Nature and Functions of Office

27.1 Introduction Every modern organisation is required to have an office. Whether it is a Government department, business firm, school, hospital, or a voluntary organisation, the existence of an office is a must to enable necessary clerical and administrative tasks to be performed properly. An office is required for collection, arrangement, retention and dissemination (communication) of right information at the right time and to the right person. Its activities such as mail handling, filing, indexing, copying, telephone handling etc. must be controlled and supervised properly. An office manager controls all the frequently performed duties in an office. The office manager performs the managerial functions, namely planning, organising, staffing, directing, and controlling. In this lesson you will learn about the meaning of ‘Office’, functions of a modern office and the need for and importance of office. 27.2 Objectives After studying this lesson, you will be able to : • state the meaning and objectives of office; • describe the functions of a modern office; • explain the need for and importance of office to business enterprises.2:: Business Studies 27.3 Office — Meaning and Objectives If you visit a firm, school or hospital you will find that a number of activities are being performed, such as letters received, despatched, typing, photocopying, word processing, filing, handling of office machines etc. The place where all such activities are performed is known as office. Thus office is a service department of an organisation, which is connected with the handling of records and provision of various services like typing, dupl i c a t ing, ma i l ing, f i l ing, handl ing off i c e ma chine s , ke eping r e cords , d r a f t i n g , us ing informa t ion, handl ing money and othe r mi s c e l l aneous activities. Definition of office Some of the popular definitions of office are as follows: ‘‘Office is a place where clerical operations are carried on’’.—Denyer, J.C. ‘‘Office is a unit where relevant records for the purpose of control, planning and efficient management of the organisation are prepared, handled and preserved. It provides facilities for internal and external communication and coordinates activities of different departments of the organisation’’. —Littlefield, Rachel and Caruth. The above definitions highlight the following characteristics— • collecting information • processing information • storing information

• coordinating information • distributing information Therefore, an office may be defined as a place where all the activities concerned with collecting, processing, storing and distributing information for efficient and effective management of an organisation are carried out. In every modern organisation, be it a business concern or a Government department, there has to be an office. It is essential for the efficient management of the organisation. Objectives of an office The main objectives of an office are as follows: (1) Aid to Management:Nature and functions of office :: 3 The office provides aid to management in performing the following functions: ( a ) Direction: Direction and guidance of management to various sections and departments are issued through the office. (b) Commu n i c a t i o n : The off i c e s e r v e s a s a c ommu n i c a t i o n channel between different parts of the organisation. It handles mail. ( c ) Planning: The off i c e he lps management in pl anning for smo o t h f u n c t i o n i n g a n d p r o g r e s s o f t h e o rg a n i s a t i o n b y providing necessary information and data. (d) Coordination: The office also facilitates co-ordination by maintaining links among departments. (2) Preserving Records The office maintains necessary books and records of the organisation. (3) Providing Information It provides the right kind of information to management at the right time. (4) Providing Office Services It provides clerical and secretarial services to different executives. (5) Distribution of work The off i c e di s t r ibut e s the work among va r ious employe e s and identifies their duties and functions. (6) Selection and Appointment It also handles selection and appointment of employees. In shor t , the off i c e i s an impor t ant and indi spens abl e pa r t of eve ry organisation. Intext Questions 27.1 I . Fill in the blanks by selecting a suitable word given in the bracket.

( a ) Every modern organisation is required to have an __________ (shop, office). (b) An o ff i c e i s n e c e s s a r y t o p e r f o rm _ _ _ _ _ _ _ _ _ _ (clerical, managerial)4:: Business Studies ( c ) The office is a __________ department of an organisation. (service, personnel) (d) An office not only performs __________ work but provides many other services. (recording, planning, paper) ( e ) More advanced and mechanised techniques of accounting is an essential characteristic of __________ scene of office. (past, present, future) (f) Preserving information is the chief __________ of a business office. (aim, objective, function) I I . Fill in the blanks ( a ) Office means a place where all sorts of ________work is performed. (b) Office is the __________centre of business. ( c ) Office activities are concerned with collecting, storing and __________ information. (d) Office is a unit where relevant ________ of the organisation are prepared, handled and preserved. duties.

