Significance of Organisation

Organisation is the foundation upon which the whole structure of management is built . It is the backbone of sound management. A sound organisation structure contributes to the success of the enterprise in the following ways:

1) Facilitates administration .

A properly – designed organisation facilitates both management and operation of the enterprise. It provides proper division of labour , consistent delegation of authority and clear authority relationships. Organisation is the mechanism through which managers direct, coordinate and control the business.If the organisation is ill-designed or it is a makeshift arrangement , the management is rendered difficult and ineffective. If, on other hand, it is logical and clearcut,then the first requisite of sound management has been achieved.

2)  Facilitates growth and diversification.

The organisation structure is the frame work within which an enterprise grows. Management can anticipates the need for change to facilitate growth and may suitably adjust the organisation structure when the size of business increases.

3)Permits optimum use of technological improvements.

Sound organisation structure provides for optimum use of technical and human resources. The high cost of installation, operation and maintenance of expensive equipment calls for proper organisation. Similarly, sound organisation structure helps in optimum use of human efforts through specialzation.

4) Encourages use of human being.

Proper organisation provides physiological satisfaction to employees. An individual contributes his best when he gets satisfaction from his job, his working environment and his relationships.In this way organisation structure facilitates insentive use of human capital. It also creates training and promotional avenues for people.

5)  Stimulated creativity.

Sound organisation stimulates creative thinking and initative by providing well defining areas of work with provision for development of new and improved ways of doing things. It enables manager to turn over routine and repetitive jobs to supporting positions.A good organisation enhances capacity of individuals and enables them to take advantage of the accumulated knowledge of preceding generations.

6)  Encourage good human relations.

In a sound organisation every individual is assigned the job for which he is best suited. The assignment of right jobs to right persons improved job satisfaction and interpersonel relations. Well defined jobs and clear lines of authority and responsibility help to establish cordial relations between management and workers.

7)  Ensures continuity of enterprise.

Sound organisations helps in the continuity of management by providing scope for the training and developing the future managers. An effective organisation provides avenues for developments and promotions through extensive delegation and decentralisation of authority.

8) Fosters coordination.

Sound organisation facilitates order in the enterprise. Division of labour,better utilisation of technology and human talent, etc.help to improve the efficiency and quality of work. By providing clear channels of communications among the members of organisation, it facilitates coordination.

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By Hassham

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