Everything you need to know about the Principles of Organization!

Principles of Organization as Studied in Management: (With Top 14 and 7 Principles)

Principles of Organization: As Listed by Koontz

A principle is a basic statement or a fundamental truth that provides under­standing and guidance to thinking and practice.

The important principles of organisation, as listed by Koontz, may be stated thus:

Principle # 1. Purpose of Organising:

Organisation should facilitate the achievement of enterprise objectives in an efficient way.


The ways are:

i. Principle of unity of objective- An organisation structure is effec­tive when it helps the achievement of enterprise objectives.

ii. Principle of organisational efficiency- An organisation structure is efficient if it facilitates the achievement of objectives with min­imum costs.

An efficient organisation structure operates without wastage of resources, allows maximum utilization of human resources, offers clear lines of authority and responsibility and provides a means for personal development.

Principle # 2. The Cause of Organising:


Span of management is the basic cause of an organisation structure. But for the principle of span of management, firms would ever remain small-managed by only one manager.

Principle of span of management- A manager should have a lim­ited number of subordinates reporting to him directly. Generally, the span should be short for novel, complex work and long for routine, simple work.

Principle # 3. The Structure of Organisation (Authority):

Authority is the cementing force in every organisation. It is the means by which groups of activities can be put under a manager. It enables the top to coordinate enterprise work effectively. A manager can show proper direction and create an environment for sound individual performance.

i. Principle of scalar chain- A scalar chain or chain of command refers to the unbroken line of authority from the top level to the bottom of an organisation. A clear chain of command facilitates communication.


ii. Principle of authority and responsibility- Subordinates must enjoy enough authority to carry out work at lower levels. While granting authority, the superior must state clearly what he expects, when he expects it done and by whom. The subordinate on his part, must show good performance, following the directives of the superior.

Responsibility, in simple terms, is the obligation of a subordinate to perform the duty as required by the superior. As a matter of principle, there should be parity between authority and responsibility. Authority without corresponding responsibility results in misuse of authority while responsibility in the absence of adequate authority brings about frustration and ineffective performance.

iii. Principle of unity of command- The unity of command principle states that for any given activity an employee should be made accountable to only one superior.

iv. Authority level principle- Decisions within the authority of indi­viduals should be made by them and not referred upward in the organisation structure. Delegation would be a futile exercise if the subordinates wait at the doorsteps of a superior for an audience before they take actions within their authority.

Principle # 4. The Structure of Organization (Departmentation):


The primary purpose of organising is to provide a basic structure in the form of a departmental framework.

Principle of functional definition- The duties, authority and re­sponsibility of every individual must be clearly stated. People at various levels must know what they are supposed to do, when, and for whom. They must also know the limits to their behaviour.

Principle # 5. The Process of Organizing:

The process of organizing becomes easy when the following principles are applied sincerely:

i. Principle of balance- Different departments and activities in an organization should be given a balanced and proportionate em­phasis in relation to their overall contribution to objectives.


ii. Principle of flexibility-The organisation structure should be de­signed in a flexible way. It should be possible to effect changes in the structure depending on situational requirements.

iii. Principle of stability- At the same time, the organisation structure should be reasonably stable. Stability refers to the organisation’s ability to withstand changes so as to meet stated organisational goals in an efficient manner.

iv. Principle of simplicity- The structure should be simple so that personnel follow the assignment of work and allocation of duties and responsibilities. This facilitates leadership activity also.

Principles of Organization: 7 Principles

(1) Consideration of Unity of Objectives:

The objective of the undertaking influences the organisation structure. The organisation is a mechanism to achieve our goals. Objectives must be clearly defined for the entire enterprise, for each de­partment and even for each position in the organisation structure.


There must be unity of objective so that all efforts can be concentrated on the set goals. Organisational structure and generated operations must be measured against the effec­tiveness in achieving set objectives.

(2) Specialisation:

Greatest output can be obtained when each person concentrates on doing the thing for which he/she is best qualified. Effective organisation must include specia­lisation. Precise division of work facilitates specialisation. Organisation expresses the law of specialisation.

However, each area of specialisation must be inter-related to the total integrated system by means of co-ordination of all depart­ments and activities.

