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TOPIC 4 ORGANIZING THE BUSINESS ENTERPRISE, NURIZATUL AMISHA BINTI…
TOPIC 4
ORGANIZING THE BUSINESS ENTERPRISE
ORGANIZATIONAL
STRUCTURE
The specification of the jobs to be done within an organization.
It shows the way in which those jobs relate to one another.
ORGANIZATIONAL
CHART
Clarify structure and to show employees where they fit into a firm’s operations.
Chain of Comand: It is the reporting relationships within a company.
DETERMINANTS OF
ORGANIZATIONAL
STRUCTURE
Mission
Strategy
Size
Internal Environment
External Environment
BUILDING BLOCKS OF
ORGANIZATIONAL
STRUCTURE
1. SPECIALIZATION
Determining who will do what.
Job Specialization
- The process of identifying the specific jobs that need to be done and designating the people who will perform them.
ADVANTAGES
:
Jobs can be learned.
Jobs can be filled easily.
Jobs can be performed more efficiently.
DISADVANTAGES
:
Lower level jobs can become too narrowly defined and overspecialized.
Employees can become less satisfied with their jobs.
Employees may lose sight if their roles in the organization.
2. DEPARTMENTALIZATION
Process of grouping jobs into logical units.
Allows the firm to treat each department as a profit center.
Profit Center - A separate company unit responsible for its own costs and profits.
BENEFITS:
Control and coordination are narrowed and made easier.
Top managers can see more easily how various units are performing.
1. FUNCTIONAL DEPARTMENTALIZATION.
Dividing an organization according to groups' functions or activities.
2. PRODUCT DEPARTMENTALIZATION.
Dividing an organization according to specific products or services being created.
3. PROCESS DEPARTMENTALIZATION.
Dividing an organization according to production processes used to create a good or service.
4. CUSTOMER DEPARTMENALIZATION.
Dividing and organization to offer products and meet needs for identifiable customer groups.
5. GEOGRAPHIC DEPARTMENTALIZATION.
Dividing an organization according to the areas of the country or the world served by a business.
6. MULTIPLE FORMS OF DEPARTMENTALIZATION.
Different forms of departmentalization have different types of different advantages, as firms grow in size they tend to adopt different types of departmentalization for various levels.
3. ESTABLISHMENT OF A DECISION-MAKING HIERARCHY
Deciding who will be empowered to make which decisions and who will have authority over others.
1. CENTRALIZED ORGANIZATIONS.
Organization in which most decision-making authority is held by upper-level management.
Most commonly found in companies that face relatively stable and predictable environments.
2. DECENTRALIZED ORGANIZATIONS
.
Organization in which a great deal of decision-making authority is delegated to levels of management at points below the top.
3. TALL AND FLAT ORGANIZATIONS.
Tall organizations
: characteristic of centralized companied with multiple layers of management.
Flat organizations
: characteristic of decentralized companies with relatively few layers of management.
SPAN OF CONTROL
Span of Control
: Number of people supervised by one manager.
The distribution of authority in an organization also affects the number of people who work for any individual manager.
In a flat organization - wide span control
In a tall organization - narrow span of control
Factor that influence how wide or narrow the span of control:
Employers abilities.
Supervisor's managerial skills.
Similarity and simplicity of tasks and the extent to which they are related.
If lower-level managers are given more decision-making authority - their supervisors will have less work to do (allowing wider span of control)
When employees perform either the same simple tasks or a group of interrelated tasks - a wide span of control is possible and often desirable.
When jobs are more diversified or prone to change - a narrow span of control is preferable.
THE DELEGATION
PROCESS
Delegation
is the process through which a manager allocates work to subordinates.
The Delegation Process:
Assigning responsibility
the duty to perform an assigned task.
Granting authority
the power to make the decisions necessary to complete the task.
Creating accountability
the obligation employees have for the successful completion of the task.
FORMS OF AUTHORITY
1. LINE AUTHORITY
Organizational structure in which authority flows in a direct chain of command from the top of company to the bottom.
Most companies rely heavily on line departments linked directly to the production and sales of specific products.
2. STAFF AUTHORITY
Authority based on expertise that usually involves counseling and advising line managers.
Staff members help line departments make decisions but do not usually have the authority to make final decisions.
3. COMMITTEE AND TEAM AUTHORITY
Authority granted to committees or teams involved in a firm's daily operations.
NURIZATUL AMISHA BINTI SHAIFUL RIZAL
BA2322C
2021155909