Orgnisational Components
There are seven components necessary to ensure a sustainable organization. This document
provides guidance and direction on each of these components.
Organizational Identity
Vision; Mission; Values; Branding;
Messaging; Strong Leadership
Financial and Other Systems
Administration
Budget; Cash Flow Analysis; Audit; IRS
Reporting
Long-Range Strategic Plan
Goals; Objectives; Benchmarks
Long-Range Fund-Raising Plan
Needs and Resource Assessment; Donor
Cultivation; Grant Writing
Annual Operational Plan
Objectives, Activities & Timelines; Staffing;
Program Needs; Committed Resources
Board Development Plan
Needs Assessment; Evaluation; Recruitment;
Orientation; Maintenance/Team Building
Staff Development and
Organizational Culture
Needs Assessment; Evaluation &
Review; Training; Team Building
Organizational Identity
Every organization needs to distinguish and market its organizational identity. The organizations
identity is made up of its vision, mission, and values. It tells the story of the organization and
why it exists. Organizational identity can also be distinguished by the organizations look
(branding) and message. Finally, an organization is often identified with its leadership. A
charismatic, smart executive director or CEO can help distinguish an organization and set it
apart. Following is a description of the components of organizational identity.
The vision is the overarching dream for which your organization aims for
example some organizations envision a time when every child is healthy and
wanted, while others look forward to a world without HIV.
The mission is the action statement that tells others how the organization
works towards realizing its vision. For example, it might be to help teens
make safe and responsible decisions about their sexual and reproductive
health.
The values of the organization tell the world how the organization operates
its philosophy and the core principles that underpin its work. Organizational
values might include the recognition that all teens deserve respect and have
the right to accurate sexual health information and confidential sexual health
care.
Niche identifies the organizations special value it adds to the field or
community. For example, the organization is the only one in the community
that provides low cost family planning services for teens.
Branding is the organizations look. Every organization should become
identifiable to the public through its logo and the look of its publications and
other communications. Further, every organization should have a short tag
line that describes something unique about the organization.
Messaging is the way the organization shares its vision, mission, and values
with the wider world.
A Long-Range Strategic Plan
For an organization to be sustainable it must have a strategic plan that speaks to the mission,
vision, goals and niche of the organization. The organization uses this strategic plan to create an
annual operational plan. Every organization should regularly (every four to five years) engage its
Board of Directors and staff in a strategic planning process. The strategic plan that results from
such a process will provide the organization with a four- to five-year road map, identifying the
goals towards which the organization will work to meet its mission and realize its vision. The
strategic plan should include the following steps:
An assessment of the external environment to answer: What are the trends in
the field? What are the opportunities and threats for the organization and its
work? How can the organization situate itself to take advantage of the
opportunities and avoid the threats? How can the organization be poised to
respond to/benefit from trends in the field?
An assessment of the internal environment to analyze the strengths and
weaknesses of the organization itself, including staffing, budget, morale,
management, perception of the organization from colleagues and funders
and any other issues that may affect the organizations ability to take
advantage of the opportunities or ward off the threats in the environment.
The revisiting of the organizations mission, vision and niche to assess
whether they are still relevant. If they are not still relevant, they should be
revised. Well crafted mission, vision and niche statements will serve the
organization well into the future.
The creation of long- term goals. Goals should be far-reaching but attainable,
and should help the organization explain how it will move towards fulfilling its
mission in accordance with its values and vision. For example, one long-term
goal might be to increase the use of evaluated sexuality education curricula
in after-school programs throughout the state. Another might be to
encourage greater investment in science-based strategies by educating
funders about evaluated adolescent pregnancy programs.
The development of quantifiable, time-lined objectives to reach each goal.
For example, one objective under the first goal above might be to work with
the school boards in three counties in order to promote science-based sex
education programs. Another objective might be to sponsor a pilot of a
promising program in one school.
The creation of benchmarks to measure progress toward accomplishing an
objective. Benchmarks identify by when, how much, who, and where.
