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Chapter 1 The business organisation Chapter learning objectives Upon completion of this chapter you will be able to: define the term organisation explain the need for a formal organisation distinguish between different types of organisation summarise the main areas of responsibility for different functions within an organisation explain how different departments co-ordinate the......
1.3 Classifying organisations by profit orientation Organisations can be classified in many different ways, including the following: Profit seeking organisations Some organisations, such as companies and partnerships, see their main objective as maximising the wealth of their owners. Such organisations are often referred to as profit-seeking. The objective of wealth maximisatio......
1.4 Classifying organisation by ownership/control Public sector organisations The public sector is that part of the economy that is concerned with providing basic government services and is thus controlled by government organisations. Illustration 3 The nature of organisations The composition of the public sector varies by country, but in most countries the public sector includ......
2.1 The main functions within an organisation The main departments in a business organisation are as follows: DepartmentRoleKey concerns Research and development Improving existing products Developing new products Anticipating customer needs Generating new ideas Testing Cost purchasing Acquiring the goods and services necessary for the business Price and payment terms Quality S......
2.2 Co-ordination It is vital that effective co-ordination is achieved between different departments and functions. The main way this is achieved is through the budget-setting process, e.g. to ensure that production make enough products (subject to stock policies) to meet predicted sales figures from marketing. Both the production and marketing budgets will be based on the same......
3 Strategic, tactical and operational planning levels in the organisation 3.1 Different levels of planning Strategic planning is long-term, looks at the whole organisation and defines resource requirements. Tactical planning is medium-term , looks at the department/divisional level and specifies how to use resources. Operational planning is very short-term, very detailed and is......
3.2 The nature of strategic planning Strategic planning is characterised by the following: Long-term perspective. Looks at the whole organisation as well as individual products and markets. Sets the direction of the whole organisation and integrates its activities. Considers the views of all stakeholders, not just the shareholders perspective. Analyses the organisations resourc......
3.3 The strategic planning process The rational approach to strategic planning breaks down the process into three distinct steps. 1 Strategic analysis three key areas External analysis of markets, competitors, the business environment, etc. to identify opportunities and threats. Internal analysis of the firms resources, competences, etc. to identify strengths and weaknesses. St......
Chapter 2 organisation structure Chapter learning objectives Upon completion of this chapter you will be able to: explain the different ways in which an organisation might be structured list advantages and disadvantages of each type of organizational arrangement define the terms scalar chain and span of control what factors influence the span of control give reasons why ownersh......
1.2 Further aspects of organisational structure Ownership and management of larger organisations are often separated. One of the main reasons for this is that the managers do not have access to sufficient funds and therefore they rely on banks and the market (the owners) to provide the investment. In order to ensure that managers are managing the business in the best interests ......
1.3 Centralisation and decentralisation Another method of analyzing structures is by reference to the level at which decisions are made. In a centralised structure, the upper levels of an organisations hierarchy retain the authority to make decisions. In a decentralised structure the authority to take decisions is passed down to units and people at lower levels. The factors tha......
1.4 The informal organisation and its relationship with the formal organisation So far, we have been looking at formal organisational structures they have been designed by management to try and ensure that an organisation can meet its goals. We now look at the informal organisation. This organisation evolves over time and is a network of relationships that exist within an organ......
1.5 The impact of the informal organisation on the business The informal organisation can either enhance or hold back the business. Managers need to be aware of the informal structure and ensure that they adapt the formal structure to complement the informal one maintain a looser formal structure so that the informal structure can thrive. For example, hold monthly meetings to i......
Chapter 3 Organisational culture Chapter learning objectives Upon completion of this chapter you will be able to: define the term organisational culture identify the components of organisational culture what factors influence the company culture describe Scheins approach to organisational culture describe Handys four cultural types describe how organisational culture is influen......
1.2 Components of culture The key elements of organisational culture are: Norms guide peoples behaviour, suggesting what is or is not appropriate (the done thing.) Symbols or symbolic action, e.g. rituals such as buying the office a cake on your birthday. Beliefs underlie the culture by identifying what is important, e.g. a belief in the importance of people as individuals.
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