Botswana College of Distance & Open Learning

Diploma in Business Management

Principles Of Management

Assignment: 1

Mmoniemang Motsele:

1

President. It controls & coordinates the activities of all the departments. According to George R. departmental managers. actuating and controlling. responsible for the performance of an organization as a whole or for one of its significant parts. Common job titles for top managers include Chief Executive Officer (CEO). According to Henry Fayol. The top management is also responsible towards the shareholders for the performance of the enterprise. to coordinate and to control". It appoints the executive for middle level i. "Management is a distinct process consisting of planning. 1. procedures. organizing. "To manage is to forecast and to plan. Terry. The role of the top management can be summarized as follows –         Top management lays down the objectives and broad policies of the enterprise. Typical management levels fall into the following categories:  Top level: Managers at this level ensure that major performance objectives are established and accomplished. 2 .e. technological resources. to organize. According to Harold Koontz. Large organizations. financial resources. It provides guidance and direction. schedules etc. "Management is the art of getting things done through and with people in formally organized groups‖. in particular.Question 1: What do you understand by term “Management”? Definitions of Management From my understanding I think Management means to get the work done through others by most advantageous utilization of all available resources depending upon their ability & capability. may break down management into different levels because so many more people need to be managed. Chief Operating Officer (COO). Resources include the use and direction of human resources. and natural resources. to command. 3. Levels of management Two leaders may serve as managers within the same company but have very different titles and purposes. 2. and Vice President. It is also responsible for maintaining a contact with the outside world. It issues necessary instructions for preparation of department budgets. These senior managers are considered executives. performed to determine and accomplish stated objectives by the use of human beings and other resources". It prepares strategic plans & policies for the enterprise.

They are responsible for coordinating the activities within the division or department. They are responsible for providing training to the workers. They make plans for the sub-units of the organization. It also sends important reports and other important data to top level management. Job titles for these first-line managers vary greatly. group leader. They participate in employment & training of lower level management. They communicate workers problems.        Middle level: Middle managers report to top managers and are in charge of relatively large departments or divisions consisting of several smaller units. 3 . They arrange necessary materials. but include such designations as department head. and division managers. Examples of middle managers include clinic directors in hospitals. They guide and instruct workers for day to day activities. They help to solve the grievances of the workers. plant managers. and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers. such as increasing market presence. deans in universities. They prepare periodical reports about the performance of the workers. such as producing a set number of items at a given quality. machines. that are consistent with the plans of middle and top management. such as a team leader or supervisor — a person in charge of smaller work units composed of hands-on workers. Middle managers develop and implement action plans consistent with company objectives. and unit leader. They motivate workers. They are responsible for the quality as well as quantity of production. They are also entrusted with the responsibility of maintaining good relation in the organization. Their activities include –             Assigning of jobs and tasks to various workers. They supervise & guide the sub-ordinates. They interpret and explain policies from top level management to lower level. They ensure discipline in the enterprise. suggestions. They are also responsible for inspiring lower level managers towards better performance. and branch sales managers in businesses. Their role can be emphasized as – They execute the plans of the organization in accordance with the policies and directives of the top management. First-line managers ensure that their work teams or units meet performance objectives. They evaluate performance of junior managers Low level: The initial management job that most people attain is typically a first-line management position. tools etc for getting the things done.

