POLYTECHNIC OF NAMIBIA   OFFICE MANAGEMENT & TECHNOLOGY     ADMINISTRATIVE MANAGEMENT A (ADM710S) 2015

Principles of organising UNIT 8 WEEK 9

Announcements week 9 Read through the course outline to see if you have any questions. Read Pages 229 – 236 in your textbook – Management principles, 5th Edition, 2011.

TOPICS Principles of Organising: Power; Authority, responsibility & Accountability. OBJECTIVES To explain the principles of organising: power, responsibility and Accountability.

Power Power of Reward – power to give or withhold rewards. Coercive Power – to force other persons to action by means of disciplinary action - Fear Legitimate Power – stems from position or rank of person. Authority granted to a particular position. Referent Power – has reference authority if others wants to identify with your personal actions Egg. Charismatic leaders – Personal power: like, respect. Expert Power: – stems from special knowledge or skills with reference to a task.

Authority Right to make decisions, issue orders and use resources Includes right to take action to compel the performance of duties and to punish default or negligence Authority resides in position Different types of authority……..

Conflict between line and staff positions Line managers regard staff managers as threat to their authority Lack of consultation with staff managers Dependence of line managers on specialist knowledge of staff managers makes them feel threatened Differences in perception i.e. staff to idealistic Line managers opposing new ideas staff managers NOTE: Staff personnel has functional authority and can issue orders to line personnel in established area of responsibility Staff managers can also have dual authority i.e. Labor relations manager advises and have line authority in HR

Types of authority Formal – specified relationships amongst people illustrated by organisational chart ; and Informal authority – patterns of relationship and communication that evolve as employees interact and communicate Line authority (originates at top management)– responsibility to make decisions and issue orders down the chain of command; and Staff authority- responsibility to advise and assist other personnel egg HR department, Company secretary, economists in staff position Centralised – important decisions re made by top management ,and decentralised organisational authority - important decisions are also made by middle and lower level mananagement

Centralise or Decentralise authority? Factors to consider External environment – complex-decentralise History of organisation past tendencies i.t.o their decisions on centralisation and decentralisation Nature of the decision – risky and costly – centralise Strategy of the organisation - depends on size of business, how products are developed etc. – larger businesses/ ones doing research with product development diversify and look at decentralised structures. Predictable buisness - centralised Skills of lower level managers – if not properly equipped/qualified – centralise Size and growth rate of organisation – larger organisation - decentralise

Advantages of decentralisation Workload of top management is reduced Decision making improves i.e. close to action Improved morale and initiative at lower levels Faster an more flexible NB in rapidly changing environment Fosters a competitive climate in organisation – managers performance constantly compared with that of colleagues

Disadvantages Danger of loss of control with too much decentralisation Danger of duplicating tasks i.e. HR at head office and sub unit Decentralisation requires more expensive and intensive management training Decentralisation demands sophisticated planning and reporting methods

Organisational design Def: Arrangement of positions into work units or departments and the interrelationship amongst them within an organisation. Need to understand the principles – to structure sound organisation Organisational structure should always be viewed against the strategy of the organisation

Departmentalisation Def: Grouping of related activities into units or departments

Functional departmentalisation Managing Director Production manager Financial Manager Marketing Manager

Functional Departmentalisation Activities belonging to each management function are grouped together Egg Advertising, marketing research and sales under marketing Structure used in org. with single product focus Require well defined skills and areas of specialisation Adv:Enables staff to focus on area of expertise Disadv: Challenge is with co-ordination of specialist functions

Tiger Brands Food Brands Spar Healthcare Brands Critical path care

Product departmentalisation All activities concerned with manufacturing of a particular product or group of products are grouped together in product sections Logical for large organisations providing a large range of products Advantages: Specialised knowledge on specific products are used to maximum, quick decisions within a section, performance of each group can easily be separately measured Disadvantages: Managers in particular section concentrate exclusively on their particular products, Admin costs increase with each section having their own functional specialists i.e. market researchers, financial experts etc

References Smit, P.J., Cronje, G. J., Brevis, T., Vrba, M. J. (2011). Management principles. A contemporary edition for Africa. (5th ed.). Cape Town, Juta. Robbins, S. P, DeCenzo, D. A. (2005). Fundamentals of Management: essentials concepts and applications. (5th ed.). New Jersey, Pearson Prentice Hall.