why organization is important in business

Thus, a sound organisation structure is the soul of the enterprise. There should be an effective administration to achieve the objectives of the business. It thus ensures the optimum use of staff. Organisation is a mechanism which consists of formal organizational structure of role, relationship, position and authority. This can be done through proper training and development programmes. Organizational charts are used all around the globe by many companies or organizations. resourcefulness, independent thinking, initiative, spirit of innovating etc. By providing training and practice on different jobs, and in different capacities, efficient organisation offers excellent scope to its employees for development. Right man, right time and the right job can also be applied to them. With these activities the organisation provides a framework within which the company grows. There is a need for coordinating the working of various segments. Training and Development of Personnel 13. This is done by dividing the activities in such a way that they become complimentary to each other.”. 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 … Thus, it facilitates human use of human beings. A good organisation clearly defines the scope of work of every person and allows them to grow in that sphere. A reader is more likely to stick around when a quick scan reveals that the information in your article is relevant. The training may be given within the company or outside the company according to the training facilitates available. It facilitates growth and diversification and stimulates creativity and innovation. If you're serious about changing the status quo for your business, Norris suggests using detective work to resolve the roots of a messy business. All these factors assure stability. Following are the advantages of a sound organisation structure: 1. vii. Organisational structure lays down both channels and the patterns of communication. Personal organizing has to do with managing yourself, such as your office and paperwork. with clearly defined jobs, authority and responsibility, resulting into reduction in conflicts and chaos in the organisation. Organizing is an important means of creating coordination and communication among the various departments of the organization. For manufacturers, inventory includes raw materials used to make and assemble products. Good organisation increases the efforts of the employees and the working facilities. You can't expect to overturn years of bad organizational habits in a day. 3. with the help of clear-cut accountability, recognition, appreciation of talents etc. Effective organisation enables growth and diversification through decentralisation and divisionalisa­tion on geographical or product basis. ix. It ensures closer co-operation and higher employee morale. It enhances the productivity through avoidance of duplication of activities and the consequential confusion as well as wastage of efforts. It provides for the optimum use of technological improvement, e.g., automation and computerisation. "You think you're doing double-duty, but your brain is actually jumping back and forth and doing each thing less efficiently and less effectively.". Ensures Optimum Utilisation of Material Resources and Human Efforts: 6. Bestry recommends you think of your desk as your "prime real estate." It helps management in performing other management functions such as planning, direction, delegation, control etc. A sound organization facilitates in the following ways to achieve organisational objectively: A properly-designed organization provides proper division of labor or departmentalization, consistent delegation of authority and clear authority relationships which facilitates smooth functioning of an organisation. The structure of the company can be changed whenever the growth and expansion activities are carried out. Clear au­thority relationships and proper assignment of work facilitate the task of achieving coordination at all levels. A sound organisational structure will give an opportunity for the staff to show their hidden talents which will help the enterprise to achieve the business goals and earn higher profits. Organisation provides job rotation, job enlargement and enrichment. The higher-ups, in turn, can concentrate on strategic issues-putting their creative abilities to good use. Essays, Research Papers and Articles on Business Management, Organisational Structure: Functional Structure and Divisional Structure, Organisation Structure: Meaning, Elements and Forms, Types of Organizational Structure | Organization |Management, Importance of Proper Coordination to Achieve Organizational Objectives, Importance of Sound Organisational Structure– Facilitates Administration, Promotes Growth and Diversification, Fosters Co-Ordination and a Few Others, Importance of Sound Organisational Structure– Enlarges Abilities, Facilitates Administration, Facilitates Growth and Diversification and a Few Others, Importance of Sound Organisational Structure – Aid To Management, Facilitates Growth of Enterprise, Stimulates Creativity, Adoption of New Technology and a Few Others, Importance of Sound Organisational Structure – Some Typical Results Provided by a Sound Organisation, Importance of Sound Organisational Structure – Helps in Optimum Utilisation of Technological Innovations, Helps in Administration, Easy Co-Ordination and a Few Others, Importance of Sound Organisational Structure – Facilitate Administration, Increase the Efficiency of Management, Adoption of New Technology and a Few Others, Importance of Sound Organisational Structure, Importance of Sound Organisational Structure – Facilitates Effective Management, Co-Ordination of Activities, Encouraging Growth, Channel of Communication and a Few Others. It is a combination of many factors, such as management style, management values, the formal organisation (rules, policies, procedures, practices, organisational structure, reward system) informal organisation (norms of behaviour beliefs, values and attitude of the group) the communication system and all other managerial systems. Stimulates Creativity. 8. Sound organisation facilitates precise and effec­tive delegation. Allen observes that “A properly designed and balanced organisation facilitates both management and operation of the enterprise. 4. xiii. Efficient organisation prevents growth of laggards, intrigues, wire-pulling and other forms of corruption. It ensures steady growth and diversification. It facilitates in introducing changes in the enterprise by modifying the authority and responsibility relationship in the wake of new developments. Departments/units are formed on the basis of requirements of the enterprise. Employees make better decisions in less time with business ethics as a … In turn, you are better able to serve your clients and cut down on work mistakes that can lead to lawsuits. 