INTRODUCTION TO BUSINESS MANAGEMENT
CHAPTER 8: ORGANISING
The importance of organising: Organising, like planning, is an integral and indispensable component of the
management process.
The reasons for the importance of organising in an organisation include the following points:
• Organising entails a detailed analysis of work to be done and resources to be used to accomplish the aims of
the business. It is through organising that tasks and resources, and methods or procedures, can be
systematised. Everyone should know their duties, authority and responsibility, the procedures they must
follow or the methods they have to adopt, and the resources they can use. Proper organising ensures that
the joint and co-ordinated efforts of management have a much greater and more effective result than the
sum of individual efforts.
• Organising divides the total workload into activities that can comfortably be performed by an individual or a
group. Tasks are allocated according to the abilities or qualifications of individuals, thus ensuring that nobody
in the business has either too much or too little to do. The ultimate result is higher productivity.
• Organising promotes the productive deployment and utilisation of resources.
• Related activities and tasks of individuals are grouped together rationally in specialised departments, such as
marketing, personnel or finance departments, in which experts in their particular fields carry out their given
duties.
• The development of an organisational structure results in a mechanism that co-ordinates the activities of the
whole business into complete, uniform, harmonious units.
Successful organising, then, makes it possible for a business to achieve its goals. It coordinates the activities of
managers and subordinates to avoid the unnecessary duplication of tasks, and it obviates possible conflicts.
The fundamentals of organising
• Designing jobs
• Grouping jobs (departmentalisation)
• Establishing reporting relationships
• Establishing authority relationships
• Co-ordinating activities.
Designing jobs
• The first building block of organisational structure is job design
• The point of departure when designing jobs for employees is to determine the level of specialisation or the
degree to which the overall task of the organisation is broken down into smaller, more specialised tasks.
Specialisation is the way in which a task is broken up into smaller units to take advantage of specialised
knowledge or skills to improve productivity. Job specialisation is normally an extension of organisational
growth
• Job rotation involves systematically moving employees from one job to another.
• Job enlargement was developed to increase the total number of tasks that a worker performs. As a result, all
workers perform a variety of tasks. It was assumed that this would reduce the level of job dissatisfaction.
• Job enrichment is a more comprehensive approach than job rotation and job enlargement. It involves
increasing both the number of tasks the worker does and the control the worker has over the job. To
implement job enrichment, managers remove some controls from the job, delegate more authority to
employees and structure the work in complete units. Job enrichment may also involve continually assigning
new and challenging tasks, thereby increasing employees’ opportunities for growth and advancement.
, Grouping jobs: Departmentalisation
The reasons for departmentalisation are therefore inherent in the advantages of specialisation and the pressure in a
growing business to split the total task of management into smaller units. As soon as a business has reached a given
size, it becomes impossible for the owner–manager to supervise all the employees, so it becomes necessary to
create new managerial positions according to departments based on a logical grouping, in manageable sizes, of the
activities that belong together.
The benefits and limitations of specialisation
Benefits of specialisation Limitations of specialisation
Workers performing small and simple tasks become Workers who perform highly specialised jobs may become
very proficient at each task. bored and dissatisfied, which may lead to absenteeism and
lower quality of work.
The transfer time between tasks decreases. If The anticipated benefits of specialisation do not always
employees perform several different tasks, some occur. For example, the time spent on moving work in
time is lost as they stop doing a task and move to process from work in process from worker to worker can be
the next tasks. greater than the time needed for the same individual to
change from job to job.
The more narrowly defined a job is, the easier it is
to develop specialised equipment to assist with
that job.
When an employee who performs a highly
specialised job is absent or resigns, the manager is
able to train somebody new at relatively low cost.
Some common bases for departmentalisation include the following:
• Functional departmentalisation;
• Product departmentalisation;
• Location departmentalisation;
• Customer departmentalisation
• The matrix organisational structure.
Functional departmentalisation
Functional departmentalisation, as shown in Figure 8.1, is the most basic type of departmentalisation. Here,
activities belonging to each management function are grouped together.
