Organizing Principles, Nature, Significance, Limitations

26/04/2020 1 By indiafreenotes

Organizing is the function of management which follows planning. It is a function in which the synchronization and combination of human, physical and financial resources takes place. All the three resources are important to get results. Therefore, organizational function helps in achievement of results which in fact is important for the functioning of a concern. According to Chester Barnard, “Organizing is a function by which the concern is able to define the role positions, the jobs related and the co-ordination between authority and responsibility. Hence, a manager always has to organize in order to get results.

A manager performs organizing function with the help of following steps:

  1. Identification of activities: All the activities which have to be performed in a concern have to be identified first. For example, preparation of accounts, making sales, record keeping, quality control, inventory control, etc. All these activities have to be grouped and classified into units.
  2. Departmentally organizing the activities: In this step, the manager tries to combine and group similar and related activities into units or departments. This organization of dividing the whole concern into independent units and departments is called departmentation.
  3. Classifying the authority: Once the departments are made, the manager likes to classify the powers and its extent to the managers. This activity of giving a rank in order to the managerial positions is called hierarchy. The top management is into formulation of policies, the middle level management into departmental supervision and lower level management into supervision of foremen. The clarification of authority help in bringing efficiency in the running of a concern. This helps in achieving efficiency in the running of a concern. This helps in avoiding wastage of time, money, effort, in avoidance of duplication or overlapping of efforts and this helps in bringing smoothness in a concern’s working.
  4. Co-ordination between authority and responsibility: Relationships are established among various groups to enable smooth interaction toward the achievment of the organizational goal. Each individual is made aware of his authority and he/she knows whom they have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure is drawn and all the employees are made aware of it.

Principles of Organizing

The organizing process can be done efficiently if the managers have certain guidelines so that they can take decisions and can act. To organize in an effective manner, the following principles of organization can be used by a manager.

(i) Principle of Specialization

According to the principle, the whole work of a concern should be divided into the subordinates on the basis of qualifications, abilities and skills. It is through division of work specialization can be achieved which results in effective organization.

(ii) Principle of Functional Definition

According to this principle, all the functions in a concern should be completely and clearly defined to the managers and subordinates. This can be done by clearly defining the duties, responsibilities, authority and relationships of people towards each other. Clarifications in authority-responsibility relationships helps in achieving co-ordination and thereby organization can take place effectively. For example, the primary functions of production, marketing and finance and the authority responsibility relationships in these departments should be clearly defined to every person attached to that department. Clarification in the authority-responsibility relationship helps in efficient organization.

(iii) Principles of Span of Control/Supervision

According to this principle, span of control is a span of supervision which depicts the number of employees that can be handled and controlled effectively by a single manager. According to this principle, a manager should be able to handle what number of employees under him should be decided. This decision can be taken by choosing either from a wide or narrow span. There are two types of span of control:

(a) Wide span of control: It is one in which a manager can supervise and control effectively a large group of persons at one time. The features of this span are:-

  1. Less overhead cost of supervision
  2. Prompt response from the employees
  3. Better communication
  4. Better supervision
  5. Better co-ordination
  6. Suitable for repetitive jobs

According to this span, one manager can effectively and efficiently handle a large number of subordinates at one time.

(b) Narrow span of control: According to this span, the work and authority is divided into many subordinates and a manager doesn’t supervises and control a very big group of people under him. The manager according to a narrow span supervises a selected number of employees at one time. The features are:

Work which requires tight control and supervision, for example, handicrafts, ivory work, etc. which requires craftsmanship, there narrow span is more helpful.

  • Co-ordination is difficult to be achieved.
  • Communication gaps can come.
  • Messages can be distorted.
  • Specialization work can be achieved.