such as greeting visitors and signing legal documents. The interpersonal role ensures that information is provided. A role is an organized set of behaviors. Maintain information links both inside and outside organization via mail. purchases. Transmit information to outsiders via reports. and phone calls. Decide who gets resources. identify new ideas and delegate idea responsibility to others. The ten roles are divided into three groups: interpersonal. scan periodicals and reports. A manager must perform certain functions and assumes certain responsibilities for any organization. counsel and communicate with subordinates. Direct and motivate subordinates. reports. sales. managers assume multiple roles. The decisional roles make significant use of the information TABLE 1 Mintzberg's Set of Ten Roles Category Role Activity Seek and receive information. The informational roles link all managerial work together. and speeches. and decisional. Perform ceremonial and symbolic duties. prepare budgets. Represent department during negotiations of union contracts. informational. Initiate improvement projects. adapt to environments. To meet the many demands of performing their functions. maintain personal contact with stakeholders. so that they can assist the organization to achieve its goals. Forward information to organization members via memos. and budgets. phone calls. set schedules and determine priorities. resolve conflicts among subordinates. and meetings. Henry Mintzberg: has identified ten roles common to the work of managers. memos. Take corrective action during disputes or crises.Managerial roles: Managers in various organizations perform many roles. Informational Monitor Disseminator Spokesperson Interpersonal Figurehead Leader Liaison Decisional Entrepreneur Disturbance handler Resource allocator Negotiator 4 .

Training is to be integrated with the promotion policy. Features of Scientific Management 1.Discuss F. Taylor suggested the need of planning the production activity accurately. Taylor suggested time study. What he put forward was to break the job into many component parts and then measure each of them to the hundredth of a minute. motion study. He also suggested the need of training of workers so as to raise their ability or efficiency. fatigue study and rate-setting for the introduction of scientific task. how it is to be done. This method is always used in big companies and mines like Toyota Company. Scientific selection and training of workers: Taylor suggested the need of scientific selection of workers for the plant/production activities. Planning the task: For performing the task by every worker. It was he who said that the trade unions were irrelevant as both the sides were important for each other's existence. 8½ hours) the task is to be calculated through careful scientific investigation. W. He is best known in the world of management for his study of time and motion. He 5 . W. where the work shall be done and when the work shall be done. Taylor’s contribution to the development of management as a discipline F W Taylor is termed as the father of scientific management and his prime contribution in the area of management is the founding of efficiency movement and also the start of the progressive era. This replaces the old rule-of-thumb knowledge of the workers. This idea of planning is Taylor's gift to the science of management. He believed that the management of that era was unprofessional and he supported that it should be taught as a separate discipline and to get the best result from the work force there should be partnership between qualified management and cooperative workforce. Scientific task setting: F. method study and work measurement study) is essential. Time study is the art of observing and recording the time required to do each detailed element in an industrial operation. work study (i. 2. He also suggested differential piece wage plan for compensation payment to workers. Planning of task gives answers to the following questions. Both the studies together help in determining the best method of performing a job and the standard time allowed for it. 3. Motion study refers to the study and analysis of the movements of an operator while performing a job so that attempts can be made to remove useless/unwanted movements from the process. What has to be done. The procedure of selection must be systematic so as to select the best and the most suitable persons for different types of jobs. Correct placement of workers is equally important.e. For this.g. Taylor suggested the introduction of standard task which every worker is expected to complete within one day (working hours e. Debswana Mines and Morupule Colliery.

He suggested new methods after systematic study and research. speed boss etc. This brings co-ordination in different activities and all workers will be able to perform the task assigned easily. Taylor recommended eight functional foremen for different activities and functions. 5. management (cost reduction. 4. Minimum wastages of materials. Wide scope for specialization and accurate planning. He was in favour of progressive. Introduction of better methods and techniques of production: F. W. Taylor’s Contribution to the Development of Management Thought / Science The contribution of F. Taylor suggested the importance of improved methods and techniques of production. Taylor recommended the use of new methods for raising overall efficiency and productivity. 2. conditions of work and speed of machines. 5. Emphasis on rational thinking: Taylor suggested rational thinking on the part of management for raising efficiency and productivity. 4.also suggested the importance of cordial relations between management and workers. Such progressive outlook is essential for the introduction of new techniques and methods in the Management. Taylor to management thought is as explained below: 1. 3. superior quality production and also for low cost production. scientific and rational thinking on the part of management on all managerial problems. 6 . instruction card clerk. W. Such specialization is useful for raising efficiency of the whole organization. materials. Benefits / Advantages of Scientific Management 1. Specialization: Taylor suggested specialization in the administrative and organizational setup of the plant. better quality productions) and consumers (superior goods at lower prices) F. He wanted managements to replace old methods and techniques by Modern methods which will raise productivity and offer benefits to all concerned parties. W. Emphasis on planning and control of production: Taylor suggested the importance of production planning and control for high production. 3. The workers will have satisfactory working conditions for work due to such standardization. Work-study techniques are his contribution to management thought. Cordial relations between workers and management. time and money. 2. Application and use of scientific methods. The foremen suggested by him are like route clerk. He suggested functional foremanship. Standardization: Taylor suggested the importance of standardization of tools and equipment. He introduced the concept of production management in a systematic way. Benefits to workers (higher wages and less burden of work).

