Helps in Optimum Utilisation of Technological Innovations: The test of a good organisation is its success in adjusting to the new and changing situation. With the growing concepts and complexities of large scale business, the need and importance of organisation has grown substantially. It lays solid ground-work for focusing the attention and action of management on the accomplishment of the objectives of enterprises. 12. Organisation structure provides the formal channel of communication which is necessary for smooth functioning of the organisation. As Lounsburry Fish points out-“Organisation is more than a chart, it is the mechanism through which management directly co-ordinates and controls the business. Here are just a few of the many things that are important to consider when thinking about the structure of your organization adapted from Factors Affecting Organizational Design...Strategy, Size, Organizaition … Each department performs its own function in a closely related manner and not as competitors. It also provides for the channels of communication for the coordination of the activities of different departments. The importance of sound organisational structure can hardly be over emphasized. It cannot be seen. In short, existence of a good organization structure is essential for better management. It enhances the productivity through avoidance of duplication of activities and the consequential confusion as well as wastage of efforts. Brings unity in direction, facilitates control and co-ordination – Efficient delegation and. Organisation provides a channel for better management. A good organisation helps in encouraging people to try new ideas. It is, indeed, the foundation of management. Effective business writing drives sales. A sound organisation utilizes the human and other resource of the organisation properly. The growth of business means an increase in the scale of operation and diversification means starting of production of a new type of products. 4. Better administration and control – A sound organisation helps in achieving better managerial administration and control. A sound organisational structure facilitates the optimum use of technological improvements such as automatic techniques of production, control devices, computer system etc. There will be a need of proper authority to carry out the functions systematically and effectively. If offers stimulating opportunities to people at all levels to use their skills on jobs best suited to their nature. Good organizational skills naturally feed productivity, enabling small business owners to cross off more items from their to-do lists. "Sometimes it's easiest to remove everything from a work station if your problem is a combination of paper and ineffective furniture and storage," Norris says. Instead of a single chief executive in a large company, Peter Drucker would prefer a team with a captain who is more than one among equals and each member of the top management team has assigned areas in which he makes formal decisions and for which he is responsible. Why? It ensures, above all, accomplishment of objectives and strategies. The following are the importance of organisational structure: 1. In this way, the organisation maintains the relationship with each other in an enterprise. It facilitates attainment of the objectives of the enterprise. This helps in the better use of individuals working in the enterprise. In short, properly conceived, ideal organizational structure is sure to demand creative result from creative people and will drain routine and repetitive work to supporting positions and will at the same time, by establishing clear cut, accountability, provide recognition for the professional and the specialist in terms of their achievement. Use of better technology – A growth oriented organisation encourages the use of better technology. Time for a dose of reality: change in business is absolutely vital if organisations are to realise growth potential, propel teams onto greater things and launch products and services which were once but a pipe dream. Right persons are given right jobs. Bestry agrees that keeping too much of anything in your workspace is a bad plan. Effective management implies managerial adaptability to changing situations within the dynamic framework of an organisational structure. Its importance lies in the systematically evolved pattern of relationships designed to set in motion the processes of managerial functions. Thus routine duties can be transferred to subordinates so that superior line officers can concentrate on policy formation and forward planning. This ensures that each person and department will contribute to his best capacity and skill, will feel definite and specific responsibility, will avoid duplications and overlaps and will improve the efficiency and speed of work. Sound organisation helps in coordinating various jobs in the department or organisation. It offers ample scope for the training and development of managers,” e.g. Delays, duplications and waste motions occur with frustrating regularity. All these factors assure stability. The person or department in the organisation will neither be overworked nor underworked. It enables smooth management and operation of the enterprise, thereby, enhancing managerial efficiency, e.g. These training institutes are collecting data directly from the field used in the training. Organizations must tailor communication based on the audience to maximize efficiency. Organisation structure establishes hierarchy in the organisation; which clearly make an outline of the information flow. with clearly defined jobs, authority and responsibility, resulting into reduction in conflicts and chaos in the organisation. Save money by comparing insurance quotes from multiple carriers, Organization 101: Why organizing your business matters. Effective organisation enables growth and diversification through decentralisation and divisionalisation on geographical or product basis. Promote Brand Values. vi. It is an important means of bringing coordination among the various departments of the enterprise. "If you have to jump through hoops and leap over storage tubs to get to your scanner or filing cabinet, you're going to avoid digitizing documents or filing forms," Bestry notes. 