FREE online courses on Organisation - Principles of an organization

 (i)       Principle of unity of objective: An enterprise must have a clearly defined objective (or objectives).

An organization structure is effective if it facilitates the contribution made by all individuals in the enterprise to the attainment of the objectives of enterprise.

(ii)       Principle of co-ordination

          (i)       a boss

          (ii)      subordinates, often 4 to 6 in number; and

          (iii)     colleagues, often of his own status.

            The structure within a department is often called a chain of command, e.g., A is the boss, B is his subordinate, C is B's subordinate, D is C's subordinate and so on.

(iii)      Principle of efficiency: The organization should be planned so that the objective can be attained with the lowest possible cost, which may be either money cost or human costs or both.

(iv)     Principle of unity of direction: There should be one head (or chief person) and one plan of action for each group of activities having a common objective and everyone must work in accordance with the plan towards the objective in one common direction.

(v)      Principle of unity of command: Each person should receive orders from only one superior and be accountable only to him, i.e., he should have only one boss.

(vi)     Principle of specialisation: As far as possible, the work of each person should be confined to a single function.

(vii)    Scalar principle: The organization must have a supreme authority and a clear line of authority should run from that person (or group) down through the hierarchy, e.g., from the Chairman-the Managing Director-Plant Manager-Production Manager- Foreman-rank and file of employees.

(viii)   Short chain of command: If the chain of command is short, it will enable better communication at various levels within the enterprise and cause fewer delays and bring the top decision-maker to grassroot levels (i.e., the operating personnel).

(ix)      Authority and responsibility: Should commensurate with each other, i.e., a man must have sufficient authority to fulfill his responsibilities.

(x)       Principle of delegation: Decision should be made at the lowest competent level.

(xi)      Principle of balance: There are various parts of an enterprise (e.g., Sales, Production, Accounts, Personnel, etc.) which functions in close co-ordination to meet the objectives of the enterprise.

(xii)     Principle of change: Change is one unchanging characteristics of an organization.

(xiii)    Federal principle of an organization: The enterprise after it has reached a certain position may well be split up into a series of separate semi-autonomous enterprises, to each of which responsibility is delegated.