Organisation – Meaning, Definitions, Characteristics, Principles, Structure, and Process
22/June/2025 18:59
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Organisation – Meaning, Definitions, Characteristics, Principles, Structure, and Process
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What is the Meaning of Organisation?
In management, an organisation refers to a structured process by which people, tasks, and resources are arranged in a coordinated manner to achieve specific goals. It is a framework where individuals work together in defined roles under a system of authority and communication.
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Definition of Organisation
> Louis A. Allen:
“Organisation is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.”
> Chester I. Barnard:
“Organisation is a system of consciously coordinated activities or forces of two or more persons.”
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Characteristics of Organisation
1. Goal-Oriented
Created to achieve defined objectives.
2. Group of People
Involves two or more individuals working together.
3. Division of Work
Activities are divided among people based on skills and responsibility.
4. Defined Authority and Responsibility
Clear delegation of power and role.
5. Coordinated Efforts
Activities are interlinked to ensure smooth operations.
6. Communication Structure
A system for upward, downward, and horizontal communication.
7. Flexibility
Capable of adapting to changes in the environment.
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Principles of Organisation
1. Unity of Command
One employee should receive orders from only one superior.
2. Span of Control
The number of subordinates a manager can effectively supervise.
3. Division of Work
Tasks should be divided to enhance efficiency.
4. Delegation of Authority
Authority should be delegated based on responsibility.
5. Scalar Chain
A clear chain of command from top to bottom.
6. Parity of Authority and Responsibility
Authority and responsibility should be equal and balanced.
7. Flexibility and Simplicity
Structure should be simple and adaptable to changes.
8. Balance
Balance between centralisation and decentralisation is necessary.
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What is Organisational Structure?
Organisational Structure refers to the formal system of task and authority relationships that controls how people coordinate their actions and use resources to achieve organizational goals.
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Advantages of Organisational Structure
1. Clarity in Roles and Responsibilities
Each person knows their duty and to whom they report.
Too much structure can reduce flexibility and innovation.
2. Slow Adaptation
May resist changes due to defined hierarchy.
3. Communication Delays
Hierarchical systems may cause delay in passing information.
4. Lack of Coordination in Large Organisations
Multiple layers may lead to silo thinking and poor integration.
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Developing Organisational Structure
While developing an organisational structure, the following factors are considered:
1. Size of the Organisation
Small firms need simple structures; large firms require complex ones.
2. Nature of Business
Manufacturing, services, and technology businesses require different structures.
3. Technology Used
Automated systems need less supervision and more technical roles.
4. Goals and Strategy
Structure must align with the vision, mission, and long-term strategy.
5. Geographical Spread
Multinational companies need divisional or matrix structures.
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Process of Organising
1. Identifying Activities
Determining all the tasks needed to achieve business objectives.
2. Grouping the Activities
Similar tasks are grouped into departments (e.g., marketing, finance, HR).
3. Assigning Duties
Allocating tasks to individuals or teams.
4. Delegating Authority
Giving appropriate authority to individuals to carry out assigned duties.
5. Establishing Relationships
Defining superior-subordinate relationships and coordination channels.
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Conclusion
Organisation and organising are fundamental to the effective functioning of any business. A well-structured organisation leads to better decision-making, coordination, productivity, and goal achievement. Despite its challenges, the process of developing and maintaining a suitable structure is essential for adaptability and long-term success.