(3) Co-Ordination:

Organisation involves division of work among people whose efforts must be coordinated to achieve common goals. Co-ordination expresses the principles of orga­nisation in toto; nothing less. Co-ordination is the orderly arrangement of group effort to provide unity of action in the pursuit of- common purpose.


It is the beginning and end of all organised effort. A manager is mainly a coordinator. Chosen grouping of activities should minimise co-ordination problems. Co-ordination is a facilitative function, helping the integration of the basic managerial functions — planning, organisation, motivation and control. Co-ordination aims at higher efficiency and effectiveness.

(4) Scalar Principle:

It points out clear unbroken line of authority. It is also called 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., we should have few levels of manage­ment.

(5) Responsibility:

Authority should be equal to responsi­bility, i.e., each manager should have enough authority to ac­complish the task. Similarly, the responsibility of the supe­rior for the acts of his subordinate is absolute.

(6) Efficiency:

The organisation structure should enable the enterprise to attain objectives with the lowest possible cost- money cost as well as human cost. An efficient organisation structure operates without wasting its scarce resources. It permits maximum use of its human resources and talents.

(7) Delegation:

Decision-making power should be placed nearer the scene of action. Decisions should be made at the lowest competent level. Authority and responsibility should be delegated as far down in the organisation as possible, i.e. at the lowest level of the organisation at which the particular responsibility can be efficiently discharged. Delegation of authority and decentralisation of authority mean the same process.

(8) Unity of Command:

Each person should be account­able to a single superior- one superior or one boss and one subordinate, e.g., A is the boss of B. B is accountable to A. B is the boss of C; C is accountable to B. Thus, no one in the organisation should have more than one boss. It clarifies authority-responsibility 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.

(9) Span of Control or Span of Management:

There is a limit to which a manager can manage effectively the number of subordinates. No superior at a higher level should have more than six immediate subordinates. Average human brain can effectively direct three to six brains (i.e. subordinates). Grouping must ensure that each supervisor and manager is not overburdened with subordinates.

(10) 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. If the chain of command is shortened, span of control will be increasing, and vice versa.

(11) Communication:

A good communication subsystem 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.

(12) Personal Ability:

People constitute, an organisation. Proper selection, placement and training need not be over­emphasized. Organisation structure must encourage manage­ment development programme and ensure optimum use of human resources.

(13) Exception Principle:

Recurring decisions should be handled in a routine matter by lower level managers. To the degree permitted by delegated authority each manager should make all decisions he can. Only those matters, not covered by his assigned responsibility and authority, should be referred to his boss.


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 executive 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. Programmed decisions of repe­titive and routine nature can be handled by standard procedures and these may be easily delegated but non-programmed deci­sions involve, one shot and unstructured elements. These require tailored handling by the superiors and usually need their attention.

(14) Flexibility:

The organisation is expected to provide built-in devices to facilitate growth and expansion without dis­location. It should be adaptable to changing circumstances. It should not be rigid or inelastic.

(15) Departmentation:

It enables the division of activities into specialised groups to attain organisational objectives. A good organisation involves precise and systematic distribution of work and responsibilities between managerial group and administrative group. Departmentation maintains balance and harmony in the working of the organisation.

(16) Definiteness:

Each activity must contribute to the primary or basic goals of an enterprise with minimum of effort and maximum of efficiency, on the part of the employees.

(17) Simplicity:

The organisation should be kept as simple as possible.

(18) Separation of Line and Staff Function:


Line function should be separated from the staff functions.

(19) Continuity:

Reorganisation is a continuous process; in every undertaking: specific provision should be made for it.

(20) Leadership:

Organisation structure should create a favourable environment or situation in which the manager can most effectively lead and motivate his subordinates.

Principles of Organisation: 14 Principles

As a manager we have various options to structure the organisation, to define the power centres, to fix the various levels of management, to establish the communication channels, and so on.

Given all these options to design the organisation, the question is how to place all these factors in combination so as to achieve the organisational objects by the best possible resource management. Various management researchers have given different principles to guide a manager performing organisation function.

Al­though these principles are not identical, we can have an overall idea by studying it combination of these principles:


1. Clearly Defined Objectives:

The first requirement is to define the objectives of the organization clearly and make everybody in the organisation aware with these. In the absence of such clarity, various units of the organisation may start pursuing their self-perceived goals rather than the common goal of the organisation.

