BCom Notes Part II Management Importance of Organization

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If you want to view other notes of BCom Part II. Click Here. 

Importance of Organization

What is the importance of Organization?

Organization is needed in order to avert the havoc of disorganization. It may be briefly illustrated as follows: A short sentence is disorganized like this. In this form it is nonsense. If we reorganize it substantially, it will look like this: Organizing gets results Now it is workable, but difficult. By a slight change, it reads: Organizing gets results. Hence organization become important for management by results – for accomplishing our goals.

A sound organization contributes greatly to continuity, growth and development of an enterprise in the following ways:

1. Facilities Administration

A properly designed organization facilitates both management and operation of the enterprise by helping in its smooth functioning through various factors, such as well-defined areas of work for employees; effective delegation and decentralization of authority; clear mutual relationships; good communication network; coordination of the activities of individuals, groups and units, adequate and control.

2. Facilitates growth, expansion and diversification

A sound organization structure is flexible enough to accommodate future changes with regard to growth expansion and diversification of enterprise’s activities. Besides, certain organization practices are developed which lead the business enterprise to expand and diversify.

3. Permits Optimum Utilization of Resources

Sound organization permits optimum use of technological improvements and human resources and efforts (right persons being placed in right positions on the basis of their skills, knowledge and experience). It develops competent people through the facility of appropriate effective training and promotion opportunities.

4. Stimulates Creativity

Specialization provides individuals with well-defined duties, clear lines of authority and clearly defined responsibilities. Delegation and decentralization makes it possible for superiors to assign routine and repetitive jobs to their subordinates and to concentrate themselves on important issues in order to better exploit their own potential and encourage the creative thinking and innovative skills of the people.