PROGRESS IN THE ORGANISATIONAL STRUCTURE FOR THE DEPARTMENT OF SMALL BUSINESS DEVELOPMENT

PRESENTATION OUTLINE Purpose Introduction Organisational Design and the importance of organisational structures Triggers for Organisational Review Organisational Design Process Fundamental Organisational Design aspects 2016 MPSA Directive on changes to the organisational structures by departments Key role players The establishment of the Department of Small Business Development (DBSD) Transferred functions Progress regarding the organisational structure of the Department of Small Business Development

PURPOSE OF THE PRESENTATION To provide progress report to the Portfolio Committee on Small Business Development regarding the organisational structure for the Department of Small Business Development.

INTRODUCTION Organisational Design is a process of aligning the organisational structure of the organisation with its strategic objectives. The output of the organisational design process is the organisational structure. The ultimate aim is to contribute in improving the efficiency and effectiveness of the organisation. The value chain: Strategy – Process – Structure (including policies, procedures, systems, management and leadership practices) – Resourcing – Actions - Service Delivery/Outputs.

ORGANISATIONAL DESIGN AND THE IMPORTANCE OF ORGANISATIONAL STRUCTURES An organisational structure is not an end in itself, but a means to achieve a particular strategy and to drive improvements and service delivery. The organisational structure: Defines purposes and functions – also ensuring the logical flow between purposes and functions. Provides the framework for order - coordination of tasks and standardization of work where applicable. Defines positions, Authority/Delegations - rights inherent in a position to accept and direct work to subordinates. Responsibility- an obligation to perform specific tasks. Reporting Lines- indicates responsibility in terms of accountability and performance management. Chain of Command- supervisor-subordinate authority. Job decomposition: Observes the principle of equal pay for work of equal value. Considers the Span of Control- The number of subordinates that report directly to a supervisor.

TRIGGERS FOR ORGANISATIONAL DESIGN PROCESS To avoid continuous review and changes that have the potential to affect implementation of programmes or the functioning of the departments, changes to the organisational structure of departments are limited to the following conditions, informed by principles as set out in the Public Service Regulations, 2016: Structuring based on amended mandate or change to the strategic focus: based on 3- 5 year strategic review processes. Structuring based on a macro-organisation of the state, as may be determined by the President. Splitting, Establishment and Abolishment of departments, or Transferring of a function between departments, as may be determined by the President or the relevant Premier. Re-structuring emanating from the adverse findings of an organisational functionality assessment (OFA) and organisational performance improvement processes. High-level diagnosis should be conducted to inform the business case.

ORGANISATIONAL DESIGN PROCESS The Organisational Design process, in line with the guidelines issued by the DPSA, has 6 distinct phases and there are decisions that need to be made as well as specific outputs to be produced during these phases as outlined below: Phase 1: Diagnose the problem (Confirm the problem i.e. operational, strategic or structural. Output is a business case for change) Phase 2: Determine Requirements, Service Delivery Model and capabilities (approve service delivery model and required capabilities to support the strategy) Phase 3: Design (approve the high-level proposed organisational structure) Phase 4: Plan for Implementation (implementation plan, all required documentation for consultation with the MPSA supported, submitted to MPSA and feedback received) Phase 5: Implement the new structure (new organisational structure approved) Phase 6: Monitor and Evaluate (close-out report approved) Change management (communication and consultation) is key to the processes.

FUNDAMENTAL ORGANISATIONAL DESIGN ASPECTS In terms of the Public Service Act (PSA), 1994, Executive Authorities (EAs) have all those powers and duties necessary regarding the internal organisation of the department concerned, including its organisational structure and establishment, the transfer of functions within that department, human resource planning, the creation and abolition of posts and provision for the employment of persons additional to the fixed establishment. Regulation 25 (2) of the PSR,2016, also states that an Executive Authority shall, based on the strategic plan of the department determine the department’s organisational structure in terms of its core mandated and support functions— in the case of a national department or national government component, after consultation with the Minister and National Treasury; and in the case of a provincial department or provincial government component, after consultation with the relevant Premier, the Minister and the relevant Provincial Treasury.

