Exam 12: Organisational Structure and Design

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Fourteen general principles that should guide the design and management of organisations:
1. Division of work: Dividing the work into a simple and homogeneous set of tasks will lead to specialisation and enhancement of efficiency.
2. Authority: Managers should be given enough authority for the performance of the responsibilities entrusted to them. In other words, authority should be commensurate with responsibilities.
3. Discipline: Employees should act in conformity with the rules of the organisation. The management should enforce such rules through effective rewards for compliance and judicious penalties for violations.
4. Unity of command: An employee should take orders from only one superior. Receiving orders from different bosses results in confusion and excuses on the part of the employee.
5. Unity of direction: Tasks that are performed using similar processes or are expected to lead to the same outcome should be brought under one plan and directed by one manager.
6. Subordination of individual interests to the general interest: The organisation's interests should be given precedence over individual or small group interests.
7. Remuneration: Workers should be paid fair wages for their services.
8. Centralisation: The degree to which decisions are made at the higher or lower levels of management should be appropriately balanced for different situations.
9. Scalar chain: The lines of authority and communication from the highest to the lowest ranks should be clearly defined. Communication should usually flow through these lines. However, horizontal communication across the departments (cross-communication) may be allowed to avoid delays, keeping the concerned superiors informed.
10. Order: There should be designated places for people and materials and they should be available at the right place at the right time.
11. Equity: Managers should be fair and considerate to their workers.
12. Stability of tenure: Management should avoid frequent movement of employees within the organisation and plan for proper replacements where moving becomes necessary.
13. Initiative: Management should encourage subordinates to originate and carry out their plans, which will stimulate them to put greater effort into their work.
14. Esprit de corps: Employees should be encouraged to transcend their individual and departmental considerations and work together as a team so that there is unity and harmony in the organisation.