Principles of organisation

Meaning

Organising turns a plan into a working structure: it settles who does which part of the work, who reports to whom, and who may decide what. Principles of organisation are guidelines, developed from the experience of managers and writers such as Henri Fayol, that help build a sound structure. They are not rigid laws but are widely useful.

Principles of organisation

Purpose

1. Unity of objectives. The structure as a whole, and every part of it, should serve the organisation's common objectives.
2. Efficiency. The structure should achieve objectives at the lowest cost in money and human effort.

Dividing the work

3. Division of work and specialisation. Work should be divided so that each person does a limited range of tasks suited to his or her skills, which raises efficiency.
4. Span of control. A manager should supervise only as many subordinates as he or she can direct effectively; the right number depends on the nature of work, the ability of the manager and subordinates, and the use of communication aids.
5. Functional definition. The duties, authority and relationships of each position should be clearly defined, in writing where possible.

Authority and responsibility

6. Unity of command. Each subordinate should receive orders from, and report to, only one superior, to avoid confusion and divided loyalty.
7. Parity of authority and responsibility. Authority given to a person should match the responsibility placed on him or her: authority without responsibility leads to misuse, responsibility without authority to frustration.
8. Absoluteness of responsibility. A superior who delegates authority remains accountable for the results; responsibility cannot be passed on.
9. Delegation down to the right level. Authority should be delegated to the lowest level at which competent decisions can be made, so that top managers are free for policy.
10. Exception principle. Only exceptional matters should go to higher levels; routine matters are settled below.
11. Scalar chain. There should be a clear, unbroken line of authority from the top to the lowest level, so that everyone knows to whom he or she reports.

Keeping the structure workable

12. Balance. There should be a balance between centralisation and decentralisation, between line and staff, and between the span of control and the number of levels.
13. Flexibility and continuity. The structure should adapt to change and provide for the continuity of the enterprise, including training of successors.
14. Simplicity. The structure should be simple and easily understood, with as few levels as possible.
15. Coordination. The structure should make it easy to coordinate the work of different units.

Example. A growing coaching institute writes job descriptions for every role (functional definition), makes each centre head report only to the regional manager (unity of command), limits each regional manager to six centres (span of control) and lets centre heads decide timetables while the head office sets fees (delegation and balance).

Conclusion

These principles help build a structure that is clear, efficient and able to grow. They must be applied with judgement, since modern structures such as the matrix deliberately relax some of them, for instance unity of command.