential activities. For example, it is divided into production, financing, purchasing, marketing, personnel, likewise.
Step # 3. Classification of Activities:
The next step is to classify activities according to similarities and common purposes and functions by taking the available human and material resources into account. For each class of activities, there will be a department and for each sub-class, there will be a section of the department and so on. For example, marketing may be one department, in which packing, dispatching, sales, consumer service, etc. may be sections.
Step # 3. Fitting Individuals into Functions:
Once the departmentalization and formation of sections are over, each section should be allocated to a subordinate and each department should be allocated to one executive. Hence, the next duty is to fix a suitable and well-qualified, and capable person to fit into these activities. The rule is a right peg in a right hole. Each person in the group is given a specific work and made responsible correctly and effectively. This step consists of appointing workers and defining their responsibility of each of them.
Step # 4. Assignment of Authority for Action:
Now suitable persons are fitted in their respective jobs and made responsible to accomplish the job. He can only proceed to do the work when he is given adequate authority to proceed to do the work. The delegation authority to take steps to complete the assigned part of the job is the next step in the organization. Once the authority is given the concerned manager will have the power to command his subordinates and get the work done by them.
What is Organizing in Management – Top 25 Principles
1. Principle of Consideration of Unity of Objectives:
The objective of the undertaking influences the organization's structure. The organisation is a mechanism to achieve the goals. The objective of an enterprise should be clearly laid down. Not only the objectives be stated in clear terms, but the method of achieving them too should also be indicated in detail and in precise terms so that the organizers may know the type of organization that is needed.
There must be unity of objectives so that all efforts can be concentrated on the set goals. Organizational structure and generated operations must be measured against the effectiveness in achieving set objectives.
2. Principle of Specialisation:
The effective organisation must include specialization. Optimum output can be obtained when each person concentrates on doing the thing for which he/she is best qualified. Precise division of work facilitates specialization. The organisation should emphasize the law of specialization. However, each area of specialization must be interrelated to the total integrated system by means of coordination in all departments and activities.
3. Principle of Co-Ordination:
Co-ordination expresses the principles of organisation in toto; nothing less. Coordination is the orderly arrangement of a group effort to provide unity of action in the pursuit of a common purpose. It is the beginning and end of all organized efforts. A manager is mainly a coordinator. Co-ordination is a facilitative function helping the integration of the basic managerial functions – Planning, Organisation, Motivation, and Control.
Organization involves division of work among people whose efforts must be coordinated to achieve common goals, Coordination of aims at higher efficiency and effectiveness.
4. Principles of Scalar Chain:
It points out a clear and unbroken line of authority. The chain of authority must be clearly defined for sound organizational purposes. It is also called a chain of command. The line of authority flows from the highest executive to the lowest managerial level and the chain of command should not be broken. It should be short i.e. it should have few levels of management. Every subordinate must know as to who is his supervisor and to whom policy matters beyond his own authority must be referred to, for decision.
5. Principle of Commensurate Authority and Responsibility:
According to this principle when an individual is responsible for a certain task, he should be given the authority to carry out that task. Without commensurate authority and responsibility, he cannot be held accountable for the unsuccessful completion of the task as he has very little control over the situation. Authority should be equal to responsibility i.e., each manager should have enough authority to accomplish the task.
6. Principle of Ultimate Responsibility:
The responsibility of higher authority for the acts of his subordinates is absolute. Responsibility to perform a task is given to a subordinate by the supervisor and the subordinate commits mistake, in such a situation the supervisor is answerable to his superiors. He cannot escape responsibility by saying that mistake was committed by a particular worker.
7. Principle of Efficiency:
The organisation structure should enable the enterprise to attain objectives with the lowest possible cost. An efficient organizational structure operates without wasting its scarce resources. It permits maximum use of its human resources and its talents.
8. Principle of Delegation:
The chief executive, for obvious limitations, cannot do the whole work of the organisation himself and hence he takes assistance from others to accomplish the objectives. He divides the whole work into a number of activities and groups then on the basis of their similarity and thus he creates a number of departments. Delegation is the process through which they are tied together by establishing a relationship between them for cooperative and integrated action. Delegations may be vertical or horizontal.