2. Organisation Structure should be Chosen According to Purpose:

Once the purpose of the organisation becomes clear, the next task is to choose the appropriate structure which can contribute best to achieve the purpose. For example- in a manufacturing concern, line structure management be appropriate, but in a contractor business, project structure may suit the best.

3. Division of Work and Specialization:

The entire work in the organisation should be divided into various parts so that every individual is confined to the performance of single job, as far as possible, according to his ability and aptitudes. This is also called the principle of specialisation. More a person continues on a particular job, the better will be his performance.


4. Proper Grouping of Activities:

Functions and activities of an organisations should be so grouped as to avoid all confusions, duplication and delay.

5. Clearly Define Every Position in the Organisation:

The duties and responsibilities assigned to every position and its relationship with other positions should be clearly defined so that there may not be any overlapping functions.

6. Scalar Chain of Command:

The word scalar means arranged like ladder. There must be clear lines of authority running from the top to the bottom of the organisation. Authority is the right to decide, direct and coordinate. From the chief executives, a line of authority may proceed to departmental managers, to super­visors or foremen and finally to workers.

This principle at once remind the line authority structure of organisations. But the basic premise of this principle is – clear lines of authority. Thus in any given organisation structure, we can have clearly defined lines of authority which always flow from superior to subordinate.

7. Unity of Command:

Every person should have only one boss and receive all instructions and directions only from one superior. This is to avoid uncertainty, confusion and the problems of conflict of authority and divided loyalty.

This principle was suggested long back by Fayol and other researchers. However, in the modern form of organisations like project and matrix organisations, there is a duality of command where a person can have more than one boss. Since the structure stipulates so, principle of unity of command cannot be followed in such organisations.

However, the basic object of this principle can still be achieved by clearly defining the scope of accountability of a subordinate towards his different bosses.

8. Span of Control:

The number of subordinates under the supervision of one superior must be reasonable. If too less number of employees are reporting to a supervisor, his time will not be utilised properly. Also, there is a limit to the number of subordinates one can supervise efficiently.

Both these points should be kept in mind while deciding the span of management at various levels. However, it is difficult to give a definite number of persons a manager can direct, as it depends upon the nature of the work and a number of other factors.

9. Communication:

Good organisation must provide for easy, smooth and quick flow of information both ways from top to bottom and vice versa. Objectives, policies and programmes of the business must be made clear to the workers and they should be encouraged to convey, their reactions and grievances and also make suggestions. Effective communication will remove all uncertainties, misun­derstandings and ensures coordinated effort of all those engaged in the enter­prise.

10. Management by Exception:

This principle requires that organisation structure should be so designed that managers are required to go through the exceptional matter only. All the routine decisions should be taken by the subordinates, whereas problems involving unusual matters and policy decisions should be referred to higher levels.

11. Use of Delegation Concept:

The manager should delegate the authority to subor­dinates adequately for enabling them to accomplish the excepted results. As far as possible, decisions should be made at the lowest possible level.

12. Decentralisation:

There should be an effort towards dispersal of authority down the levels of organisation. This allows the decisions to be made as near the source of information and action as possible.

13. Absolute Responsibility:

The responsibility of the higher authority for the acts of the subordinates should be absolute. Senior officer should not be allowed to shirk or shift his responsibility.

14. Parity of Authority and Responsibility:

Authority and responsibility should go together and the degree of responsibility is to be matched with the degree of authority. If a person has responsibility, he must be given adequate authority. Also, if a person has authority, he must accept corresponding responsibility.

15. Balance of Various Factors:

There should be proper balance in the formal structure of the organisation in regard to factors having conflicting claims. For example- between centralisation and decentralisation, between span of supervision and lines of communication and authority allocated to departments and personnel at various levels.

16. Flexibility:

The structure must be flexible to adopt changes in the nature of business as well as the technical innovations. Good organisation is not a straight jacket. It should be adaptable to the changes in the nature of business as well as environment.

These are the broad guidelines, which should be kept in mind while setting up and organising an organization. However, circumstances may require deviation from any or some of these principles.

Principles of Organisation: 15 Principles

There is a need to follow certain principles in order to formulate and develop a sound and efficient organisation structure.

