Organisation, in its simplest sense, means a form of human association for the attainmentof common objectives. Sound organisation is quite essential for every enterprise. Organised thoughts have always been the basis of organised actions. Without sound organisation, no management can manage the various operations of the enterprise. Obviously, the better the organisation, the fuller would be the achievement of the common objectives and similarly, loose organisation of an enterprise implies a dangerous state of affairs.

The importance of organisation can be clearly understood from the statement of Kenneth C Towe. According to him , "A sound form of organisation is the answer to every business problem, that a poor organisation could run a good product into the ground and that a good organisation with a poor product could run a good product out of the market." Some of the principal advantages of organisation may be outlined as below:

Facilitates Administration

A properly designed and balanced organisation facilitates both management and operation of the enterprise. It increases management's efficiency and promptness, avoids delay and duplication of work and motivates the employee to perform their job efficiently. By proper division of labour, consistent delegation and clear job definition, the organization structure siphons off the routine duties and makes them the responsibility of lower rated positions.

Facilitates Growth and Diversification

The organisation structure is the framework within which the company grows. The organisation structure should provide for expansion and diversification of the enterprise otherwise, the enterprise will find itself in a serious administrative crisis. Thus, the organisation facilitates growth and diversification of the enterprise.

Provides for Optimum use of Technological Improvements

A sound organisation structure facilitates the optimum use of technological improvements like computer systems etc. The high cost of installation, operation and maintenance of such equipment calls for proper organisation.

Encourages Human use of Human Beings

A sound organisation provides for efficient selection, training and development of staff, job rotation and job enlargement. The organisation structure can profoundly affect the people of the company. Proper organisation facilitates the intensive use of human capital.

Stimulates Creativity

Organisation stimulates creativity. By providing well-defined areas of work and ensuring delegation of authority, organisation provides sufficient freedom to the managers and encourages their initiative, independent thinking and creativity.

Facilitates stability of the organisation

By ensuring delegation of authority, two-way communication, co-operation, effective leadership, employee morale and flexibility to adjust to changes in the conditions, a sound organisation facilitates stability of the organisation.

Reduces Employee Turnover

Organisation increases employee satisfaction, ensures better relations between the management and the workers, and thereby reduces employee turnover.

Reduces Duplication of Activities

Organisation avoids delay and duplication of activities and consequent confusion by ensuring well-defined responsibilities and authority.

Fosters Coordination

By providing the framework for holding together the various functions in an orderly pattern, organisation fosters co-ordination.

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Principles of Management and Organisational Behaviour Topics