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Factors Affecting Organizational Design

Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and technology. Organizational size The larger an organization becomes, the more complicated its structure. When an organization is small such as a single retail store, a two person consulting firm, or a restaurant its structure can be simple. In reality, if the organization is very small, it may not even have a formal structure. Instead of following an organizational chart or specified ob functions, individuals simply perform tas!s based on their li!es, disli!es, ability, and"or need. #ules and guidelines are not prevalent and may e$ist only to provide the parameters within which organizational members can ma!e decisions. %mall organizations are very often organic systems. As an organization grows, however, it becomes increasingly difficult to manage without more formal wor! assignments and some delegation of authority. Therefore, large organizations develop formal structures. Tas!s are highly specialized, and detailed rules and guidelines dictate wor! procedures. Interorganizational communication flows primarily from superior to subordinate, and hierarchical relationships serve as the foundation for authority, responsibility, and control. The type of structure that develops will be one that provides the organization with the ability to operate effectively. That&s one reason larger organizations are often mechanisticmechanistic systems are usually designed to ma$imize specialization and improve efficiency. Organization life cycle 'rganizations, li!e humans, tend to progress through stages !nown as a life cycle. (i!e humans, most organizations go through the following four stages: birth, youth, midlife, and maturity. )ach stage has characteristics that have implications for the structure of the firm.

Birth: In the birth state, a firm is ust beginning. An organization in the birth stage does not yet have a formal structure. In a young organization, there is not much delegation of authority. The founder usually *calls the shots.+ Youth: In this phase, the organization is trying to grow. The emphasis in this stage is on becoming larger. The company shifts its attention from the wishes of the founder to the wishes of the customer. The organization becomes more organic in structure during this phase. It is during this phase that the formal structure is designed, and some delegation of authority occurs. Midlife: This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger, with a more comple$ and increasingly formal structure. ,ore levels appear in the chain of command, and the founder may have difficulty remaining in control. As the organization becomes older, it may also become more mechanistic in structure.

Maturity: 'nce a firm has reached the maturity phase, it tends to become less innovative, less interested in e$panding, and more interested in maintaining itself in a stable, secure environment. The emphasis is on improving efficiency and profitability. -owever, in an attempt to improve efficiency and profitability, the firm often tends to become less innovative. %tale products result in sales declines and reduced profitability. 'rganizations in this stage are slowly dying. -owever, maturity is not an inevitable stage. .irms e$periencing the decline of maturity may institute the changes necessary to revitalize.

Although an organization may proceed se/uentially through all four stages, it does not have to. An organization may s!ip a phase, or it may cycle bac! to an earlier phase. An organization may even try to change its position in the life cycle by changing its structure. As the lifecycle concept implies, a relationship e$ists between an organization&s size and age. As organizations age, they tend to get larger0 thus, the structural changes a firm e$periences as it gets larger and the changes it e$periences as it progresses through the life cycle are parallel. Therefore, the older the organization and the larger the organization, the greater its need for more structure, more specialization of tas!s, and more rules. As a result, the older and larger the organization becomes, the greater the li!elihood that it will move from an organic structure to a mechanistic structure. Strategy -ow an organization is going to position itself in the mar!et in terms of its product is considered its strategy. A company may decide to be always the first on the mar!et with the newest and best product 1differentiation strategy2, or it may decide that it will produce a product already on the mar!et more efficiently and more cost effectively 1cost leadership strategy2. )ach of these strategies re/uires a structure that helps the organization reach its ob ectives. In other words, the structure must fit the strategy. 3ompanies that want to be the first on the mar!et with the newest and best product probably are organic, because organic structures permit organizations to respond /uic!ly to changes. 3ompanies that elect to produce the same products more efficiently and effectively will probably be mechanistic. Environment The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, socialcultural, legalpolitical, technological, and natural environment conditions. )nvironments are often described as either stable or dynamic.

In a stable environment, the customers& desires are well understood and probably will remain consistent for a relatively long time. )$amples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products. In a dynamic environment, the customers& desires are continuously changingthe opposite of a stable environment. This condition is often thought of as turbulent. In

addition, the technology that a company uses while in this environment may need to be continuously improved and updated. An e$ample of an industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers. In general, organizations that operate in stable e$ternal environments find mechanistic structures to be advantageous. This system provides a level of efficiency that enhances the longterm performances of organizations that en oy relatively stable operating environments. In contrast, organizations that operate in volatile and fre/uently changing environments are more li!ely to find that an organic structure provides the greatest benefits. This structure allows the organization to respond to environment change more proactively. Advances in technology are the most fre/uent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tas!s are accomplished using tools, e/uipment, techni/ues, and human !now how. In the early 4567s, 8oan Woodward found that the right combination of structure and technology were critical to organizational success. %he conducted a study of technology and structure in more than 477 )nglish manufacturing firms, which she classified into three categories of coremanufacturing technology:

Small batch production is used to manufacture a variety of custom, made to order goods. )ach item is made somewhat differently to meet a customer&s specifications. A print shop is an e$ample of a business that uses small batch production.