Some of the important principles of organisation are as follows:

(1) Principle of Objectives:

The formulation of organisation structure is very much influenced by the objectives of the business concern. In view of this, the objectives of the business concern should be clearly stated. This helps the management in formulating the organisation structure and also in achieving the enterprise objectives with minimum cost and effort.

(2) Principle of Specialisation:

It is akin to the principle of division of work. In this the organisation structure should be formulated in such a way that the activities of the enterprise are divided according to different functions and the same are assigned to persons according to their specialization. This means effective organisation must include specialization.

(3) Principles of Span of Control:

The span of control should be minimum because there is a limit to the number of persons that can be effectively supervised by one boss. The number of sub-ordinates may be few or many. This depends upon the ability, the job, the complexity of the duties of the sub-ordinates, the nature and importance of the work to be supervised etc. These factors should be considered at length before taking any final decision in this respect.

(4) Principles of Exception:

Only exceptionally complex matters should be referred to the executives for their decision and matters of routine nature should be decided by the sub-ordinates themselves. This is necessary because the executive at a higher-level instead of spending their time for deciding routine matters can concentrate on more important matters.

(5) The Scalar Principle:

This principle is sometimes known as the “Chain Command” also. In this for making in management effective, there should be a clear line of authority. The line of authority from the Chief Executive at the top of the enterprise to the first line at the bottom must be clearly stated.

(6) The Principle of Authority:

Authority is the element of organisation structure. It is the tool by which a manager is able to create an environment for individual performance. So the responsibility and authority of each manager and supervisor should be clearly defined. Authority that is given to the manager enables him to accomplish the objectives of the enterprises. Hence, the authority of each manager should be clearly defined and it should be equal to the responsibility entrusted to him.

(7) The Principle of Unity of Command:

According to this principle, each sub­ordinate should have only one superior and dual sub-ordination should be avoided. Dual sub-ordination may result in indiscipline of sub-ordinates, under mining of authority, disorder, delay and confusion. This principle avoids the possibility of conflicts in instructions and develops the feeling of personal responsibility for the work.

(8) Principle of Delegation:

The organisation structure should provide for the delegation of authority at every level. The authority delegated should be equal to responsibility so as to enable the concerned person to accomplish the task assigned to him by his superior.

(9) Principle of Responsibility:

The superior should not be allowed to avoid responsibility be delegating authority to his sub-ordinates. It means that the superior should be held responsible for the acts of his sub-ordinates to whom he has delegated authority.

(10) Principle of Flexibility:

The organisation structure should be such which should be adaptable to the changing circumstances. There should be a possibility, if circumstances warrant, for expansion and replacement without disrupting the basic design of the structure.

(11) Principle of Simplicity:

The organisation structure should be simple with a minimum number of levels. If the organisation structure has a large number of levels, the problem of effective co-ordination and communication may arise.

(12) Principle of Continuity:

The organisation structure should be serviceable for a long time. This is possible if it is dynamic and capable of adopting itself to the needs of changing circumstances.

(13) Principle of Unity of Direction:

It means, for a group of activities having the same objective, there should be one plan and one objective. This facilitates verification and co-ordination of activities and also completion of task as per the schedule.

(14) Principle of Efficiency:

The structure that is formulated should enable the business concern to function efficiently and achieve its objectives with minimum cost and effort.

(15) The Principle of Balance:

In every organisation structure there is need for balance. For effective grouping and assigning activities, this principle calls for putting balance on all types of factors—human, technical as well as financial.

Thus, we find that—in order to develop a sound and efficient organisation structure, certain principles are necessary. Every manager should have knowledge of the principles and apply them efficiently.

Mooney and Reilly have apply remarked -“This does not mean that knowledge of these principles will make everyone who knows them an efficient organizer. To know the principles is one thing and to apply them efficiently is another. Nevertheless it stands to reason that knowledge of these principles must be the first step in the acquisition of a sound organisation technique”.

Principles of Organisation: 3 Fundamental Principles by Simon

Simon has laid down three fundamental principles in preparing the structure of an organisation.

These are as follows:

(1) Communication:

The organisation should have a communication system which would pass on all relevant information to all concerned so that decision-making becomes an easy and acceptable process. In the absence of complete information a sound decision cannot be taken.

(2) Authority:

Communication, according to Simon, should have an authority so as to make it acceptable. The decision-making and its implementation becomes easy when communications are acceptable to all concerned without and reservation.

