115. Principles of Organization

Important Functional Principles of Organization

Luther gullick and Urwick claim that there are some general principles that guides the functioning of the organization.  Herbert Simon criticized that the general principles of organization are nothing but proverbs.  L.D. White on the other hand felt that they are only working rules which is widely experienced across all the organizations and seem to have validated over a period of time.  Therefore, there is no consensus among experts on the question whether there are some general principles of administration.  Nevertheless, student of public administration cannot afford to ignore the significance of some important principles like hierarchy, control, coordination and others that are briefly discussed below.

In administration, the process of achieving the goals of the organization requires the division of jobs into various functional units.  The units are further divided into sub units until the base order.  This is called hierarchical principle.  There are three important features that govern the hierarchical principle.  They are a) The entire administrative functions of the organization is divided into successive units or sub units b) These units are organized in pyramidical form, concentration of power in the central authority at the top and authority getting decentralized as the organization widens towards the base c) The authority, command and control in the organization descends from the top step by step towards the bottom.  Thus the general rule that applies according to the hierarchical principle is that the authority delegated to any functionary should be commensurate with the responsibility imposed on him.  Once the administrative activity is classified on the basis of position classification according to hierarchical principle, it has to be coordinated in both time and space.  In administration work needs to be coordinated due to its very complexity. The work has necessarily to be subdivided into various departments.  There has to be a lot of inter-dependence and inevitable overlapping of functions.  Therefore, every subunits’ actions needs coordination.  Coordination means to bring harmony and consistency in the actions of persons working towards a common goal.  In any organization theoretically speaking, the entire authority is vested in the head of the organization.  Practically, to execute the work, head of the organization delegate their functions or part of their functions to their subordinates which is called as principle of delegation.  Only by such chain of delegation can any large organization functions effectively.  Delegation involves grant or conferment of authority by a superior to his subordinates for performance of particular functions.  This function is called as principle of decentralization.  Delegation enables distribution of functions among the different functionaries of the organization.  The organization is therefore, able to handle a large volume of work in an orderly fashion.  All these functional principles are depending on one more important factor that is principle of control.  Effective control procedures should be enforced in organization.  Such procedures can go a long way in creating climate suitable for delegation in the organization.  These procedures create confidence in the superior that they can delegate their functions without fear of losing control.  The subordinates also know the expectations of the organization from them.  They would accordingly be expected to perform better to meet these expectations. All these are in turn related to factors like discipline, morale and motivational factors in the organization.  Thus the organization designed with these general principles will prove effective for the sound structure of the organization.

Discuss the merits and demerits of the pyramidical structural design and horizontal structural design of the organization.

Dr. Anita Prasanna M.A. Ph.D is available for consultation through the Institute


5 thoughts on “115. Principles of Organization

  1. Pyramidical structural design:
    The organization is divided into units and sub-units based on the regions, functions etc. These units and sub-units are structured under the supervision and control of the top units, likewise the employees form a Pyramidical structure. Each sub-ordinate receives communication from his superior and passes that piece of communication to sub-ordinates or vice-versa. Delegation of work and authority forms a chain of command from the top level to the lower level in the organization. The authority of an employee at any level is corresponding to the responsibility imposed at that level. A hierarchy emerges when the organization faces coordination and motivational problems due to increased horizontal differentiation.

    i)The goals, efforts and objectives of the organization is well directed
    ii)The number of levels in the pyramidical structure must be relatively less compared to the size of the organization for this design to be effective.
    iii)Decentralization of work.
    iv)Delegation of work takes place.
    v)Decentralizing authority improves communication and coordination due to less direct supervision.
    vi)Standardization reduces supervision, because employees follow rules, Standard Operating Procedures and norms.
    vii)There is cooperation and co-ordination among the units and subunits setting clear goal orientation.

    i)The number of levels in the pyramidical structure must be relatively less compared to the size of the organization, if it exceeds can give rise to communication problems.
    ii)There is overlapping and repetition of work to an extent on the part of the superior-subordinate relationship.
    iii)Lacks transparency with many levels of management.