Annual Operational Plan
The annual operational plan identifies the work the organization will undertake in the coming
year. An operational plan is a practical one-year plan of action that includes objectives, activities
and timelines. It should be intimately tied to the strategic plan in that any activity the
organization will undertake in the year ahead should move the organization towards meeting the
goals and objectives identified in the strategic plan. To create an operational plan, start by
identifying any work to which the organization is already obligated to conduct based on its
current grants and contracts. Chart out the work, including what will need to be done to
accomplish what was promised in the grant or contract, who will do the work, and by when will
the work it get done. Then think through what new work the organization can take on, based on
its niche, to move towards meeting the goals and objectives outlined in its strategic plan. Again
identify the activities staff would undertake, who would conduct the work and by when would it
be accomplished. Finally, try to identify where the organization might go for funding for these
activities.
If an organization has more than one department or program/project, then an annual operational
plan should be created for each. Senior staff should then work to join the individual plans in an
overall organizational operational plan. It is this organizational plan that is then used to create an
organizational budget and funding proposals.
The Annual Financial Plan
The annual financial plan is the organizations fiscal plan of action. It includes the creation of an
organizational budget as well the conduct of a number of processes to monitor the financial
health and well-being of the organization.
The Annual Budget
To create the annual budget, staff should sit down with the organizations financial manager to
create an activity budget for each departments/projects operational plan. To create the activity
budget consider the work outlined in each operational plan. What activities will it take to
complete this work? What resources will be needed to conduct these activities? Include travel,
supplies, consultants, postage, telephone, etc. What staff will work on the program and for what
percentage of their time? Include salaries and benefits.
Once each department/project has an activity budget, the financial manager can collapse these
into an organizational or line item budget. Like activities across projects (such as staff travel) are
collapsed into one line item. Line items might include staff, fringe, travel, supplies, meetings,
consultants, telephone, postage, etc.
Now burden the activity budget with the non-program or general and administrative costs
of running the organization, such as utilities, the receptionists and other support staffs salaries
and benefits, the cost of an annual audit, rent, web site hosting fees, etc. These general and
administrative costs should be spread to the programs and should not equal more that 25 percent
of the total program costs of each project or of the organization. That is, a sustainable
organization spends more than 75 percent of its revenue on program activities and less than 25
percent on administration.
Once the budget is created, management should identify sources of revenue to meet the
budgetary needs. Some funds may already be in hand from existing grants or contracts.
Additional funds will probably need to be raised. Identify where the organization will go for
these additional funds. Identify if these are good bets or if there is a low probability that the
funding source will pan out. Do not spend above the organizations means. Cut back on
operational plans or put holds on activities that do not have a source of funding. The funding
gap (the amount needed to fully fund the operational budget) drives the fund-raising plan
described further below.
The Cash Flow Analysis
Another financial tool every organization should employ to be sustainable is the cash flow
analysis. It is not enough to know that the organization will raise the funds it needs to meet its
budget. It is essential to know if the funds will come into the organization in a timely manner to
pay the bills and to meet the payroll as it comes due. Financial managers should create a spread
sheet that identifies what funds are expected to come in each month and measure that by the
anticipated expenditures for each month. The spreadsheet should anticipate the cash flow for at
least a year, should be updated every month to reflect at least a year from that time point, and
should be used to identify if a cash flow shortage will arise and when. Only through this process
will management be able to anticipate a cash flow problem and take steps to fix it in time.
Annual Audit
The annual audit is another important part of the annual financial plan and should be conducted
by an independent certified public accountant (CPA). An annual audit will test for the accuracy
and completeness of an organizations financial statements and accounting practices and
controls. The CPA will examine the organizations financial records and statements and will issue
an opinion stating whether or not these records accurately reflect the organizations financial
position. Further the audit will state whether or not the organization complies with generally
accepted accounting principles. An audit can help the organization to find and repair important
record-keeping errors and can help build confidence among funders of the organizations
financial health.
IRS reporting
All charitable, non-profit organizations have to file certain forms with the Internal Revenue
Service and, usually, with their state government as well. The annual financial plan identifies the
officer responsible for filing these reports and helps to ensure that filing occurs correctly and on
time.