Nature of Organizing:

  • Organization is a group of Individuals: Organization can consider as a group of individuals who comes together and make co-operative relationship with each-other and contributing their efforts with a view to attain preset goals. Infect, in the absence of group of individuals there is no existence of organization. Thus it is clear that organization is a group of individuals.
  • Organization is a process: The feature of organization can put to be as a process, because a large number of events are done under organizing process towards the attainment of predetermined goals, such as determination of various activities, grouping of activities, allocation of work among-st the employees and delegation of authority as well. Hence, organization is a process.
  • Organization is a ‘Means’ not an ‘End’: Organization is a means to reach out the goals of an enterprise. In fact organization provides such platforms to enterprise where all the activities are clearly predefined, as a result of this enterprise easily obtain its goals. Thus it is proved that organization is a ‘Means’ not an ‘End’.
  • Organization is an important Function of Management: It is an essential feature of organisation. Organization refers to an important function of management because all other functions of management like staffing, directing, controlling etc will become ineffective in the absence of this function.
  • Organization is related to its Objectives: Organization is directly concerned with the objectives of enterprise. In the absence of objectives there is no life of organization. If there is an organization then the objectives must be attached with it. Hence, Organization is related with its goals.
  • Communication is the life of organization: It is also an important feature of organization. Communication can be treated as a life of organization, because in the lack of proper network of communication there is no existence of organization. Infect the foundation of an organization properly depends on communication. On the whole it is clear that organization is the system of communication. 


  1. Benefits in specialisation:

In organising every individual is assigned a part of total work and not the whole task.

Due to this division of work into smaller units and assignment of units according to the qualification leads to specialisation. The specialisation automatically comes when an individual is performing one job repeatedly.

  1. Role Clarity:

In the organising function the employees are assigned different jobs and the managers clearly define the jobs. The jobs are defined on the written document called job description which clearly spells out what exactly has to be done in every job.

This description of job brings clarity in the minds of employees.

  1. Clarity in working relationship:

In the organising function it is clearly defined that what all and how much power and authority is enjoyed by different individuals or managers. Each manager knows very clearly to whom he can give order and from whom he has to receive the order. The superior-subordinate relation is clearly defined in organising.

  1. Optimum utilization of resources:

In the organising function there are very few chances of duplication of work or over-lapping of work because the jobs are assigned to different individuals by clearly defining the job in job description document. So, there are no chances that the same work is performed by two or more individuals.

  1. Co-ordination and effective administration:

In the organising function, the similar and related jobs are grouped under one department which leads to unification of efforts and harmony in work. The organising function establishes relation between different departments keeping in mind the co-ordination among different departments. By bringing clarity in working relationship administrative efficiency improver.

  1. Adoption to change:

Whenever the changes take place in the business environment then with the help of organising function these changes can be adopted systematically because organising function creates different departments and group related activities under each department.

With this, changes can be adopted only in that area which may be affected by these changes and changes can be easily communicated to whole organisation through departments. Organisational structures can be suitably modified according to changes.

  1. Expansion and Growth:

With optimum utilization of resources and proper division of work and departmentation, companies can easily meet the challenges and can expand their activities in a planned manner.

  1. Development of personnel:

Delegation of authority is an important part of organising. By delegating the routine the managers can concentrate to develop new methods and ways of performing job. It gives them time to innovate new technologies and areas for growth of the companies. Delegation not only reduces the work load of managers but it also helps them to use and realise their full potential for more creative work.

Limitations of Organizing

(1) Difficulty in Interdepartmental Coordination:

All departmental heads may work as per their own wish. No doubt this facilitates coordination within the department but it makes interdepartmental coordination difficult.

(2) Hurdle in Complete Development:

This system is a hurdle in the way of the complete development of the employees. Each employee specialises only in a small part of the whole job.

(3) Conflict of Interest:

Every departmental head wants to become a functional empire. To satisfy their ego every one demands maximum resources for their department. This situation leads to conflicts among the various departmental heads.

(4) Ignorance of Organisational Objectives:

Each departmental head works according to his sweet will. They always give more importance to their departmental objectives. Hence, overall organisational objectives suffer. For example, to establish its image, the production department may produce quality product ignoring the fact that market trend favors accepting medium quality product.