Mass production is used to create a large number of uniform goods in an assemblyline system. Wor!ers are highly dependent on one another, as the product passes from stage to stage until completion. )/uipment may be sophisticated, and wor!ers often follow detailed instructions while performing simplified obs. A company that bottles soda pop is an e$ample of an organization that utilizes mass production.

'rganizations

using continuous process

production create

goods

by

continuously feeding raw materials, such as li/uid, solids, and gases, through a highly automated system. %uch systems are e/uipment intensive, but can often be operated by a relatively small labor force. 3lassic e$amples are automated chemical plants and oil refineries. Woodward discovered that smallbatch and continuous processes had more fle$ible structures, and the best massproduction operations were more rigid structures. 'nce again, organizational design depends on the type of business. The smallbatch and continuous processes wor! well in organic structures and mass production operations wor! best in mechanistic structures.

Organizational Theory and Design


Organization An organization is a collection of people working together under a defined structure for the purpose of achieving predetermined outcomes through the use of financial, human, and material resources. There are a number of approaches to the structure and management of organizations. Classical or Scientific Theory The oldest theory of management has a focus on efficiency and production. Evolved into classical organizational theory with the principals of chain of command, unity of command, span of control, specialization, and the use of a scalar chain or vertical levels of authority.The organizational design is bureaucracy. Classical Theory Work is divided into specialized tasks and standardized. The hierarchy of authority ( the right to direct ) and responsibility ( the obligation to perform ) is the chain of command. Line authority is linear and derived from position, staff authority is an advisory relationship. The arrangement of the work group or organizational structure is based on departmentalization. pan of control refers to how many employees a manager can effectively supervise. Characteristics of Bureaucratic Structures !uthority and communication flow downward through a rigid chain of command. The vertical growth represents many levels of supervision and indicates a one person one boss philosophy(unity of command) The number of people supervised is small(span of control). Bureaucratic Structure "ureaucracy results in a line structure, so called because it is a chain of command or leader# follower relationship. $t is also called a machine bureaucracy. This type of structure facilitates large scale administration by coordinating the work of many personnel. Complex Organizations %ighly structured, formal entities with uniform rules, policies and procedures. &eople placed in functional specialty areas with standard pay structures,roles and responsibilities. !uthority clearly designated and centralized'a tall structure Flat Structures Less comple( organizations have flat structures where authority is decentralized and the span of control is wider. )ther *lassical +esigns imple structure consists of a strategic ape( ( e(ecutive# level management ) and an operating core ( the individuals responsible for the organizational work ). !n e(ample is a private physicians office. Classical Designs ! professional bureaucracy consists of an operating core of professionals with decentralized decision making and a well developed support staff. The technostructure ( individuals who standardize and improve the work, such as accountants ) is underdeveloped.,ost hospitals are professional bureaucracies. ! divisionalized form is characterized by a number of independent divisions with one administration such as an integrated system. !dhocracy is a fluid structure using shifting teams of management, staff, and e(perts. Human Relations Era *oncern for profit and production along with the human or social elements of an organization.