CHAPTER 8: ORGANISING
The importance of organising: Organising, like planning, is an integral and indispensable component of the
management process.
The reasons for the importance of organising in an organisation include the following points:
• Organising entails a detailed analysis of work to be done and resources to be used to accomplish the aims of
the business. It is through organising that tasks and resources, and methods or procedures, can be
systematised. Everyone should know their duties, authority and responsibility, the procedures they must
follow or the methods they have to adopt, and the resources they can use. Proper organising ensures that
the joint and co-ordinated efforts of management have a much greater and more effective result than the
sum of individual efforts.
• Organising divides the total workload into activities that can comfortably be performed by an individual or a
group. Tasks are allocated according to the abilities or qualifications of individuals, thus ensuring that nobody
in the business has either too much or too little to do. The ultimate result is higher productivity.
• Organising promotes the productive deployment and utilisation of resources.
• Related activities and tasks of individuals are grouped together rationally in specialised departments, such as
marketing, personnel or finance departments, in which experts in their particular fields carry out their given
duties.
• The development of an organisational structure results in a mechanism that co-ordinates the activities of the
whole business into complete, uniform, harmonious units.
Successful organising, then, makes it possible for a business to achieve its goals. It coordinates the activities of
managers and subordinates to avoid the unnecessary duplication of tasks, and it obviates possible conflicts.
The fundamentals of organising
• Designing jobs
• Grouping jobs (departmentalisation)
• Establishing reporting relationships
• Establishing authority relationships
• Co-ordinating activities.
Designing jobs
• The first building block of organisational structure is job design
• The point of departure when designing jobs for employees is to determine the level of specialisation or the
degree to which the overall task of the organisation is broken down into smaller, more specialised tasks.
Specialisation is the way in which a task is broken up into smaller units to take advantage of specialised
knowledge or skills to improve productivity. Job specialisation is normally an extension of organisational
growth
• Job rotation involves systematically moving employees from one job to another.
• Job enlargement was developed to increase the total number of tasks that a worker performs. As a result, all
workers perform a variety of tasks. It was assumed that this would reduce the level of job dissatisfaction.
• Job enrichment is a more comprehensive approach than job rotation and job enlargement. It involves
increasing both the number of tasks the worker does and the control the worker has over the job. To
implement job enrichment, managers remove some controls from the job, delegate more authority to
employees and structure the work in complete units. Job enrichment may also involve continually assigning
new and challenging tasks, thereby increasing employees’ opportunities for growth and advancement.
, Grouping jobs: Departmentalisation
The reasons for departmentalisation are therefore inherent in the advantages of specialisation and the pressure in a
growing business to split the total task of management into smaller units. As soon as a business has reached a given
size, it becomes impossible for the owner–manager to supervise all the employees, so it becomes necessary to
create new managerial positions according to departments based on a logical grouping, in manageable sizes, of the
activities that belong together.
The benefits and limitations of specialisation
Benefits of specialisation Limitations of specialisation
Workers performing small and simple tasks become Workers who perform highly specialised jobs may become
very proficient at each task. bored and dissatisfied, which may lead to absenteeism and
lower quality of work.
The transfer time between tasks decreases. If The anticipated benefits of specialisation do not always
employees perform several different tasks, some occur. For example, the time spent on moving work in
time is lost as they stop doing a task and move to process from work in process from worker to worker can be
the next tasks. greater than the time needed for the same individual to
change from job to job.
The more narrowly defined a job is, the easier it is
to develop specialised equipment to assist with
that job.
When an employee who performs a highly
specialised job is absent or resigns, the manager is
able to train somebody new at relatively low cost.
Some common bases for departmentalisation include the following:
• Functional departmentalisation;
• Product departmentalisation;
• Location departmentalisation;
• Customer departmentalisation
• The matrix organisational structure.
Functional departmentalisation
Functional departmentalisation, as shown in Figure 8.1, is the most basic type of departmentalisation. Here,
activities belonging to each management function are grouped together.
