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

2. Principles of organising
UNIT 8
WEEK 9

3. 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.

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

5. 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.

6. 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……..

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. Departmentalisation
Def: Grouping of related activities into units or departments

14. Functional departmentalisation
Managing Director
Production manager
Financial Manager
Marketing Manager

15. 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

16. Tiger Brands
Food Brands
Spar
Healthcare Brands
Critical path care

17. 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

18. 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.