2. 2
• Process of identifying and
grouping the work to be
performed, defining and
delegating responsibility and
authority, and establishing
relationships for the purpose of
enabling people to work most
effectively together in
accomplishing objectives.
3. 3
Objectives
• The objectives of the enterprise
influence the organisation
structure and hence the objectives
of the enterprise should first be
clearly defined.
• Then every part of the organisation
should be geared to the
achievement of these objectives.
4. 4
Span of control
• There is a limit to the number of
persons that can be supervised
effectively by one boss, the span
of control should be as for as
possible, the minimum.
• An executive should be asked to
supervise a reasonable number of
subordinates only say six.
5. 5
Specialization
• Effective organisation must
promote specialization.
• The activities of the enterprise
should be divided according to
functions and assigned to
persons according to their
specialization.
6. 6
Exception
• As the executives at the higher
levels have limited time, only
exceptionally complex problems
should be referred to them and
routine matters should be dealt with
by the subordinates at lower
levels.
7. 7
Scalar Principle
• This principle is sometimes known
as the ‘chain of command’.
• The line of authority from the chief
executive at the top to the first line
supervisors at the bottom must be
clearly defined.
8. 8
Unity of Command
• Each subordinate should have only
one supervisor whose command he
has to obey.
• Dual subordination must be
avoided, for it causes uneasiness,
disorder, indiscipline and
undermining of authority..
9. 9
Delegation
• Each subordinate should have only
one supervisor whose command he
has to obey.
• Dual subordination must be
avoided, for it causes uneasiness,
disorder, indiscipline and
undermining of authority..
10. 10
Responsibility
• The superior should be held
responsible for the acts of his
subordinates.
• No superior should be allowed to
avoid responsibility by delegating
authority to his subordinates.
11. 11
Authority
• The authority is the tool by which
manager is able to accomplish the
desired objective.
• Hence, the authority of each
manager must be clearly defined.
• Further, the authority should be equal
to responsibility..
12. 12
Efficiency
• The organisation structure should
enable the enterprise to function
efficiently and accomplish its
objectives with the lowest possible
cost.
13. 13
Simplicity
• The organisation structure should be
as simple as possible and the
organisation levels should, as for as
possible, be minimum.
• A large number of levels of
organisation mean difficulty of
effective communication and
coordination.
14. 14
Flexibility
• The organisation structure should be
flexible, should be adaptable to
changing circumstances and
permit expansion and replacement
without dislocation and disruption
of the basic design..
15. 15
Balance
• There should be a reasonable balance
in the size of various departments,
between centralization and
decentralization, between the
principles of span of control and the
short chain of command, and among
all types of factors such as human,
technical and financial.
16. 16
Unity of direction
• There should be a one objective
and one plan for a group of
activities having the same objective.
• Unity of direction facilitates
unification and coordination of
activities at various levels.
17. 17
Personal Ability
• As people constitute an organisation,
there is need for proper selection,
placement and training of staff.
• Further, the organisation structure must
ensure optimum use of human
resources and encourage
management development
programmes.
18.
19. 19
• The process of grouping the activities
is commonly known as
departmentation.
• In business organisations, such as
division, department, and section are
used; in government, these are called as
branch, department, bureau, and sections
etc.
20. 20
• The basic aim of functionalisation is
to simplify complexity by grouping
all the work to be done into major
functional departments such as
production, engineering, sales,
marketing, finance etc.
• It is best suited to medium-size
organisations
21. 21
• It is adopted in the case of a multi-product
enterprise.
• The product structure is organised according to
organisational output.
• The structure is divided into several fairly
autonomous units.
• Each unit is relatively self-contained and is headed
by a product manager who is responsible for the
company’s investment in capital, facilities as well as
for the unit’s progress.
22. 22
• It is also known as geographic
departmentation.
• Large companies that distribute
products on a massive scale
nationally often cannot coordinate all
regions from the headquarters.
23. 23
• To satisfy the customer’s requirements more
conveniently and successfully.
• Banking, book publishing and food industry
24. 24
• The activities are grouped on the basis of
various manufacturing processes.
• Similar types of labour and equipment
are brought together.
• It permits intensive and economical
usage of costly equipment.
• It is better suited to manufacturing
companies.
25. 25
• Same product is marketed through
two or more different channels (unlike
customer departmentation).
• Each channel may ultimately sell to the
same customers.
• Major departments are organised around
each of the firm’s marketing channel to
meet the unique and diverse channel
demands.
26. 26
• In some organisations that work
round-the-clock, mostly applied in
public utilities (for example, public
utilities like Railways, Post and
Telegraph offices, Hospitals etc.)
departmentation is based on time.