27.4 Functions of a Modern Office An office is primarily concerned with collection and supply of information. Accurate and up to da te information relating to organisation and othe r agencies affecting the organisation is always required for taking decisions and fo r m ulating policies . Besides , off ice h as assumed many othe r respo nsibilities , such as safeguardi ng assets , per sonnel manageme n t , procrement of assets etc., which are incidental to the primary function. Therefore, the functions of a modern office may be classified into two categories: ( a ) Basic functions, and

(b) Administrative functions. (a) Basic functions Basic functions are those functions of an office which need to be performed in all types of organisations. They are mainly related to receiving and giving of information. These basic functions are as follows:Nature and functions of office :: 5 1 . Collecting information The office receives or collects information about various activities of the organisation. The information may be collected from internal or external sources. Internal sources may be employees and various departments of the organisation. The external sources are customers, suppliers and Government Departments etc. From internal sources information may be received in the form of letters, circulars, reports etc., and external sources provide information through letters, orders, invoices, inquiries, reports, questionnaires etc. The executives of the organisation may also collect information while visiting other organisations. 2 . Recording information The office keeps record of information collected from variousmn sources to make it readily available to the management. The information is kept in the form of correspondence, reports, statements, circulars, lists, charts, registers, books, etc. An office has also to maintain records as prescribed under law. The registered office of a company is required to maintain Register of Members under the Companies Act, 1956. 3 . Arranging, analysing and processing the information The information collected in an office is generally not in the form in which it may be used by the management. Therefore, facts and figures collected have to be arranged, processed, o rg a n i s e d a n d a n a l y s e d t o m a k e t h e m u s e f u l t o t h e management. In this connection financial statements, statistical statements, charts, lists, reports, summaries are prepared. 4 . Preserving Information The information is properly sorted out and preserved in the mo s t e c o n omi c a n d s c i e n t i f i c ma n n e r. Va r i o u s t y p e s o f equipment s , f i l ing c abine t s , e t c . a r e us ed for pr e s e rving records. Unnecessary and out-dated records are destroyed to make space for new and valuable records. 5 . Supplying information All accumulated and processed information is useless unless it is communicated. The office serves as a two way channel for communication. On the one hand, it supplies the collected, recorded and processed information to the management and on6:: Business Studies the other hand, the policy decisions, guidelines and instructions issued by themanagement to the departments are also routed through the office. The information may be supplied verbally or in writing. Internal Agencies : Employees, Departments, Management etc. External Agencies: Customers, Suppliers, Govt. Deptt. etc. 1. Receiving Information 5 . Giving information 2 . Recording Information 3 . Analysing and Arranging Information 4 . Preserving Information Fig. 27.1 Basic functions

(b) Administrative Functions Administrative functions are in addition to the basic functions. But the office cannot hope to work smoothly without them. These relate to the tasks of protecting and safeguarding assets, maintaining and enhancing the operating efficiency, stationery control, choice and use of the office equipments and selection, training, placement, and remuneration of the personnel etc. The following functions are normally considered as administrative functions of an office:1 . Management functions Various functions of management are also applicable to the management of a office functions. Office work has to be planned, organised and executed according to the plan. Control is exercised to ensure efficiency of operations in the office. Staffing, directing, communicating, co-ordination, motivating are also important for the management of offices. 2 . Instituting office systems and routines An office has to develop systems and procedures for providing better services to other departments. Each phase of office work is carefully analysed and a proper procedure is developed for it. Proper sequencing of different tasks is necessary to ensure continuous flow of work. 3 . Procuring stationery and supplies Adequate supply of office stationery of proper quality is necessary for the efficient performance of office work. The office purchases standard quality paper, pens, ink and other stationery items, maintains the stock and issues them only on demand. 4 . Designing and control of office forms Use of standardised forms simplifies office operations. It is the responsibility of the office to design, standardise, provide and control the forms to be used in the office as well as in other departments of the enterprise. 5 . Purchasing office equipments and furniture Efficient and economical performance of office work requires proper furniture, equipment and machines. Office has to arrange for selection and purchase of these items from reliable suppliers. It has also to ensure timely availability of furniture e t c . , t o d e p a r tme n t s a n d emp l o y e e s t o f a c i l i t a t e p r o p e r utilisation, as well as arrange for maintenance, servicing and replacement according to need. 6 . Safeguarding of Assets Different types of assets are maintained in an organisation. The assets must be protected against damages and losses on a c count of f i r e , the f t e t c . An eff i c i ent cont rol sys t em i s exercised by office to safeguard the assets. 7 . Personnel Management The efficiency of office work depends very much on the employees. Their appointment, training, promotion, appraisal and welfare are the functions of the office. 8 . Maintaining Public Relations