Long-Range Fund-Raising Plan
Every organization needs a long-range fund-raising plan to maintain its sustainability. The longrange fund-raising plan helps the staff and board to ensure that the organization will have the
funding necessary to conduct its annual operational plan and to fulfill its long-range strategic
plan. A long-range fund-raising plan includes steps to identify the funding needs of the
organization (often assessed through the creation of the annual budget and the growth trajectory
of the organization) and the organizations potential sources of income or support. Staff must
then identify and cultivate potential donors, apply/ask for funding (write grants and/or solicit
individual donors) and report the organizations accomplishments on an on-going basis.
Identifying Potential Source of Support
To be sustainable, organizations need to identify and then cultivate a diverse pool of support.
Sources of support might include:
Government funding, including city, county, state and federal grants
Foundation support, be it general funds or project support
Corporations, both financial support or in-kind contributions, from local or
national corporations,
Individual donors, including volunteers and/or financial contributions
Staff should assess the organizations current sources of support as well as its strengths to create
a long-range fund-raising plan that will leverage the organizations current assets. To create the
long-range plan, staff should ask itself the following questions:
Regarding foundations:
Do we have an existing network of foundations that might put us in contact
with other foundations?
Do we have foundation supporters that might be willing to increase our grant
level or provide multi-year funding?
Do we have a list of foundations that provide support in our area of work, but
we have not yet approached them or have been unsuccessful in our
approach?
Do we have the staff capacity to write effective grants and if not, who will be
responsible and what training might be needed?
Regarding Government Funding:
Are we aware of potential government funding sources?
How well does our work lend itself to government contracts/grants?
Do we have the staff expertise to write government grant applications? If not,
what training will we need?
What are the pros and cons of pursuing government funding?
Regarding Corporations:
Does our cause lend itself naturally to corporate funding? In other words, is
there a natural partnership between the business goals of a local or national
corporation and our work?
Do we have any contacts with local or national corporations, either through
staff or the board of directors, that might provide us support?
Regarding Individual Donors:
Do we already have a list of individuals who support our work either through
financial contributions or volunteer hours? If so, what do we need to increase
these individuals annual contributions? If not, do we have a board of
directors that is willing to help develop a list of potential donors?
What staff capacity do we have for individual fund-raising and what training
or resources are needed?
Finally, staff should think about what type of funding is needed project support, general funds,
in-kind contributions and which sources naturally lend themselves to this type of funding.
Answering these questions will help the organization determine its fund-raising focus. A plan
should be created to allocate staff time and resources to each possible funding source based on its
potential return.
Cultivating Supporters
Any sustainable organization knows that the secret of fund-raising is not in getting that donors
first contribution; it is in getting second and third renewals from that donor. Developing a steady
group of supportive donors is essential. Staff must pay as much attention to donors after they
have given as before. Correspond regularly with donors, update them on the progress and
achievements of the organization, and keep them aware of how much their support is helping the
organization to accomplish. Find creative ways to say thank you and to say it often!
Annual Board Development Plan
A strong and sustainable organization has a Board of Directors that is engaged in the
organizations strategic vision and whose members are willing to help the organization meet its
programmatic and fund-raising goals. Nurturing a board of directors is hard work and needs
thought and intention. The creation of an annual board development plan can help the
organization keep its current board members engaged while cultivating new board members to fit
the ever-changing needs of the organization. Steps in board development follow:
Needs assessment
Once a year, the executive director and a sub-committee of the board of directors should compare
the strategic needs and objectives of the organization with the expertise and engagement of its
current board members. This comparison allows the committee to create a plan to engage each
current member to assist the organization in ways that will benefit both the board member and
the organization. It will also help the committee begin to identify gaps in expertise for
example, do we have enough physicians on the board? Do we have enough fund-raisers?and
aid in the development of a recruitment plan.
Evaluation
Each year the board of directors should assess its own effectiveness to fulfill its responsibilities
to the organization. Has the board helped with fund-raising? Has it monitored the financial health
of the organization? Has it assisted the organization in creating a broad base of support? If so,
how can it do even more in the year ahead? If not, what can it do to strengthen its effectiveness?
