Principles of Organizing

(a) Formal Organizations

An organization is formal when the activities of two or more persons are consciously coordinated towards a given objective. A more detailed definition refers to a formal organization as a planned system of co-ordinating the activities of a group of people for the achievement of some identified common goal, objectives or purpose. This is done through division of labour and functions plus a hierarchy of authority and responsibility.the formal organization is highly structuredis deliberately created with clear roles and positions and with clearly stated objectives it can clearly be represented on an organizational chart.

A formal organization comes into being when:

•    persons are able to communicate with one another
•    when they are willing to act and
•    when they share a purpose

(b) Informal Organizations

An informal organization will always appear within the formal organization. This primarily arises from interpersonal interactions. As people relate to one another they tend to form into groups with certain norms of behaviour irrespective of those defined by the formal organization. The informal organization is highly flexible, often with undefined relationships, spontaneous membership and no official leader.

(c) Principles of Formal Organization

The attainment of goals should be the reason for any formal cooperative activity. However there exists certain principles that could be used to guide the establishment of formal organizations.

1.    Unity of Objective

It states that all individuals in the organization and the departments to which they belong should contribute to the principal objectives of the organization.
So an organization structure is effective if it facilitates the contribution of individuals in the attainment of organizational objectives.

2.    Principle of Efficiency

An organization structure is efficient if it facilitates accomplishment of objectives by people with the minimum possible costs and other unsought consequences.

3.    Scalar Chain

States that authority should flow directly and clearly from the top executive downward to each successive level in the organization until the bottom. The principle implies that best results are obtained when a clear chain of command is established and followed.

4.    Adequacy of Authority

This means that each manager in the organization should be given sufficient authority to achieve the desired results.

5.    Responsibility for Results

States that even if a superior delegates adequate authority to a subordinate, the superior is still responsible for the results if the goal is not attained.

6.    Accountability

The responsibility for results principle does not however relieve subordinate managers of their responsibility to perform. It holds that when managers accept a plan from their superiors, they are duty bound to carry it out i.e. they are accountable to their superiors for the results.

7.    Division of Work

States that work should be divided and grouped in a logical manner in order to eliminate duplication of effort and other forms of waste.

8.    Unity of Command

Ideally the principle states that each individual in an organization should report to only one superior. However this principle is often violated. In organizations there are many people who are responsible to two or more persons. Failure to adhere to the principle of unity of command may result into confusion because the individual is not sure of the superior to whom he/she reports; or she/he fears that if allegiance is shown, to manager A, probably manager B will be offended and he can take punitive measures. Inefficiency can arise if the subordinate serves both A and B then some of his/her work falls below perceived standards.

The principles should not be viewed by managers as absolute measures but rather as guidelines that must be applied in the light of the circumstances prevailing in the organizations. It is possible to find that some of the principles are completely inapplicable to some of the local firms in Kenya especially due to the nature of ownership and size. For example in a small family concern where different members of the family run the firm together, the unity of command principle may prove difficult to apply.