1. Facilitates Administration

An efficient and sound organization make easy for the management to relate the flow of resource continually to the overall objectives. A sound organization helps in providing appropriate platform where management can performs the functions of planning, direction, coordination, motivation and control.

2. Facilitates Growth and Diversification

A sound organization helps in the growth and diversification of activities. The growth is facilitated by clear division of work, proper delegation of authority etc. In short, it helps in the organizational elaboration. In case of reasonable expansion of organization, the functional types get replaced by more flexible decentralised organisation

3. Permits optimum use of Resources

The optimum use of technical and human resources gets facilitated in sound and efficient organization. The organization can have the facilities of latest technological developments and improvements. It also facilitates optimum use of human resources through specialization. The people in the organization get appropriately trained and get promotion opportunities. A sound organization provides all the desired potential and strength to the company to meet the future challenges.

4. Stimulate Creativity

The specialization in the organization helps individuals in getting well defined duties, clear lines of authority and responsibility. It encourages the creativity of the people. The sound organizational structure enables mangers to concentrate on important issues where their talent can be exploited to the maximum.

5. Encourages Humanistic Approach

A sound organization helps in adopting efficient methods of selection, training, remuneration and promotion for employees. It makes people work in a team and not like machines or robots. Organization helps in providing factors like job rotation, job enlargement and enrichment to its employees. A sound organization provides higher job satisfaction to its employees through proper delegation and decentralization, favorable working environment and democratic and participative leadership. It enhances the mode of communication and interaction among different levels of the management.