(3) Loyalty to the Organisation:

Reserved loyalty does no good to an organisation. Therefore, as far as possible decisions should be ‘Laudable’ and full proof.

Simon’s Five Principles:

Based on his study and generalization Simon later gave the following five principles of organisation:

(1) Suitability of a Decision:

Every decision cannot suit each individual. Neither, the decisions are acceptable nor are suitable in all the circumstances. But a decision should be reasonably sound and appropriate to the circumstances in which it has been taken. Decision always depends on information’s compiled and received. Hence, a decision should be in the best interest of the enterprise and personnels affected by such decisions.

(2) Acceptability of Authority:

Authority is exercised with an aim in mind for common good and not to safeguard the interest of an individual. Great care is to be taken before exercising one’s authority. Authority carries no meaning if it is not acceptable to those who are to abide by the authority.

(3) Excellent Decision is No Substitute to a Satisfactory Decision:

The organisation is not expected, always to take an excellent decision. ‘Excellent’ is a relative term significant in the sense it is being used. Decision may be the best or may not be the best but it must be satisfactory and based on sound judgement. It should be taken without any prejudice. It should receive wide acceptance.

(4) Routine Process:

Decision-making process should be made a routine job. Secret should not shroud it. It should be open. It should pass thorough democratic process if permitted by the prevalent circumstances.

(5) Live to the Role:

Decisions affect the working condition and zeal of a human being assigned to do a particular job. Hence, his behaviour should be given due weight before a decision is taken. It should live to the role which an organisation is required to play in preparing a dedicated, sincere and responsible working force.

Principles of Organization: Basic Principles

Though, organization has been most developed area of the management science but no one would claim the management has developed to the point where principles are infallible laws. But on the basis of past experience certain principles have been derived for a sound business organization. Taylor, Fayol and Urwick have spelt out various principles on the basis of their experiences.

Some of the basic principles are given below:

1. Unity of Objective:

An organization structure is sound when it facilitates the accomplishment of objectives. Therefore, the organization as whole and every part of it must be geared to the basic objectives of the enterprise.

2. Specialization or Division of Work:

The activities of every member of the organization should be confirmed, as far as possible, to the performance of a single function.

3. Span of Control:

Every manager should have a limited number of sub-ordinates reporting to him directly. Generally, the span should be narrow for complex work and wide for simple and routine work. Span should be neither too wide nor too narrow.

4. Scalar Principle:

There should be a clear chain of command extending from top to the bottom of the organization. Every sub-ordinate should know who his superior is and who his sub­ordinates are.

5. Functional Definition:

The duties (functions), authority and responsibility of every position should be clearly defined so as to avoid duplication of work and overlapping of functions.

6. Exception Principle:

Only exceptional matters which are beyond the authority of lower .level persons should be referred to higher levels. Routine matters should be dealt with by executives at lower levels. This is also known as authority level principle.

7. Unity of Command:

Each sub-ordinate should have only one superior whose command he has to obey. This is necessary to ensure discipline and to fix responsibility for results.

8. Balance:

A proper balance between centralization and decentralization should be kept. Each function in the organization should be developed to the point at which the value received is at least equal to costs.

9. Efficiency:

The organization structure should facilitate the achievement of objectives at minimum possible cost. It should permit the optimum use of resources.

10. Flexibility:

The organization structure should be adaptable enough to accommodate technical and other changes in the environment. Therefore, complicated procedures, red tape and complexity of control should avoided. At the same time, the organization structure should be reasonably stable so as to changes.

11. Continuity:

Proper arrangements should be made for the training and development of executives:

12. Facilitation of Leadership:

Organization structure should be so devised that there is enough opportunity for the management to give effective leadership to the enterprise.

13. Parity of Authority and Responsibility:

In every position, the authority and responsibility should correspond. Equate authority should be delegated to all levels and wherever authority is delegated the person should be held responsible.

14. Co-Ordination:

The organization structure should facilitate unity of effort and co-ordination among different individuals and groups. Channels of communication should be open and clear.

Principles of Organization: Top 15 Principles

Effective and efficient working of any organization depends on how the managerial function of organization is being performed.

