BBA Study Material Principle of Business Organisation

BBA Study Material Principle of Business Organisation

BBA Study Material Principle of Business Organisation :In This Article You Can Find Meaning Principle of  Organisation Notes . and small business, medium business,  Large business, principle of organisation Means That Its Is Best Topic of Business Organisation  Study For BBA 1st Semester Year . Here You Find Topic Wise,Chapter Wise, Subject Wise  Study Material BBA MBA Management introduction of management  And other  Links of Related to the Business organisation . How To Learn BBA Business organisation  Notes Levels of management scientific management introduction of management spacial of bba and mba  other You Here . Thanks For Read This Article. Knowledge is the only meaning full resource today. The traditional factors of production-land, labour and capital have not disappeared. But they have become secondary. Speaking and writing effectively is important, but nowadays greater importance lies acquiring a firm and job oriented technical know-how. We are in continuum of producing edition series of BBB Notes Video classes, which is providing aspirants self-help BBA study material in the form of question/Answer series. This Question Paper series for BBA has been written according to the latest national curriculum approved by course includes C.C.S University. The Purpose of this series is to enable the student to develop a better understanding of the concerned subject in the field of business management-both in theory and practical aspects. It also aims at inculcating the student a deeper appreciation for entrepreneurship. BBA notes Language of the series is simple and lucid. The word Business organisation originates from the word ‘organism’ which means a structure with its parts so integrated that their relation to each other is governed by their relation to be whole.

BBA Study Material Principle of Business Organisation
BBA Study Material Principle of Business Organisation

Principle of Organisation

  1. Principle of Objectives : An organisation in every part of it should be directed towards the accomplishment of basic objectives. Every member of the organisation should be well familiar with its goals and objective. Common objectives create commonness of interests.
  2. Principle of Division of Work : The total task should be divided in such a manner that the work of every individual in the organisation is limited. The activities of the enterprise should be so divided and grouped as to achieve specialization. The allocation of tasks should be on the basis of qualification and aptitude.
  3. Principle of Unity of Command : Each person should receive orders from only one superior and be accountable to him. This is necessary to avoid the problems of conflict in instruction, frustration, uncertainty and divided loyalty and to ensure the feeling of personal responsibility for results.
  4. Principle of Spam of Control : No executive should be required to supervise more sub-ordinates then he Can effectively manage on account of the limitation of time and ability. There is a limit on the number of subordinates that the executive can effectively supervise.
  5. Principle of Scalar Chain : Authority and responsibility should be in a clear unbroken line from the highest executive to the lowest executive. The more clear the line of authority from the ultimate authority in an enterprise to every sub-ordinate position, the more effective will be the decision making and organisation communication.
  6. Principle of Delegation : Authority delegated to a individual manager should be adequate to enable him to accomplish result expected of him. Through delegation of authority coordination and decision making can take place as close as possible to the point of action.
  7. Principle and Absoluteness of Responsibility : The responsibility of the subordinates to his superior is absolute. No executive can escape responsible for the delegation of authority to his subordinates.
  8. Principle of Co-ordination : There should be an orderly arrangement of group efforts and utility of action in the pursuit of a common purpose. This would help in securing unity of effort.
  9. Principle of Parity of Authority and Responsibility : The responsibility expected for a position should be commensurate with the authority delegated to that position and vice-versa. In addition authority and responsibility should be clearly defined for all positions.
  10. Principle of Flexibility : The organisation must pursuit growth and expansion without dislocation of operations, devices techniques and environmental factors should be built into structure to permit quick and easy adaptation of the enterprise to change in its environment.
  11. Principle of Efficiency : An organisation is efficiency it is able to accomplish predetermined objectives at minimum possible cost. An organisation should provide maximum possible satisfaction to its members and should contribute to the welfare of the community.
  12. Principle of Continuity : The organisation should be so structured as to have continuity of operations. Arrangement must be made to enable people to gain experience in positions of increasing diversity and responsibility.
  13. Principle of Balance : The various parts of the organisation should be kept in balance. It is essential to maintain a balance between centralization and decentralization between line and staff etc. Vertical and horizontal dimensions must be balanced. The structure is neither too tall nor too flat.
  14. Principle of Exception : Every manager should take all decisions within the scope of his authority and only matters beyond the scope of his authority should be referred to higher levels of management, e.g., routine decisions should be taken at lower levels and top management should concentrate on matters of exceptional importance.