scientific selection of workers. 7 . work design and one best way to doing a job are some new ideals suggested by Taylor and are responsible for the introduction of Many positive changes in the field of industrial/ production management. Time and motion study: Taylor introduced new concepts like time study. i. motion study and work study in the field of industrial management such concepts are for the introduction of new methods which will be more quick. Scientific management not only developed a rational approach to solving organizational problems but also contributed a great deal to the professionalization of management. and job performance monitoring system. It increased productivity cost reduction. time rate pay.e. a few of his systems are still being implemented in some organizations. Time and motion studies. He suggested the need of personnel department and its importance. Importance of personnel and personnel department: Taylor suggested the importance of manpower in management. Conclusion I therefore recommend Taylor‘s management as it appears that in today‘s world. time.. Industrial fatigue and rest pauses: Taylor noted the nature of industrial fatigue and suggested the introduction of suitable rest pauses for removing such fatigue of workers. 8½ hours of work. 6. He favored incentive wage payment to workers. better quality productions as compared to the old traditional system.4. 5. He was in favour of progressive personnel policies for the creation of efficient and satisfied labour force. scientific and less troublesome to workers. He wanted to reduce the burden of work on workers through the use of scientific methods.

It would appear that the optimal approach to human resource management would be lie somewhere between these extremes. Theory X leadership assumes the following: Work is inherently distasteful to most people. to best benefit the company. employees will cooperate when asked. Each assumes that management's role is to organize resources. Most people are innocent and unintelligent Essentially. and they will attempt to avoid work whenever possible. however. micromanagement. McGregor asserts that neither approach is appropriate since the foundations of Theory X are incorrect. and extreme union demands. Most people have little aptitude for creativity in solving organizational problems. and prefer to be directed. The hard approach to motivation relies on coercion. The hard approach results in hostility. beyond this commonality. purposely low-output. However. Douglas McGregor made his mark on the history of organizational management and motivational psychology when he proposed the two theories by which managers perceive employee motivation. However. The Human Side of Enterprise. they're quite dissimilar Theory X          According to McGregor. implicit threats.essentially an environment of command and control. The soft approach. However. they must be closely controlled and often coerced to achieve organizational objectives Most people resist change. Most people are not ambitious. with security as a strong The Hard Approach and Soft Approach   Under Theory X.Question 2 Explain theories X and Y of motivation as put forward by Douglas McGregor Motivation Theories X and Y . The soft approach results in increasing desire for greater reward in exchange for diminishing work output. have little desire for responsibility.McGregor In his 1960 management book. management approaches to motivation range from a hard approach to a soft approach. in return. and tight controls -. Motivation occurs only at the physiological and security levels of Maslow's Needs Hierarchy Most people are self-centered. neither of these extremes is optimal. including people. He referred to these opposing motivational theories as Theory X and Theory Y. As a result. 8    . this theory assumes that the primary source of most employee motivation is monetary. is to be permissive and seek harmony in the hopes that.