The function of organization can be carried effectively with the help of under mentioned principles:

Principle # 1. Attention to Objectives:

An organization is a mechanism to accomplish certain goals or objectives. The objectives of an organization play an important role in determining the type of structure which should be developed. Clearly defined objectives facilitate grouping of activities, delegation of authority and consequently effective coordination.

Principle # 2. Authority and Responsibility:

Authority should commensurate with responsibility. While assigning the responsibility, authority should also be assigned. If authority is not granted, the subordinates cannot discharge their responsibility properly.

Principle # 3. Continuity:

The form of organization structure should be such which is able to serve the enterprise to attain its objectives for a long period of time.

Principle # 4. Coordination:

The principal of coordination underlines that there should be proper liaison and cooperation between different departments and units of work. Unity of efforts for the accomplishment of desired objectives is the main aim of organization. This can be achieved through the principle of coordination.

Principle # 5. Decentralization:

This principle is of great significance to big organizations. Decentralization implies selective dispersal of authority to help departments and units to run effectively and efficiently without frequent interruptions from the top of the enterprise.

It requires very careful selection of what decisions to push down into the organization, of what to hold at or near the top specific policy making to guide the decision-making, selection and training of people and adequate control. Decentralization, as such, embraces all areas of management and evidently is of overwhelming significance in organization structure.

Principle # 6. Departmentation:

Departmentation is the process of grouping activities into units for purposes of administration. In other words, it denotes grouping of related jobs and activities without violating the principle of homogeneity over which an executive has authority to exercise and assert. The main advantages of departmentation are that it enables individual executive to manage his subordinates effectively since a manageable number of persons are brought under the direct supervision of individual executive.

Principle # 7. Division of Work:

While structuring organization, division of work, at the very outset, should be considered as the basis of efficiency. It is an established fact that group of individuals can secure better results by having division of work. Therefore, while designing the organization, we should aim at making suitable grouping of activities. This is also called the principle of specialization.

Principle # 8. Efficiency:

The organization should be able to attain the predetermined objectives at the minimum cost. It is done so; it will satisfy the test of efficiency. From the point of view of an individual, a good organization should provide the maximum work satisfaction. Similarly, from the social point of view, an organization will be efficient when it contributes the maximum towards the welfare of the society.

Principle # 9. Flexibility:

While designing the organization it should be kept in mind that organizational structure should not be regarded as static. Every organization is a living entity in a living environment which is fast changing. As such there must be sufficient room for changing and modifying the structure in the light of environmental changes so that the ultimate objective of the organization is achieved.

Principle # 10. Management by Exception:

It is a fundamental principle that makes any organization effective in its true sense. This principle signifies that problems of unusual nature only should be referred upward and decided by higher level executives in the managerial hierarchy, whereas the routine problems should be passed on to lower levels and resolved there. Application of this principle as such, certainly requires adhering to the principle of delegation of authority. The principle of exception is thus of significant practical utility and applies to all levels in the organization structure.

Principle # 11. Proper Balance:

It is important to keep various segment or departments of an organization in balance. The problem of balance basically arises when an activity or a department is further divided and subdivided into smaller segments. The problems of balancing also crops up with the growing of any organization in its size and functioning.

Principle # 12. Scalar Principle:

Scalar chain refers to the vertical placement of superiors starting from the chief executive at the top through the middle level to the supervisory level at the bottom. Proper scalar chain or line of command is prerequisite for effective organization.

Principle # 13. Span of Management:

Span of management also refers to span of control signifying the number of subordinates reporting directly to any executive. It is an established fact that larger the number of subordinates reporting directly to the executive, the more difficult it tends to be for him to supervise and coordinate them effectively. This important principle of management should also be kept in mind.

Principle # 14. Unity of Command:

Organization structure should also be designed in such a way that there exists unity of command in the sense that a single leader is the ultimate source of authority. This facilitates consistency in directing, coordinating and controlling to achieve the end objectives.

Principle # 15. Unity of Direction:

This means that each group of activities having the same objectives should have one plan and one head. There should be one plan or programme for each segment of work which is to be carried under the control and supervision of one head or superior. If different plans or policies are followed in one department by the subordinates, confusion is bound to occur.

Principles of Organisation – Top 17 Principles

Principles are the guidelines for managerial thinking and action. They help in effectively carrying out the organising function.

