The following principles are helpful in developing a sound and efficient organization structure

The following principles are helpful in developing a sound and efficient organization structure:

1. Objectives and Purpose

2. Specialization and Definiteness

3. Delegation and Authority

4. Span of Control

5. Co-ordination and Balance

6. Decision Making and Continuity

7. Responsibility

8. Efficiency

9. Grouping

10. Personal Ability

11. Flexibility

12. Scalar Principles.

1. Objectives and Purpose

Organization is the mechanism through which management directs co-ordinates and controls the business. Therefore, organisation is the foundation of management. Orderly planning is necessary for a good organisation. The entire organisation, at all levels of the organisation structure, must be geared in order to obtain the maximum results.

It provides the framework within which all activities of the various connected works are carried out. The purpose of organisation is to avoid waste of time and duplication of work, and at the same time it aims at maximum co-ordination among departments. There must be unity of objectives so that all efforts can be concentrated on the set goals.

2. Specialization and Definiteness

The principle of specialization is the division of work aiming at maximum results. The effective attainment of the objectives needs specialization in organisational functions through the division of labor. The ac trinities of a concern are divided into many units and sub-units and suitable groupings into departmental activities, sectional activities, etc.

In a small business, the manager does all the functions. But in modern business, the activities have become more involving complex specialized function. Through a good organisation, each job is well defined and is distributed on the basis of skill, experience and ability of the persons concerned.

Fixed responsibilities aid in speeding up the work. Every employee must definitely know of his position in the firm and purpose thereof, so that he realizes his responsibility and works accordingly.

3. Delegation and Authority

A clerk gets his authority from his section-head, to whom the worker is responsible for the proper performance of the job assigned. Therefore authority always flows downward, while responsibility always moves upward. A clear definition of authority and responsibility is essential.

In the lack of clear definition, the management cannot have a smooth function of office work. A busy management allocates task among the sub-ordinates. A successful office manager never performs the task himself, but gets the work done by others.

4. Span of Control

No executive must have too many sub-ordinates reporting to him. If an office manager has many sub-ordinates under him, then the control becomes defective. The span of supervision or the span of authority or span of control limits the number of sub-ordinates reporting to a chief.

An office manager should be expected to supervise a reasonable number of sub-ordinates. A sound organisation requires a proper balance between a section-head and workers. The ratio between the section-heads and the workers may depend upon factors: say, size of the units, nature of organisation, individual differences, etc.

5. Co-ordination and Balance

Co-ordination is essential to bring unity of action in the organisation. Centralization of control of an organisation can be achieved through interlocking all units of the organisation. To secure co-ordination, working relationship should be established.

Each worker should be known by the organisational structure, his designation in it and the relationship of his work with other departments as well as his executive.

Work of all departments should be balanced in order to avoid conflict or overlapping of functions; with the object of ensuring smooth and efficient working of functions. Co-ordination aims at higher efficiency and effectiveness. It is a facilitative function. It helps the integration of the basic managerial functions i.e. planning, organizing, motivation and control.

6. Decision-Making and Continuity

The organizational structure should be capable of ensuring the continuity of existence of an enterprise, and must permit the growth and expansion without dislocation of existing methods. The decision making process should be moved from bottom to upwards.

7. Responsibility

Without authority there cannot be any responsibility. Assignment of responsibility should be coupled with authority sufficient to carry them out. There must be parity between authority and responsibility. Each worker must have sufficient authority to discharge the responsibility assigned to him.

No superior should be allowed to avoid his responsibility by delegating authority to his sub-ordinates. He must be held accountable for the acts of his sub-ordinates.

8. Efficiency

Available human resources should be utilized to the best and fullest capacity in order to achieve the highest efficiency through operations.

The structure formulated should enable the enterprise to function efficiently and to achieve its objectives with minimum cost and effort.

9. Grouping

The work of the enterprise is divided into certain groups of activities and placed in charge of different departments or sections. The work load must be equally distributed to ensure smooth working of the enterprise. A periodical evaluation of the work load of departments and the workers should be made by the management.

10. Personal Ability

As people constitute an organization, proper selection, placement and training are necessary. Organizational structure must ensure optimum use of human resources.

11. Flexibility

Organization must be flexible so that it can be adjusted to changing conditions. It must permit expansion, replacement, merger etc. It should not be rigid.

12. Scalar Principle

The line of authority, called the chain of command, from the top executive to the lowest level executive should be clear and unbroken. Every individual should know whom he reports and who reports to him.