1.0 INTRODUCTION
Another important aspect of organizing will occupy our attention
in this notes and that is business structure. In the last note we discussed delegation
of authority and centralization of authority. We
draw the conclusion that there
should be no absolute delegation of authority because that will mean that the
manager carrying out the delegation does not want to work again in that
organization.
We also said that there should be no absolute centralization
because that would mean that there is no organization. This is because you can
not give somebody a responsibility without the commensurate authority. We did
identify too the conditions for delegation as well as the advantages and
limitations of delegation. We also saw the reasons for centralization.
In the design of a business organization we noted in previous discussions
that the aim is to create positions and levels. But in doing this, it is for a
promise; and the purpose is that there must be some role in a position that
twill contributes meaningful to the attainment of the pre-set objectives of the
organization. Consequently, if there are no roles to perform by somebody in an
organization, that person has no business in being in that organization
But in creating positions and levels with the associated roles
gives rise to an organization. And the structure is important because it shows
the duties that should be performed in order tat the goals and objectives can
be reached. The structure of an organization is basically of three layers.
The first layer is the Board of Directors, the second layer is the
office of the Managing Director and the third and last layer is what is
commonly referred to as a complex layer consisting of the functional managers
and their subordinates. One important point we should again re-emphasis is that
we know these layers through the functions that they perform.
2.0 OBJECTIVES
By the end of the note, you should be able to:
· describe the Board of Directors
· explain the functions of the Board of Directors
· describe the office of the Managing Director
· discuss the complex layer and
· list the functions of the complex layer.
3.0 MAIN CONTENT
3.1 Board of Directors
This is the first layer of a typical business organization.
Members of the board are drawn from the share holders. The Managing Director,
even though he is in change of then day to day activities of the organization
is also member of the board. The board provide leader and that is why who ever
is going to be elected or appointed to the board must be a matured individual
capable of contributing constructively to the leadership role of the board. But
beyond leader guidance to an organization, there are still other functions of
the board which must be performed. These functions include the following:
3.1.1 Determination of
Organizational Policy
It is the responsibility of the board to fashion out what should
be the policy of an organization. The policy is important because it gives a guide
to action. It provides the framework through which all other activities are
carried. If this is not , there will be no notey of purpose as every member
will be doing things accordingly to the ay he/she likes. Such action of course
will create waste, apart from the confusion. It will result, because action
demands the expenditure of organizational resources.
But this expenditure can only be worth the while if it is for the
purpose of carrying out the objectives of the organization in line with the
policy framework. It is for this reason that the primary task of the bound is
to work out what will be regarded as correct policy framework which the members
will use to assess their activities.
The corporate policy affects the entire organization. But the
department and sections can also have their policies which must of course
support the corporate policy and never contradicting it.
3.1.2 Determination of Organization Objectives
The corporate objectives of the organization are also determined
by the board, which also provides the guidelines for each department to set its
objectives. Again, the departmental objectives should not conflict with the
corporate objectives.
If there is any contradiction, because the corporate objectives
are superior to the departmental or any other objectives in the organization,
the corporate objectives will be upheld. We have emphasized this point in
earlier note. Remember, we discussed hierarchy of objectives with the corporate
objectives at the top, followed by the departmental objectives and so on. Y
ou may do well by reading again note 4. W have discussed what a
good business objectives are, the characteristics of objectives, types of
business objectives, importance of objectives to an organization and other
issues relating to objectives. We are not going to repeat them again in this note.
3.1.3 Carrying out Appraisal on the Organization
The board has to regularly carry out particularly the economic
appraisal of the organization. It is not just enough to firm corporate policy
and providing guidelines for sub policies in respect of the departments, the policies
must be implemented. The board will review at appropriate period that extent to
which policies earlier formulated are being implemented. The board also reviews
the projects that have been approved for implementation.
The review and appraisal are important so as to find out the level
of implementation, the cofirmly in the process of implementation to existing
guidelines and finding out if there are problems associated with the
implementation. Any problem detected is 190
then investigated and remedial action taken. Detailed programmes concerning how
the projects are being implemented need to be reviewed. All the 3ps (policy ,
projects and progammes) are therefore regularly appraised so as to ensure the
economic viability of the organization.
3.1.4 Determination and Provision of Adequate funds
The board does two things here. The first is that they find out
preciously the amount of money that is needed for the projects and programmes they
have approved based on courses on the corporate or organizational policy. Also,
it is the responsibility of the board how the net profit will be distributed,
that is, how much will be given to share holders as dividends, how much will go
into reserves to improve performance among other important decision. Again on
the event of the organization borrowing money from the bank to finance its
operation, it is the board that will give the go-ahead.