etc. Consequently. one would expect employees to dislike their work. In strong contrast. no longer motivates. Theory Y The higher-level needs of esteem and self-actualization are continuing needs in that they are never completely satisfied. 9 . motivation seemed more likely with Theory Y. Theory Y leadership makes the following general assumptions: Work can be as natural as play if the conditions are favorable. thus creating a self-fulfilling prophecy. People will be committed to their quality and productivity objectives if rewards are in places that address higher needs such as self-fulfillment.The Problem with Theory X Drawing on Maslow's Hierarchy of Needs. the only way that employees can attempt to satisfy higher level needs at work is to seek more compensation. People will be self-directed and creative to meet their work and organizational objectives if they are committed to them. While money may not be the most effective way to self-fulfillment. it is these higher-level needs through which employees can best be motivated. The company relies on monetary rewards and benefits to satisfy employees' lower level needs. in fact. so it is quite predictable that they will focus on monetary rewards. Theory X management styles. Unfortunately. In this situation. hinder the satisfaction of higher-level needs. Once those needs have been satisfied. and seek to satisfy their higher needs during their leisure time. McGregor argues that a need. People will use work to satisfy their lower needs. McGregor makes the point that a command and control environment is not effective because it relies on lower needs for motivation. the motivation is gone. have no interest in organizational goals. Most people can handle responsibility because creativity and ingenuity are common in the population. in a Theory X environment it may be the only way. resist change. once satisfied. The capacity for creativity spreads throughout organizations. avoid responsibility. As such. but in modern society those needs are mostly satisfied and thus no longer motivate. employees can be most productive when their work goals align with their higher level needs. To McGregor.

individuals can achieve their own goals best by directing their efforts towards the success of the organization. this theory has been criticized widely for generalization of work and human behavior. the word ―authoritarian‖ suggests such ideas as the ―power to enforce obedience‖ and the ―right to command. where the aims of the organization and of the individuals in it are integrated.Consulting employees in the decision making process taps their creative capacity and provides them with some control over their work environment. there is an opportunity to align personal goals with organizational goals by using the employee's own need for fulfillment as the motivator Applying Theory Y Management . Under these assumptions. 10 . Participative Management .‖ In contrast Theory Y organizations can be described as ―participative‖.Broadening the scope of an employee's job adds variety and opportunities to satisfy ego needs. managers will have more subordinates and consequently will be forced to delegate some responsibility and decision making to them.Business Implications If Theory Y holds true. An organization that is run on Theory X lines tends to be authoritarian in nature. However. an organization can use these principles of scientific management to improve employee motivation: Decentralization and Delegation . people will seek responsibility.If firms decentralize control and reduce the number of levels of management. Job Enlargement .Under these conditions. On analysis of the assumptions it can be detected that theory X assumes that lowerorder needs dominate individuals and theory Y assumes that higher-order needs dominate individuals.

education etc. prejudice. and shared 2. Diverse workforce: A diverse workforce refers to two or more groups. The need for ethics: Management decisions need to be weighed to ensure that they do not have a negative effect on ethics of people in and outside the organization. used. economical growth in China and India and resurgence of energy market firms due to record crude oil prices has motivated a fierce competence to hire. age group. not desktops.Question 3 Challenges faced by managers 1. stored. 4. Ethics is concerned with the question of who benefits and who should benefit from activities of an organization. They need to see the ever changing scenario regarding their work. discrimination. 11 . Competition: Managers today face many challenges regarding their work the major challenge that is faced by managers nowadays is the competition. train and retain the already scarce talent available in the job market. or market share of one product as a result of the introduction of a new product by the same producer). and computers occupied entire rooms. several barriers in dealing with diversity include stereotyping. cannibalization refers to a reduction in the sales volume. Anticipate Global Talent Shortage: The most critical problem is hiring. retaining. and gender-role stereotypes 3. giving more competition to managers. World is now global village with Internal organization coming in and bringing ideas from abroad. few workers used machines or email. Advances in information and communication technology have permanently alters the workplace by changing the way information is create. training and motivating professional talent in a troublesome scenario where the already critical shortage of human talent in some professional areas and in diverse managerial disciplines due to the beginning of the retirement with no enough replacements of the baby boomers‘ workforce. Twenty years ago. sales revenue. human talent is being more critical to ensure the competitiveness of a company for the long term. This trend is particularly critical in the Oil & Energy and Engineering industries where it is possible to observe a continuous turnover of engineers from one company to the other one looking for better salary perspectives and superior career development plans. Such perspective is the expression of a growing trend of cannibalization in hiring and recruiting scarce professional resource that finally is engaged to work with the bigger companies (in marketing and strategy. ethnocentrism. Being so. each of those members are identifiable and distinguishable based on demographic or other characteristics like gender. tokenism. Managers in organization today need to be cognizant of ethics in the decision they make and how these decisions will affect people within and outside the organization.

