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BUSINESS ORGANIZATION - INTRODUCTION

Q Question Answer Imp.
No
1. Meaning of Henry Fayol To organize a Business is to provide it with
Business everything useful to its functioning, Raw Materials,
organization Tools, Capital and Personnel. 2

2. Principles of Balance To maintain a balance between centralization and

Organization decentralization of authority.

Continuity The business should be a going concern. Again, there

shall be continuity of training and development of
staff.
Co-ordination There should be co-ordination amongst different
individuals and groups.

Division of work Duty and activity of the staff should be confined to a

single function.

Span of control would determine the supervision and

control required over the staff.

There are two kinds of structures Tall structure

Flat structure

Efficiency There shall be optimum of resources made.

Flexibility To accommodate changes, wherever necessary, there

should be flexibility in the organization structure.

Functional definition To clearly define responsibilities and authorities to

avoid duplication and over-lapping.

Leadership The management should develop leaders amongst the

staff.
Parity of authority and responsibility It should be maintained at all levels in the
organization.
Scalar principle Chain of command should be clear.

Unity of command There shall be only one superior to whom a sub-

ordinate reports.
Unity of objectives There shall be expression of purpose for which the
organization comes into existence.

3. Types of Line/Scalar {Military structure} It’s an unbroken vertical line from which the
organization authority flows from top to bottom.
structures
There are two types of organizations under this Pure line:
structure, namely; All individuals are at a given level.

Department line:
Individuals are grouped under
department-wise.
Functional Organization is divided into a number of functions. Ex: HR, Legal, Marketing, Finance
etc.
Line and Staff It’s a mix of line and functional structures.
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