Introduction to Functional Areas of Management Unit 2

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Questions and Answers

What is the primary goal of organising in a business?

To select a plan or strategy

To combine people with raw materials only

To allocate only financial resources

To achieve the organisation's goals (correct)

What is the definition of organisational structure?

A mechanism to implement a plan or strategy

A plan or strategy to achieve organisational goals

A framework or architecture of the entire enterprise (correct)

A group of people working together

What is a key requirement for organising?

Employing only skilled workers

Allocating resources only to top management

Co-ordination between departments only

Communication, co-operation, and co-ordination between people, departments, and sections (correct)

What must management consider when matching an organisational structure to a company's needs?

The particular needs of the company Signup and view all the answers

What is an important aspect of organising?

Grouping people into teams or departments Signup and view all the answers

What must be determined when organising?

What activities will be carried out, what resources will be employed, and who will perform the activities Signup and view all the answers

What does an organisational structure outline?

The reporting system of the organisation and the framework of the entire enterprise Signup and view all the answers

What is the outcome of effective organising?

Achievement of organisational goals Signup and view all the answers

What is the main purpose of organisational structure?

To separate and integrate tasks Signup and view all the answers

What happens when there is no clear designation of activities and responsibilities in an organisation?

Leadership and control are not possible Signup and view all the answers

What is the benefit of grouping related tasks together in specialised departments?

Specialisation and efficient allocation of resources Signup and view all the answers

What is job design?

The determination of an employee's responsibilities in the organisation Signup and view all the answers

Who described a pin factory in his famous work 'The Wealth of Nations'?

Adam Smith Signup and view all the answers

In Phase 1 of the evolution of specialisation, what is the primary role of the inventor?

Designer, seller, and accountant Signup and view all the answers

What is the primary role of the bookkeeper in Phase 2 of the evolution of specialisation?

Part-time administration and accounting Signup and view all the answers

What is the characteristic of Phase 4 of the evolution of specialisation?

Specialists running departments with various people reporting to them Signup and view all the answers

What is the primary benefit of organising in an organisation?

Productive deployment and utilisation of resources Signup and view all the answers

What is one of the advantages of specialisation?

Reduced training Signup and view all the answers

What is the main purpose of the Unity of Command Principle?

To establish reporting lines among departments and positions Signup and view all the answers

What is the Scalar Principle?

A clear and unbroken chain of command Signup and view all the answers

What is the Span of Control Principle?

The number of subordinates reporting directly to a manager Signup and view all the answers

What is the purpose of establishing a Span of Control?

To limit the number of subordinates per manager Signup and view all the answers

Who attempted to quantify the problems with the Span of Control?

Graicunas Signup and view all the answers

What is a flat organisational structure?

Few levels of management Signup and view all the answers

What is the effect of a flat organisational structure?

Fewer management layers Signup and view all the answers

Why do successful organisations tend to have flat structures?

Because they are more effective Signup and view all the answers

What is the result of having too many management layers?

Time and money waste Signup and view all the answers

What is the primary consequence of broadening the span of control?

Increased cost per unit Signup and view all the answers

What is a key factor in determining the best span of management?

The complexity of the subordinate's job Signup and view all the answers

What type of authority belongs to managers who have the right to direct and control the activities of subordinates?

Line authority Signup and view all the answers

What is the purpose of clear operating standards and rules in an organisation?

To allow for a broader span of control Signup and view all the answers

What is the term for the flow of authority downwards through managers to their subordinates?

Chain of command Signup and view all the answers

What type of relationships are designated by dotted lines on an organisational chart?

Staff relationships Signup and view all the answers

What is the result of a manager having a narrower span of control?

Higher cost per unit Signup and view all the answers

What is the purpose of staff authority in an organisation?

To advise, recommend, and offer technical expertise Signup and view all the answers

Study Notes

Introduction to Organising

Organising involves developing a framework or organisational structure to indicate how people and resources should be deployed to achieve goals.
Management must match the organisational structure to accommodate the particular needs of the company.

The Concept of Organisation Structure and Organising

Organising involves combining people, capital, and raw materials to achieve the organisation's goals.
Key aspects of organising:
- Mechanisms to implement the plan or strategy
- Activities and arrangements to determine what activities will be carried out
- Resources and who will perform the various activities
- Communication, cooperation, and coordination between people, departments, and sections
Organisational structure:
- Indicates the work to be done and the connections between positions and tasks
- Lays out the reporting system and framework of the entire enterprise
- Utilises managerial techniques such as job design, departmentalisation, establishing chains of command, and assigning authority and coordination mechanisms

The Importance of Organising

Organising is an integral part of the management process.
Without organising, there cannot be successful implementation of plans due to the absence of a systematic allocation of resources.
Organising entails:
- Detailed analysis of work to be done and resources to be used
- Systematising methods or procedures
- Dividing the total workload into activities that can be performed by an individual or group
- Promoting productive deployment and utilisation of resources
- Grouping related tasks together rationally in specialised departments

The Evolution of Specialisation as Businesses Grow

Job design involves determining an employee's responsibilities in the organisation.
Concept of specialisation:
- Dates back to Adam Smith's "The Wealth of Nations"
- Involves dividing work into smaller, manageable tasks to increase efficiency and productivity
Phases of the evolution of specialisation as businesses grow:
- Phase 1: Inventor-designer, single entrepreneur
- Phase 2: Adding a bookkeeper to relieve administrative burden
- Phase 3: Employing specialists to run departments (Human Resources, Finance, Marketing, and Production)
- Phase 4: Expansion with multiple specialists and departments
Reasons for specialisation:
- Individual ability: Concentrating on one task to acquire skill and efficiency
- Reduced transfer time: Minimising time lost when switching between tasks
- Specialised equipment: Using equipment designed for a particular task to increase efficiency
- Reduced training: Reducing the cost of training by focusing on a specific task
- Coordination: Improving communication and cooperation between tasks and departments

The Unity of Command Principle

Establishes reporting lines among departments and positions in departments
States that an employee should have only one superior to whom they are directly responsible
Minimises confusion and conflict, ensuring clear direction and decision-making

The Scalar Principle

Establishes a clear and unbroken chain of command linking every person in the organisation to someone at a higher level
Helps employees know who to report to and who is responsible for decision-making
Often incorporated into the chain of command, with the idea that "the buck stops here" – someone is ultimately responsible for every decision

Span of Control Principle

Also known as span of management
Establishes the number of subordinates who report directly to a manager
Limited to ensure effective supervision and decision-making
Factors determining the best span of management:
- Competence of the manager and employees
- Similarity or dissimilarity of tasks being supervised
- Incidence of new problems in the manager's department
- Extent of clear operating standards and rules
- Complexity of the subordinate's job

Line and Staff Structures

Line authority: Managers who have the right to direct and control the activities of subordinates
Staff authority: Those who advise, recommend, research, and offer technical expertise
Line and staff relationships:
- Line managers have authority over subordinates and report to higher-level managers
- Staff specialists provide support and advice to line managers and report to higher-level managers
- Conflicts can arise between line and staff managers due to differences in authority and responsibility

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Description

Learn about the concepts of organising and organisation structure in management. Understand how to develop a framework to achieve company goals and match the organisational structure to the company's needs.