hired and finally fired out. relocated. USA has developed practices to improve five cultural dimensions (Credibility. these companies are developing a more proactive HR management and are making the necessary adjustments to excel in the role of hiring. When an employee as usually happens in most of today's companies is considered as a mere commodity that may be easily replaced.Being so. located in San Francisco. 12 . 7. The Great Place to Work Institute. evaluate and forecast the talent that they need to develop their strategic planning. empowered and influential leadership with the willingness of applying the proper corporate governance practices to homogenize those differences around an inspiring business vision that being strongly encouraged by senior Management and enabled by collaborative technologies may be instrumental in reducing the inefficiencies of having multidisciplinary teams geographically dispersed with different cultures working in markets. progressive disengagement and lots of motivation finally will have a profound and detrimental impact over employee‘s productivity. respected and recognized. increasing the rate of employee‘s attrition and affecting the whole company‘s productivity for the long term. 5. This is the reason that justifies the progressive adoption of Employer Branding practices. it is easy to expect that in such workplaces an anguish feeling of demoralization. retaining. current global financial crisis is considered a significant change which requires innovative enlightened management skills to adapt to it. 6. Pride and Companionship) to pursuit this purpose. searching for new markets and reducing overheads costs are some of the initial solutions which can be implemented to cope with such change. Fairness. products and projects that could be intrinsic and inherent to the particular country´s culture. history and traditions. For example. Market changes: Coping with continuous rapid changes in marketplace and the need to find new ways of anticipating changes are as challenging as they ever were. Managing efficiently multicultural organizations: In global organizations that are engaged in developing transformational projects with a worldwide scope dealing with cultural differences in organizations requires from a strong. In parallel. Reshaping the organizational structures strategic merging with other organization. Respect. Employer Brand Management: Today‘s global organizations should excel in developing Employer Brand Management practices to generate multicultural workplaces where an employee can feel pride and satisfaction for belonging to an organization where he/she is considered. training and motivating professional talent. some companies belonging to these industries are beginning to develop systematically their respective Strategic Workforce Planning to analyze.

