Importance, Need and Significance of Organization Management - Chapter 1 - Part 4

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Importance / Need / Significance of Organization/Management

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

1. It Facilitated Administration and management:  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. It Help in the Growth of Enterprise:  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. It Ensures Optimum Use of Human 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. It 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.

5. Eliminates Overlapping and Duplication or work:  Over lapping and duplication of work exists when the work distribution is not clearly identified and the work is performed in a haphazard and disorganized way. Since a good organization demands that the duties be clearly assigned amongst workers, such overlapping and duplication is totally eliminated.


6. Prevents Corruption: Usually corruption exists in those enterprises which lack sound organization. Sound organization prevents corruption by raising the morale of employees. They are motivated to work with greater efficiency, honesty and devotion.

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