3.1.5 Providing Schemes of Control
It is only the
policy, projects and programmes of an organization that the board controls.
Even though the board does not manage the day to day activities of the
organization, the members works out appropriate methods and guidelines through
which a activities of employees are control to ensure that they work towards
attaining organizational objectives. All these are reflected in the
organizational manual.
3.1.5 Appointment of the Managing Director
The board also appoints the Managing Director who is also the
Chief Executive Officer of the organization. In appointing the Chief Executive,
they fix his salary plus other benefits associated with that position. In some
organization, the Managing Director is not only a member of the Board of
Directors but sometimes serves as the Chairman of the Board of Directors.
3.2 The Managing Director
The office of the Managing Director is the next layer. He occupies
a dual office, as a member of the board; he shares in the duties of the board
that is in the corporate responsibilities with the other board members. Also,
by his special position as the Chief Executive Officer, he acts as a link
between the board and the rest of the organizations. The duties of the Managing
Director or the General Manager as he is sometimes called include the
following:
3.2.1 He presents organizational objectives
This is one of the primary duties of the Managing Director. It is
not the wish of members of the organization to be in the board; it is not
allowed. That is why they have to be represented by their Managing Director. But
they need to know the objectives(s) of the organization because that is why the
organization is existing in the first place, and these objectives must be sold
to them so that they can be committed to them and regard them as their own
”baby” .
The person to do that is the Managing Director. It must be pointed
out that at the initial stage of gathering data necessary for objective
formulation by the board, the Managing Director encourages other members of the
organization to make contributions which are corrected to the board by the
Managing Director for consideration.
The idea is to encourage other members of the establishment,
though indirectly, to objective formulation. In the same manner, the Managing
Director encourages members of the organization towards policy formulation.
3.2.2 The Managing
Director issues appropriate instructions
It is the responsibility of the Managing Director to issue out the
necessary directives that will set the organization to work. This is directing.
But whatever director that issued must be clear and devoid of any word that is
capable of double interaction. Of course, the directives can be oral or written
or a combination of the two. There are still other forms of communication but
these are the popular ones.
3.2.3 He maintains Co-ordination
The Managing Director ensures a high level of co-ordination. We
will be discussing this management function in detail in the later stage of
this course. But basically, co-ordination involves the linking logically of an organization’s
activity with another activity so that the entire organization works as
systems. Effective co-ordination among the activities of the organization’s
members (employees) will create a high will to work.
3.2.4 He creates and sustains morale
In the process of directing and leading the other members of the organization.
There should be high morale, that is, enthusiasm, vim, rigor and total
commitment to the objectives of the organization. All these are achieved
through team spirit, appropriate motivation such as good salaries and wages
tied to productivity, recognition, challenging tasks to perform, promotion as
and when, good pension scheme, awards and other motivation techniques.
3.3 The Operating Executives (complete layer)
This layer is a complex one and it consists of the functional
managers (the financial, production marketing and personnel mangers) and the subordinates
working under each of them. They perform a variety of tasks.
3.3.1 The Financial Department
· they carry out costing
· financial accounting
· records
· budget and budgeting
control among others.
3.3.2 The marketing Department
Here functions such as the following are performed.
· market and marketing
resources
· market information
· segmentation
· product valuation
· buying and selling
· pricing
· distribution etc
3.3.3 Production Department
The personnel Department performs:
- planning for and
measuring production progress
- engineering
- methods and standards
- manufacturing, among others
This layer comprising of
the executive structure report to the managing director through a line of see
executives. See the diagram me below.
Figure 12.1: sharing the
business structure
3.3.4 The personnel department
Functions that are performed here include:
· recruitment
· selection or
interview
· placement
· salaries and wages administration
· promotion
· training, among others
4.0 CONCLUSION
We have discussed business structure in this note. We identified
three layers that make up a business structure. And these are : Board of Directors
as the first layer, the Managing Director as the second layer, and the
operating executive consists as the third layer. The operating executives
consist of functional managers; together with their subordinates perform a
variety of tasks. They are linked to the managing director through a line of
successive senior officers.
5.0 SUMMARY
We are making steady progress in our discussions concerning organizing.
We will soon finish the discussions so that we can take up again another
management function. But before we do that there are still a few things we need
to know. Next note, we will be talking on span of control.
0 comments:
Post a Comment