-osters cooperation between labor and management and strives for worker autonomy and growth. -ocus on the informal organization with its rewards of attention and recognition. Neoclassical or Humanistic Theory Less formal, less control.,ore participation in decision making with decision authority at the point of service. .esults in a flat structure developed along horizontal lines with fewer levels of management. *ommunication is enhanced, but managers can be overburdened. Neoclassical Theory eeks to validate aspects of human behavior in organizations through research/ the %awthorne study. 0iews managers as coaches, not as authority figures. *oncerned with employee motivation, satisfaction, creativity. !uthority works with willing participants. Systems Theory ! system is a set of interrelated parts arranged in a unified whole. &roductivity is viewed as a function of the interplay among people, structure, and the environment. The organization is a comple( social and technical open system that re1uires human, financial, and material resources. earning Organizations $nfluenced by systems theory, learning organizations are characterized by five disciplines2 systems thinking, personal mastery, mental models, shared vision, and team learning. &articipation, in these organizations, is the basis of learning. The organizational design is a systems model based on the rapid sharing of information through computer technology. This design can be applied to both bureaucracies and organic structures. Contingency Theory The organizations structure must be matched to its environment to enhance performance. The optimal form of an organization is contingent on the circumstances faced by that organization including patients, third#party payers, regulators, and personnel. Chaos Theory "ased upon the belief in the uncertainty and unpredictability of the environment, chaos theory asserts that organizations are living, self#organizing systems that are comple( and self#adaptive. The system moves between order and chaos and is only stable temporarily. Health Care Organizations %ealth care organizations differ in ownership which can be either private or government, voluntary (not#for profit) or investor owned (for#profit), and sectarian or nonsectarian. %ealth care organizations also differ in role, activity, and size. %ospitals %ospitals are classified by length of stay and type of service. ,ost are acute care facilities in which the average length of stay is less than 34 days/ chronic or long#term hospitals have longer lengths of stay. The services offered may be general or special care such as pediatric or rehabilitative. Long Term *are -acilities Long term care facilities provide skilled nursing or rehabilitative services. 5ursing facilities provide daily care. .esidential facilities are sheltered environments in which no skilled care is provided. !mbulatory *are *enters &hysicians offices, birthing centers, surgical centers, and imaging centers are e(amples of ambulatory care. %ome %ealth *are !gencies

%ome health care is the temporary delivery of health care in the home by nurses, therapists, or aids. ome agencies also provide durable medical e1uipment. Temporary ervice !gencies These agencies provide nurses and other health care workers to hospitals and individual patients in a variety of settings. ,anaged %ealth *are )rganizations %ealth maintenance organizations(%,)s)#prepaid group practice plans in which a group of providers is responsible for managing health care. &referred &rovider )rganizations(&&)s)#health care contracts with various groups. &oint of ervice &lans (&) ). %ealth ,aintenance )rganizations taff ,odel#&hysicians are %,) employees and salaried. $ndependent &ractice !ssociation#&hysicians have a private practice but contract with %,)s. 6roup and 5etwork ,odels#The %,) contracts with a specialty group to provide capitated services to enrollees. $nter#organizational .elationships %orizontal integration refers to arrangements between or among organizations that provide similar services. 0ertical integration refers to an arrangement between or among dissimilar but related organizations to provide a continuum of services. +iversification +iversification is the e(pansion of an organization into different arenas either by complementing e(isting services or by moving into areas that differ from the original product or service. ,ulti#organizational !rrangements ,ergers#organizations combining assets to ensure profits and survival. !c1uisitions#buy out usually of a smaller facility. *onsolidated systems#large regional or national multi#hospital entities. -uture Trends The growth of multi#hospital systems has challenged many principles of management and organization. +ecentralization is the trend and a challenge to nursing services. 5ursing must be able to contribute to corporate profits while meeting market demands. )rganizational tructure -unctional structures#employees are grouped in departments by specialty with all nursing tasks under nursing service and centralized decision making as the norm. ervice integrated structure#all functions needed to produce a product or service are grouped together. %ybrid structure#both self#contained and functional units are organized in an attempt to provide functional coordination across service or product structures. &arallel structure#the medical staff is separate and autonomous from the organization creating two lines of authority. ,atri( tructure ,atri( designs have a duel authority structure with both a functional manager and a pro7ect manager. &roduct and functional structures are integrated and results in a dual organizational focus. hared governance, based on participatory management uses a committee structure whereby staff make either managerial or clinical decisions. &rofessional practice or self#governance allows staff to govern themselves using specific councils with decision authority.

