Chapter 2:Organisation structure
Organisations have one primary corporate objective and a series of subordinates
Business functions include production,sales and marketing,accounting and
finance and human resource management.
Organisation stucture is the framework for allocating tasks,delegating
authority,coordinating activity and channelling communication.
Henri Fayol was an early management theorist,who proposed six principles of
-Division of work-specialisation to produce more and better outputs.
-Authority and responsibilies-A person with responsibility for performing an
action should be given a clear authority to do it,a person with the authority to
perform an action should be made clearly responsible for its outcome.
-Scalar Chain-There is a chain of authority running from the top of the
organisation hierarchy to the bottom.
-Unity of Command-Subordinate should receive orders from only one superior.
-Unity of direction-There should be one identified “chief” and one overall plan.
-Subordination of individual interests-Satisfaction of employees should be
recognised as less important than the fulfilment of the organisation’s objectives.
Henry Mintzberg has categorise five basic component parts in any organisation:
– The strategic apex is made up of the senior management, who are concerned
with ensuring that the organisation pursues its
objectives and serves the needs of its owners and stakeholders through strategic
planning and resource allocation. It also involves managing the boundaries
between the organisation and its external environment and stakeholders. – The operating core comprises the people directly involved in production. Tasks
for the operating core involve securing inputs
and processing and distributing them as outputs, i.e. goods and services.
– The middle line comprises the managers and supervisors within the
organisation, who form a chain of command that runs
between the strategic apex and the operating core. Tasks for the middle line
include the organisation, planning and controlling
of the work of the organisation. The middle line acts as an interface between
senior management and ope