Management and Supervision

Food Production Management 1Module 3

Section C – Organising

All of the information has been adapted from Cronje, GJ. Et al. 2007. Introduction to Business Management. 6th Edition. Cape Town: Oxford University Press.

Admin

Purpose of this Chapter• Once management has devised a plan to achieve

the organisation's goals, it must deploy resources such as people, equipment, money and raw materials.

• I addition, it must – design jobs, – assign tasks, duties and responsibilities to

people, – coordinate activities, – and establish lines of reporting and

communication.

Learning Outcomes• The content of this section will enable learners to:

– Explain the concepts of organising and organisational structure.

– Describe the importance of organising.– Explain how an organisation evolves from a

single-entrepreneur organisation to a large one.– Present viewpoints regarding the factors that

influence organising.

Introduction to Organising• Planning, the first fundamental element of the

management process, is defined as the setting of goals and the development of a plan of action to achieve the goals as productively as possible.

• Planning, however, is only one component of the management process, and it alone cannot guarantee that the goals of the business will be accomplished.

• Once the plan has been selected, management must combine human and other resources, such as money, machines, raw materials and info or knowledge, in the best way to achieve the organisations goals.

Introduction to Organising• The most important of these is the task of grouping

people into teams or departments to perform the activities that will convert the plan into accomplished goals.

• The structured grouping and combining of people and other resources, and coordinating them to achieve organisational goals, constitute the second fundamental element of management, Organising.

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

Introduction to Organising• Arrangements have to be made to determine what

activities will be carried out, what resources will be employed, and who will perform them.

• This involves: – the distribution of tasks among employees, – the allocation of resources to persons and the

departments, – and giving the necessary authority to certain

people to ensure that the tasks are in fact carried out.

Introduction to Organising• Above all, there must be communication,

cooperation and coordination between the people and the departments or sections performing tasks.

• The business's organisational structure therefore indicates the work to be done and the connections between various positions and tasks.

• Organising, or the design of a framework of how the work must be done to accomplish the goals, is an indispensable step in the management of any business, whether existing or new.

Introduction to Organising• In a newly established business, decisions have to

be taken regarding equipment, suppliers, processes to be followed, and people who must perform the tasks.

• In addition, the structure indicating the distribution of tasks among departments and individuals has to be drawn up, indicating the responsibilities and lines of authority and communication.

• In an existing business, organising has to be constantly reviewed and adapted to accommodate new products and new processes or any organisational changes which affect the activities.

The Importance of Organising• Organising, is important for the following reasons:

– It entails a detailed analysis of work to be done and resources to be used to accomplish the aims of the business.

– It is through organising that tasks and resources, and methods or procedures, can be systematised.

– Everyone should know their duties, authority and responsibility, the procedures they must follow or the methods they have to adopt, and the resources they can use.

– Proper organising ensures that the joint and coordinated efforts of management have much greater and more effective result that the sum of individual efforts.

The Importance of Organising• Organising, is important for the following reasons:

– Organising divides the total workload into activities that can comfortably be performed by an individual or a group.

– Tasks are allocated to the abilities or qualifications of individuals, thus ensuring that nobody in the business has either too much or too little to do.

– The ultimate results is higher productivity. – Organising promotes the productive deployment

and utilisation of resources.

The Importance of Organising• Organising, is important for the following reasons:

– The related activities and tasks of individuals are grouped together rationally in specialised departments such as marketing, personnel or finance departments, in which experts in their particular filed carry out their given duties.

– The development of an organisational structure results in a mechanism that coordinates the activities of the whole business into complete, uniform, harmonious units.

The Fundamentals of Organising• Building an organisational structure revolves around

the building blocks or the fundamentals of organising:– Designing jobs for employees.– Grouping employees into teams or departments

based on commonalities.– Assigning authority.– Establishing a command structure.– Establishing coordinated mechanisms.

Designing Jobs• Job design is the determination of an employee's

responsibilities in the organisation and the compilation of a job specification that explains what he or she must do and what performance standards are expected.

• The point of departure of designing jobs for employees is to determine the level of specialisation or the degree to which the overall task of the organisation is broken down into smaller, more specialised tasks.

• 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.

• Best example = Assembly Line

The evolution of specialisationPHASE 1: The Single Entrepreneur

Production, marketing, bookeeping, product development (owner-manager)

Production, marketing, product development (owner-manager)

PHASE 2: The Small Business

Bookeeper(Part Time)

Owner-Manager

PHASE 3: The Growing Business

Owner-Manager Owner-ManagerOwner-Manager

Owner-Manager

Production

PHASE 4: The Large Business

Marketing Finance HR

Designing Jobs• The growing business is continually compelled to

apply specialisation or the division of labour. The other reasons that justify specialisation:– Individual ability– Reduced transfer time– Specialised equipment– Reduced training costs.