This process ties together the whole organizational structure for integrated and cooperative action. If a delegation of authority is not carefully done, the very existence of the organization is in danger, and chaos and confusion may be raised.
Authority and responsibility should be delegated as far down in the organisation as possible i.e. to the lowest level of the organisation at which the particular responsibility can be efficiently discharged. Delegation of authority and decentralization of authority means the same process.
9. Principle of Unity of Command:
The core of this principle is that a man can serve only one boss. It means that instructions and directions to a subordinate must come from one person only. Each subordinate must have one superior, to whom he should be answerable. This helps in avoiding conflict in command and in fixing responsibility. According to this principle each person should be accountable to a single superior.
Thus, no one in the organisation should have more than one boss. It clarifies authority – responsibility and relationship. If an individual has to report to only one supervisor there is a sense of personal responsibility to one person for results. Let a person receive orders from and be responsible to only one superior.
10. Principle of Span of Control:
The maximum number of employees or subordinates that can be supervised effectively by a person is known as the span of control. The span of control should be limited to a reasonable number according to circumstances. A span of control of six subordinates has been considered to be the most desirable. There is a limit to the number of subordinates which a manager can manage effectively. Grouping must ensure that each supervisor and manager is not over burdened with subordinates.
11. Principle of Balance:
There should be reasonable balance in the size of various departments, between standardisation of procedures and flexibility between centralisation and decentralisation. Similarly, there should be balance between the principle of span of control and the short chain of command.
12. Principle of Communication:
A good communication network is essential for smooth flow of information and understanding and for effective business performance. The line of authority offers a standing channel for downward and upward communication.
13. Principle of Personal Ability:
People constitute an organisation. Proper selection, placement and training need not be over emphasized. Organisation structure must encourage management development programmes and ensure optimum use of human resources.
14. Principle of Exception:
Under the exception principle recurring decisions should be handled in a routine manner by the lower level manager, whereas problems involving unusual matters should be referred to the higher level. The executives at the higher level of an organisation have limited time and capacity. They should not be bothered by routine problems which can as well be managed by subordinates.
15. Principle of Flexibility:
The structure of an organisation must be flexible so that adjustments necessitated by changed circumstances may be planned and incorporated in it. The organisation is expected to provide build-in devices to facilitate growth and expansion without dislocation. It should be adaptable to changing circumstances. It should not be rigid or inelastic.
16. Principle of Departmentation:
It enables the division of activities into specialized groups to attain organisational objectives. A good organization involves the precise and systematic distribution of work and responsibilities between the managerial group and administrative group. Departmentation maintains balance and harmony in the working of the organisation.
17. Principle of Division of Work:
Specialization in organisational functions is necessary for the most effective attainment of objectives. Specialization depends on the division of work. Total activities of an enterprise should be divided and grouped into departmental, sectional and individual activities to facilitate the division of work.
18. Principle of Definiteness:
Each activity must contribute to the primary or basic goals of an enterprise with minimum effort and maximum efficiency on the part of the employees. This contribution should be well-defined and definite.
19. Principle of Discipline:
Discipline is vitally important in all types of organizations. In its absence, it is difficult to achieve success.
20. Principle of Simplicity:
The organization should be kept as simple as possible so that there should not be any confusion and misunderstanding among the superiors and subordinates.
21. Principle of Separation of Line and Staff Function:
Line functions should be separated from the staff functions.
22. Principle of Continuity of Operations:
The form of an organisation should be such that it facilitates the continuous performance of all the activities necessary for the continuance and growth of the enterprise.
23. Principle of Leadership:
Organizational structure should create a favorable environment or situation in which the manager can most effectively lead and motivate his subordinates.
24. Principle of Definition:
The duties responsibilities, authority, and relations of everyone in the organisational structure should be clearly and completely defined preferably in writing.
An individual will accomplish a task in a given period only when the responsibility for that task is fixed upon him.
25. Principle of Work Assignment:
The work assignment for each individual in the organisation should take into consideration the special strength and talents of the individual. This means that an individual should be given an assignment commensurate with his or her ability and interest.
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