The principles of organising are as follows:

1. Principle of Unity of Objectives:

All organisational activities are geared towards common objectives. Objectives are framed for each level (top, middle and low) in each functional area. They should be clearly understood by all and support each other at every level to attain objectives at higher levels.

2. Principle of Organisational Efficiency:

Organisational goals should be achieved efficiently. It means optimum (efficient) use of resources, that is, maximum output should be achieved out of minimum inputs.

3. Principle of Division of Labour:

Division of labour means breaking the main task into smaller units. The major task is broken into sub-tasks and assigned to people according to their skills and abilities. This makes every person specialised in his job. He can concentrate on his part of the job, perform it efficiently and contribute to organisational output.

4. Principle of Authority—Responsibility:

Authority and responsibility should go hand-in- hand. Responsibility means obligation to carry out the assigned task. To carry out the task, authority must be delegated to every person. Conversely, given the authority, responsibility (tasks assigned) should be within the scope of authority. Authority without responsibility will result in misuse of authority and responsibility without authority will result in poor performance. There should be parity between authority and responsibility.

5. Principle of Delegation:

Total work load is divided into parts. A part is assigned to subordinates with authority to efficiently carry out the assigned task. Top managers delegate part of their duties to lower levels and concentrate on important organisational matters.

6. Principle of Scalar Chain:

Scalar chain is the line of authority running from top to lower levels. Authority flows from top to bottom in the chain and responsibilities flow from bottom to top. The chain promotes communication amongst people at different levels and facilitates decision-making. Every person in the chain knows his superiors and subordinates.

7. Principle of Span of Control:

Span of control means the number of subordinates that a manager can effectively supervise. Exact number of employees to be effectively supervised cannot be determined. It depends upon competence of managers, nature of work, system of control, capacity of subordinates etc. However, if a manager can supervise less number of workers, there will be more levels in the organisation structure and vice-versa. Supervising few subordinates creates tall organisation structures and supervising large number of workers creates flat structures.

There is better communication and control in narrow span but too many levels can make co-ordination difficult.

8. Principle of Unity of Command:

One subordinate should have one boss. People should receive orders from their immediate boss only. This brings discipline and order in the organisation. Receiving orders from two or more bosses can create confusion and indiscipline. Unity of command creates commitment, responsibility and consistency in directions issued by superiors.

9. Principle of Balance:

There should be balance between different principles of organising like balance between centralisation and decentralisation, narrow and wide span of control.

10. Principle of Flexibility:

Organisations should be flexible. Changes in organisation structure should be according to changes in environmental factors.

11. Principle of Continuity:

Organisations should adapt to environmental changes for long-run survival, growth and expansion. Continuity provides dynamism in the working of functional departments.

12. Principle of Exception:

Every matter should not be reported to top managers. Only significant deviations should be reported to them. Routine matters should be dealt by middle and lower-level managers. It leads to growth and development of lower level managers as they deal with simple and routine problems. Top managers can also concentrate on strategic matters like exploring environmental opportunities for organisational growth.

13. Principle of Simplicity:

Organisation structure should be simple that can be understood by everyone. People can work efficiently in a simple structure as they are clear of the jobs and authority/responsibility of each job. A simple structure promotes co-operation, co-ordination and communication in the organisation. It also avoids duplication and overlapping of efforts.

14. Principle of Departmentation:

It means dividing work into specialised groups (departments) where each department performs specialised tasks. All activities of similar nature are grouped in one department headed by the departmental manager. Departments can be created on the basis of geographical locations, customers, products etc.

15. Principle of Decentralization:

It means delegation of authority to lower level managers to the maximum extent. It increases decision-making authority of lower-level managers and organisational efficiency.

16. Principle of Unity of Direction:

When all organisational activities of similar nature are grouped in one unit (production or marketing), the departmental manager directs the efforts of members towards a single objective; the departmental objective.

17. Principle of Co-Operation:

All individuals and departments co-operate with each other and help the organisation achieve its goals. Co-operation promotes teamwork, coordination and uniformity in operations.

Principles of Organisation – By Taylor, Fayol and Urwick

In every enterprise the success of management depends on an efficient organisation and in order to make an organisation efficient and effective certain basic and universally accepted principles have to be observed. Taylor, Fayol and Urwick have discovered many principles with the help of their experience.

