PRINCIPLES OF ORGANISATION

The following are the cardinal principles of a sound organisation:

a) Align departmental objectives to corporate goals: It is to be ensured that

the objectives of different departments in the organisation are unified and
aligned to the corporate goals.
b) Cost-effective operations: An organisation is said to be efficient if it can
achieve the goals at the lowest costs and with minimum undesirable
consequences.
c) Optimum number of subordinates: In each managerial position, there is a
limit to the number of persons an individual can effectively manage. The
optimum number will depend on various factors such as efficiency of the
superior and subordinates, the nature of work---routine or special,
responsibility, and so on.
d) Specialization: Similar activities are grouped together to ensure better
performance of the work and efficiency at each level.
e) Define authority: The authority and responsibility relationships underlying
each position in the organisation have to be defined clearly to avoid
confusion or misinterpretation.
f) Flow of authority: This refers to the line of authority from the top
management in an enterprise to other levels. If this is clear, then the terms
of responsibility also can be understood. Further, this will strengthen the
flow of communication to different levels in the organisation.
g) Manage via exceptional cases: An organisation should be geared in such a
way that managers attention is drawn only to exceptional problems. In
other words, a system should be developed to take care of routine
administration
h) Ensure one employee, one superior: Each subordinate should have only one
superior. There should not be any room for conflict of command.
i) One head and one plan: Every group of activities with common objective
should be handled by one person and on plan. If handled by different
persons, the organisation may lose direction.
j) Define responsibility: A superior is responsible for the omissions and
commissions of his ordinates and at the same time the subordinates must
be held responsible to their superiors for the performance of the work
assigned.
k) Commensurate authority and responsibility: Authority is the right instituted
in a position to exercise discretion in making decisions affecting others. The
manager occupying that position exercises the authority. Responsibility is
the willingness on the part of the employee to be bound by the results.
The authority and responsibility should always be commensurate and
coextensive with each other. In other words, if the authority is less than the
responsibility, the manager cannot deliver performance of the task and
similarly, if the responsibility is less than the authority, the employee may
go berserk and unchecked. In other words, the manager cannot discharge
his responsibility for want of necessary authority to execute the work
assigned.
l) Attain balance: Every organisation need to be balanced one. There are
several factors such as decentralisation of authority, delegation of authority,
departmentation, span of control, and others, that have to be balanced to
ensure the overall effectiveness of the structure in meeting the
organisational objectives.
m) Ensure flexibility: The more the flexible structures, the better is the scope to
be successful. The principle of contingency endorses this. Where the
organisation procedures are cumbersome or rigid, it necessary to develop
an in-built mechanism to forecast any type of constraint.
n) Provide for continuity: The organisation structure should provide for the
continuation of the activities. There cannot be any breakdown in the
activities of the organisation for the reasons such as a change in the policies
or retirement or death of any key employee in the organisation.