• The main purpose of specialisation is to increase productivity.

• Managers should be sensitive to overspecialisation and also consider such approaches as job enrichment, job enlargement, and job rotation to counter the negative effects of specialisation.

Departmentalisation • When a business has reached a certain size (phase

4), it becomes impossible for the owner manager to supervise all the employees.

• And so it becomes necessary to create new managerial positions according to departments based on a logical grouping, in manageable sizes, of various activities that belong together.

• The various departments created constitute the organisational structure of the business as they appear on the organisational chart.

• Depending on such factors as the size and kind of business, and the nature of its activities, various organisational structures may be developed.

Departmentalisation

• It is the most basic type of organisational structure. • Activities belonging to each management function are

grouped together. • Activities such as advertising, market research, and

sales, for example, belong together under the marketing function, while those concerned with the production of goods are grouped under operations.

Managing Director

Production Marketing Finance HR

The Functional Organisational Structure

Departmentalisation

All activities concerned with a product grouped together in product sections, where all the specialists associated with product are together.

Logical structure for a large business providing a wide range of products or services.

Advantages: decisions made quickly, performance easily measured. Disadvantages: higher costs, lose bigger picture.

Managing Director

ManagerIndustrial Products

Product Departmentalisation

ManagerConsumer Goods

Marketing Manager

HRManager

FinancialManager

ProductionManager

Marketing Manager

HRManager

FinancialManager

ProductionManager

Departmentalisation

Business that manufactures and sells goods in diff geographical regions. Example: SAB Miller.

This structure gives autonomy to area managers, which is necessary to facilitate decentralised decision making and adjustments to local business environments.

Managing Director

Location Departmentalisation

ManagerWestern Cape

Marketing Manager

HRManager

FinancialManager

ProductionManager

ManagerEastern Cape

ManagerGauteng

ManagerKwaZulu-Natal

Departmentalisation

Used when business concentrates on some special segment of the market.

Grouped not according to knowledge, skills, or product, but on the customer's needs. Each can be considered as a separate business unit. Each is accountable for its own profits and losses. But, it is still subject to the goals and strategies set by the company's top management.

Managing Director

Customer Departmentalisation

ManagerElectronic Equipment

for the TV Industry

ManagerElectronic Equipment for the SA Air Force

Departmentalisation The Matrix Organisation

HRManager

FinancialManager

OperationsManager

ManagerElectronic Equipment for the SA Air Force

FinancialManager

OperationsManager

PersonnelManager

Project Manager: Project Impala

Project Manager: Project Zebra

Project Manager: Project Bushbuck

FinancialManager

OperationsManager

PersonnelManager

FinancialManager

OperationsManager

PersonnelManager

Authority Relations• The assignment of tasks to sections and members of

staff entails the assignment of responsibility and authority to each post in the org structure.

• This also involves organisational relations: stipulating the persons from whom subordinates receive instruction, to whom they report, and to whom and for what they are responsible.

• Responsibility is a particular commitment of managers to carry out tasks they have received.

• Authority is the right to command or give orders. It is power that has been legitimised by the organisation. Includes the right to take action to compel performance and punish negligence.

Reporting Relationships• Who reports to whom.• Clear and precise reporting lines are important. =

Chain of command. • Span of management = Number of subordinates who

report directly to a manager.

Narrow or High Structure: Few subordinates per manager

Broad or Flat StructureMany Subordinates per manager

Coordination• The division of work into smaller jobs raises the problem

of cooperation. • The work from different departments must be

coordinated into an integrated whole. • Departments are interdependent: They depend on each

other for resources in order to work. • Without coordination, individuals and departments lose

sight of the organisations' primary goals. • Timing is very important to coordination. It enables

smaller tasks to be scheduled to integrate well. • Management must endeavour to develop congruence, or

harmony of goals through organising. • Tools: Org Chart, Budget, Committee, P&P, Info System.

Organisation Design: Influencing Factors• Plans can only be successfully implemented if the

organisational structure makes it possible. – The environment in which the business operates– The relationship between strategy and structure– The size of the business.– Staff employed by the business.– The organisational culture. (personality of the business)

Organisation AssignmentGroup Work• Complete the group assignment on page 10 of the

notes in class.

Individual Assignment• Complete group work assignment 2.6 on page 10 on

your own and post up to the blog.