The Process of Organisation(Organisation Formation)

BBA Study Material Principle of Business Organisation
BBA Study Material Principle of Business Organisation

Organisation Structure : Before we study the various types of organisation structure like line and staff. Functional etc. it should be clear that organisation structure varies according to the size of the organisation, e.g., as number of employees increases HR department increases more.

S.B.U (Small Business Units) : S.B.U is that organisation which has less then 100

BBA Study Material Principle of Business Organisation
BBA Study Material Principle of Business Organisation

Medium Size (Enterprise) : More than 100 to 2000 employees.

BBA Study Material Principle of Business Organisation
BBA Study Material Principle of Business Organisation

Large Size Enterprise Business (BBA Notes)

BBA Study Material Principle of Business Organisation
BBA Study Material Principle of Business Organisation

Line and Staff Organisation

Because of the inherent drawback of line organisation and functional organisation centralizes too much. To eliminate the drawbacks of line organisation and functional organisation, they are rarely used in nure forms. The line organisation centralizes too much and the functional organisation diffuses too much. To eliminate the drawbacks of both types of organisation is envolved.

In this type of organisation structure there are two type of relationships— Line relationships and the staff relationship. Line relationship is a decision maker and staff person is an advisor.

“Staff is a group of men who have the strength, knowledge and time which the line manager may lock.”

“Line refers to those positions and elements of organisation, which have the responsibility and authority and are accountable for the accomplishment of primary objectives. Staff elements are those which have responsibility and authority for providing advice and service to the line in the attainment of objectives.”

Merits of Line and Staff Organisation (BBA Notes)

  1. Specialised Knowledge : Line manager gets the benefit of specialised knowledge of staff specialists at various levels.
  2. Reduction of Burden : Staff Specialists relieve the line manager for specialised functions like accounting, production, public relation etc.
  3. Proper Weightage : There are well defined authorities and responsibilities given to manager so that many problems that are handled in the organisation can be properly covered and managed with the help of staff specialists.
  4. Better Decisions : Staff specialists helps the line manager in taking better decisions by providing them with adequate information of right type at right time.
  5. Flexibility : Line and staff type organisation has more flexibility because only those decisions are taken by taking view of experts.
  6. Unity of Command: The expert staff provides special guidance without giving only orders. The only line manager has the right to give orders, i.e., one subordinate receives orders from one boss only.

Demerits of Line and Staff Organisation

Although line and staff organization are suitable for a large organization some times drawbacks also arrises in this  system such as :

  1. Some time line and staff may differ in opinion for taking a particular decision this may result in conflict due to which decision making is delayed.
  2. The staff people may feel themselves statusless without the authority of taking decisions.
  3. Since staff people are not accountable (responsible) fully for the results they may not be performing their duties well.

Economic Activities

Meaning of Activites

The human activities related to production, exchange, distribution, and consumption of wealth are known as economic activities. These activities may be undertaken to produce something for own consumption or to earn income to buy goods from the market. They may be pursued by individuals or groups either on a large scale or on a small scale. All economic activities are directly related to money, i.e., their primary objective is to earn money and to create wealth.


A doctor attending to his patients and a shopkeeper selling goods to his customers etc.

Features (BBA Notes)

The main characteristics of economic activities are as follows :

  1. All economic activities are directed toward producing goods and services for the satisfaction of human wants.
  2. Economic activities ensure proper allocation of scarce resources.
  3. Economic activities involve the optimum utilization of the factors of production.
  4. All economic activities result in the creation of wealth.

Non-Economic Activities

Meaning: Besides, economic activities there are certainly other activities which are not undertaken to create wealth but are undertaken to satisfy social, religious, cultural and sentimental requirements. Such activities are termed as non-economic activities. The motive behind non-economic activities may be love, sympathy, religion, patriotism etc.


Housewives cooking food for the family, a farmer producing food grains for his own family, donations by rich men to the various charitable organization, etc., may be quoted as examples of non-economic activities.

Features (BBA Notes)

The main characteristics of non-economic activities are given hare under :

  1. Non-economic activities are undertaken to get some sort of social, cultural, religions or recreational satisfaction.
  2. The result of non-economic activities cannot be measured in terms of money.

Full BBA Notes All Semester 

Montey Parjapati



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