Decision making. team. internet. Failure to give them the feedback they need is to keep them in the dark regarding the assessment of their performance and how and where they need to improve. Employees want to know how they are doing . and cultural management skills if they hope to adapt themselves to a changing world. Extension programme managers must overcome this resistance and adopt innovative and efficient management techniques to remain high performers. If these decisions are made without bottomup feedback. Feedback mechanisms. current management wisdom touts the goal of getting decisions made as low down in the organization as possible. Responsiveness: Today‘s organizations are facing many challenges and threats from internal or external environment and it has to be responsive to the. software. 13 . Mangers need to have sensitivity to cultural diversity within their organization and find ways of accommodating needs of various groups of people. Because change means doing something new and unknown.8. Overwhelmingly. Conclusion Organizations constantly encounter forces driving them to change. 12. It also helps communicate more effectively with internal corporation and external market and customers 9. high technology opens the door up to the globe marketing and this requires innovative ideas to cope with such change and to minimize costs. The leader of the team is responsible for creating a good work environment for his/her team. The basic idea is that since people closest to the work are likely to know the most about solving problems in their areas. The quick responsiveness would be required to meet the opportunities and challenges happened out of these changes. Many managers make decisions that other employee‘s will either have to implement or that will affect them. the natural reaction is to resist it. Many managers are finding it necessary to rethink traditional policies and look for ways to accommodate the varying needs of the diverse groups of people. We all know that people who are motivated will be more productive and perform better at work.whether poorly or well. advances telecommunication. 10. Micro-electronic technology: Micro-electronic technology becomes widely used by successful competitive organizations to increase productivity and enhance the outcome results. It includes the use of automated manufacturing process. 11. etc. Empowerment: The key challenge facing managers and leaders today is to understand how to empower and motivate their team. you can guarantee that the outcome of the decisions will be less than desired or expected. This involves spending time trying to understand what motivates each individual and addressing problems faced by the team. They must improve their personal. An added benefit is that they are more motivated if they have some control over their work and over their own destinies. they should be involved in the decisions concerning those areas.

It is the starting point of the management process. Fayol was the managing director of a large French coal-mining firm and based his book largely on his experiences as a practitioner of management. link related jobs together in an understandable well-organized style and appoint the jobs to individuals. Organization is a matter of appointing individuals to assignments or responsibilities that blend together to develop one purpose. It also requires that managers be good decision-makers. acquiring resources. its employees. 1998). These goals will be reached in accordance with the company‘s values and procedures. This is achieved through management staffing the work division. and threats. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. Organizing In order to reach the objective outlined in the planning process. organizing. and other business functions. Then you need to decide on the resources that are needed to ensure that the objectives are met. The functions of management define the process of management as distinct from accounting. SWOT stands for strengths. or elements of management: planning. (Allen. The most commonly cited functions of management are planning. (Bateman. and most basic management texts since the 1950s have been organized around a functional framework. 2007). and controlling. to accomplish the goals.Question 4 Four functions performed by every manager in the entire organization The functions of management uniquely describe managers' jobs.4). organizing. G. and organizing the work group into a productive team. One way to do this is to use SWOT analysis completed by senior management before you even start the planning process. commanding. Completing a SWOT analysis will save you almost an entire hour in the planning process (Rowland. you are setting goals and objectives. p. then scheduling the steps to achieve the goals in a certain time. In this function. structuring the work of the organization is a vital concern.. Pre-planning can save a tremendous amount of time. Planning Planning is the function of management that involves setting objectives and determining a course of action for achieving these objectives. break the assignments into units that one person can complete. leading. It is the foundation on which other elements of the management process are built. although some identify additional functions. 14 . setting up the training for the employees. Snell. Fayol defined five functions. The manager must then go over the plans with the team. opportunities. coordinating. weaknesses. The first function is planning. Henri Fayol was the first person to identify elements or functions of management in his classic 1916 book Administration Industrielle et Generale. marketing. R. These functions provide a useful way of classifying information about management. and controlling. finance. A manager must know their subordinates and what they are capable of in order to organize the most valuable resources a company has.

