Principles of Management

•Organising•Organisation Chart

•Span of Management•Departmentation

•Delegation•Decentralisation

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Organising“It is defining and grouping the activities of

the enterprise and establishing authority, responsibility and relationships among

them.”

Steps in Organising Process1. Identification of tasks involved2. Differentiation3. Departmentation4. Delegation and decentralisation5. Monitoring the effectiveness of the

organisation and making adjustments to maintain or increase effectiveness

Organisation Chart“It is a diagramatic representation of all the

positions in an organisation and their formal relationships to one another. It

illustrates an organisation’s overall shape and the levels of management in a

comprehensible manner.”

Span of Management“It refers to the number of subordinates who

report directly to a manager.”

The ideal number of subordinates for all superior positions to be four and at the lower level of organisation the number may be eight or twelve.

Relationships on Span of Control

1. Direct one-to-one relationships2. Direct group relationships3. Cross relationships

Factors influencing Span of Management

1. Managers’ personality2. Managers’ capability3. Subordinates capabilities4. Fatigue tolerance5. Activity level6. Non-supervisory activities7. Supervision of routine and non-routine

activities8. Complexity of work9. Availability of sophisticated facilities10. location

Organisation – structure : Departmentation

“It is the process of dividing the organisation into manageable subunits. The subunits

are often referred to as departments, divisions, or sections. By whatever name the units are called, the process is known

as departmentation.”

Basis of Departmentation

1. Functional departmentation2. Product departmentation3. Market departmentation4. Customer departmentation5. Project organisation6. Matrix structure

Delegation“It is the process by which authority is

granted to a subordinate by his superior.”

Authority: is the right to command

Delegation Process1. Entrustment of duties or assignment of

responsibilities2. Granting of authority3. Creation of accountability

Decentralisation of AuthorityIn delegation authority is transferred on one-

to-one basis from the superior to subordinate, whereas decentralisation of authority is broader in scope and involves the transfer of authority in the organisation

context from top to the lower rungs of management in the hierarchy.

Factors influencing Decentralisation

1. Philosophy of top management2. Attitude of subordinate managers3. The cost and impact of the decisions4. Company size and growth5. Organisation’s environment