Recruitment
Board recruitment is an essential component of organizational sustainability. Board members
should have limited terms and no more than one-quarter of the board should cycle off in any
given year. This ensures that the board always consists of experienced as well as new members.
A sub-committee of the board should be responsible for board recruitment. Board recruitment is
an ongoing process and includes the identification of gaps in the boards expertise based on the
changing needs of the organization or on who is rotating off of the board. The committee must
then identify a list of potential board members that can fill these gaps, assess their interest in and
fit with the organization, and request their participation on the board of directors.
Orientation
Every new board member needs an organizational orientation to be effective. The orientation is a
way to bring new board members up to speed on the organization, its mission, its goals and
objectives. It should also address the role and the responsibilities of the board as a whole and of
the new member individually.
Maintenance and team building
Finally, for a board to be effective, it needs to be nurtured and cultivated. The board chair should
work with the executive director to identify ways of ensuring that each board member is engaged
in the work of the organization and that he/she feels needed and appreciated. It is also essential to
plan board meetings that build the cohesion of the board (the feeling that they are part of a team)
and that include training on issues of importance to the organization and to fulfilling the
responsibilities of the board.
Staff Development and Organizational Culture
An organizations staff is its bread and butter. If the staff is competent and well respected in the
field, then the organization is more likely to be sustainable. Staff development is an on-going
process of investing in the individuals that make up the organization and ensuring that each
individual has the confidence and skills necessary to excel at his/her work. Staff development
also means building an organizational culture that values each staff member and creates cohesion
and a feeling of team among staff members. Sustainable organizations invest in their employees,
reward initiative and competence, and provide transparency and flexibility. The components of
good staff development include the conduct of a needs assessment, an annual employee
evaluation and review, staff training, and team-building. Staff development costs money and
should be included in the annual organizational budget.
Needs and assets assessment
Every organization should engage in a periodic needs and assets assessment. This includes a
number of steps:
Annually, management should compare current staff skills to the skills
needed to complete the activities outlined in the operational plan. For
example, if the operational plan for the coming year will require that a
particular staff person upgrade and then maintain the Web site, she/he may
also need additional and substantive Web development training. Plans,
including the allocation of resources, must be made to acquire this training.
Periodically, management should also take the pulse of the organization.
This can be done by sitting down with each staff member to assess their
perception of the health of the organizational culture (is the organization
flexible, does it promote creativity, does it respect and foster diversity and
professionalism, is the decision making process transparent?), the external
reputation of the organization (what does staff think the reputation of the
organization is and what components lend to that reputation?); and the
satisfaction of each staff member (does his/her role within the organization
advance his/her own career goals?). An organization can always improve on
its culture. However, organizations in which employees feel valued and
respected and part of something bigger than themselves are better situated
to become sustainable than are other organizations.
Evaluation and review
Every staff member needs feedback about his/her performance. This feedback should be ongoing and not saved only for the employees annual evaluation and review. If the employee isnt
meeting his/her responsibilities, sit down and discuss it in a timely manner. Make a plan to help
the employee improve his/her work. If the employee is doing well, let him/her know this.
Even if managers provide on-going feedback, every member of the staff from the executive
director to the part-time administrative assistant should also have an annual performance
evaluation and review. Supervisors should take the time to acknowledge work done well, discuss
skills that could be improved, reflect upon successes as well as mistakes, assess the employees
job satisfaction and make a plan that meets the goals of the organization and the employee for the
year to come.
Training and continuing education
Staff training is integral to the work of an effective non-profit organization. Because non-profits
usually pay less than the corporate or governmental sectors, they must find other ways to
encourage, reward, and value staff. Training and continuing education not only helps the
organization to acquire and hold highly qualified staff, but also rewards and encourages
professional growth and development.
Team building
No organization is sustainable if the staff is not cohesive. Respect and appreciation for each other
make the whole stronger than its individual parts. It is essential that management invest time in
building a sense of team among the staff. This can be accomplished in many different ways. Each
individual staff person should be encouraged to understand how he/she contributes to the whole.
