Principles of Organisation

To function both effectively and efficiently, organisations must be designed appropriately so that the subsystems or units can work together. The classical principles  of organizing 

are based on the following two basic ideas : 

1. an individual person cannot do everything; and 
2. when the work is divided, it must also be coordinated integrated. 

These two classical ideas address two basic problems of structuring or designing organisations, namely, division of labour and specialization, and coordination. Both are highly interrelated. 

Division of Labour and Specialization 

The process of break the work into smaller components and allocating them as individual or group tasks designed to fit together in service of the organisation's purpose is called the "division of labour". 

The most famous commentary on the division of labour and its resulting specialisation is in Adam Smith's book, 'The Wealth of Nations',  written in 1776. In that book, the noted economist and philosopher described a small pin-making shop that employed ten men. 

Each job in the shop was specialized and divided into about eighteen distinct operations. One man drew at the wire, another straightened it, and a third cut it. Still others sharpened the point of the pin and put together the head. Ten persons, therefore, could make among them upward of forty-eight thousand pins a day. Each person, therefore 'might be considered as making four thousand eight hundred pins in a day. As Smith pointed out, if each man has performed all the steps needed to make a single pin, each could have produced not more than twenty pins a day. 

As workers specialise, they often increase their expertise and productivity and are able to develop work methods that are well suited to the tasks they perform. Furthermore, specialized procedures and machinery can be developed to improve productivity, and new workers can be effectively trained in a specialized segment of a job. 

Levels of Specialisation 

Managers are concerned with two levels of specialisation : (a) by job design, and (b) by departmentation. Specialisation by 'job design' in the allocation of specific work tasks to individuals and groups in the organisation. On the other hand, specialisation by 'departmentation' is creation of work units or groups by placing several jobs under the authority of a common manager. The resulting work units are called departments, which, when groups together in hierarchical levels, form the total organisational system.