Principles of Organizing

The organizing process can be done efficiently if the managers have certain guidelines so that they can
take decisions and can act. To organize in an effective manner, the following principles of organization
can be used by a manager.
1. Principle of Specialization
According to the principle, the whole work of a concern should be divided amongst the
subordinates on the basis of qualifications, abilities and skills. It is through division of work
specialization can be achieved which results in effective organization.
2. Principle of Functional Definition
According to this principle, all the functions in a concern should be completely and clearly
defined to the managers and subordinates. This can be done by clearly defining the duties,
responsibilities, authority and relationships of people towards each other. Clarifications in
authority- responsibility relationships helps in achieving co- ordination and thereby organization
can take place effectively. For example, the primary functions of production, marketing and
finance and the authority responsibility relationships in these departments shouldbe clearly
defined to every person attached to that department. Clarification in the authority-responsibility
relationship helps in efficient organization.
3. Principles of Span of Control/Supervision
According to this principle, span of control is a span of supervision which depicts the number of
employees that can be handled and controlled effectively by a single manager. According to this
principle, a manager should be able to handle what number of employees under him should be
decided. This decision can be taken by choosing either froma wide or narrow span. There are
two types of span of control:-
a. Wide span of control- It is one in which a manager can supervise and control effectively
a large group of persons at one time. The features of this span are:-
i. Less overhead cost of supervision
ii. Prompt response from the employees
iii. Better communication
iv. Better supervision
v. Better co-ordination
vi. Suitable for repetitive jobs
According to this span, one manager can effectively and efficiently handle a large
number of subordinates at one time.
b. Narrow span of control- According to this span, the work and authority is divided
amongst many subordinates and a manager doesn't supervises and control a very big
group of people under him. The manager according to a narrow span supervises a
selected number of employees at one time. The features are:-
i. Work which requires tight control and supervision, for example, handicrafts,
ivory work, etc. which requires craftsmanship, there narrow span is more
helpful.
ii. Co-ordination is difficult to be achieved.
iii. Communication gaps can come.
iv. Messages can be distorted.
v. Specialization work can be achieved.
Factors influencing Span of Control
3. Managerial abilities- In the concerns where managers are capable, qualified and experienced,
wide span of control is always helpful.
4. Competence of subordinates- Where the subordinates are capable and competent and their
understanding levels are proper, the subordinates tend to very frequently visit the superiors for solving
their problems. In such cases, the manager can handle large number of employees. Hence wide span is
suitable.
5. Nature of work- If the work is of repetitive nature, wide span of supervision is more helpful. On
the other hand, if work requires mental skill or craftsmanship, tight control and supervision is required
in which narrow span is more helpful.
6. Delegation of authority- When the work is delegated to lower levels in an efficient and proper
way, confusions are less and congeniality of the environment can be maintained. In such cases, wide
span of control is suitable and the supervisors can manage and control large number of sub- ordinates at
one time.
7. Degree of decentralization- Decentralization is done in order to achieve specialization in which
authority is shared by many people and managers at different levels. In such cases, a tall structure is
helpful. There are certain concerns where decentralization is done in very effective way which results in
direct and personal communication between superiors and sub- ordinates and there the superiors can
manage large number of subordinates very easily. In such cases, wide span again helps.

Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of
authority available, wastages of resources are minimized, communication is affected, overlapping of
work is avoided and easy organization takes place. A scalar chain of command facilitates work flow in an
organization which helps in achievement of effective results. As the authority flows from top to bottom,
it clarifies the authority positions to managers at all level and that facilitates effective organization.
ple of Unity of Command
It implies one subordinate-one superior relationship. Every subordinate is answerable and accountable
to one boss at one time. This helps in avoiding communication gaps and feedback and response is
prompt. Unity of command also helps in effective combination of resources, that is, physical, financial
resources which helps in easy co- ordination and ,therefore, effective organization.


Authority Flows from Top to Bottom

Managing Director

Marketing Manager

Sales/ Media Manager

Salesmen
According to the above diagram, the Managing Director has got the highest level of authority. This
authority is shared by the Marketing Manager who shares his authority with the Sales Manager. From
this chain of hierarchy, the official chain of communication becomes clear which is helpful in
achievement of results and which provides stability to a concern. This scalar chain of command always
flow from top to bottom and it defines the authority positions of different managers at different levels.

Organizing Function of Management
Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources takes place. All the three
resources are important to get results. Therefore, organizational function helps in achievement of
results which in fact is important for the functioning of a concern. According to Chester Barnard,
Organizing is a function by which the concern is able to define the role positions, the jobs related and
the co- ordination between authority and responsibility. Hence, a manager always has to organize in
order to get results.
A manager performs organizing function with the help of following steps:-
1. Identification of activities - All the activities which have to be performed in a concern have to be
identified first. For example, preparation of accounts, making sales, record keeping, quality
control, inventory control, etc. All these activities have to be grouped and classified into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine and group
similar and related activities into units or departments. This organization of dividing the whole
concern into independent units and departments is called departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to classify the
powers and its extent to the managers. This activity of giving a rank in order to the managerial
positions is called hierarchy. The top management is into formulation of policies, the middle
level management into departmental supervision and lower level management into supervision
of foremen. The clarification of authority help in bringing efficiency in the running of a concern.
This helps in achieving efficiency in the running of a concern. This helps in avoiding wastage of
time, money, effort, in avoidance of duplication or overlapping of efforts and this helps in
bringing smoothness in a concerns working.
4. Co-ordination between authority and responsibility - Relationships are established among
various groups to enable smooth interaction toward the achievment of the organizational goal.
Each individual is made aware of his authority and he/she knows whom they have to take orders
from and to whom they are accountable and to whom they have to report. A clear
organizational structure is drawn and all the employees are made aware of it.

