Principles of Organisation In Management
A principle is a rule which is generally accepted by all. It is a guideline for solving problems and difficulties. The principles of organisation are called as "Classical Principles" because they are old and some of them are adopted from Henry Fayol's principles of management. The most common principles of organisation are Objectives, Specialisation, Co-ordination, Authority and Responsibility, which are often abbreviated as the OSCAR principles.
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Some Principles of Organisation used for Designing an Organisation are:-
The objectives of the organisation should be clearly defined. Every single individual in the organisation should understand these objectives. This will enable them to work efficiently and help the organisation to achieve its objectives.
Every single individual in the organisation should be asked to perform only one type of function (work). This function should be related to his educational background, training, work-experience, ability, etc., in other words, there should be a division of work and specialization in the organisation. This will increase the efficiency, productivity and profitability of the organisation.
The efforts of all the individuals, departments, levels, etc. should be co-coordinated towards the common objectives of the organisation. Therefore, managers must try to achieve co-ordination.
Every individual should be given authority (power) to perform his responsibilities (duties). This authority should be clearly defined. Authority should be maximum at the top level and it should decrease as we come to the lower levels. There should be a clear line of authority which joins all the members of the organisation from top to bottom. This line of authority should not be broken. It should be short, i.e. there should be few levels of management.
The responsibility (duties) of every individual should be clearly defined. This responsibility is absolute, i.e. it cannot be delegated. The responsibility given to an individual should be equal to the authority given to him.
6. Span of Control
Span of control means the maximum number of subordinates which one superior can manage effectively. The span of control should be as small as possible. Generally, at the top level, the span of control should be 1:6, while at the lower level, it should be 1:20. Span of control depends on many factors such as nature of job, ability of superior, skill of subordinate, etc.
There should be a proper balance between the different levels, functions and departments of the organisation. Similarly, there should be a proper balance between centralisation and decentralisation, authority and responsibility, etc. If there is no balance between these factors then the organisation will not function smoothly.
8. Chain of Command
The chain of command should be very short. That is, there should be very few levels of management. If not, there will be many communication problems and delays in execution of workflow.
Authority and responsibility should be delegated to the lowest levels of the organisation. Therefore, the decisions can be made at the lowest competent level. The authority delegated to an individual should be equal to his responsibility.
The organisation structure should have continuity. That is, the enterprise should be able to use the organisation structure for a long period of time. The organisation structure should be able to achieve not only present objectives but also future objectives of the enterprise.