An organisation depends on public reputation and goodwill for its existence and progress. Maintaining public relations is also the responsibility of the office. Most organisations have r e c e p t i o n c o u n t e r s t o g r e e t a n d r e c e i v e v i s i t o r s t o t h e organisation. The above are some of the more important functions of office. The nature of functions differ from organisation to organisation as per needs. Intext Questions 27.2 I . Match the following Statement Function ( a ) The efficiency of office (1) Forms control depends on the personnel assigned to different jobs (b) The office supplies the (2) Preserving information collected, recorded and processed information ( c ) The cost of office operations (3) Personnel management are to be kept within reasonable limits. ( d ) Use of standard forms (4) Cost reduction simplifies office operations ( e ) Unnecessary records should (5) Giving information be destroyed to make space for new records. I I . Fill in the blanks. ( a ) An office is primarily concerned with collection and supply of __________. (b) The employees, departments and management are __________ agencies. ( c ) The customers, suppliers and Government departments are __________ agencies. (d) All __________ functions are related to receiving and giving

of information. ( e ) Procuring stationery and supplies is considered an __________ function.Nature and functions of office :: 9 I I I In the answer column, write ‘A’ for Administrative Function and ‘B’ for Basic Function. Function Answer (1) Maintaining Public Relations (2) Recording in Register of Members (3) Staffing (4) Drafting of letters (5) Selection and purchase of equipment (6) Filing (7) Issue of stock (8) Designing office systems (9) Preparing Financial Statement (10) Collecting Information 27.5 Importance of office Office is an indispensable part for all types of organisations just like thebrain of a human body. It works as the nerve centre of the organisation, and is vital for its functioning. It helps management to plan, execute, communicate, control and co-ordinate activities to achieve the pre-defined objectives of the organisation. The importance of an office is discussed below : 1 . Office as a service centre Office provides the services of typing, duplicating, printing, providing information from records, supplying forms and stationery etc. No organisation can work smoothly without these services. Therefore, office is sometimes referred to as a service department. 2 . Office as a memory centre All types of information are arranged and preserved in the office a n d s u p p l i e d t o m a n a g e m e n t a s a n d w h e n r e q u i r e d . Va r i o u sm transactions and activities of the organisation which are on record are preserved by the office. Therefore, office may be described as the memory centre, information centre or brain of an organisation.10:: Business Studies 3 . Office as a channel of communication