Importance of Organizing Function
Specialization - Organizational structure is a network of relationships in which the work is divided into
units and departments. This division of work is helping in bringing specialization in various activities of
concern.
Well defined jobs - Organizational structure helps in putting right men on right job which can be done
by selecting people for various departments according to their qualifications, skill and experience. This is
helping in defining the jobs properly which clarifies the role of every person.
Clarifies authority - Organizational structure helps in clarifying the role positions to every manager
(status quo). This can be done by clarifying the powers to every manager and the way he has to exercise
those powers should be clarified so that misuse of powers do not take place. Well defined jobs and
responsibilities attached helps in bringing efficiency into managers working. This helps in increasing
productivity.
Co-ordination - Organization is a means of creating co- ordination among different departments of
the enterprise. It creates clear cut relationships among positions and ensure mutual co- operation
among individuals. Harmony of work is brought by higher level managers exercising their authority over
interconnected activities of lower level manager.
Authority responsibility relationships can be fruitful only when there is a formal relationship between
the two. For smooth running of an organization, the co- ordination between authority- responsibility is
very important. There should be co- ordination between different relationships. Clarity should be made
for having an ultimate responsibility attached to every authority. There is a saying, Authority without
responsibility leads to ineffective behaviour and responsibility without authority makes person
ineffective. Therefore, co- ordination of authority- responsibility is very important.
Effective administration The organization structure is helpful in defining the jobs positions. The
roles to be performed by different managers are clarified. Specialization is achieved through division of
work. This all leads to efficient and effective administration.
Growth and diversification - A companys growth is totally dependant on how efficiently and
smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the
managers, co-ordination between authority and responsibility and concentrating on specialization. In
addition to this, a company can diversify if its potential grow. This is possible only when the organization
structure is well- defined. This is possible through a set of formal structure.
Sense of security - Organizational structure clarifies the job positions. The roles assigned to every
manager is clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in
increasing mental satisfaction and thereby a sense of security in a concern. This is very important for
job- satisfaction.
Scope for new changes - Where the roles and activities to be performed are clear and every person
gets independence in his working, this provides enough space to a manager to develop his talents and
flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or
path to adoption of new techniques of production. This scope for bringing new changes into the running
of an enterprise is possible only through a set of organizational structure.
Principles of Delegation
There are a few guidelines in form of principles which can be a help to the manager to process of
delegation. The principles of delegation are as follows: -
1. Principle of result excepted- suggests that every manager before delegating the powers to the
subordinate should be able to clearly define the goals as well as results expected from them.
The goals and targets should be completely and clearly defined and the standards of
performance should also be notified clearly. For example, a marketing manager explains the
salesmen regarding the units of sale to take place in a particular day, say ten units a day have to
be the target sales. While a marketing manger provides these guidelines of sales, mentioning
the target sales is very important so that the salesman can perform his duty efficiently with a
clear set of mind.
2. Principle of Parity of Authority and Responsibility- According to this principle, the manager
should keep a balance between authority and responsibility. Both of them should go hand in
hand. According to this principle, if a subordinate is given a responsibility to perform a task, then
at the same time he should be given enough independence and power to carry out that task
effectively. This principle also does not provide excessive authority to the subordinate which at
times can be misused by him. The authority should be given in such a way which matches the
task given to him. Therefore, there should be no degree of disparity between the two.
3. Principle of absolute responsibility- This says that the authority can be delegated but
responsibility cannot be delegated by managers to his subordinates which means responsibility
is fixed. The manager at every level, no matter what is his authority, is always responsible to his
superior for carrying out his task by delegating the powers. It does not means that he can
escape from his responsibility. He will always remain responsible till the completion of task.
Every superior is responsible for the acts of their subordinates and are accountable to their
superior therefore the superiors cannot pass the blame to the subordinates even if he has
delegated certain powers to subordinates example if the production manager has been given a
work and the machine breaks down. If repairmen is not able to get repair work done,
production manager will be responsible to CEO if their production is not completed.
4. Principle of Authority level- This principle suggests that a manager should exercise his authority
within the jurisdiction / framework given. The manager should be forced to consult their
superiors with those matters of which the authority is not given that means before a manager
takes any important decision, he should make sure that he has the authority to do that on the
other hand, subordinate should also not frequently go with regards to their complaints as well
as suggestions to their superior if they are not asked to do. This principle emphasizes on the
degree of authority and the level upto which it has to be maintained.