Further, each staff person should be encouraged to learn how the others contribute. Attend each
others events. Shadow each other at trainings or in the clinic to gain a healthy respect for each
others expertise. Finally, plan a few events/parties each year that build cohesion and team
among the whole group. Shut the office and go bowling together, have dinner and plan to talk
about cutting-edge issues. These are healthy investments in building a strong and sustainable
organization.
Written by Debra Hauser, MPH and Barbara Huberman, RN, MEd 2008 Advocates for Youth
2008-01-14 ASH/TPP/PSBA-Sustain SBA This publication is made possible through a
Cooperative Agreement (Grant #: 5U58/DP324962-03) with the Centers for Disease Control and
Prevention (CDC). Any part of this publication may be copied, reproduced, distributed, and
adapted, without permission of the authors or the publisher, provided that the materials are not
copied, distributed, or adapted for commercial gain and provided that the authors and Advocates
for Youth are credited as the source on all copies, reproductions, distributions, and adaptations of
the material.
Organizational Structure - read pdf
An organization is a group of people who together work to achieve a common goal. In order to
work together efficiently, the group must find the best way to organize the work that needs to be
done in order to meet the goals of the organization. Organizational structure defines how tasks
are divided, grouped, and coordinated in organizations. Every organization has a structure that
clarifies the roles that organizational members perform, so that everyone understands their
responsibilities to the group.
For example, the Beaver Scouts is a youth organization that meets for outdoor activities, such as
hiking and camping. When the Beaver Scouts of Colony #33 go camping, the lodge leader
constructs a list of tasks that must be performed during the trip. Tasks are divided up among the
members of the colony and written down on a chore chart, so every scout knows what job they
are responsible for each day. Without this formal structure, the scouts would waste a lot of time
trying to decide who should do what, and many tasks would likely go undone.
How Size Affects Structure
When an architect plans a new building, the size of the building being planned will have a
considerable impact on how the building is designed and the type of foundation that is used to
support the building. A small building typically requires a simple design with a shallow
foundation, and a larger building requires a more complex design and a deeper foundation.
In the same vein, when determining the most effective structure and design for an organization,
the number of people that belong to the organization has a major impact on which structure
works best. The typical structure of a small business is flat since there are a limited number of
people who are responsible for many tasks. The typical structure of a large organization is tall,
with several vertical levels, or management layers, which represent a more complex structure.
In short, when determining what type of structure works best for an organization, size matters.
Let's take a look at two different sized companies that operate in the same industry and learn how
the size of these organizations impact how they are structured.
How Size Affects Work Specialization
One factor of organizational structure that is impacted by the size of an organization is work
specialization, which determines how tasks are subdivided into separate jobs. The more a job is
broken down into small tasks, the more specialization is required by each individual worker.
Small organizations have fewer people to divide tasks among, so the jobs in small organizations
have a lower degree of work specialization than the jobs in large organizations.
For example, the Droopy Dog Motel is a small motel that operates off Interstate 88 near DeKalb,
Illinois. The Droopy Dog has 22 rooms and 19 employees. The structure of this organization is
comprised of a general manager, four front desk workers, six housekeepers, three maintenance
people, three security staff members, an accountant, and a night auditor.
At the Droopy Dog Motel, there are usually two members of the housekeeping staff on duty, and
each is assigned 11 rooms to clean in addition to cleaning the common areas of the motel. The
job description of a housekeeping staff member in this organization includes making beds,
cleaning rooms, stocking supplies, washing linens, and cleaning the front desk area and other
general areas of the motel. It takes a member of the housekeeping staff an average of 45 minutes
to clean a room.
The Silver Spike Resort is a big hotel and spa in Reno, Nevada, with over 1,000 rooms, a fully
staffed spa and fitness center, an 18-hole golf course, and eight swimming pools. The Silver
Spike employs over 2,000 people and has six vertical levels of management. Housekeeping at the
Silver Spike is done in teams of three with each housekeeper performing a specialized task. One
person cleans the bathroom, one person cleans the bedroom and makes the bed, and the third
person vacuums and washes the windows. Because the jobs are much more specialized, it takes
an average of 12 minutes for a team of housekeepers to clean a room at the Silver Spike Resort.