2016 MPSA DIRECTIVE ON CHANGES TO THE ORGANISATIONAL STRUCTURES BY DEPARTMENTS The Directive is issued in terms of section 41(3) of the PSA, read with PSR, 2016. The Directive specifies requirements and the principles and procedures on changes to the organisational structures which should be consulted with the MPSA by departments prior to the approval thereof by the relevant Executive Authority. In line with the above, the EAs shall consult with the MPSA on all changes to the organisational structure affecting all units or posts from salary level 9 to level 16 (PSA posts and equivalent grades in OSD posts) with regard to creation of units and posts and functional reorganisation within the key programmes. The Directive applies to all departments and government components, both nationally and provincially, unless a deviation is approved by the MPSA in terms of clause 3.

KEY ROLE PLAYERS Internal Audit and Risk Management Assess organisational review and redesign project’s risks and advice on the implementation of appropriate mitigation strategies. Ensure compliance with all legislative requirements and applicable norms and standards. Chief Financial Officer and Budget Committee Based on the budget information from the National/Provincial Treasury, provide advice on financial implications, before the decision-making authority approves the proposed changes. Manco/Executive Structure Ensure alignment of the organisational structure to the functional strategies. Support that the proposal be submitted to the Director-General/Head for recommendation to the Minister.

KEY ROLE PLAYERS Director-General/ Head of the Department Champion the organizational review and change management process. Ensure that all, and in particular affected staff are consulted on the rationale, processes, timelines and envisaged outcomes of the organisational review and redesign process. Ensure consultation with the trade unions in the Departmental Bargaining Chamber for buy- in and support. The consultation need to be conducted in line with the relevant workplace agreements, which require management to undertake certain consultation processes. Recommend the proposed changes to the Executive Authority support. Executive Authority Support the proposed changes and submit the consultation request to the MPSA for advice and concurrence. Approve the final organisational structure, after consultation with the MPSA, by signing all the pages of the new structure to avoid unauthorized changes. Submit the approved organisational structure to the DPSA to serve as baseline information and to inform future consultation requests. MPSA Concur with the proposed organisational structure or provide advice in cases where concurrence could not be granted.

THE ESTABLISHMENT OF THE DEPARTMENT OF SMALL BUSINESS DEVELOPMENT (DBSD) Following the appointment of the National Executive, the DSBD was established as a National Department (Proclamation No. 43 of 8 July 2014). The administration of the following Acts and entity were transferred from the Minister of Trade and Industry to the Minister of Small Business Development: Section 2A of the Small Business Development Act, 1981 (Act No. 112 of 1981). Close Corporations Act, 1984 (Act No. 69 of 1984). National Small Enterprise Act,1996 (Act No.102 of 1996). This action effectively transferred the Small Enterprise Development Agency. Co-operatives Act, 2005 (Act No.14 of 2005). On the 19th of September 2014, a determination was made by the Minister of Public Service and Administration (MPSA), in terms of section (3)(4)(b) of the Public Service Act, 1994 that the small business and co-operative functions and concomitant resources be transferred from the Department of Trade and Industry (DTI) to the Department of Small Business Development (DSBD). Through the determination, the MPSA has, in terms of Public Service Regulations concurred with the start-up organisational structure, post establishment and post levels of the DSBD.

TRANSFERRED FUNCTIONS The following functions in respect of small business and co-operatives development have been identified: Co-operatives Development Unit. Enterprise Development. Gender for Women Empowerment. Broadening Participation Incentive. Support for Township Business. Centre for Entrepreneurship. Export Development and Support.

PROGRESS REGARDING THE ORGANISATIONAL STRUCTURE OF THE DEPARTMENT OF SMALL BUSINESS DEVELOPMENT On 05 April 2017, a meeting was held between officials from the DPSA (led by the Chief Director: Organisational Design and Macro-Organising) and the DSBD (led by the Chief Director: Corporate Management) to discuss the service delivery model and the draft proposed organisational structure. Following the deliberations on the draft proposed organisational structure, the following resolutions were agreed upon: The Department of Small Business Development will incorporate input from the DPSA on the proposed organisational structure. The Department will finalise the Job Evaluation process on the newly created and affected posts. The Department will accommodate posts transferred from the DTI that were not part of the approved start-up structure. The Department should finalise the service delivery model and the business case to reflect its evolving nature as informed by the operational requirements.