TOPIC 6:

ORGANIZATIONAL/ADMINISTRATIVE PLANNING

5. Organizational Plan

This topic covers: Information about the company vision, mission & objectiveOrganizational structureHuman resource planningOffice equipment and facilities Administrative budget

Organization structureThe ways an organization divides its labor into distinct tasks and then coordinates themthe pattern of jobs and groups of jobs in an organization.It is an important cause of individual and group behavior.Often discussed as organizational chart

Organisational StructureFunctions StructureRegions/Parts StructureMatrics StructureClients StructureProducts Structure

Common organizational structureFunctional structureAn organization in which similar and related occupational specialties are grouped togetherJobs are combined according to the functions of the organization

EngineeringReliabilityFinanceManufacturingDistributionHumanResourcesPublicRelationsPurchasingOBM CompanyFunctional Structure

Product structureAll jobs associated with producing and selling a product or product line will be placed under the direction of one managerProduct becomes the preferred basis as a firm grows by increasing the number of products it markets

OBM CompanySmallHouseholdAppliancesLargeHouseholdAppliancesCommercialAppliancesBuildingMaterials andProductsLawn andGardenProductsAutomotiveProductsProduct Structure

Customer StructureStructure is based on different categories of customers have independent needs that differ from each other The importance of customer satisfaction has stimulated firms to search for creative ways to serve people better

Customer Structure

Geographic/regional StructureEstablish groups according to geographic areaThe logic is that all activities in a given region should be assigned to a managerAdvantageous in large organizations because physical separation of activities makes centralized coordination difficultProvides a training ground for managerial personnel

Example of Geographic Structure

An organization in which specialists from functional departments are assigned to work on one or more projects led by a project managerMatrix structure

Sample of Matrix StructureExhibit 5.10

Sample of Matrix StructureExhibit 5.10

Mixed structureIs a hybrid structureCombination of at least two structurePurpose to gain the advantages of one structure and reduce its disadvantages by incorporating the strengths of different structure

Example of mixed structure

Human resource planning

PositionNumber of staffGeneral manager1Manager2Account officer1Marketing officer1Operations officer1Administrative clerk3Operations clerk5

Roles and responsibilities

PositionMain tasksGeneral managerTo plan, implement, and control the overall management of the businessTo plan and monitor the strategic progress of the businessTo accountable for the overall performance of the businessAccount officerTo take charge of the overall financial aspect of the company

Salaries, allowance, and others

PositionNo.Monthly salary (RM)EPF (13%) (RM)SOCSO(2%)(RM)Amount(RM)General Manager16,0007801206,900Manager29,0001,17018010,350Account executive13,000390603,450Marketing executive12,800364563,220Total23,920

Office furniture, equipment and others

ItemQuantityPrice/unit (RM)Total cost (RM)Office furniture3 sets2,0006,000Personal computer4 sets5,00020,000Office renovation--15,000Total41,000

Administrative Budget

ItemTotal (RM)Furniture and fitting41,000Salaries23,920Rental deposit9,000

Utilities deposit1,000

Grand Total74,920.00

**Placing organizations into only two categoriesmechanistic and organicdoes not capture the nuances and realities of modern organizations. The following slides present a number of practical organization design options. We will start with the simple structurethe form that almost all new organizations begin with and that continues to be used by managers of small businesses. Popular in small businesses owned and managed by same person, the simple structure has several characteristics: a low degree of departmentalization, wide spans of control, centralized authority, little formalization, and a flat structure. This fast, flexible structure is inexpensive to maintain and promotes clear accountability. However, as the organization grows, low formalization and high centralization can cause information over-load at the top. And, this structure is risky because everything depends on one person.

*4*7*Because workers in the matrix have two bossestheir functional department managers and their product managersthe matrix breaks the unity-of-command concept. The matrix has strong points: it facilitates coordination between multiple projects that are complex and interdependent, and it efficiently allocates specialists. The matrix also has several weaknesses: it can create confusion, foster power struggles, and increase employee stress. So, the matrix has met with mixed success.

*Because workers in the matrix have two bossestheir functional department managers and their product managersthe matrix breaks the unity-of-command concept. The matrix has strong points: it facilitates coordination between multiple projects that are complex and interdependent, and it efficiently allocates specialists. The matrix also has several weaknesses: it can create confusion, foster power struggles, and increase employee stress. So, the matrix has met with mixed success.