Management Principles

Line and Staff Organization

A line and staff organization is a mixture of the line as well as staff organization.

Line organization points out direct vertical relationships, i.e., superior-subordinate relationship connecting the positions at each level. It forms a chain of command or hierarchy of authority on scalar principles. A line relationship is simply known as a relationship of authority between the superior and subordinates in a hierarchical arrangement. The direct line superior has control over his immediate subordinates.   In this case, authority flows downward and accountability goes upward in a straight line. The work also flows in a direct line. The line offices are responsible for accomplishing basic objectives, so that they can issue orders and implement plans and policies with the help of their subordinates.… Read the rest

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Features of Business Organizations

An organization is the association of persons for achieving certain objectives. An organization is a social system wherein its members try to achieve their private goals while achieving the organizational goals. The seemingly contradictory goals are resolved by effective organizational behavior.   The organization has some objectives which are attained by organizing the activities of their member. An organization for business purposes is commonly known as a corporate body or a corporation or a company or formally established business unit. It is dynamic and ever changing as per the needs of society, its members, corporate objectives and environmental changes.… Read the rest

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Organisation Structure – Meaning and Types

An organisation structure is a set of planned relationships between groups of related functions and between physical factors and personnel required for the performance of the functions. The organisation structure is generally shown on the organisation chart. It shows authority and responsibility between various positions in the enterprises by showing who reports to whom. Organisation structure lays down the pattern of communication and coordination in the enterprises.

Though organisation structure is very important, it is not an end in itself. According to Peter F. Drucker, “Organisation is not an end itself, but a means to end of business performances and business results.

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Decentralization of Authority

By decentralization of authority we mean dispersal of decision-making authority at various levels in the organization. In a centralized set-up, decision-making authority is concentrated at the top-level of the management, whereas in the decentralized set-up, many important decisions are made at the lower level also. The most significant feature of decentralization of authority is that most of the decisions made at the lower level do not need approval of the seniors. This means greater freedom is given in decision-making to lower level managers and supervisors in the organization.

Factors Determining the Degree of Decentralization
  1. Importance and significance of the decision: One of the important factors determining the degree of decentralization of authority is costliness of the decision.
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Span of Management Types

Span of management directly affects the number of levels in the organization. Span of management is of two types; Wider span of management and Narrow span of management.   Wider span of management leads to flat organization whereas narrow span of management result in tall organization structure. The principle of span of management does not by itself resolve the conflict between the advantages to tall organization and that of a flat one.

Narrow spans lead to many levels in the organization and thus required a larger number of managers. This, in turn, leads to larger expenses in the form of executive remuneration.… Read the rest

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Span of Management

An organization is characterized by the presence of a number of levels and departments. But more the levels are created, more will be the administrative cost due to additional staff required and more will be the difficulties to be encountered in communication and controlling. If this is so, why create departments and levels? Answer to this question is provided by the principle of span of management. This is basically the problem of deciding the number of subordinates to report directly to each manager. The principle states that there is a limit to the number of subordinates that each manager can effectively supervise.… Read the rest

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