&articipatory ,anagement allows participation in decision making but the power over the final decision remains with the top e(ecutive. )ther designs include pro7ect management, collegial management, and the corporate model which has led to mergers,buyouts, etc. -ollowership The success of an organization depends on followers who view themselves as e1uals of the leaders and who work for the common good. -ollowers are supportive of the leader but will also challenge the leader. They adhere to lines of communication and authority. 8ey *oncepts related to )rganizational tructure trategic and )perational &lanning2 trategic planning e(tends 3 to 9 years into the future and involves an analysis of the internal and e(ternal environment so as to determine the direction of the organization. )perational planning is short range and concerned with daily activities. 8ey *oncepts trategic planning in health care is relatively new and represents a paradigm shift from person as customer to population as customer/ from illness care to wellness care/ from revenue management to cost management/ from professional autonomy to professional interdependence. trategic planning gives direction to an organization and clarifies beliefs and values. $t results in a vision of the preferred future. This vision gives rise to a mission statement which is the stated purpose for which the organization e(ists, its aim and function. &hilosophy is a written statement, influenced by the mission, which provides a statement of beliefs and values. $t includes approaches to care, beliefs about patients and workers, and level of responsiveness to the community. 6oals and ob7ectives state actions for achieving the mission and philosophy.6oals are central to the whole management process and help focus attention on what is important.6oals are broad statements of e(pectations. )b7ectives are specific ways to reach the goal. &olicies e(plain how goals will be achieved and serve as guides that define the activities permissible for goal accomplishment. &rocedures are more specific guides to action. &rocedures are a step by step protocol that standardizes various approaches to patient care. .ules and regulations are part of both policy and procedure statements, they constitute the one and only one choice of action. )rganizational *limate and *ulture The climate of an organization is the perceived characteristics including the physical plant, lines of communication, and rule structure. The culture of an organization is the norms and traditions maintained. *omponents of )rganizations2 .eview )rganizational *harts are the visual representation or blue print of an organizational structure showing how resources, departments, and personnel are grouped horizontally and vertically into lines of authority, communication, delegation, and decisions. *harts The chart designates areas of responsibility and areas of specialization *harts show only formal relationships, the framework in which the management process takes place. The informal structure, personal and social relationships, is not depicted on the chart. *hain of *ommand The chain of command is the formal line of authority and communication. $n bureaucratic structures or hierarchies authority and communication flow from the top downward. *entrality *entrality indicates the location of a position in an organization where fre1uent communication occurs.$t is determined by organizational distance as depicted by the chart.

:nity of *ommand :nity of command represents the managerial dictum of one person, one boss . $t is represented by the vertical solid line between positions on the organizational chart. pan of *ontrol pan of control or span of management is the number of people the manager directs.The optimal span of management is highly variable. $n general, managers in bureaucratic structures have a narrow span of control while those in flat structures have a broader span. *entralized versus +ecentralized *entralization refers to the area where decisions are made. $n autocratic structures decisions are made at the top and flow downward. There is a small span of control resulting in many layers of management and a tall structure.+ecentralized structures are flat and decisions are made at the level where they occur. :nit Level )rganization *ase ,ethod or Total &atient *are2 ;ach patient is assigned to a nurse for all care while that nurse is on duty. -unctional ,ethod2 "ased on scientific management, this method emphasizes efficiency. ;ach staff member is assigned a task. *are is fragmented. Team 5ursing2&atients are assigned to a team of staff led by an .5 who plans, coordinates, and supervises care. ,odular or +istrict 5ursing2 These are similar to team nursing e(cept that patients are assigned by location and the .5 is more actively involved in care. &rimary 5ursing2 This represents an e(tension of decentralization to the unit level. $n this model the .5 is completely responsible for <= hour care of a group of patients for their entire length of stay.The .5 establishes outcome criteria and is accountable for patient care.The care plan is the basis for coordination. *ase ,anagement2 This model focuses on an entire episode of illness, including all settings in which the patient receives care. The case manager coordinates services for the patient and family. The concern is on managing 1uality, access and cost. The critical path is the analysis tool. *ollaborative &ractice2 This model can include interdisciplinary teams, nurse#physician 7oint practice or collaboration. &artners in &ractice2 ! model based on collaborative practice in which an .5 and an associate work together in care. The associate is cross trained. +ifferentiated &ractice2 This model recognizes the competencies of baccalaureate versus technical nurses . The professional nurse is responsible for assessment, planning and evaluation while the technical nurse is responsible for implementation of care. &atient centered care2 ! nursing care delivery system that is unit based. !ll patient care services take place on the unit and the focus is on cost containment, efficiency, 1uality, and decentralization. The ..5. is the patient care coordinator.

