UNIT 9: BUSINESS ORGANIZATION STRUCTURE
Key Unit competence: To be able to design business organization structure
Read the following paragraph and answer questions that follow:
Uwineza started a maize flour processing farm in her community. She is renting the place where her business is operating from. She buys her raw materials (maize grain) from a nearby town. She says she trusts her employees so they never write down anything about duties. She always has a meeting with her employees in the morning or uses a telephone call at a distance to assign tasks. Recently, after some advice from a friend, she discovered that she was so wrong in tasks assignments and immediately take a step forward to collect the errors previously done.
Questions:
a) What errors/mistakes did Uwineza do?
b) What are the likely consequences of Uwineza‘s actions mentioned above?
c)What advice would you give to Uwineza to avoid the consequences above and why?
9.1. Meaning of organization structure and department in an organization.
1. Read the following statements to identify an organization structure, give reasons to support your response
a) Claudette and Niragire playing football against Uwera and Mutesi
b) Uwimana is the deputy of one TTC, she outlined and documented the ways subjects’ teachers teach and assigned supervisory duties to different heads of departments
c) A group of fellow students with whom they are going to represent the school in a debate competition
d) A group of five girls reading science magazines in the library preparing for a science competition against another class
2. What is a department in your own point of view?
3. Give any two departments that you know.
9.1.1. Organizational structure
Organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles and responsibilities. The organization structure also determines how information flows between levels within the company. Simply, an organizational structure is a system used to define a hierarchy within an organization. To achieve organizational goals, there must be a team and teamwork
▪ Team
A team is a group of individuals working together to reach a common goal. It can also be seen as a group of people with different skills and different tasks, who work together on a common project, service, or goal.
▪ Teamwork
Teamwork is the collaborative effort of a team to achieve a common goal or to complete a task in the most effective and efficient way. (From Wikipedia, the free encyclopedia)An organizational chart is a graphical representation of a firm’s hierarchy of authority. An organizational structure is primarily represented by an organizational chart. It shows how different people and departments are linked together in the organization. People at the same rank in the business are at the same level on the organizational chart.
An example of organizational chart/Organogram
9.1.2. Departments
Department is also known as a section, Division or a single unit (special unit) within an organization that has specific functions which help the entire firm to achieve its goals.
Any organizational structure must be departmentalized i.e subdivided according to responsibilities.
Departmentalization can be done through 4 ways such as
a) By functions
b) By product
c) By geography
d) By type of customersSome of the departments that may be found in different organizations
1) Assume you are working in a business, which department do you wish to work from and why?
2) From the list of departments, you have gone through which one is very important to you and why?
3) From your community, identify some business organizations that operate from there, explain how they are organized and the way they operate in different positions.
9.2. Managerial functions
Mugisha attended a business meeting organized by Executive Secretary of the Sector together with the one in charge of business where business owners who attended were told to abide to the rules and regulations regarding the business. They were also told to properly plan and take into consideration other business managerial functions related to the effective and efficient production, hence, develop particularly our sector and our country in general.
From your point of view what do you think are other managerial functions discussed in that meeting?
9.2.1. Definition of concepts
a) Management is the process of getting things done by using other people and resources like capital, raw materials, and time.
b) Business management involves planning, organizing and coordination of the activities of an enterprise to achieve defined objectives. Without proper coordination and planning, a business cannot achieve its goals and objectives.
9.2.2. Managerial functions
These are special activities that are designed for a manager to perform in order to achieve the goals and objectives of an enterprise.
a) Planning: Refers to the process of setting goals and determining a course of action, defining who, when and how to achieve them.
b) Organizing: Refers to the coordination and supervision of factors of production particularly land, capital, and labor. It involves grouping activities and assigning tasks to people who would assume them. Organizing includes Identifying tasks, assigning them to responsible workers and Developing work plans. An organization chart is one of the tools managers use to organize the people in business.
c) Leading: This involves directing/ influencing or inspiring the workers towards achieving organizational goals.
d) Staffing: Refers to identification of the right people who will do the jobs as necessary to achieve organizational objectives. This is done through recruiting them through test, training, and paying them for the work done.
