Guidelines for Effective Organization

There are some established guidelines that are common to all organizations that are structured in a classical form. The classical form means a bureaucratic structure where there is a hierarchy of power and responsibility and the directions primarily flow from the top management to the lower levels of workers through its hierarchical ranks.

Few of these Guidelines are:

1. The lines of authority should be clearly stated and should run from the top to the bottom of the organization. This principle is known as the scalar principle and the line of authority is referred to as chain of command.

The major decisions are mode and policies are formulated at the top management level and they filter down through the various management levels to the workers. The line of authority should be clearly established so that each person in this chain of command knows his authority and its boundaries.

2. Each person in the organization should report to only one boss. This is known as the principle of unity of command and each person knows as to whom he reports to and who reports to him. This process eliminates ambiguity and confusion that can result when a person has to report to more than one superior.

3. The responsibility and authority of each supervisor should be established clearly and in writing. This will clarify the exact role of the supervisor as to the limits of his authority. Authority is defined as the formal right to require action from others and responsibility is the accountability of that authority. With clearly defined authority and responsibility, it will be easier for the supervisor to trace and handle problems and make quick decisions when necessary.

4. The senior managers are responsible for the acts of their subordinates. The manager or the supervisor cannot dissociate himself from the acts of his subordinates. Hence, he must be accountable for the acts of his subordinates. The authority and responsibility should be delegated as far down the hierarchical line as objectively possible.

This will place the decision-making power near the actual operations. This would give the top management more free time to devote to strategic planning and overall policy making. This is specially necessary in large complex organizations. This principle is known as decentralization of power as against centralized power where all decisions are made at the top.

5. The number of levels of authority should be as few as possible. This would make the communication easier and clear and the decision-making faster. A longer chain of command generally results in run around because the responsibilities are not clearly assigned and hence become ambiguous. According to Gilmore, most organizations do not need more than six levels of supervision, including the level of the president.

6. The principle of specialization should be applied wherever possible. Precise division of work facilitates specialization. Every person should be assigned a single function wherever possible. This rule applies to individuals as well as departments.

The specialized operations will lead to efficiency and quality. However, each area of specialization must be interrelated to the total integrated system by means of coordination of all activities of all departments.

7. The line function and the staff function should be kept separate. The overlapping of these functions will result in ambiguity. The line functions are those that are directly involved with the operations that result in the achievement of the company objectives.

Staff functions are auxiliary to the line function and offer assistance and advice. For example, legal, public relations and promotional functions are all staff functions. The activities of line managers and staff managers should be coordinated so as to achieve synergetic results.

8. The span of control should be reasonable and well established. The span of control determines the number of positions that can be coordinated by a single executive. The span of control could be narrow where there are relatively few individuals who report to the same manager or it could be wide where many individuals are under the supervision of the same manager.

However, such a span of control would depend upon the similarity or dissimilarity of the subordinate positions and how interdependent these positions are. The more interdependent these positions are, the more difficult is the coordination. In such interlocking positions, it is advisable to have no more than five or six subordinates working under any one executive.

9. The organization should be simple and flexible. It should be simple because it is easier to manage and it should be flexible because it can quickly adapt to changing conditions. It should be such that it can easily be expanded or reduced, as the times demand. Furthermore, simplicity would make the communication much easier, fast and accurate, which is necessary for successful organizations.

While these principles, in general, apply to classical organizations as proposed by Frederick Taylor and Henry Fayol, and have been adopted to facilitate administration, some more recent principles have evolved which have become an integral part of most modern organizations.

These new principles of participative decision-making, challenging work assignments, management by objectives, decentralization of authority and so on have been integrated with the traditional ones. The idea is to stimulate creativity, encourage growth and optimize the utility of all resources in reaching the goals of the organization.