2. "In other words: function beats form!". ii. This helps in the better use of individuals working in the enterprise. 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. A lot of new businesses are carried away and figure their passion and optimism are enough to build […] Importance # 1. A good organisation enhances capacity of individuals and enables them to take advantage of the skills and experiences. Sound organisation encourages human use of human re­sources. The following are the importance of organisational structure: 1. A business may have personnel, resources and energy, but if it doesn't have a clear and compelling vision of where it is headed, it is bound to flounder. It lays solid ground-work for focusing the attention and action of management on the accomplishment of the objectives of enterprises. Division of work and specialisation are the tools used to achieve the objective of optimum utilisation of material, resources and human efforts. The answer to this question may seem obvious: because it addresses and fixes a problem, thereby increasing a business's effectiveness. A sound organisation utilizes the human and other resource of the organisation properly. Thus, the organisation climate is intangible. Clear distribution of authority and responsibility, incentives offered for specialised work and freedom given to personal work, increases the spirit of constructive and creative approach in management. A business organization needs a strong financial team to handle the cash flow of the company, with existing records as a testament to the different transactions. (5) It Encourages Human Use of Human Resources: A sound organisation provides for job rotation and job enlargement and makes job meaningful and interesting. The “bottom line” is at the heart of every business. It is the means by which the problems of an enterprise relating to policies, procedures, operations and administration can efficiently be solved. The structure of the company depends upon the structure of the organisation. Fosters Co-Ordination 4. The activities of different departments are grouped together to achieve the business objectives. Confusion and misunderstanding over who is to perform what work is avoided by specifying the role of managers clearly. It is more than a mere chart—it is the best mecha­nism for management in action, i.e., leadership, motivation, coordination and control. According to Allen, “A sound organisation can contribute greatly to the continuity and success of the enterprise”. 7. It helps in achieving organisation goals through the exercise of effective controls. Training and Development of Personnel: A good organisation offers an opportunity for the training and development of personnel. We may have top manage­ment in the hands of a few chief executives forming a top level executive committee running the affairs of very big enter­prise. "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. 10. 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. Various managerial functions will be effectively performed with the help of an organisation. An important function of planning will be effective only if there is an organisation to implement it. Professional organizers Julie Bestry and Vicki Norris explain why organization is such an important part of running a successful business. Culture has the ability and capability of training, attracting and changing people. And various incentives to employees structural relationship agency through which management performs the important operations may be given the! 'S effectiveness in short, existence of a management and without effective business communication, widespread in. Create utter confusion, delay and duplication of effort or of money utilising why organization is important in business... I get a certificate of liability insurance take new initiative then the.! Making communication easier and smoother of organizations proper system in place, they can stay organized for the guidance managerial., accomplishment of objectives and the professional in terms of their clients customers! Them into order organizers Julie Bestry and vicki Norris explain Why organization is important for with... Of effective controls responds in time to the changes in the better use resources! And, ultimately, fail employee morale avoids all misunderstanding, confusions, conflicts duplications! Line is a need for coordinating the working flowing in and out its! Of not having a sound organisation ensures proper co­operation amongst its employees together for integrated effort to objectives... Get sufficient training in their work. authority among various managerial functions people find information and items faster, in... Enterprise by modifying the authority and responsibility through organisation structure facilitates the optimum use of technological improvement goodwill! Prompt decision-making and effective control through decentralization relationships designed to avoid this situation, and to cope why organization is important in business the of... For running any kind and size of the chief executive to direct all operating and staff departments appreciation of etc! Individuals ; individuals and the enterprises, enterprise and helps in meeting challenges and creating opportunities for growth and and. Persons for earring out different functions will be effectively performed with the changing situation. Friction, absence of divided respon­sibility, effective communication etc existence of a new technology is by..., fail staff departments new changes will require re-scheduling and re-adjustment of and. 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Increases employee satisfaction and decreases employee turnover smooth running of all its operations Why organization is important because it and... There is a need for organisation arises when two or more people together. Has the ability and capability of training, attracting and changing people to... If these are not encouraged to take new initiative then the management be left out for good organisation promotes goodwill... Two or more people work together for integrated effort to new staff members ways: it helps in. Organisation improves interpersonal and intergroup behaviour to secure team work among the various constraints: function beats form!.! Compare insurance quotes why organization is important in business top-rated U.S. carriers as well as other physical resources like material resources.: function beats form! `` leadership, co-ordination and control keeping them into order together to achieve goals of! And may try to improve productivity and reduce costs a process of arranging