e) Controlling: This refers to the evaluation of achievements compared to the plans/standards and taking measures towards success of organizational goals/objectives.
f) Budgeting: This refers to making monetary estimations of the expected revenue and
expenses of the business over a given period of time, usually a year.
g) Coordination: This refers to bringing together different workers and departments of the business so that they work in harmony and strive to achieve the set goals.
h) Motivating: This involves inspiring and encouraging workers by appreciating the work well done, allowing them to participate in decision making, paying their salaries on time and giving them incentives, bonuses and benefits. This encourages the workers to work harder, increase the output/productivity and improve on its quality.
i) Commanding: This involves giving orders and instructions to staff members so that the targets and deadlines are met.
j) Communicating: This involves passing on information between people and departments. The manager passes on information regarding responsibilities, targets to achieve, suppliers, laws and regulations, …
Mugabo is an entrepreneur who always commands his employees with a harsh voice and assigns them tasks basing on nepotism. While recruiting employees Mugabo never set exams for selection but rather considered groupmates, neighbors, and his relatives.
From the passage above, with justification what managerial functions does Mugabo fail to obey/follow?
9.3. Personnel (Human Resource) Management
Analyze the following case study.
Mr. Busan’s factory is among the oldest brick making factories that has been operating in their area. It started operating in the first half of the 20th Century. It employs over 200 employees and owns production machines. Last year, the external auditor of the factory found out that the business was about to collapse. When the manager read the report, he was shocked about the eminent collapse of the business and could not figure out what to do to prevent the business collapse. He consulted many people for help, but he was not able to get a clear solution.
a) As an entrepreneurship student, what do you think could be the main cause of poor performance of that oldest brick making factory?
b) Suppose you are appointed as the manager of this factory, what can you do so that this business does not collapse?
9.3.1. Meaning of Human Resource Management
Human Resource Management is a process or a managerial activity that consists of four main activities, namely, acquisition, development, motivation, as well as maintenance of human resources.
It involves several functions concerned with the management of people at work. It includes manpower planning, employment, placement, induction, training, motivation and appraisal and compensation of employees.
9.3.2. Human Resource Management process
It involves determining the number and kinds of personnel required to fill various positions in the organization.
Recruitment:
Selection and placement of personnel,
This requires ensuring that the right people are recruited and placed to the right jobs through selection exam/test.
Induction: is the process where new employees are welcomed in the business /company and are prepared for their new duties.
Training and development of employees for their efficient performance and growth. Enabling employees to carry out their responsibilities effectively and make use of their potential.
Appraisal of performance of employees and taking corrective steps such as transfer from one job to another is evaluating the performance of employees and to identify the abilities of a person for further growth and development.
Motivating the workforce by providing financial incentives and avenues of promotion.
Remuneration of employees. The employees must be given sufficient (equivalent to work done) wages and fringe benefits to achieve higher standard of living and hence higher productivity.
Note: According to Edwin Filippo; Performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job.
According to Cummings, the overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisals achieve four objectives including the salary reviews, development and training of individuals, planning job rotation and assistance promotions.
Claudette is a human resource manager of Berwa enterprise, who is humble, always manages her employees in harmony and handle every personal issue accordingly. She normally performs her duties the way they are, whenever employees’ challenges happen Claudette addresses those issues with integrity and professional manner, she always faces the person to whom they are talking to, listen carefully and takes step forward to solve any complaint of that person. Claudette is the best employee of Berwa enterprise in 2018.
1) Basing on this ‘scenario what do you think is her duty/duties in Berwa enterprise?
2) Is her duty/duties important in Berwa enterprise? Give your point of view.
With reference to a business project owned by your school business club
a. Design an organization chart of the business club and give functions for each department
b. How do you think that project got the right persons to work within different departments?
1. Fill in the gap the following:
i.…………………………...is a process, which consists of four main activities, namely, acquisition, development, motivation, as well as maintenance of human resources.
ii.…………………………. Is one of the managerial functions consisting of:
a) preparation of task force.
b) allocation of work to individuals.
c) integration of the efforts of the task force; and
d) coordination of individual work with that of the department
2.Design an organizational chart of your school.