PRINCIPLES OF ORGANIZATION 1. Principle of Objective: The enterprise should set up certain aims for the achievement of which various departments should work. A common goal so devised for the business as a whole and the organization is set up to achieve that goal. In the absence of a common aim, various departments will set up their own goals and there is a possibility of conflicting objectives for different departments. So there must be an objective for the organization. 2. Principle of Specialization: The organization should be set up in such a way that every individual should be assigned a duty according to his skill and qualification. The person should continue the same work so that he specializes in his work. This helps in increasing production in the concern. [Link] of Co-ordination: The co-ordination of different activities is an important principle of the organization. There should be some agency to co-ordinate the activities of various departments. In the absence of co-ordination there is a possibility of setting up different goals by different departments. . 4. Principle of Authority and Responsibility: The authority flows downward in the line. Every individual is given authority to get the work done, Though authority can be delegated but responsibility lies with the man who has been given the work. If a superior delegates his authority to his subordinate, the superior is not absolved of his responsibility, though thesubordinate becomes liable to his superior. The responsibility cannot be delegated under any circumstances. 5. Principle of Defis Every person should know his work with definiteness. If the duties are not clearly assigned, then ion: The scope of authority and responsibility should be clearly defined. it will not be possible to fix responsibility also. The relationship between different departments should also be clearly defined to make the work efficient and smooth. 6. Span of Control: Span of control means how many subordinates can be supervised by a supervisor. The number of subordinates should be such that the supervisor should be able to control their work effectively. If the span of control is sproportionate, it is bound to affect the efficiency of the workers because of slow communication with the supervisors. 7. Principle of Balance: The principle means that assignment of work should be such that every person should be given only that much work which he can perform well. Some person is over worked and the other is under-worked, then the work will suffer in both the situations. The work should be divided in such a way that everybody should be able to give his maximum. 8. Principle of Continuity: The organization should be amendable according to the changing situations. Everyday there are changes in methods of production and marketing systems. The organization should be dynamic and not static. There should always be a possibility of making necessary adjustments. 9. Principle of Uniformity: The organization should provide for the distribution of work in such a manner that the uniformity is maintained. Each officer should be in-charge of his respective area so as to avoid dual subordination and conflicts. 10. Principle of Unity of Command: There should be a unity of command in the organization. A person should be answerable to one boss only. If a person is under the control of more than one person then there may be confusion and conflict. He gets contradictory orders from different superiors. This principle creates a sense of responsibility to one person. 11. Principle of Exception: This principle states that top management should interfere only when something goes wrong. If the things are done as per plans then there is no need for theinterference of top management. The management should leave routine things to be supervised by lower cadres. Principle of exception allows top management to concentrate on planning and policy formulation, Important time of management is not wasted on avoidable supervision. 12. Principle of Simplicity: The organizational structure should be simple so that it is easily understood by each and every person. The authority, responsibility and position of every person should be made clear so that there is no confusion about these things. A complex organizational structure will create doubts and conflicts among persons. There may also be over-lapping and duplication of efforts which may otherwise be avoided. 13. Principle of Efficiency: The organization should be able to achieve enterprise objectives at a minimum cost. The standards of costs and revenue are pre-determined and performance should be according to these goals. The organization should also enable the attainment of job satisfaction to various employees. 14, Scalar Principle: This principle refers to the vertical placement of supervisors starting from top and going to the lower level. The scalar chain is a pre-requisite for effective and efficient organization,DEPARTMENTATION The first task in designing an organization structure is the identification of activities and to group them properly. The process of grouping the activities is known as Departmentation. The process of grouping of activities into units for the purpose of administration is called departmentation. It can be defined "as the process by which activities or functions of enterprise are grouped homogeneously into different groups." The administrative units are called divisions, units or departments. ‘The followings are the basis of departmentatio a) When departmentation is done on the back of functions the departments created are Production, marketing, accounting, and finance and personnel departments. b) When departmentation is done on the basis of geographical area, the departments are known as eastern department, western department, northern and southern department. ©) Departmentation can be done on the basis of customers. of product handled. d) Departmentation can be done on the basisDELEGATION OF AUTHORITY The process of transferring authority form the top to the lower levels in the organization is called delegation. Although a task maybe delegated or passed down the chain of command form a ‘manager to a subordinate, the manager continues to be responsible for making sure that his/her instructions are carried out. The organization is said to be centralized when the authority to take decisions is held by the corporate office. If the authority is delegated to the regional offices, then the organization is said to be decentralized. EMPOWERMENT Empowerment means authority or power given to someone to do something. A management practice of sharing information, rewards, and power with employees so that they can take initiative and make decisions to solve problems and improve service and performance. Empowerment is based on the idea that giving employees skills, resources, authority, opportunity, motivation, as well holding them responsible and accountable for outcomes of their actions, will contribute to their competence and satisfaction.CENTRALIZATION Centralization is the degree to which decision-making is concentrated at upper levels of the organization, Centralization is a process where the concentration of decision making is in a few hands; All the important decisions and actions at the lower level, are subject to the approval of top management. Benefits: 1. Centralization offers a simple, easier-to-manage system2. Itimproves efficiency by taking advantage of potential economies of scale. It brings groups together to create order and enforce uniformity in the policies, practices, procedures and process. 4. Itavoids the waste of money on duplicate systems, extra work, and manual processes. Direct and close control on operations. DECENTRALIZATION Decentralization is the degree to which lower-level employees are given authority to make decisions except that which can only be exercised at central points. Decentralization is simply a matter of dividing up the managerial work and assigning specific duties to the various executive skills. Decentralization is a systematic delegation of authority at all levels of management and throughout the organization, Authority is retained by the top management for taking major decisions and framing policies concerning the whole concern. “Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization”. Benefits: It promotes efficiency as a result of faster decision making. The branches are empowered to take decisions within the given framework, 2, It improves speed and flexibility by reorganizing to increase local control and execution of a service, It breaks away from frustrating bureaucratic ways of traditional systems. 4, In case of adversity or crisis, the damage can be confined to a given zone. The operations of other zones are not affected, 5. Improves scope for customization. RECENTRALIZATION Recentralization is the process of taking back the authority from the divisions or departments where the purpose of decentralization is not achieved. If the situation so demands, the top management may hold back the power or authority from the lower level managers which were earlier decentralized. Since business conditions are volatile and uncertain, the process of decentralization may not yield the expected results. In cases where there are many complaintsfrom the customers or vendors, the head office may roll back the authority delegated to the branch offices. Where decentralization has failed, the head office institutes a detailed enquiry, call for al the reasons of failure, analyze how it can be corrected and identify who has to be trained further to improve the service quality. Once the corporate office feels that situation is under control and the divisional office is fully geared up to handle the situation competently, then the authority can be delegated back. Benefits: 1. Itoffers scope for the mangers to correct the situation instantly. 2. Itimproves the confidence level of the stakeholders. 3. The head office can take stock of the situation and decide the next best course of action. 4, It is quick response tool to uphold service quality by improving leadership competence, staff motivation, improve service delivery by addressing the delays and increased bureaucracy.