Another
important aspect of organizing will occupy our attention in this page and that
is business structure.
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 that 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.
By
the end of the going through this page, you should be able to understand the
following
1. The
Board of Directors
2. The
functions of the Board of Directors describe the office of the Managing
3.
Know director discuss the complex layer and
4. Understand
functions of the complex layer.
Board of Directors
This
is the first layer of a typical business organization. Members of the board are
drawn from the shareholders. The Managing Director, even though he is in charge
of then day to day activities of the organization is also member of the board.
The board provide leader and that is why whoever 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:
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 unity 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.
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
unit. Remember, we discussed hierarchy of objectives with the corporate
objectives at the top, followed by the departmental objectives and so on.
We
have discussed what a good business objectives are, the characteristics of objectives, typesof business objectives, importance of objectives to an organization and
other issues relating to objectives.
Read on: Management Objective and Management Skill
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 firmly in the
process of implementation to existing guidelines and finding out if there are
problems associated with the implementation. Any problem detected is 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.
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 shareholders 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.
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.
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.
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:
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.
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.
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.
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.
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.
1.
The Financial Department
They
carry out costing financial accounting records budget and budgeting control
among others.
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.
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.
The personnel department
Functions
that are performed here include:
1. Recruitment
2. Selection
or interview placement
3. Salaries
and wages administration promotion
4. Training,
among others
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