chapter 8 - bus mang

organisation

organisation

• Organising means that management must develop mechanisms in order to implement the strategy or plan

• Organising can be defined as the process of delegating and co-ordinating tasks, activities and resources in order to achieve organisational objectives

importance of organising

• Entails a detailed analysis of work to be done and resources to be used to accomplish the aims of the business  

• Divides the total workload into activities that can be comfortably performed by and individual or a group 

• Promotes the productive deployment and utilisation of resources 

• Related activities and tasks of individuals are grouped together

• The development of an organisational structure results in a mechanism that co-ordinates the activities of the whole business into complete, uniform, harmonious units

Five fundamentals of organising

1. Designing jobs

2. Grouping jobs (departmentalisation)

3. Establishing reporting relationships

4. Establishing authority relationships

5. Co-ordinating activities

job design

Job design is the determination of an employee’s work-related responsibilities

job specialisation

Job specialisation is normally an extension of organisational growth

job rotation

 Job rotation involves systematically moving employees from one job to another

Job enlargement

Job enlargement was developed to increase the total number of tasks that a worker performs

job enrichment

Job enrichment involves increasing both the number of tasks the worker does and the control the worker has over the job

job specification

Job specification explains what must be done and sets the expected performance standards

specilisation

Specialisation is the way in which a task is broken up into smaller units to take advantage of specialised knowledge or skills to improve productivity

4 benefits and limitations of specialisation

Benefits of Specialisation	Limitations of Specialisation
Workers that perform specialised tasks become experts in performing each task for which they are responsible. Therefore, the biggest benefit of specialisation is that it reduces the risk of error as the specialist is less likely to commit a mistake in doing a particular task than a non-specialist person doing the same task.	Workers who perform highly specialised tasks may become demotivated and feel they need more challenging tasks to perform. This may lead to absenteeism, low morale, conflict and a lower quality of work.
If workers perform several different tasks, some time is lost as they stop doing a particular task and move to the next one. Specialisation may lead to a decrease in the transfer time between tasks.	In some cases, it may happen that the time spent on moving work-in-progress from worker to worker is greater than the time needed for the same worker to change from one job to the next. In such a case, the benefits of specialisation are not realised.
The more specialised a job is, the easier it is to develop specialised equipment to assist with that job.	Specialised equipment is more expensive, and the training costs to be proficient in using this equipment can also be very high.
When a worker who performs a highly specialised job is absent or resigns, the manager can train somebody new at relatively low cost.	Specialised workers can be hard to replace, and the replacement costs can also be relatively high.

6 departmentalisation

Functional Departmentalisation

• Activities belonging to each management function are grouped together 

Product Departmentalisation

• Departments are designed so that all activities concerned with making a product are grouped together

Location Departmentalisation

• Logical structure for a business that manufactures and sells its products in different geographical areas

Customer Departmentalisation 

• Used when a business concentrates on a special segment of the market 

The matrix organisational structure

The virtual organisational structure

• The virtual organisational structure is a boundaryless organisation, consisting of individuals working out of physically dispersed workplaces, or even individuals working from mobile devices and not tied to any particular workspace

steps of reporting relatinships

Step 1 

• Determine who reports to whom

• Chain of command:

• The unity of command – report to one supervisor

• The scalar principle – clear unbroken line of authority

Step 2

• Span of management( span of control) – how many people will report to a manager?

establishing authority relationships

• Responsibility is the duty to perform a task or activity assigned 

• Authority is the right to command or to give orders 

3 characteristics of formal authority

1. Formal authority is given to people based on their position in the business hierarchy 

2. It is accepted by the employees 

3. Formal authority flows down the vertical hierarchy of an organisation

line authority

Line authority is authority is delegated down through the line of command

staff authority

• Indirect authority 

• Accountability is the alignment factor of authority and responsibility

centralisation

Centralisation is the process of systematically retaining power and authority in higher level managers

decentralisation

Decentralisation is the process of systematically delegating power throughout the organisation to middle and lower level management

coordinating activities

• Main reason for coordination is that departments are interdependent 

• Coordination is the synthesis of separate parts into a unity and is the binding factor of the managerial process