1.3 summary I

THE ORGANISATION OF WORK
Organisations enable people to be more productive.

How organizations differ?

• Ownership
• Control
• Activity
• Profit or non-profit orientation
• Size
• Legal status size
• Sources of finance
• Technology

Formal Organisation
Vs
Informal Organisation

• Link individuals
  Formation of social group
• Allocate tasks
  Develop informal rules & procedures
• Authority allocation
  Ignore official network channels
• Coordinate & control the objectives
• Facilitate flow of work
  

Mintzberg
(Pls refer to the diagram from your textbook Pg 42)









Fayol – classical approach (Scalar Chain)

Modern approaches (Drucker, Kanter, Mintzberg)

• Multi-skilling
• Flexibility
• Empowerment

Contingency Theory – no one best way to structure an organization

• Age
• Size/structure
• Technology
• Environment
• Strategy

Centralisation

• decision making authority in upper management
• minimal delegation of authority
• suitable for activities such as planning, R&D

Decentralisation
(Vertical & Horizontal)

• handing down of decision making authority to lower levels in an organization
• authority & responsibility are delegated

Advantages of Centralisation

• unity of control
• strategic conformity
• uniformity of policies and standards
• quality of decision making higher
• common culture

Disadvantages of Centralisation

• planning process
• decision making overload
• slow response to changes
• errors of judgement
• stifles initiatives

Advantages of Decentralisation

• prevention of overload
• speed of decision making is faster
• faster response to change
• higher awareness of costs and profits
• motivation

Disadvantages of Decentralisation

• loss of control
• sub-optimisation
• inconsistency of quality
• higher calibre staff

Authority – rights to give orders and expect them to be obeyed.

Line authority – authority from top to bottom

Staff authority – authority that supports, assists, advises

Functional authority- hybrid of line & staff authority (eg Finance Manager has authority to require timely report from line manager)

Responsibility – an obligation to perform assigned activities.
Ultimate responsibility cannot be delegated.

Power – capacity to influence decisions

Span of control – number of subordinates a manager can direct (control) efficiently and effectively.

Factors affecting span of control

• Level of skills, competence and self-reliance of a subordinate
• Management style
• Nature of task
• Time availability
• Effectiveness of communication and control system