BBA Study Material Notes Structure Principles of Organisation
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Principles of Organisation (BBA Principles of Business Organisation)
Principles of an Organisation : in organising an enterprise, it is necessary to adhere to certain basic principles of organisation, which should serve as guidelines for action.
These are as follows :
- Consideration of Objectives : an organisation is a mechanism to accomplish certain goals or objectives. The objectives of an organisation play an important role in determining the type of structure which should be developed. Only after the objectives have been determined, a structure should be developed that will help to achieve the objectives.
- Unity of Action : All business organisations are composed of certain functions like production, marketing, finance, personnel, etc. which must be performed in perfect harmony to flexible enough to adjust growth, expansion and seasonal variation.
- Division of Work : There should be proper division of work in the organisation so that every person does a single job, as far as possible. This is called the principle of specification. By doing the same job, a worker becomes an expert. This will increase his productivity. The efficiency of the whole enterprise will also grow.
- Definition of Jobs : Every position in the organisation should be clearly defined in relation to other position in the organisation. The duties and responsibilities assigned to every position and its relationship with other position should be clearly defined so that there may not be any overlapping of function.
- Scalar Principle : There must be clear lines of authority from the top to the bottom of the organisation. Clarity is achieved through delegation by steps from top position to the operating level.
- Unity of Command : No one in the organisation should report to more than one, line supervisor. Everyone in the organisation should know to whom he reports and who reports to him. In a very simple word, “Every one should have only one boss.”
- Balance of Various Factors : There should be proper balance in the structure of the organisation in regard to factor having conflicting claims, e.g., between centralization and decentralization, span of supervision and lines of communication and authority allocated to departments and personnel at various levels.
- Flexibility : The organisation, structure should be flexible so that it can be easily and economically adapted to the changes in the nature of business as well as technical innovation.
- Continuity : Change is the law of nature. So many changes take place outside the organisation. The change must be reflected in the organisation.
- Delegation of Authority : Adequate authority should be delegated to the subordinates for carrying out the jobs assigned to them. Authority delegated should commensurate with responsibility.
- Management by Exception : This principle requires that organisation structure should be so designed that managers are required to through the exceptional matters.
- Span of Control : Span of control may be defined as the number of employee a manger can directly supervise. In considering span of control the main consideration is the use of manager’s time and his work load.
- Simplicity : An enterprise should be organized in such a manner that every employee is able to follow the laid down procedure and method without difficulty.
- Efficiency : The task of the organisation should be achieved at minimum cost, it is the real test of efficiency. The organisation should provide job satisfaction to the workers so that they become more efficient.
Designing steps in a Organisation bba notes
Step 1 : Determining activities
Step 2 : Grouping of activities
Step 3 : Assigning duties
Step 4 : Delegating authority
Step 5 : Coordinating activities
- Determining Activities : The first step in organising is to identify and enumerate the activities required to achieve the objectives of the enterprise. The activities will depend upon the nature and size of the enterprise. e.g., A manufacturing concern will have production, marketing and other activities but there are no production activity in a retail establishment.
Each major activity is broken into small part e.g., production activity may be divided into purchasing of material, plants layout, quality, control, production research, etc.
- Grouping of Activities : the various activities are classified into appropriate departments and division on the basic of functions; products, territories, costomers, etc. similar and related activities may be grouped together under one department or division. Each department may be further subdivided into sections and groups. Grouping of activities should not only allow specialization but keep in view that human factor, nature of activities and the needs of the organisation and the people.
- Assigning Duties : The individual groups of activities are then allotted to different individuals on the basis of their ability and aptitude. The responsibility of every individual should be defined clearly to avoid duplication of work and overlapping of effort. Each person is given a specific job best suited to him and he is made responsible for its execution.
- Delegating Authority : Every individual is given the authority necessary to perform the assigned task effectively. Authority delegated to a person should be commensurate with his responsibility. Through successive delegation a clear hierarchy of authority or chain of command running from the top to bottom of the structure is established. An individual cannot perform his job without the necessary authority or power.
- Coordinating Activities : The activities and efforts of different individual are synchronised and such coordination is necessary to ensure effective performance of specialised function. Interrelationship between different job and individual are clearly defined so that every body know from whom he has to take orders and to whom he is answerable.
Organisation Structure (BBA Management Notes)
An organisation structure shows the authority and responsibility relationship between various position in the organisation and also clarifies who reports to whom. It is a set of planned relationship between groups of related functions and between physical factors and personnel required for the achievement of organisational goals.
The organisation structure is generally shown on an organisation chart. It represent authority relationships between various positions in the organisation by showing who reports to whom. Organisation structure is developed to attain the objectives of the enterprise.