I t i s through the off i c e tha t communi c a t ion, e spe c i a l ly wr i t t en communi c a t ion, t ake s pl a c e be twe en di ff e r ent depa r tment s and different levels of the organisation. An organisation would fail, in spite of the best organisational resources, if the communication system is not effective. 4 . Office as a co-ordinator Office maintains links with all the departments of an organization and keeps every department informed about what is happening in othe r depa r tment s . Thus , i t provide s the ba s i s of co-ordina t ion between departments. For example, office informs the production department about changing tastes and fashion in the market as revealed by the market survey conducted by marketing department. Similarly marketing department is supplied information about the cost of production to fix appropriate prices. 5 . Office as a controller Control is a necessary function of management executed through office. It requires (i) establishment of standards, (ii) measurement of performance against the standard (iii) ascertainment of deviation, and (iv) correction of deviations from standards and plans. 6 . Office as a intermediary The offfice maintains contact with outsiders and links the organisation with customers, suppliers, etc. It attends to the enquiries, orders and complaints, and maintains liaison between government and the organisation. 7 . Importance of office to employees Maintenance of attendance records, and preparation of wage and salary sheets for timely payment are the responsibility of the office. It is also responsible for operating different employee benefit schemes, like group insurance, provident fund, etc. 8 . Importance of office to customers The office acts as a link between the business and its customers. Enquiries, orders, and complaints of customers are taken care of by t h e o ff i c e . I t a l s o a d v e r t i s e s t h e p r o d u c t s a n d t h e i r u s e s f o r information of the customers. 9 . Importance to general public The off i c e a l so a c t s a s a l ink be twe en gene r a l publ i c and theNature and functions of office :: 11 organisation. It is responsible for creating a good image for the organisation in the minds of people. Intext Question 27.3 I . Fill in the blanks ( a ) Office is an indispensable part of an ___________ just like the brain of a human body. (b) Competent _ _ _ _ _ _ _ _ _ _ _ s e r v i c e i s a p r e c o n d i t i o n f o r

e fficient conduct of affairs of any set-up. ( c ) As a/an___________ centre the office collects, compiles and provides the required information to the management . (d) The office acts as a link between general ___________ and the organisation. ( e ) Office works as channel through which __________ moves from top to bottom and vice-versa. I I . Which of the following statements are True and which are False? ( a ) The office is the production department of an enterprise. (b) The off i c e provide s a l ink be twe en the organi s a t ion and outsiders. ( c ) The off i c e i s r e spons ibl e for ope r a t ing employe e bene f i t schemes. (d) Office work is unproductive work. ( e ) Cont rol i s a ne c e s s a ry func t ion of management exe cut ed through office. I I I . Match the following statements with functions : Statements Functions ( a ) It provides typing, duplicating (1) Memory filing and recording (b) It requires establishment of (2) Co-ordination standards12:: Business Studies ( c ) It prepares attendance records, (3) Control wage and salary sheets etc. (d) It maintains links with all (4) Service departments ( e ) It collects, compiles and (5) Employees provides information

27.7 Terminal Exercises Answer should not exceed 10 words 1 . What is meant by ‘paper work’? 2 . What is the importance of basic functions? 3 . Name two basic functions of an office. 4 . Name two administrative functions of an office. 5 . Write two points of importance of an office to a business enterprise. 6 . Define the term ‘office’.Nature and functions of office :: 13 7 . State the importance of the office. 8 . Enumerate the basic functions of the office. 9 . What are the administrative functions of office? 10. Is office work unproductive? Explain in brief. Answer should not exceed 150 words. 11. What is meant by office? Explain its functions. 12. ‘‘An office is to a business what the mainspring is to a watch.’’ Explain this statement. 13. Discuss the significance of office to a modern enterprise. 14. Write the objectives of an office in detail. 15. What is the role of a modern office in business.Explain. 27.8 Answers to Intext Questions 27.1 I ( a ) Office (b) Clerical ( c ) Service (d) Paper ( e ) Future (f) Objective I I ( a ) clerical (b) nerve

( c ) distributing (d) records 27.2 I (a) - 3 (b) - 5 (c) - 4 (d) - 1 (e) - 214:: Business Studies I I . ( a ) information (b) internal ( c ) external (d) basic ( e ) administrative III.1-A 2-B 3-A 4-B 5-A 6-B 7-A 8-A 9-B 10 - B 27.3 I . ( a ) organisation (b) clerical ( c ) information (d) communication I I . (a) F (b) T (c) T (d) F (e) T I I . (a) - 4

(b) - 3 (c) - 5 (d) - 2 (e) – 1

Types of Business Enterprise
There are several types of business enterprises an investor can choose from in establishing operations in the Philippines. Organized under Philippine Laws 1. Sole Proprietorship - is a business structure owned by an individual who has full control/authority of its own and owns all the assets, personally owes answers all liabilities or suffers all losses but enjoys all the profits to the exclusion of others. A sole proprietorship must apply for a business name and be registered with the DTI-National Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices.


