The line agency in its traditional form exists as departments. Departments are the fundamental unit of administrative organizations and carries out all the functions. There are different shortcoming and problems associated with this structure as well but before we dwell into that, we shall make an attempt to understand the basic principles on which the organization of departments is based.

The organization of departments is based on four principles:

• The Financial Principle: When the administrative business if organized on the basis of the nature of function or the purpose of the work, then it is known as the financial principle. A simple example to elaborate that would be the creation of a Department of Commerce to regulate the trade and commerce within the country.

• The Process Principle: When the organization of business is done on the basis of the process of the nature of nature of activity. This principle is also called the Professional Principle, basically the business transactions are carried out based on the target profession, like the Law Department or the Health Department for legal and medical activities of the government.

• Clientele or Commodity Principle: In this case the business of organization is based on the set of people for whom its services are meant for, or its clients. For e.g. the Department of Scheduled Casts and Tribes.

• Geographical Principle: As the name suggests, it has the geographical area as its basis to determine the organization of business.

The above mentioned principles are not the sole criteria for the basis of organizations, aspects like traditions and history also play a role. Generally, the governments look at a combination of one or more principles and considerations to base the departments on. The most relevant however has been the functional principle or the Scientific Principle of Organization. With increase in specialization of functions, it only makes sense to have organizations based on them. Let us read about some of the features of this principle:

• Specialization of functions and division of labor are two important aspects.

• Economical and efficient administration with speedy decision making

• Expedient in approach

• Concentration of the responsibility and power in the hands of single individual usually the head thus ensuring appropriate accountability

The departments are further divided into divisions which is the vertical division based on the broader functions to be performed by the department. The horizontal division is done for other specific activities to be carried out under that division.

The horizontal method of dividing the work within the organization is preferred in comparison to the vertical segregation. The arguments given for the same are:

• It helps achieve specialization and ensures the prevention of duplicity of work

• It makes delegation easy and therefore eases out the work load of the Head of the Department

• It also helps the HOD focus on supervision and control rather than bothering about minor details thus saving his time and effort

The departments are generally divided into two divisions (there may be more), the division of Primary Activities and the Division of Secondary or Institutional Activities about which we read earlier.

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