Limitations of Organization ChartOrganization chart suffers from the following limitation:
1. Only a blue-print of formal relationships :Organization structure changes to adapt to the changing environment. In such a situation, organization chart acts as only a ‘blue print ‘ of the formal authority- responsibility relationships unless it can quickly change according to the changing environment.
2. Only a broad view of organization structure:The organization chart depicts only a broad framework of the organization’s working. Division of jobs into specific activities is not shown in these charts.
3. Existence of informal relationships:The organization chart shows only formal relationships amongst people in the organization. Informal relationships develop simultaneously along with formal reactions. Informal structures are based on social interactions and norms. Formal and informal organizations are complementary to each other but all kinds of informal relationship cannot be drawn on the organization charts. Informal relationships can be partially shown on the organization chart as follows:
4. Misinterpretation of charts:Sometimes, people do not understand these charts the way they are intended to be understood. These defeats the purpose of ht charts.
It was suggested by Robert Townsend that “organization charts are demoralizing because they reinforce the idea that all authority and ability rest at the top of the organization. Proper training of organizational members can help the top executives overcome this problem.”
5. Extent of authority:While these charts depict the nature of authority exercised by managers at different levels, they do not show the extent to which this authority can be exercised. It is difficult to overcome this limitation as the extent to which this authority can be exercised cannot be measured.
6. Dynamic environment:Organization charts show formal relationships amongst people that exist at the time these charts are prepared. Changes in reporting relationships that arise due to changing environment (internal and external) are not shown in the charts. These charts, thus, may not show exact relationships amongst people of the organization.
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Principles of Organization ChartPreparing an organization chart is based on the following principles:
1. Clear definition of jobs:The charts are prepared keeping in view overall jobs of the organization. Every job has a suitable position on the organization chart.
2. Authority-responsibility:The responsibility for each job along with commensurate authority at different levels must be clearly shown on the organization charts.
3. End result areas:These charts represent the activities (jobs) performed at different managerial positions and the end-results (or- the objectives) expected of each position.
4. Flexibility:In the changing environment, these charts must be flexible to report the changing relationships.
5. Exhibition of informal relationships:Though all informal relationships cannot be exhibited on theses charts, as it would make these charts complex to be understood, managers must recognize the need for reporting as many informal relations helps on them as possible.
6. Control:By dividing the overall task into smaller units, these charts provide yardstick of performance against which actual performance can be measured and suitable measures of control can be adopted.
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