3. A good organisation enhances capacity of individuals and enables them to take advantage of the skills and experiences. It also encourages new and automatic techniques of production, control devices and data processing. Ensure growth – A well-defined organisation structure will help an enterprise to grow and expand its operations. 6. Different jobs and positions are interrelated by structural relationship. Division of work and specialisation are the tools used to achieve the objective of optimum utilisation of material, resources and human efforts. Disclaimer 8. It encourages creativity, i.e. Independent, creative thinking is stimulated. 17. "Aesthetics are more of a luxury than functionality," Bestry says. It thus ensures the optimum use of staff. The importance of sound and ideal organizational structure can be studied under the following heads:-, 1. It determines whether or not you stay in business. xiii. A lot of new businesses are carried away and figure their passion and optimism are enough to build […] Duplication of work, wrong planning, inefficient personal, lack of motivation, improper allocation of duties and responsibilities, absence of co-ordination, communication gap, and improper instructions are the ingredients of ineffective administration. 6. Right from your small wallet to … 2. They are attached to experienced persons who guide them on undertaking various jobs. This will give job satisfaction to employees. But once the business starts to grow and separate departments are created for buying, selling, accounting, administration and so on, the need for organisation undoubtedly grows with it. With these activities the organisation provides a framework within which the company grows. Confusion, delay and duplication of work are avoided in good organisation. It disposes of conflict between individuals; individuals and the enterprises, enterprise and the economy as a whole. The information systems section is answerable for sustaining the software, hardware, data storage, and networks that encompass the business’s IT arrangement. It is the means by which the problems of an enterprise relating to policies, procedures, operations and administration can efficiently be solved. Better Human Relations and a Few Others. It is a mechanism with the help of which management directs, co-ordinates and controls the business. Promotes Growth and Diversification 3. Organising makes possible the effective operations of a group. iii. So, don't be afraid to clear your desk. Everything you need to know about the importance of organisational structure. Stimulates Creativity. It also helps in making communication easier and smoother. The technological improvements are taking place every time and management is required to make use of them to exist in competitive world. Creation of organisational structure also necessitates delegation of authority among various managerial positions. Changes in the organisation may result in the appointment of additional staff members, de-centralisation of authority and responsibility, raising of additional capital, identification of the consumer’s satisfaction and preferences, expansion of sales promotion activities and the like. iv. As a result, unimportant and trivial issues are given top priority. The initiative and creativeness encouraged in the organisation will make it dynamic and responsive to the new situations. Controlling as a function of management is of great value and importance in a business organization to ensure that the actual state of affairs of a business is along the lines of … This is essentially due to the importance that businesses try to improve productivity and reduce costs. It comprises people and it is the agency through which management performs the important functions of direction, co-ordination and control. The assignment of responsibilities among various persons for earring out different functions will be essential for making the plans effective. It is the basis for necessary team work among the various members of a common enterprise and helps in coordinating their efforts. The function of organizing is required for the performance. When more activities are added to an enterprise then only a sound organisation structure will be able to maintain the smooth running of the enterprise. Published on November 10, 2015 November 10, 2015 • 235 Likes • 19 Comments The policies and procedures are laid down for the guidance of managerial personnel. Yet plenty of companies plunge into the competitive arena without a formal plan. And without effective business communication, you won’t. Another critical and versatile advantage of finance is developing long … Proportionate and balanced emphasis is put on various activities. Small business establishments and organizations use MS Excel spreadsheet for storing contact information of their clients and customers. quick, disposal, minimum inter-department rivalry or friction, absence of divided responsibility, effective communications, etc. (6) It Facilitates Stability of Enterprises: A sound organisation has flexibility to adjust to the changes in the conditions, promotes effective leadership, promotes employees morale, provides for delegation of authority and develops coordination, co-operation and communication. 