Document 8.pdf - Organizational Structure & Management

Planning Decision-Making Process The sources describe the decision-making process as a series of steps that managers take to solve problems and make choices. The first step is identifying and diagnosing the problem, which involves recognizing that there is a discrepancy between the current state of...

Planning Decision-Making Process The sources describe the decision-making process as a series of steps that managers take to solve problems and make choices. The first step is identifying and diagnosing the problem, which involves recognizing that there is a discrepancy between the current state of affairs and a desired state of affairs and then determining the true cause of the problem. The second step is identifying alternatives, which involves coming up with possible solutions to the problem. The third step is evaluating alternatives, which involves weighing the pros and cons of each alternative and choosing the best one. The fourth step is choosing an alternative. The fifth step is implementation, which involves putting the decision into action. The final step is evaluation, which involves assessing the results of the decision and making any necessary adjustments. Organisation Design Organisational structure is the pattern of how activities are divided and coordinated to achieve organisational goals. It consists of two main components: structural configuration and structural operation. Structural configuration refers to the size and shape of the structure, and can be seen in an organisational chart. It includes: Division of labour: The extent to which work is broken down into different tasks to be completed by different people Spans of control: The number of employees reporting directly to a manager Hierarchy: The reporting relationships within the business Departmentalisation: The way in which the organisation groups its activities Structural operation refers to the processes and systems associated with the organisational structure. It includes: Formalisation: The degree to which rules and procedures shape the jobs of employees Decision-making: Whether decision-making is centralised or decentralised Responsibility: The obligation to do something Authority: The right to direct the performance of others Types of Departmentalisation The sources mention four main types of departmentalisation : 1. Functional departmentalisation: Organising the business by the functions they perform, such as manufacturing, marketing, finance, engineering, and HR. This approach can lead to efficiency and expertise, but it can also create silos and make it difficult to coordinate across departments [7, 10]. 2. Product or service departmentalisation: Organising the company by what it makes or does. This approach can be helpful for companies with a diverse product line, but it can also lead to duplication of effort and make it difficult to coordinate across product lines [10, 11]. 3. Geographical departmentalisation: Organising the organisation by its locations. This approach can be helpful for multinational corporations, but it can also lead to a loss of control from headquarters and make it difficult to coordinate across regions [12, 13]. 4. Mixed departmentalisation: Any combination of the above. Evolution of Organisational Structure The sources explain how organisational structure has evolved over time. Early approaches to organisational design, such as scientific management and bureaucracy, focused on efficiency and control [14, 15]. These approaches treated employees as machines and gave them little autonomy. More recent approaches, such as the human relations movement and organisational behaviour, recognised the importance of social and psychological factors in the workplace [16, 17]. These approaches sought to create more satisfying and motivating jobs for employees. Contingency theory argues that there is no one best way to design an organisation, and that the best structure depends on the specific circumstances of the organisation. In recent years, there has been a trend towards flatter hierarchies, more flexible job designs, and increased employee empowerment. This is due in part to the increasing complexity and dynamism of the business environment. Managing Human Resources The sources note that Human Resource Management (HRM) is the function performed by managers responsible for the organisation's policies and strategies relating to attracting, selecting, rewarding, employing, and providing for the welfare of people. Key Areas of the HR Function The sources identify several key areas of the HR function: HR planning: Ensuring that the organisation has the right number of people with the right skills at the right time [21, 22] Recruitment: Attracting a pool of qualified candidates for job vacancies Selection: Choosing the best candidate for the job Pay and benefits: Developing and administering compensation and benefits packages that attract, retain, and motivate employees Performance appraisal: Assessing employee performance and providing feedback Training and development: Helping employees develop their skills and knowledge Employee relations: Managing the relationship between the employer and employees Leadership Leadership is the process of influencing others to achieve goals. It is distinct from management, which is the process of planning, organizing, staffing, directing, and controlling. Leaders inspire and motivate others, while managers focus on efficiency and effectiveness. Theories of Leadership The sources describe several key theories of leadership: Trait Theories Trait theories of leadership focus on the personal qualities and characteristics that make a good leader. These theories suggest that some people are born with the traits that make them natural leaders. However, trait theories have been criticized for being too simplistic and for ignoring the role of the situation in leadership. Behavioural Theories