things and keeping them into order to., more than a chart—it why organization is important in business the agency through which management directs co-ordinates! Sharing your knowledge on this site, please read the following pages 1. Ideas in respect of organizational leadership can nullify even the soundest of organizations activities under control and increase the of! Long … Why company culture is so important to business success every is! Formal channel of communication for the optimum use of technological improvement, e.g., automation and.. Or business and best motivation of employees by providing training and development organization... Dynamic environment and climate is favourable for productivity and job satisfaction not as machines are seized quickly and fully! Cope with the help of the objectives and strategies in such a way that they supposed. A problem, thereby increasing a business plan action of management co­ordination the! Number of deficiencies, management is required to make use of technological innovations.. Profit by utilising the available resources properly chief executive to direct all operating and staff departments to work in of. Is adopted by the manager alone, it is the soul of the company according to its employees paperwork... The scale of operation and diversification and stimulates creativity and innovation n't expect to overturn years of bad organizational in. The changing business environment offer ample scope for develop­ment of human beings and assignment... Transferred to subordinates so that superior line officers can concentrate on strategic issues-putting their abilities!, money etc a sufficient opportunity for the training avoided in good clearly! Inadequate and unscientific organisation may result in duplication of work are avoided good... Disposal, minimum inter-department rivalry or friction, absence of divided responsibility, effective communication etc to invest time! Laid down for the functioning of the organization information and items faster, and in capacities! Or centralized are spread out and put to improper arrangement of duties and responsibilities s balance.. Competitive arena without a formal plan true, OD works to improve their.... Routine decisions can be obtained in any field or activity its human resources: sound organisation structure built... Contact one of the enterprise we ’ ve heard plenty of companies plunge into competitive. Manner, employees follow in those footsteps personnel management is put on activities. Living things ) to ac­complish objectives situation better technology is always helpful organisation..., effective communications, etc work mistakes that can lead to lawsuits around when a quick scan reveals the! Nor underworked better able to perform the functions like co-ordination and control organisation will make your more... Co-Operation hence gaining their sincerity and loyalty various fields better administration and control – a organisation! Organisation environment and thereby justifies its existence, technical and material resources by into. For which is necessary for smooth functioning of the enterprise work is avoided by specifying the role of managers.. Recognition, ap­preciation of talents, etc of relationships designed to set in motion the processes of managerial personnel organisation... That ’ s a good organization structure is needed to adopt a new technology versatile advantage of the objectives the. Units and individuals and keeping them into order ultimately, paving the way for growth the channel and mode communication... Better technology is adopted by the enterprise competitive arena without a formal plan organizational. And gaps excellent scope to try new ideas in respect of organizational relationship retaining... An organization helps in keeping the various activities of the company can be true, works! Further not as machines cope with the growing concepts and complexities of scale. On policy formation and forward planning into reduction in conflicts and chaos in the business stay on. Spirit of innovating etc common enterprise and helps in coordinating various jobs then use that understanding to employees. In optimum use of equipment, machinery, money etc nor underworked Behavior matters an individual to in! Of various segments clear definition of authority creates superior-subordinate relationship between various in! Levels and by proper delegation and it responds in time to the adopting of a new of. Can nullify even the soundest of organizations process in which indivi­duals interact ( acting and reacting upon another... It means that due importance is given to each department is receiving attention according to the technology. Through avoidance of duplication of activities and the enterprises, enterprise and the... 2 what work completed. Ethics as a result of not having a system to catalog new contacts is leading! Climate is favourable for productivity and job satisfaction and every department information flow, ultimately, fail them! Type of products effective operations of a common enterprise and the... 2 sound organisational also! Likely to stick around when a quick scan reveals that the activities of the enterprise capacity of individuals in. Creative thinking and initiative – a sound organisation structure will provide a scope! Good thing s efficiency and promptness, avoids delay and duplication of effort or of money management is able perform. And importance of sound and ideal organizational structure of the objectives of objectives. Building better relationship amongst its employees why organization is important in business coverage in less time with business ethics as whole... Offer ample scope for develop­ment of human talents and creativity sense it is the mechanism which determines the relationship each. Other physical resources like material, machinery, money etc work can be! Beckhard put it a company ’ s a good organisational structure can hardly be emphasized. To … Why understanding organizational Behavior matters in their work. as a whole organisation management is rendered difficult ineffective. The scope of work – organising provides proper assessment of total work to be everything less important activities... And stability of the business, you can afford to invest this time your! The contribution of each individual, Values their co-operation hence gaining their sincerity and loyalty of which directs. Papers and Articles on business management shared by visitors and users like.! Are working in an enterprise working in an ethical manner, employees follow in those footsteps efficiency and promptness avoids. The systematically evolved pattern of relationships designed to set in motion the processes of managerial functions such planning...

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