How Size Affects Departmentalization
Another aspect of organizational structure that is affected by the size of an organization is
departmentalization, which establishes how jobs are grouped together. Large organizations use
a high degree of departmentalization when defining jobs since they need to provide their large
workforce with clearly defined tasks in order to keep the organization running efficiently. Small
organizations require less departmentalization since there are a small number of people available
to achieve the organization's goals, and departmental functions often overlap.
For example, Jack Johnson is one of the night auditors at the Silver Spike Resort. He works from
11:00 pm to 6:00 am along with the night audit supervisor. Jack's job description is to audit the
receipts for the day and assist the front desk people if they get busy.
Woody Thomas is the night auditor for the Droopy Dog Motel. Woody's job is to audit the
receipts for the day, make the night deposit, take reservations over the phone, answer calls from
guests, set up the breakfast area, and make coffee in the morning. Sometimes, after a bad snow
storm, he has to shovel snow in the parking lot so that guests can get their cars out. Woody does
many jobs that would typically be handled by several departments in a large organization
because he is the only employee at the motel during his late night shift. Woody's job description
is loosely defined as 'do whatever is necessary to keep guests happy.'
How Size Affects Formalization
A third aspect of organizational structure that is affected by the size of an organization is
formalization, which determines to what degree the jobs in the organization are standardized
and to what extent members of the organization are governed by rules and regulations. Since
large organizations have taller structures, they have a longer and more structured chain of
command, which results in highly structured jobs that are governed by many rules and
regulations. Small organizations are less formal and typically have fewer rules and regulations,
since they are less bureaucratic and simply do not have the manpower to enforce a long list of
rules and regulations for each and every job.
The process of organizing consists of following steps!
1. Identification and Division of work:
The organising function begins with the division of total work into smaller units. Each unit of
total work is called a job.
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And an individual in the organisation is assigned one job only. The division of work into smaller
jobs leads to specialization because jobs are assigned to individuals according to their
qualifications and capabilities. The division of work leads to systematic working. For example,
in a bank every individual is assigned a job. One cashier accepts cash, one cashier makes
payments, one person issues cheque books, one person receives cheques, etc. With division of
work into jobs the banks work very smoothly and systematically.
2. Grouping the Jobs and Departmentalisation:
After dividing the work in smaller jobs, related and similar jobs are grouped together and put
under one department. The departmentation or grouping of jobs can be done by the organisation
in different ways. But the most common two ways are:
(a) Functional departmentation:
Under this method jobs related to common function are grouped under one department. For
example, all the jobs related to production are grouped under production department; jobs related
to sales are grouped under sales department and so on.
(b) Divisional departmentation:
When an organisation is producing more than one type of products then they prefer divisional
departmentation. Under this jobs related to one product are grouped under one department. For
example, if an organisation is producing cosmetics, textile and medicines then jobs related to
production, sale and marketing of cosmetics are grouped under one department, jobs related to
textile under one and so on.
3. Assignment of Duties:
After dividing the organisation into specialised departments each individual working in different
departments is assigned a duty matching to his skill and qualifications. The work is assigned
according to the ability of individuals. Employees are assigned duties by giving them a document
called job description. This document clearly defines the contents and responsibilities related to
the job.
4. Establishing Reporting Relationship:
After grouping the activities in different departments the employees have to perform the job and
to perform the job every individual needs some authority. So, in the fourth step of organising
process all the individuals are assigned some authority matching to the job they have to perform.
The assignment of the authority results in creation of superior-subordinate relationship and the
question of who reports to whom is clarified. The individual of higher authority becomes the
superior and with less authority becomes the subordinate.
With the establishment of authority, managerial hierarchy gets created (chain of command) and
principle of scalar chain follows this hierarchy. The establishment of authority also helps in
creation of managerial level.
The managers with maximum authority are considered as top level managers, managers with
little less authority become part of middle level management and managers with minimum
authority are grouped in lower level management. So with establishment of the authority the
individuals can perform their jobs and everyone knows who will report to whom.