Meaning of Organization
Organization is the foundation upon which the whole structure of management is erected. Organization is associated with developing an outline where the overall work is divided into manageable components in order to facilitate the achievement of objectives or goals. Thus, organization is the structure or mechanism that enables living things to work together. In a static sense, an organization is a structure or machinery manned by group of individuals who are working together towards a common goal. Examples of organization are Corporations, governments, non-government organizations, armed forces, non-profit organizations etc.
The term organization has been used in four different senses;
- Organization as Framework of Relationships: Organization refers to the structure and interactions among various job positions which are created to realize certain objectives.
- Organization as a process: Organization is viewed as a dynamic process and a managerial activity which is vital for planning the utilization of company’s resources.
- Organization as a System: Organization is also viewed as a system. System concepts recognize that organizations are made up of components, each of which has exclusive properties, abilities and reciprocated associations. The constituent elements of a system are linked together in such complex ways that actions taken by one individual have far reaching effects on others.
- Organization as a Group of Persons: Organization is very often viewed as a group of persons contributing their efforts towards certain goals.
Definitions of Organization
- “Organizations may be defined as a group of individuals large or small thetre cooperating under the direction of executive leadership in accomplishment of certain common object.” – Keith Davis
- “Organization is a system of cooperative activities of two or more persons.” – Chester Barnard
- “Organization is the form of every human association for the attainment of a common purpose.” – Mooney and Reily
- “Organization is a harmonious adjustment of specialized parts for the accomplishment of some common purpose or purposes.” – Haney
- “In its broadest sense, organization refers to the relationship between the various factors present in the given endeavor. Factory organization concerns itself primarily with the internal relationships within the factory such as responsibilities of personnel arrangement and grouping of machines and material control. From the standpoint of enterprise as a whole, organization is the structural relationship between various factors in an enterprise.”- Spriegel
Need / Importance of Organization
A renowned industrialist of U.S.A, Andrew Carnegie when sold his company ‘United States Steel Corporation’, showed his confidence in organization by saying “Take away our factories, take away our plants, our avenues of transportation, our money, leave nothing but our organization and we shall establish better factories.” Since ages and all walks of life, organization has been playing a significant role. The importance of organization is as stated below.
- A tool for achieving objectives: Organization is an important tool in the hands of management for accomplishing the objectives of an enterprise.
- It facilitates administration and management: A sound organization increases efficiency, avoids duplication of work, avoids delay in work, improves managerial skills and motivates employees to perform their duties.
- It ensures optimum use of human resource: Good organization establishes individuals with interests, knowledge, skills, abilities and viewpoints.
- It enhances creativity: A well-conceived and comprehensive organization is the source of creative thinking and initiation of new ideas.
- Prevents Corruption: Enterprises which lack sound organization most of the times have problem of corruption. Sound organization helps to prevent corruption by raising morale of the employees. As a result of which employees are encouraged to work with higher efficiency, commitment and honesty.
- Fosters growth of enterprise: Good organization plays a key role not only in growth but also in the expansion and diversification of an enterprise.
- Eliminates overlapping and duplication of efforts: In a situation, where the distribution of work is not clearly identified and the work is performed in a haphazard manner there will be duplication and overlapping of efforts. As a good organization requires that the work be clearly assigned amongst employees, such overlapping and duplication is to be eliminated.
- Coordination: Various jobs and positions are linked together by structural relationship of the organization. The organizational process exercises its due and balanced emphasis on the coordination of different activities.
Principles of Organization
For timely and systematic completion of work it is must for every organization to adopt some techniques or principles. Thus these principles would be the deciding factor for the success or failure of an organization.
- Principle of Objective:All the enterprises whether large or small, set certain central objectives. Every element of the organization and organization as whole should be geared to the central objectives identified by the enterprise.
- Principle of Specialization: Precise division of work facilitates specialization. According to this principle, division of work among the employees should be based on their knowledge, skills, abilities, capabilities and interests. This would lead to specialization which would in turn lead to efficiency, quality and elimination of wastage of resources.
- The Scalar Principle: This principle is sometimes referred to as the chain command. There must be clear lines of authority running from the top to bottom of the organization and linking all the individuals in the organization.
- The Principle of Authority: Authority is an important ingredient of the organization structure. It is the tool by which the manager can create an environment where an individual can perform with greater efficiency.
- The Principle of Span of Control: This principle states that there is a limit to the number of subordinates that report to one superior. Supervision of too many people can lead to trouble and confusion. Also the superior will not be able to spare time to supervise each of his subordinate. It will also lead to increased complexity of the organization structure. The span of control depends upon a number of considerations. It is easy to supervise a large number of subordinates involved in routine jobs and working in the same room, whereas it is difficult to supervise highly diverse and specialized personnel scattered widely. The ability of the employee, their willingness to assume responsibility and the attitude of management towards delegating and decentralization should also be analyzed in detail while making a decision on span of control.
- The Principle of Unity of Command: This principle is basically about avoiding dual reporting. It states that every individual employee working in the organization should be kept in the supervision of one boss only. This principle eliminates the possibility of conflicts in instructions and fosters a feeling of personal responsibility for work.
- The Principle of Definition: Each individual in the organization should be made aware about his / her responsibilities, duties, authorities and relations with the other job positions in the organization structure.
- Principle of Unity of Direction: The basic motive for the existence of organization is the attainment of certain objectives. Major objectives should be split into functional activities and there should be one objective and one plan for each group of people.
- The Principle of parity of Authority and Responsibility: The responsibility for execution of work must be accompanied by the authority to control and direct the means of doing the work.
- The Principle of Supremacy of Organizational Objectives: The organizational goals and objectives should be given wide publicity within the organization. The people contributing to it should be made to understand that enterprise objectives are more valuable and significant and one should give higher priority to organization’s objectives in comparison to personal motives.