Professional Documents
Culture Documents
Divison of Labour:
As businesses grow from sole trader to medium size to large different persons had to
specialise in different functional departments as follows:
Production
The production department is responsible for transforming raw materials into finished
products. They are also responsible for quality control to ensure that required standards are
met.
- Input to output
- Quality control
Finance/Accounts
The accounts department makes and receives all payments on behalf of the business and
records all financial transactions
- Producing end of year financial statements – Annual reports, Balance sheets and
Profit and Loss.
- Advising Management
Marketing
This department creates awareness for the firm products and motivates consumers to buy.
They also carry out market research to identify customer’s needs.
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- Advertising and sales promotion
- Distribution of products
Human Resources/Personnel
The human resource department recruits and selects staff for the business organization. They
are also responsible for staff training and welfare.
- Promotion criteria
- Training
- Interviews
- Wage negotiation
- Public Relations
This department is responsible for the purchasing of the firms raw material, stationery and
goods for re-sale.
This Department bridges the gap between a business and its customers. It deals with
customers’ queries, advising and assisting customers to place orders and handling customers’
complaints.
Legal Department
This department is concerned with legal problems that might arise for the company. For
example, compensation for employees and customers, who have brought lawsuits against the
company.
This department is involved with research to explore ways of improving the company’s
existing products, developing new ones and identifying efficient processes to increase
production. This department works closely with the marketing department as products
developed must satisfy consumers’ needs.
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Organisational Structure- refers to the way a business is structured to achieve maximum
efficiency. An organizational structure defines how activities such as task allocation,
coordination and supervision are directed towards the achievement of organizational aims
Formal Structure - Formal organization is a fixed set of rules of intra-organization
procedures and structures. As such, it is usually set out in writing eg. Org Chart.
Informal Structure – the unofficial relationships that exist in the firm.
Span of Control - refers to the number of subordinates a supervisor has.
Lines of Communication- this represents the standards and procedures associated with the
movement of information
Organizational Charts
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Those who have the power to issue commands have authority in an organization. In the
organization chart above the sales manager has the authority in the Sales department. All
persons with the same level of authority are placed at the same level on the chart. For
example the sales manager and the accounts manager have the same level of authority in their
various departments.
Responsibility is the capacity to accept duties and to carry out their tasks. For example, both
sales supervisors are responsible to the sales manager.
1. Line
2. Staff
3. Functional
4. Committee
Line or Direct
The line organizational chart depicts a straight line of command. Authority is said to flow
downwards only in the line organization. The line organizational structure is found in schools
or in the military.
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Advantages
Disadvantages
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The Functional organizational chart combines the straight line of command of the line
organization with horizontal dotted diagonal lines representing functional authority. The
dotted diagonal lines in the figure above show the authority that the Human Resource
Manager has over other departments. The Human Resource Manager is allowed authority in
these department over human resource matters only e.g. to hire and fire workers. He therefore
cannot give directives on production or marketing matters.
Advantages
Disadvantages
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The Line and Staff organizational chart combines the line and functional organization with
the addition of staff personnel. Staff workers assist and advise line workers. Staff workers
include consultants, advisors, company lawyers, executive secretary, auxiliary workers etc.
Staff officers do not have authority, that is, the power to delegate tasks to subordinates in the
organization. Their main role is to advise and assist line officers. This is why there are no
vertical lines connecting staff officers to any other member of staff on the chart. They are
therefore, placed at the side directly below the line officer whom they assist or advise.
Advantages
2. Expert Advice
3. Productivity increases because line managers can have more free time to focus on
other duties.
Disadvantages
1. Authority- confusion between the line and staff positions for authority.
2. Decision Making- line position relies heavily on a staff position for decision making.
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Committees are advisory bodies. They are usually appointed to advise organizations.
Examples of committees include; parent teachers associations and student councils which are
committees within a school organization. Committees usually delegate certain duties to sub-
committees. For example, an executive committee may appoint a finance committee to advise
it on financial matters. Note that an element of the line organization exists in the committee
organization as all sub-committees are responsible to the executive committee.
Advantages
2. Authority is shared
Disadvantages
Matrix structure:
This is a combination structure that joins functional areas with structures for projects and
teams. The functional areas flow vertically down the chain of command. Simultaneously, a
worker can be horizontally attached to a project team. Matrix structures offer flexibility for
organisation employees to utilize skills and competencies. It is based on the individual having
expertise in functional areas and be able to transfer these skills to projects. Difficulties can
occur in areas of control of tasks, role ambiguity and role conflict.
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Advantages
1. Efficient Information Exchange
2. Increased Motivation – shared decision making encourages employees
Disadvantages
1. Internal Complexity- this may cause miscommunication and confusion because of
dual authority.
2. Expensive to Maintain and Internal Conflict
1. Vertical
2. Circular
3. Horizontal
Types of Departmentalization:
1. By Function
2. By Process or Equipment
3. By Geographic Territory
4. By Product
TEAMWORK
Definition of Team:
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A group of two or more persons interacting regularly and coordinating their work to
accomplish a common objective.
Role of Teamwork
Many firms adopt a teamwork approach to complete tasks more efficiently. For example a
major Caribbean airline encourages its workers to work as a team to achieve the main task of
having each flight leave on time. Workers therefore move to various positions if needed, to
have each flight leave on time.
Advantages
2. It increases communication
6. Ensures continuity, i.e. if one team member is absent the other will complete the task.
Disadvantages
Groups are formed naturally by persons with similar interest, common goals and similar past
experiences in an organization. The establishment of various clubs, work socials and outings
will encourage greater interaction among workers, better relationships and a teamwork
approach to completing tasks.
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