An organizational structure should be basically simple. The concept of simplicity implies that various organizational relations should be kept minimum possible.
Flexibility
An organization structure should be flexible enough so that changes can be incorporated whenever needs arise. The structure is design do not only for a time period but a distant future also. As such continuity must be maintained in the organizational structure over the period of time.
Whatever the form of structure is adopted, there should be clear lines of authority running from top to bottom or in horizontal directions.
Application of ultimate responsibility
The concept of ultimate responsibility suggests that although a superior manager assigns some of the work to his subordinates, he is ultimately responsible for performance of total work.
Proper delegation of authority
The concept of ultimate responsibility can work only when there is proper delegation of authority at various levels of the organization. Delegation of authority refers to authorizing a manager to make certain decisions.
Minimum possible managerial levels
As far as possible, there should be minimum managerial levels. Greater the number of managerial levels, longer is the line of communication in the chain of command and the communication has to travel along the line creating problems of delay and distortion.
Principles of unity of direction and command
Principles of unity of direction and unity of command should be followed that is an employee should receive orders from only one superior.
Proper emphasis on staff
Line functions should be separated from staff functions and adequate emphasis should be placed on important staff activities.
In corporate form of organization, it is imperative to provide some means by which shareholder and members of the board of directors participate in management process. Normally shareholders are indifferent so far as day – to – day management affairs of the company are concerned.
A group is a set of two or more individuals who are jointly characterized by a network of relevant communications, a shared sense of collective identity and one or more shared dispositions with associated normative strength.
A group may de defined as a social phenomenon in which two or more persons decide to interact with one another, share common ideology and perceive themselves as a group.