Organizational effectiveness
Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce.[1] The idea of organizational effectiveness is especially important for non-profit organizations as most people who donate money to nonprofit organizations and charities are interested in knowing whether the organization is effective in accomplishing its goals. However, scholars of nonprofit organizational effectiveness acknowledge that the concept has multiple dimensions [2] and multiple definitions. [3] For example, while most nonprofit leaders define organizational

effectiveness as 'outcome accountability,' or the extent to which an organization achieves specified levels of progress toward its own goals, a minority of nonprofit leaders define effectiveness as 'overhead minimization,' or the minimization of fundraising and administrative costs. According to Richard et al. (2009) organizational effectiveness captures organizational performance plus the myriad internal performance outcomes normally associated with more efficient or effective operations and other external measures that relate to considerations that are broader than those simply associated with economic valuation (either by shareholders, managers, or customers), such as corporate social responsibility.[4] An organization's effectiveness is also dependent on its communicative competence and ethics. The relationship between these three are simultaneous. Ethics is a foundation found within organizational effectiveness. An organization must exemplify respect, honesty, integrity and equity to allow communicative competence with the participating members. Along with ethics and communicative competence, members in that particular group can finally achieve their intended goals. Foundations and other sources of grants and other types of funds are interested in organizational effectiveness of those people who seek funds from the foundations. Foundations always have more requests for funds or funding proposals and treat funding as an investment using the same care as a venture capitalist would in picking a company in which to invest. Organizational effectiveness is an abstract concept and is difficult for many organizations to directly measure. Instead of measuring organizational effectiveness directly, the organization selects proxy measures to represent effectiveness. Proxy measures may include such things as number of people served, types and sizes of population segments served, and the demand within those segments for the services the organization supplies. For instance, a non-profit organization which supplies meals to house bound people may collect statistics such as the number of meals cooked and served, the number of volunteers delivering meals, the turnover and retention rates of volunteers, the demographics of the people served, the turnover and retention of consumers, the number of requests for meals turned down due to lack of capacity (amount of food, capacity of meal preparation facilities, and number of delivery volunteers), and amount of wastage. Since the organization has as its goal the preparation of meals and the delivery of those meals to house bound people, it measures its organizational effectiveness by trying to determine what actual activities the people in the organization do in order to generate the outcomes the organization wants to create. Organizational effectiveness is typically evaluated within nonprofit organizations using logic models. Logic models are a management tool widely used in the nonprofit sector in program evaluation. Logic models are created for specific programs to link specific, measurable inputs to specific, measurable impacts.[5] Typically, logic models specify how program inputs, such as money and staff time, produce activities and outputs, such as services delivered, which in turn lead to impacts, such as improved beneficiary health.

Activities such as administration, fundraising, and volunteer training are important inputs into organizational effectiveness because although they do not directly result in programmatic results, they provide the essential support functions needed for the organization to successfully finance and administer its programs. These other activities are overhead activities that indirectly assist the organization in achieving its desired outcomes. However, some nonprofit watchdog agencies regard overhead spending not as indirect program spending but as in indication of organizational ineffectiveness or inefficiency since funds are not being spent directly on programs. Cost ratios such as overhead are much simpler to measure than actual programmatic results and can be easily calculated from publicly available information disclosed on nonprofit organizations' IRS Forms 990. Several nonprofit watchdog agencies provide ratings of nonprofit organizations using these data. However, this practice is widely criticized by scholars and practitioners.[6][7] A nonprofit with low overhead may have ineffective programs that have no impact, while a nonprofit with relatively higher overhead may be significantly more effective in terms of achieving meaningful results.[8][9] Some studies suggest that low overhead may actually reduce organizational effectiveness.[10] Moreover, an organization with higher overhead is more efficient than one with lower overhead if the organization with higher overhead achieves the same results at a lower total cost. The term Organizational Effectiveness is often used interchangeably with Organization Development, especially when used as the name of a department or a part of the Human Resources function within an organization. Definition, Meaning & Characteristic of Organisation Meaning of Organisation: Organisation is the foundation upon which the whole structure of management is built. Organisation is related with developing a frame work where the total work is divided into manageable components in order to facilitate the achievement of objectives or goals. Thus, organisation is the structure or mechanism (machinery) that enables living things to work together. n a static sense, an organisation is a structure or machinery manned by group of individuals who are working together towards a common goal. !like "management", the term "organisation" has also been used in a number of ways. broadly speaking, the term "organisation" is used in four different senses# as a process, as a structure of relationship, as a group of persons and as a system, as given below# Organisation as a Process: n this first sense, organisation is treated as a dynamic process and a managerial activity which is essential for planning the utilization of company"s resources, plant an e$uipment materials, money and people to accomplish the various objectives. Organisation as a Framework of Relationship: n the second sense organisation refers to the structure of relationships and among position jobs which is created to release certain objectives. The definitions of %enry, &rwick, 'arland, (orthcourt, )ansburgh and *priegel +reach, ,avis, -ooney and .eily etc., come under this group. 'or e/ample# !ccording to -ooney and .eily, 0Organisation is the form of every human association for the attainment of a common purpose.0 Organisation as a Group of persons: n the third sense, organisation is very often viewed as a group of persons contributing their efforts towards certain goals. Organisation begins when people combine their efforts for some common purpose. t is a universal truth that an individual is unable ability and