Partnership - Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of their capital contributions. It consists of two or more partners. A partnership with more than P3,000 capital must register with the Securities and Exchange Commission (SEC).


Corporation - is composed of juridical persons established under the Corporation Code and regulated by the SEC with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital. It consists of at least five to 15 incorporators, each of whom must hold at least one share and must be registered with the SEC. Minimum paid up capital is P5,000. A corporation can either be stock or non-stock company regardless of nationality. Such company, if 60% Filipino-40% foreign-owned, is considered a Filipino corporation; If more than 40% foreign-owned, it is considered a domestic foreign-owned corporation.

StockCorporation This is a corporation with capital stock divided into shares and authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held. Non-stockCorporation This is a corporation organized principally for public purposes such as charitable, educational, cultural, or similar purposes and does not issue shares of stock to its members. Organized under Foreign Laws 1. Branch Office - is a foreign corporation organized and existing under foreign laws that carries out business activities of the head office and derives income from the host country. It is required to put up a minimum paid up capital of US$200,000, which can be reduced to US$100,000 if activity involves advanced technology, or company employs at least 50 direct employees. Registration with the SEC is mandatory.


Representative Office - is a foreign corporation organized and existing under foreign laws. It does not derive income from the host country and is fully subsidized by its head office. It deals directly with clients of the parent company as it undertakes such activities as information dissemination, acts as a communication center, and promotes company products, as well as quality control of products for export. It is required to have an initial minimum inward remittance in the amount of US$30,000 to cover its operating expenses and must be registered with the SEC. Under Republic Act (RA) 8756, any multinational company may establish a Regional Headquarter (RHQ) or Regional Operating Head Quarter (ROHQ) as long as they are existing under laws other than the Philippines, with branches, affiliates, and subsidiaries in the Asia Pacific Region and other foreign markets.


Regional Headquarters (RHQs) - An RHQ undertakes activities that shall be limited to acting as supervisory, communication, and coordinating center for its subsidiaries, affiliates, and branches in the Asia-Pacific region. It acts as an administrative branch of a multinational company engaged in international trade. It does not derive income from sources within the Philippines and does not participate in any manner in the management of any subsidiary or branch office it might have in the Philippines. Required capital is US$50,000 annually to cover operating expenses.


Regional Operating Headquarters (ROHQs) - An ROHQ performs the following qualifying services to its affiliates, subsidiaries, and branches in the Philippines.

-General administration and planning -Business planning and coordination -Sourcing/procurement of raw materials components Corporate finance advisory services -Marketing control and sales promotion -Training and personnel management - Logistic services -Research and development (R&D) services and product development -Technical support and communications - Business development - Derives income in the Philippines - Required capital: US$200,000 - one time remittance

Types of business structures Sole Proprietorship A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate, and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes. However, the business owner is personally liable for all debts incurred by the business. General Partnership A General Partnership is composed of 2 or more persons (usually not a married couple) who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement. Limited Partnership A Limited Partnership is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment. Limited partners are usually not involved in the day-to-day operations of the business. Filing with the Washington Secretary of State is required. Limited Liability Partnership (LLP) A Limited Liability Partnership (LLP) is similar to a General Partnership except that normally a partner doesn’t have personal liability for the negligence of another partner. This business structure is used most by professionals, such as accountants and lawyers. Filing with the Washington Secretary of State is required. Limited Liability Limited Partnership (LLLP)