Some of the main principles are the following:

(1) Principle of Unity of Objectives:

The success of an organisation is measured by the success of its objectives. So the objectives of the organisation should be clearly defined so that every part of the organisation starts moving towards its attainment. The principle of unity of objective means that even if the various offices of the organisation have different aims, they are somehow or the other linked with the main objective of the organisation.

(2) Principle of Specialisation:

According to this principle, the organisation should be established in such a manner as to divide work among individuals according to their knowledge, experience and tastes. Such a division of work makes every person a specialist in his field. This results is an increase in the production of the organisation and a decrease in cost.

(3) Principle of Coordination:

It is an important principle of organisation to establish coordination among different activities. All the departments established under the organisation are inter-dependent. If there is some hindrance in the functioning of one department, the whole organisation is rendered useless.

For example- carelessness on the part of the purchase department in purchasing the raw material will stop the working of the department of production. As a result of it the sales department will not be able to supply material to the purchasers. Therefore, in order to make an organisation a success there should be coordination among all its parts or constituents.

(4) Principle of Parity of Authority and Responsibility:

According to this principle, whatever responsibility is given to an individual, he should be given an equal amount of authority to discharge his responsibility. In no condition authority should be more than the responsibility or vice- versa.

(5) Principle of Absoluteness of Responsibility:

A superior can delegate authority to his subordinates for work performance but by doing so he cannot evade his responsibility. The final responsibility will lie on him, yet the subordinate always remains answerable to his superior.

(6) Principle of Exception:

According to this principle, the superiors should have the authority to take decision regarding important activities alone, and the remaining authority regarding daily activities and problems and the power to take decisions should be delegated to the subordinates. By doing so the superiors will save much of their time from being wasted and the time saved can be usefully employed in creative activities.

(7) Principle of Span of Control:

Span of control means the number of subordinates over which a superior can exercise successful control. The number of subordinates under a superior depends on the nature of work. Generally speaking a superior can have successful control over five or six subordinates. Therefore, there should not be a superior in the organisation having more subordinates or even less than that. In both the circumstances the work performance will be affected.

(8) Principle of Flexibility:

There are continuous changes taking place in the internal and external environment of business. Internal changes include chiefly changes regarding policies and technology, while the external changes pertain to competition, the tastes of consumers, policies of the government, etc. They all affect the organisation deeply. Therefore, the organisational structure should be such as to allow changes in a simple manner.

(9) Principle of Full Clarity:

Every employee in the organisation should have the complete information about the objectives of the organisation, his activities, authority and responsibility so that every individual’s work performance remains within the authorised limits.

(10) Principle of Balance:

This principle means that there should be a balance in the work load of all the persons. It should not happen that a person with more capacity to work is allotted more work and the others are assigned less work. The over-worked employees as well as under-worked employees create situations which are harmful. Hence, all the persons should be assigned work according to their capacity.

(11) Principle of Unity of Command:

According to this principle, an employee should get orders only from one superior at a time. If there are more than one superior to give orders to a subordinate he will not be able to understand as to whose orders should get priority and consequently, his efficiency will be reduced.

(12) Scalar Principle:

According to this principle, all the persons working in an organisation should be bound together from top to bottom in a chain. This will amply clarify as to who is the superior and who is the subordinate. Scalar chain makes relationship clear and the communication becomes effective.

(13) Principle of Simplicity:

The organisational structure should be simple so that every individual can understand his position or place in it. As far as possible the number of posts should be less which will make communication effective and the coordination will be easy.

(14) Principle of Continuity:

There should not be any hindrance in the smooth running of work in an organisation. In other words, it should be so organised that even if somebody leaves the organisation, someone else should immediately take over his work.

(15) Principle of Regular Checks:

According to this principle, arrangement should exist in an organisation so that one man’s work is checked by another person.

(16) Principle of Efficiency:

The organisational structure should be so organised as to ensure the achievement of its objectives at the minimum cost. An organisation will be called successful if from the point of view of the workers it can afford them the maximum job satisfaction. From the social point of view the efficiency of an organisation can be seen through its efforts to make available good quality products at low prices to the consumers. Hence, it is important that an organisation should be efficient.

(17) Principle of Participation:

This principle seeks to involve all those people working in the organisation in the process of decision-making. By doing this the decision can be easily implemented without any difficulty and sweet relationships among the superiors and the subordinates are established.