The Principle of

Organization

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 The Principle of Organization

Principle
A basic idea or rule that explains or controls how something happens or works

Example:

The organization works on the principle that all members have the same rights.

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 The Principle of Organization

1. Principle of Unity of Objectives

When there is contradiction among different level of goals desired goals can’t be achieved. Therefore, unity of
objectives is necessary.

2. Principle of Specialization
When an employee takes special type of knowledge and skill in any area, it is known as specialization.

3. Principle of Coordination
Coordination can be obtained by group effort that emphasize on unity of action.

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 The Principle of Organization

4. Principle of Authority
Authority is the kind of right and power through which it guides and directs the actions of others so that the
organizational goals can be achieved.

5. Principle of Responsibility
Authority is necessary to perform the work. Only authority is not provided to the people but obligation is also
provided. So the obligation to perform the duties and task is known as responsibility.

6. Principle of Delegation
Process of transferring authority and creation of responsibility between superior and subordinates to
accomplish a certain task is called delegation of authority.
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 The Principle of Organization

7. Principle of Efficiency
When the organization fulfills the objectives with minimum cost, it is effective. Organization must always
concentrate on efficiency.

8. Principle of Unity of Command

Subordinates should receive orders from single superior at a time and all subordinates should be accountable to
that superior.

9. Principle of Span of Control

Unlimited subordinates can’t be supervised by manager, this principle thus helps to determine numerical limit
if subordinates to be supervised by a manager.

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 The Principle of Organization

10. Principle of Balance

The functional activities their establishment and other performances should be balanced properly. This is very
challenging job but efficient management must keep it.

11. Principle of Communication

Communication is the process of transformation of information from one person to another of different levels.
Effective communication is important.

12. Principle of Personal Ability

For sound organization, human resources is important. Mainly training and development programs must be
encouraged to develop the skill in the employees

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 The Principle of Organization

13. Principle of Flexibility

Organizational structure must be flexible considering the environmental dynamism.

Sometimes, dramatically change may occur in the organization and in that condition, organization should be
ready to accept the change.

14. Principle of Simplicity

The structure of organization should be simple with minimum number of levels so that its member can
understand duties and authorities.

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 Managerial
Environment

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4 Managerial Environments

▪ Internal
▪ External
▪ Cultural
▪ Ethics/Social Responsibility

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The Internal Environment

▪ Management and Culture

▫ Organizational Culture
The values, beliefs, and assumptions about appropriate behavior that members
of an organization share.
▪ Mission
▫ An Organization’s purpose or reason for being
Top management’s responsibility is to develop a mission with clear measurable
objectives

Should be relevant to all stakeholder’s interests.

Is an expression of the ends the organization strives to attain.

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The Internal Environment

▪ Resources
▫ Human Resources
▫ Physical Resources
▫ Financial Resources
▫ Informational Resources
▪ Systems Process
▫ The method use to transform inputs to outputs.
▫ Process components

1. Inputs
2. Transformation
3. Outputs
4. Feedback

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The Internal Environment

The Systems Process

Transformation
Inputs Process Outputs

Feedback

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The Internal Environment

▪ Structure
▫ The way in which resources are grouped to effectively achieve the
organization’s mission.
▫ Organizations structure resources transform inputs to outputs.
▫ All of an organization’s resources must be structured effectively to achieve its
mission.

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The External Environment

▪ Task Factors
▪ General Factors
▪ Chaos and Interactive Management

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The External Environment

▪ Task Factors
▫ Customers
Their needs decide what products businesses offer.
▫ Competition
Competitors’ business practices often have to be duplicated to maintain
customer value
▫ Suppliers
Poor quality suppliers mean poor quality products.

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The External Environment

▪ General Factors
▫ Society
Businesses are pressured by societal forces to behave in an acceptable manner.
▫ Technology
Firms must stay current on technology to stay competitive and provide
customer value.
▫ The Economy
Economic activity has both short and long-term effects on an organization’s
ability to provide customer value.
▫ Governments
Policies, rules, and regulations affect what, how much, and how business is
conducted.

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The External Environment

▪ Chaos and Interactive Management

▫ Reactive Managers
Make changes only when forced to by external factors
▫ Responsive Managers
Try to adapt to the environment by predicting and preparing for change before
they are acquired to do so.
▫ Interactive Managers
Design a desirable future and invent ways of bringing it about by trying to
prevent, not prepare for, threats and to create, not exploit, opportunities

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The Organizational Environment

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Business Ethics

▪ Ethics
▫ The standard of right and wrong that influence behavior.
▫ Government laws and regulations are designed to govern business behavior.
However, ethics go beyond legal requirements.
▫ Ethical concepts are culturally-bound.
What is considered ethical in one country may be unethical in another.

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Business Ethics

▪ Does Ethical Behavior Pay?

▫ Research shows a positive relationship between ethical behavior and leadership
effectiveness.
Having strong ethics means having integrity, and people trust others they
believe have integrity
▫ Unethical behavior creates a negative image of big business.
Mahatma Gandhi called business without morality a sin.

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Factors Affecting Ethical Behavior

Personality traits Moral

and Attitudes Development

Ethical Behavior

The Situation

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How People Justify Unethical Behavior

▪ Moral Justification
▫ The process of reinterpreting immoral behavior in terms of a higher purpose.
1. Displacement of Responsibility - Blaming someone else
2. Diffusion of Responsibility – When no person is held responsible
3. Advantageous Comparison – Comparing oneself to others who are worse
4. Disregard or Distortion of Consequences - Minimizing the harm
5. Attribution of blame – Someone else was unethical so I had to be unethical too.
6. Euphemistic Labeling – Using ‘Cosmetic’ words to make the behavior sound
acceptable.

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Simple Guide to Ethical Behavior

▪ Golden Rule
▫ ‘Do unto others as you want them do to you.’
▪ Four-way Test
1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better friendship?
4. Will it be beneficial to all concerned?

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 Lesson 2 - Members

Erenz Louie Catahan Glenn Mico Jerome Bello Renwick Brent

The Various types of Types of Organization
Organizational Structures and
Carandang Corcega
Virtual Organization The Principle of Organization
Forms of Commercial Organization
The Basic Concept of Organization Managerial Environment

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