20. It gives them job satisfaction too. It creates an environment where people can work effectively. A well-structured organisation also encourages co-ordination and co-operations amongst all the individuals in the organisation. job rotation, job enlargement, delegation etc. Thus, a sound organisation structure is the soul of the enterprise. A flexible organisational structure will enable the employment of more persons without disturbing the working. Therefore, the importance of organizational leadership cannot be … Whether you’re running your own business, or just starting out on your business career, you’ll need to be a great communicator! An enterprise takes advantage of the technological advancements through sound organisational structure. "In other words: function beats form!". That is why, it is generally said that organisation is the machinery of management in its achievement of the ends determined by administration. Brings unity in direction, facilitates control and co-ordination – Efficient delegation and effective communication system, and well knitted relationships bring unity in command and direction, fixed responsibilities and division of work and facilitate control and co-ordination. Organizing your business's workspace may not be high on the priority list, but it should be. It Prevents the Growth of Laggards, Wirepullers, Intriguers or other Forms of Corrupters: As a matter of fact, experience shows that corruption can only thrive in those enterprises which have failed to set up a sound organisational structure. Eliminates communication silos. Uploader Agreement. Opportunities are seized quickly and exploited fully, ultimately, paving the way for growth and diversification. More important, it is a major part of your ongoing business operations. … That is, if there is no organization there is nothing but chaos - which can’t be managed. This will bring an automatic co-ordination in the business. Training and Development of Personnel: A good organisation offers an opportunity for the training and development of personnel. The actual work is completed at lower level of the organisation. Give yourself time to get organized. Everybody will know his limitations and may try to remain in that sphere. According to Allen, “A sound organisation can contribute greatly to the continuity and success of the enterprise”. Organising makes possible the effective operations of a group. Confusion and misunderstanding over who is to perform what work is avoided by specifying the role of managers clearly. 2. Activities that should be integrated or centralized are spread out and put to improper supervision. Following are the advantages of a sound organisation structure: 1. Why Is Inventory Important for a Business?. It helps people find information and items faster, and it allows groups to work together without wasting time. (9) It Ensures Co-Operation among Workers: A good organisation promotes mutual goodwill and co-operation among workers also. It facilitates administration by avoiding waste motions, overlap in work and duplication of effort. There will be a need for employing more persons whenever expansion and diversification takes place. It is the means by which the problems of an enterprise relating to policies, procedures, operations and administration can efficiently be solved. All these ensure an optimum use of human resources of an enterprise. Prevents the Growth of Secret, Influence and Corruption: 4. A sound organisational provides training to new staff members before placement and give refresher training to the existing staff members to improve their efficiency. Ensures Optimum Utilisation of Material Resources and Human Efforts: 6. Organisation is one of the basic functions of management. The higher-ups, in turn, can concentrate on strategic issues-putting their creative abilities to good use. Co-operation – A sound organisation ensures proper cooperation amongst its employees. "There are 8,760 hours in a year, so you can afford to invest this time in your business," she notes. There will be a sufficient scope to try new ideas in improving the working of the organisation. Ensures Co-Operation among Workers 12. It lays the basis for other managerial functions such as planning, direction, co-ordination and control. 9. Best plans may fail if these are not executed properly. Jobs are designed to suit human needs. If the new technology is adopted by the enterprise, the maximum benefits can be obtained in any field or activity. Sound organisation has flexibility and also stability. It ensures steady growth and diversification. It has been said in some quarters that an organization without a leader is like an … There are different types of organization, according to the Skills and Practices in Organizational Management website. The functions like co-ordination and control require a proper division of various functions and their assignment to suitable persons. 7. Balance should be maintained in authority and responsibility through organisation structure. Increases management efficiency – Good organisation assures all round efficiency by bringing definiteness all around, matching jobs with individuals and individuals with jobs, by utilising best skills, experience, abilities and specialisation and by avoiding delays and wastages. v. Sound organisation provides for optimum use of technological improvement. Inadequate organisation may not only discourage but also actually preclude effective administration”. It ensures closer co-operation and higher employee morale. This can be done through proper training and development programmes. Personal organizing has to do with managing yourself, such as your office and paperwork. Organisation is an important way of achieving coordination among different departments of an enterprise. A one man business, will have no difficulty about coordinating the efforts of the buying, selling and other management functions of the business. Good organizational structure and design helps improve communication, increase productivity, and inspire innovation. In any industry, trust plays a pivotal role in determining whether a business … Departments/units are formed on the basis of requirements of the enterprise. Jobs are made challenging, meaningful and interesting. Division of work enables an individual to specialize in the job in which he is proficient leading to better utilization of resources and talents. Encourages Initiative 14. But without a proper system in place, they can be a great source of problems, particularly legal issues. 