resources. +arnard has defined "Organisation" as an identifiable group of people contributing their efforts towards the attainment of goals. Organisation as a S stem: n the fourth sense, the organisation is viewed as system. *ystem concepts recognize that organizations are made up of components each of which has uni$ue properties, capabilities and mutual relationship. The constituent element of a system are linked together in such comple/ ways that actions taken by one producer have far reaching effect on others. n short, organizing is the determining, grouping and arranging of the various activities deemed necessary for the attainment of the objectives, the assigning of people to those activities, the providing of suitable physical factors of environment and the indicating of the relative authority delegated to each individual charged with the e/ecution of each respective activity. Definitions of Organisation ,ifferent authors have defined organisation in different ways. The main definitions of organisation are as follows#

!ccording to keith ,avis, 0Organisation may be defined as a group of individuals, large of small, that is cooperating under the direction of e/ecutive leadership in accomplishment of certain common object.0 !ccording to 1hester . +arnard, 0Organisation is a system of co2operative activities of two or more persons.0 !ccording to )ouis !. !llen, 0Organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives.0 !ccording to -ooney and .ailey, 0Organisation is the form of every human association for the attainment of a common purpose.0 Characteristics ! Features of Organisation The main characteristics or 'eatures of organisation are as follows# Outlining the O"#ecti$es: +orn with the enterprise are its long2life objectives of profitable manufacturing and selling its products. Other objectives must be established by the administration from time to time to aid and support this main objective. %&entif ing an& 'numerating the (cti$ities: !fter the objective is selected, the management has to identify total task involved and its break2up closely related component activities that are to be performed by and individual or division or a department. (ssigning the Duties: 3hen activities have been grouped according to similarities and common purposes, they should be organized by a particular department. 3ithin the department, the functional duties should be allotted to particular individuals. Defining an& Granting the (uthorit : The authority and responsibility should be well defined and should correspond to each other. ! close relationship between authority and responsibility should be established. Creating (uthorit Relationship: !fter assigning the duties and delegations of authority, the establishment of relationship is done. t involves deciding who will act under whom, who will be his subordinates, what will be his span of control and what will be his status in the organisation. +esides these formal relationships, some informal organizations should also be developed. %mportance ! )ee& ! (&$antages ! Significance of Organisation

The well2known industrialist of &.*.!. late !ndrew 1anrnegi, when sold his famous "&nited *tate *teel 1orporation", showed his confidence in organisation by uttering the following words, 0Take away our factories, take away our trade, our avenues of transportation, our money, leave nothing but our organisation, and in four years, we shall re2established ourselves.0 *ince ages and in every walk of life, organisation has been playing a vital role. The significance or main advantages of organisation are as follows# %t Facilitate& (&ministration an& management: Organisation is an important and the only tool to achieve enterprise goals set b administration and e/plained by management. ! sound organisation increases efficiency, avoids delay and duplication of work, increases managerial efficiency, increases promptness, motivates employees to perform their responsibility. %t *elp in the Growth of 'nterprise: 4ood organisation is helpful to the growth, e/pansion and diversifications of the enterprise. %t 'nsures Optimum +se of *uman Resources: 4ood organisation establishes persons with different interests, skills, knowledge and viewpoints. %t Stimulates Creati$it : ! sound and well2conceived organisation structure is the source of creative thinking and initiation of new ideas. ( ,ool of (chie$ing O"#ecti$es: Organisation is a vital tool in the hands of the management for achieving set objectives of the business enterprise. Pre$ents Corruption: &sually corruption e/ists in those enterprises which lack sound organisation. *ound organization prevents corruption by raising the morale of employees. They are motivated to work with greater efficiency, honesty and devotion. Co-or&ination in the 'nterprises: ,ifferent jobs and positions are welded together by structural relationship of the organisation. The organizational process e/erts its due and balanced emphasis on the co2ordination of various activities. 'liminates O$erlapping an& Duplication or work: Over lapping and duplication of work e/ists when the work distribution is not clearly identified and the work is performed in a haphazard and disorganized way. *ince a good organisation demands that the duties be clearly assigned amongst workers, such overlapping and duplication is totally eliminated.