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8/4/2019 Management Functions Module 3
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Module 3Organisational Planning and
Creating an Organisational Structure
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Part 1: Organisational Planning
Planning defined? How do you plan? All other management functions stem from
planning A plan is a blueprint for goal achievement What are our goals and how will we achieve
them? Planning = preparing for tomorrow today!
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The 6 Basic Planning Questions
What needs to be accomplished? When is the deadline? Where will this be done? Who will be responsible for it? How will it get done?
How much time, energy and resources arerequired to accomplish this goal?
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The Advantages of PlanningIf you fail to plan, you plan to fail.
Gives an organisation a sense of direction
Focuses attention on objectives and results Establishes a basis for teamwork Helps anticipate problems and cope with change Provides guidelines for decision making A prerequisite to all other management functions
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Criteria for an Effective Goal
Specific and measurable Covering key result areas Challenging but not too difficult Time deadline Linked to rewards (motivational)
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SMART GoalsWork smarter, not harder
Specific
Measurable Agreed/achievable Realistic/Relevant Timebound
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Coordination of Goals
Top-level managers strategic goals
Middle-level managers tactical goals First-level managers operational goals
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Types of Plans
Operational plans (single use or ongoing apolicy, procedure or rule)
Tactical plans (concerned with what each deptor division must do, time span 1 year or less)
Strategic plans (designed with the goals of theentire organisation as a whole in mind, looking
ahead for the next 2, 3, 5 or even more years) Contingency plans what could go wrong?
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Barriers to Planning
Inability to plan or inadequate planning Lack of commitment to the planning process Inferior information Focusing on the present at the futures expense Too much reliance on the planning department
Concentrating on controllable variables
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Part 2: Creating anOrganisational Structure
From planning to organising
The plan is in place now allocate theresources to achieve the goal Tasks must be assigned and coordinated Organising transforms plans into reality through
the deployment of people and resources within aframework known as the organisational structure
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The Organisational Process
1. Review plans and objectives2. Determine the work activities required to
achieve the objectives3. Group the necessary work activities into
manageable units4. Assign activities and delegate authority
5. Design a hierarchy of relationships
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Concepts of Effective Organising
Work specialisation (a more efficient way ofworking?)
Chain of command (line of authority whoreports to whom)
Management authority (formal and legitimateright to make decisions, issue orders and
allocate resources) Span of control (wide or narrow number of
workers reporting to a manager) Delegation (downward transfer of authority)
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Why the Reluctance to Delegate?
I can do it quicker myself! I can do it better than you! You might do it better than me (embarrassing)! Its risky you might do it wrong! I wont be needed any more!
Ill be unpopular only giving the dull jobs out! Theyll think I cant do it myself! I dont know how to delegate!
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Benefits for the Delegator
More free time
Increase in knowledge, skills & experience
Builds relationship with delegatee
If over -specialised, can pass on knowledge and skills
Enhances upward mobility within company
Higher earning potential
Can provide a refresher for delegator
Job satisfaction
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Benefits for the Delegatee
Increase in knowledge and skills, more
versatile Motivation and greater job satisfaction
Improved promotion prospects
Builds relationship with delegator Less likely to leave company
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Benefits for the Organisation
More flexible/versatile/productive workforce
Higher staff morale
Lower staff turnover
Lower sickness/absenteeism rates
Costs savings on recruitment
Higher productivity and revenues
Enhanced company image/reputation
When recruiting, more applicants to choose from
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Key Principles of Delegation
Match the employee to the task
Be organised and communicate clearly Transfer authority and accountability
Choose the level of delegation carefully
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Centralisation versus Decentralisation
Centralised organisation = authorityconcentrated at upper levels
Decentralised = authority spread to lower levels
External environment (complex, unpredicable?)
Nature of the decision (important, risky?)
Abilities of low level managers (strong decisionmaking skills?)
Organisations tradition of management (whathas been done before?)
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The Informal Organisation
The hidden side of the organisation!
Defined by the behaviours and interactions thatstem from personal rather than officialrelationships within the company
Individuals can possess a lot of informal power
Its not what you know, its who you know! The grapevine the informal communication
network; usually much faster than formalchannels!
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Factors Affecting Organisational Design
Organisation size (small = simple, large = needfor formal structure)
Organisation life cycle (birth, youth, midlife,maturity)
Organisational strategy
Environment (stable or dynamic) Technology
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Five Approaches toOrganisational Design
Functional structure
Divisional structure Matrix structure
Team structure
Network structure
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Functional Structure
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Divisional Structure
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Matrix Structure
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Network Structure
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Any Questions?
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