A Limited Liability Limited Partnership is a Limited Partnership that chooses to become an LLLP by including a statement to that effect in its certificate of limited partnership. This type of business structure may shield general partners from liability for obligations of the LLLP. Filing with the Washington Secretary of State is required. Corporation A Corporation is a more complex business structure. A corporation has certain rights, privileges, and liabilities beyond those of an individual. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control. Corporations may be formed for profit or nonprofit purposes. Filing with the Washington Secretary of State is required. Nonprofit Corporation A Nonprofit Corporation is a legal entity and is typically run to further an ideal or goal rather than in the interests of profit. Many nonprofits serve the public interest, but some engage in private sector activities. If your nonprofit organization is, or plans to, raise funds from the public, it may also be required to register with the Charities Program of the Washington Secretary of State. Charitable activities may require additional registration. Contact the Office of the Secretary of State for more information. Limited Liability Company (LLC) A Limited Liability Company (LLC) is formed by 1 or more individuals or entities through a special written agreement. The agreement details the organization of the LLC, including provisions for management, assignability of interests, and distribution of profits and losses. LLCs are permitted to engage in any lawful, for-profit business or activity other than banking or insurance. Filing with the Washington Secretary of State is required. Massachusetts Trust A Massachusetts Trust is an incorporated business with the property being held and managed by the trustees for the shareholders. The trustees are considered employees since they work for the trust. Filing with the Washington Secretary of State is required. Trust A Trust is a legal relationship in which one person, called the trustee, holds property for the benefit of another person, called the beneficiary. Joint Venture A Joint Venture is formed for a limited length of time to carry out a business transaction or operation. Tenants in Common A Tenants in Common is allows 2 or more people to occupy the same business while retaining separate identities in regard to assets or liabilities resulting from business activities. Municipality A Municipality is a public corporation established as a subdivision of a state for local governmental purposes. Association An Association is an organized group of people who share in a common interest, activity, or purpose.

1500-1770 - In their formative stages, offices were more like independent studies. Be glad you don’t have to wear a robe to work and write in ink-dipped pen. 1770-1880 – This era is represented by hand crafted furniture, specific attention to themed decoration, and shared workspaces. We also see our first signs of electricity, which would change life in the office forever. 1880′s – With the invention of the first commercial typewriter in 1870, many offices began to take advantage. Skilled typists could now transcribe information at 3-4 times the handwritten rate. 1890′s – The desire for personal comfort and more relaxed office rules made way for what would become the modern day “suit and tie.” 1900′s – The turn of the century began what is considered the first decade of materialism and consumerism. Men styled in long, slim suits while women wore dresses with broad shoulder pads. Doesn’t casual Friday sound fantastic now? 1910′s – With the invention of the electrical typewriter, hundreds of typewriter secretary positions were created. This decade also saw the men of many offices off to fight in WWI. 1920′s – Henry Ford’s studies of workflow and mass production had affects far beyond auto production. Offices were planned to promote maximum efficiency and minimize waste 1930′s – Though women had been members of the American workforce for over 100 years, their inclusion became rapidly prevalent. In the 1930′s alone, the percentage of women in the workplace rose by 25%. 1940′s – World War II pulled the nation out of the Great Depression as women stepped up to fill the jobs vacated by men who went to war, while television became mainstream. The total number of TV sets grew from 5,000 to 17 million during the decade. 1950′s – With Europe decimated and American soldiers back from the war, industry and family creation exploded. Culture took a conservative turn, as the battle between capitalism and communism invaded every aspect of society. 1960′s - Style becomes a priority. Concepts such as spacing, color, and flow are given specific attention. And check out that hairstyle! 1970′s – The floppy disc arrived in 1970 and was soon followed by the microprocessor. The invention of jumbo jets revolutionized commercial flights and counter culture elements from the 60s like long haired men, bell bottoms, and platform shoes became mainstream. 1980′s – The personal computer, though expensive and limited in its functionality, begins to nudge its way onto desks across the country. 1990′s – Computers can be found on almost every desk. It’s interesting to note that the large stacks of paper almost vanish completely. 2000′s – Flat panel monitors allow for a lot more desk space, and rapidly blossoming technology allows creative new setups. Bonus – The Future – Of course, these are only guesses, but the adaptation of evolving technology is already showing signs of multi-screen displays, complete wireless setups, and progressive, relaxed work environments that cater to their young and hip inhabitants.

Sign up to vote on this title
UsefulNot useful