| balance of effort-the different activities within a business need to be allocated effort(including time and manpower)which is appropriate to the activity in that business. it would be foolish, and unsuccessful, if a sole trader spent all the available time on making things, and none on selling them. use of special skills-if several(or many) people work for a business, then they should be able to spend the majority of their effort on those tasks to which they are best suited leadership- in any group with a common aim, there is a leader.Even if there are only two people in equal partnership, sometimes one and sometimes the other maybe the leader. Leadership eliminates indecision and directs employees to pull in the same direction the principle of objective-every business has one or several objectives;things it is trying to achieve.This is often embodied in the business's mission and purpose statement. Every part ofm the business must contribute to one or more of the overall objectives or it should not be part of that business the principle of specializationthe business will be best served if individuals are employed to do only one task, ensuring that their skills will be best utilized the principle of coordination-the objective behind any attempt to establish internal structure is to enable people and functions to work better together.Also, coordination ensures that people do not make it difficult for others to do their task the principle of authority-in any organization, someone must have authority. Each member of the group should know how to access that authority, for decisions, and how to expect and receive instructions the principle of responsibility-where there are two people, one acting as superior, the other as subordinate, the superior carries full responsibility not only for his or her own actions, but also those of the subordinate.So, the fact that some person is put in the position of directing others implies that he or she is also fully responsible for the results they produce the principle of definition-everyone in their organization must know where they stand, what tasks their position requires them to carry out, to whom they should report, and who reports to them. This information must be available to everyone in the organization, not just to the individual concerned the principle of correspondenceclearly you cannot expect someone to be responsible for actions of another unless there is authority. There must be an equal correspondence between authority and responsibility for every position in the organization the principle of span of control-it is not acceptable to give one individual direct authority over a large group of others. he or she could not cope.Therefore the principle is that no person should have not more than five direct subordinates the principle of balance-each of the different functional units of an organization needs to be kept in balance with the rest of the business organization.The internal structure must be such that no function receives such attention or effort as to unbalance the whole.for example: there must be sufficient sales people and there must be sufficient staff in the invoicing, credit control and accounts departments to ensure that the income keeps pace with the sales the principle of continuity- Few, if any, organizations stay static, change is a normal feature of life. Therefore, the organization must expect re-organization and must assume in all its planning and functions that there will be change, but with the continuation of the organization's operations. |
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line relationships- everyone below the top is accountable to someone else above, and everyone above the lowest level has on or several people below under their authority. job role is indicated on the chart with the names of the persons currently holding that position. The implication of such a chart is that official lines of communication from top to bottom are clearly defined, together with responsibilities staff relationshipssometimes a group of people can be regarded as interchangable in the sense that they all have the same position and level of responsibility. The one person responsibility and authority can thus be transferred to the group, and all in the group are seen as having authority over those in the level immediately below. If cooperation between people gives greater overall efficiency, this is a good model specialist relationshipsThere are many specialized functions which can be used by different groups at different levels, such as personnel and recruitment, or information services.there may be no actual authority vested in the specialist function, as they may only have an advisory role within it. lateral relationshipsthis is rarely shown on the organization chart, but it implies that there is direct coordination and cooperation between two or more separate functions in the organization. Although lateral relationships are generally a good thing, their very informality can lead to difficulties in a business.For example, a very strong character in charge of a function could, in fact, be the principal driving force of the company |
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division by function-division by function means that the separate activities such as finance, production, sales, purchasing and personnel are the basis for the division. This has one significant difficulty. Each of the three areas is so different from the other two that friction can develop division by location-often a business occupies a widely spread geographical location. This can happen because of a desire to take advantage of government grants, local skilled and available labour, or some benefit available on a specific location, or because it is cheaper and better to carry out manufacture or assembly near to the point of distribution division based on customer-it may be right to divide the business into units, each handling a special market segment division based on productif there are significant differences between products in the business range, it may be advisable to allocate one product to a function, or to have a small related range of produccts division by process-based on differences in manufacturing methods |