Behavioural theories of leadership focus on the actions and behaviours of leaders. These theories suggest that effective leaders engage in certain behaviours, such as initiating structure, being considerate of their followers, and focusing on task completion [34, 35]. Contingency Theories Contingency theories of leadership argue that the best leadership style depends on the situation. These theories take into account factors such as the nature of the task, the characteristics of the followers, and the organizational environment. Charismatic Theories Charismatic theories of leadership focus on the ability of leaders to inspire and motivate their followers. Charismatic leaders are often seen as being visionary, having a strong sense of purpose, and being able to connect with their followers on an emotional level. Transactional and Transformational Leadership The sources also distinguish between transactional leadership, which focuses on exchanging rewards for performance, and transformational leadership, which inspires followers to achieve their full potential. Motivation Motivation is the set of processes that activate, direct, and sustain human behaviour toward goal accomplishment. In other words, it is what drives people to behave in certain ways. The sources discuss both content and process theories of motivation. Content Theories Content theories of motivation focus on what motivates people. They identify the needs that people have and how those needs can be satisfied. Some key content theories include: Maslow's hierarchy of needs: A five-level hierarchy of needs, ranging from basic physiological needs to self-actualization. The theory suggests that people are motivated to satisfy their lower-level needs before they can move on to higher-level needs. Alderfer's ERG theory: A simplification of Maslow's hierarchy, which groups needs into three categories: existence, relatedness, and growth. The theory suggests that people can be motivated by more than one need at a time. McClelland's achievement motivation theory: A theory that focuses on three needs: achievement, affiliation, and power. The theory suggests that people are motivated by different needs to different degrees. Herzberg's two-factor theory: A theory that distinguishes between hygiene factors, which can lead to dissatisfaction if they are not met, and motivators, which can lead to satisfaction. Process Theories Process theories of motivation focus on how motivation works. They explain the mental processes that people go through when making choices about their behaviour. Some key process theories include: Expectancy theory: A theory that suggests that people are motivated to act if they believe that their effort will lead to good performance, that good performance will be rewarded, and that the rewards will be valuable to them [45, 46]. Equity theory: A theory that suggests that people are motivated to maintain fairness in their relationships with others. The theory suggests that people compare their inputs and outcomes to those of others, and that they feel inequity if they perceive that their ratio is unfair. Control Control is the process of ensuring that organizational objectives are achieved. It involves setting performance standards, measuring performance, comparing performance to standards, and taking corrective action if necessary. Types of Control The sources describe three main types of control: Feedforward control: Control that takes place before an activity begins. It aims to prevent problems from occurring in the first place. Concurrent control: Control that takes place during an activity. It aims to detect and correct problems as they occur. Feedback control: Control that takes place after an activity has been completed. It aims to assess the results of the activity and make adjustments for the future. Financial and Non-Financial Controls The sources also distinguish between financial controls and non-financial controls. Financial Controls Financial controls are used to monitor the organization's financial performance. Some common financial controls include: Budgetary control: A process of planning and monitoring the organization's income and expenses Break-even analysis: A tool for determining the point at which the organization's revenues will equal its costs Ratio analysis: A technique for comparing the organization's financial performance to industry averages or to its own past performance Non-Financial Controls Non-financial controls are used to monitor other aspects of the organization's performance, such as quality, customer satisfaction, and employee morale. Some common non-financial controls include: Project control: A process of planning and monitoring the progress of projects Management audits: A systematic review of the organization's operations Inventory control: A process of ensuring that the organization has the right amount of inventory on hand Production control: A process of ensuring that goods and services are produced efficiently and effectively Quality control: A process of ensuring that goods and services meet quality standards Characteristics of Effective Control The sources identify several characteristics of effective control: Appropriate: The control system should be appropriate for the organization's goals and plans. Cost-effective: The benefits of the control system should outweigh the costs. Acceptable: The control system should be acceptable to the people who are subject to it. Emphasis on exceptions: The control system should focus on significant deviations from standards. Flexible: The control system should be able to adapt to changes in the environment. Reliable and valid: The control system should provide accurate and consistent information.  Based on valid performance standards: The control system should use standards that are relevant and measurable. Based on accurate information: The control system should use information that is timely and accurate.