9. For manufacturers, inventory includes raw materials used to make and assemble products. vi. It means that due importance is given to each department according to its contribution towards the achievement of the objectives. Organizing is a process of arranging things and keeping them into order. Obvious organization will make your post more skimmable, and that’s a good thing! The answer to this question may seem obvious: because it addresses and fixes a problem, thereby increasing a business's effectiveness. In the business world, organization might be said to be everything. As more and more businesses are looking for ways to grow and remain competitive in the market, there is an increase in need of technical skills and … Thus, organisation facilitates the growth of enterprise. Sound organisation alone assures accomplishment of objectives and strategies as per predetermined plans and policies. Running a small or even big business is not an easy job. Every enterprise has a number of departments and sections. Delegation helps people at lower levels to do more challenging work. Inspiring Morale. If you do not feel confident about what you are doing, two things will happen. 7. It Provides Ample Scope for Training and Development: An effective organisation facilitates delegation of authority which is an important device for training and developing the personnel. "If you're losing out on leads, opportunities, income, and quality of life, take stock of that human and financial cost," Norris says. It facilitates the other functions of management. Loose contact files and business cards are missed leads and lost revenue if information isn't managed and queued. Inventory is a current asset on your company’s balance sheet. Important of finance for business organizations. Customer Data. With the help of a well-defined organisation management is able to perform the functions of direction, co-ordination and control. Business leaders can first use their understanding of organizational behavior to evaluate their own attitudes and behaviors as well as the company’s values, strategies and goals. ix. Places Proportionate Importance to the Various Activities of the Enterprise: 9. Importance # 1. It is more than a chart-it is the best mechanism for managerial leadership, co-ordination and control. Norris suggests allocating at least 24 to 28 hours to the initial process. Inventory Tracking. But within these limits people are given freedom to show their talent. Organisation creates the relationship between top level executives and lower level staff members. xi. See business insurance requirements in your state, Studies from the Journal of Experimental Psychology, Marketing a cleaning business: Productivity and health benefits of a clean space, Small business spotlight: Getting organized with HAUTEheadquarters. It Promotes Growth and Diversification: Only sound organisation designed on scientific principles can create conditions conducive to planned expansion and diversification of the activities of the enterprise. It helps an organisation in the following ways: It helps individuals to enlarge their capabilities. Employees make better decisions in less time with business ethics as a … It facilitates proper... 3. Another management expert Kenneth C. Towe states that—”A sound form of organisation is the answer to every business problem, that a poor organisation could run a good product into the ground and that a good organisation with a poor product could run a good product out of the market”. rise in the level of mutual trust, support, openness and completeness of communication, widespread participation in planning and decision making. Why Understanding Organizational Behavior Matters. A flexible organisational structure is needed to adopt a new technology. The need for organisation arises when two or more people work together. 18. Human relations improve in a good organisational set up. Co-ordination – Co-ordination means bringing harmony in the efforts of various individuals. It responds in time to the changes in the environment and thereby justifies its existence. How do I get a certificate of liability insurance? To avoid this, block out your time. Image Guidelines 4. Professional organizers Julie Bestry and Vicki Norris explain why organization is such an important part of running a successful business. In an environment in which an organisation is dynamic and constantly changing to cope with ever changing situations, it is very important to encourage the employees to take proper initiative. It ensures, above all, accomplishment of objectives and strategies. Julie Bestry, certified professional organizer and president of Best Results Organizing, says from her experience, people often make the mistake of thinking about organization in terms of how things look. Authority, and responsibility for operating or routine decisions can be delegated closer to the operating levels. 19. Copyright 10. 5. It Provides for the Optimum Use of Technological Innovations: A sound and ideal organizational structure is not rigid but it is flexible to give adequate scope for the improvements in technology. 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