. Evaluating employees is a continual process that takes place regularly within the company. Managers at (UB) are responsible for keeping communication lines open between departments to eliminate any issues from forming. G. (Bateman. prevent problems and to ascertain when problems do exist in order to address and solve those that occur as quickly and as efficiently as possible. (Allen. Snell. Leading Organizational success is determined by the quality of leadership that is exhibited. Managers and supervisors are given work performance evaluations that are a form of control as it connects performance assessments to rewards and corrective actions. The University of Botswana‘s leadership provides needed direction for staff to achieve personal success that leads to organizational success. G. 1998). Leadership is the power of persuasion of one person over others to inspire actions towards achieving the goals of the company.. (Allen. 1998). Control is the process through which standards for performance of people and processes are set. communicated. (Allen. 2007). and applied. 15 . Those in the leadership role must be able to influence/motivate workers to an elevated goal and direct themselves to the duties or responsibilities assigned during the planning process. but a manager is not necessarily a leader. departments and divisions. Meetings are used to review the daily schedule. "A leader can be a manager. Authorizing staff to have the capability to deal with situations is a significant part of leading. G.. (Allen. G.‘ This allows for the performance standard within the group to be set and communicated. Department meetings are daily at the University of Botswana.Organization is strong at the University of Botswana with the ability to be flexible. (Allen. Control allows for ease of delegating tasks to team members and as managers may be held accountable for the performance of subordinates. G. They as leaders have day to day contact with workers using open communication and are able to give direction individually as well as within teams." says Gemmy Allen (1998). Management is there to inspire subordinates to ‗step up to the plate‘ and find innovative means to solve department problems. Gemmy Allen stated that ‗Controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle. Controlling The process that guarantees plans are being implemented properly is the controlling process. Managers at Wyeth are there to motivate workers to fulfill the goals of the company and out-perform their competitors. they may be wise to extend timely feedback of employee accomplishments.. 1998). Leadership involves the interpersonal characteristic of a manager's position that includes communication and close contact with team members. Wyeth would not be a healthcare leader if there was little or no organization. 1998). 1998)..

Wyeth has the appropriate functions of management in position to be a long-term success 16 . Even with room for improvement. 2007). each employee‘s individual contribution to the success of the company is of enormous importance as the company‘s goals would not be met and success would not be reached. (Bateman. leading and controlling. In all organizations. Snell. organizing. assume a great worth in the success of any business every day.Importance of Functions of Planning The four functions of management planning.

as in a department store organized by retail product categories. 4. or by geographic divisions. as in men's wear or women's wear. to set a plan or strategy in motion is based on certain principles and these are: 1. An organization‘s structure may be of many types.Question 5 Steps to be followed in the organizing process The process of organizing is the way in which tasks and resources are distributed among departments. 5. This helps in proper distribution of work but can be harmful in terms of efficiency and decision making. as in accounting and human resource departments. as indispensable part of organization. 3. A horizontal organizational structure is what we call the traditional structure or at times. 2. the bureaucratic structure where there are one or more levels between the most junior and the senior most employees. These parts then have their various functions and are interdependent on each other for a smooth functioning of the organization. Organization Structure Every organization is composed of certain parts. This could provide greater speed in the decision making process but then the boss ends up taking care of a lot of things thus making delegation difficult. Specialization Departmentalization Organization structure coordination Restructuring Work Specialization Specialization is a situation where a task is broken up into smaller units to take the advantage of specialized knowledge or skills to improve productivity. An organization‘s structure is a framework that allots a particular space for a particular department or an individual and shows its relationship to the other. The division of task into smaller units however means that the various units have to be coordinated. Workers with varying skills and levels of expertise are grouped into a specific department and their interactions with one another are governed by established procedures. Departmentalization It is the process of forming employees into groups to accomplish specific organizational goals. Departments can be organized according to functions workers perform. 17 . by type of customer. the most common of these being the hierarchical and the flat organizational structure. A flat organization is much more relaxed and so-called modern in approach where everyone directly reports to a single boss. by products.

or other structures of a company for the purpose of making it more profitable. repositioning. debt restructuring and financial restructuring. Restructuring may also be described as corporate restructuring. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt.Coordination Once the organization has been divided into various departments the next important point is coordination. demerger. and reorganizing or reducing operations. Alternate reasons for restructuring include a change of ownership or ownership structure. operational. Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. Lack of coordination often leads to frustration and waste of time. or buyout. The basic nature of restructuring is a zero sum game. or a response to a crisis or major change in the business such as bankruptcy. ownership. selling portions of the company to investors. Restructuring It is the corporate management term for the act of reorganizing the legal. simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation. Strategic restructuring reduces financial losses. 18 . or better organized for its present needs.

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