    Hierarchical structural design:
    Here there is division of work, among people of same level. Horizontal differentiation controls employees when an organization cannot increase its hierarchical levels and establishes specialized functions or divisions.

    i)Horizontally structured companies tend to have better employee morale because employees have more decision-making authority.
    ii)Also, generally it costs lesser to run a horizontally structured company because managers cost more than regular employees.

    i)causes co-ordination and motivational problems.

    Although small businesses start with Horizontal structure, as they grow implement the vertical structure to compete with the global market. Ideally, a business should have neither a strictly horizontal nor vertical structure but a combination of the two.

    1. Dear Chandra, very good attempt of answering the questions in a concise form. I would like to supplement that either the pyramidical structure or horizontal structure of the organisation, the efficiency of the structure is largely dictated by the formal as well informal processes of the organisation say motivational process, communication process and others. Therefore, there should be proper blend of both structural and processes (formal and informal) in the organisation.

  2. “Every company has two organizational structures: The formal one is written on the charts; the other one is the everyday relationship of the men and women in the organization. ” – Harold S. Geneen

    * Pyramidical Structural design :-
    1. It reflects a hierarchy. Executives are at the top of the chart; middle management follows; and lower-ranking employees are at the bottom.
    2. Merits :
    * Authority and responsibility clearly defined.
    * Clearly defined promotion path.
    * Employees very loyal to their department within the organization.
    3. Demerits :
    * The organization can be bureaucratic and respond slowly.
    * Communication across various sections can be poor.
    * Departments can make decisions which benefit them rather than the business as a whole specially if there is inter-departmental rivalry.

    * Horizontal Structural design :-
    1. Emphasizes as employee-centered approach with emphasis on team work and collaboration.
    2. Merits :
    * Greater satisfaction due to greater freedom and autonomy.
    * High levels of cooperation throughout the organization.
    * Heavy emphasis on innovation can lead to ideas that keep the organization ahead of the competition.
    * Streamlined communication and reporting processes making organization more nimble and adaptable to change.
    3. Demerits :
    * Could lead to “loose ship” due to high levels of responsibility.
    * A resulting lack of control can lead to finger-pointing when things go awry, which can hinder productivity.
    * Convert from a vertical to horizontal structure can face challenges, as management needs to adjust to a less authoritarian and a more peer-like relationship with subordinates.

    * It is so important to compare and contrast these organizational structures and choosing the correct one to meet all individual organizations needs and wants, because choosing the wrong one could end in failure.

    1. Dear SASI K,

      Thoughtful answers. It is important for us know when the inefficiency crepts in, in any structural form of the organisation and the factors responsible for it. Therefore, it is necessary for us to chalk out the checks and balances within the structural form as well as the procedural processes so that the chances of inefficiency reduces.

  3. Pyramidical Structure of the organisation also called as hierarchical structure of the organisation.
    Its important principles are:-
    i) Principle of ‘through proper channel’
    ii) Principle of ‘correspondence’
    iii) Principle ‘Unity of command’

    Merit: 1) Organisations guard against possible work failure at lower level.
    2) It facilitates quality control in work organisation
    3) Subordinate has only from where he will receive orders and he will report to. “Unity of command”
    4) Help in integration and coherence in the organisation
    5) Facilitates decentralisation
    6) Delegation of Authority
    7) It avoid short circuiting by ensuring strict adherence to procedure
    8) It helps in coordination by securing unity of purpose.

    Demerit: 1) lose touch with the men at the bottom.
    2) Authority and privileges are unequally distributed
    3) Interrelation tends to be conditioned by the fact of inequality
    4) Cause organisational fighting
    5) Increase delay in the disposal of work.

    Horizontal Structure of an organisation
    Horizontal structure in an organisation is the result of division of work at the same level.
    It has very few and no level of hierarchy between management and staff. Also it is more
    process oriented.

    Merit: 1) It is more employee friendly, allows better interaction with its staff and management.
    2) Supports collaborative decision making and reduce time delay.
    3) It is more agile and adapts changes quickly.
    4) Performance measures and incentive can be tied more directly to tangible, measureable work progress.

    Demerit: 1) Coordination is very important in the structure. That is, personal relationship of worker and management. So this type of structure will require more time to build compare to hierarchical structure.
    2) Such a structure is difficult to maintain when its size grows.

    As we can see that both structure has its advantages and disadvantages. So the structure of an organization should be decided on its objective, processes and external environment.

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