Module 3 Organisational Planning and Creating an Organisational Structure
Part 1: Organisational Planning
Planning defined? How do you plan? All other management functions stem from planning A plan is a blueprint for goal achievement What are our goals and how will we achieve them? Planning = preparing for tomorrow today!
The 6 Basic Planning Questions
What needs to be accomplished? When is the deadline? Where will this be done? Who will be responsible for it? How will it get done? How much time, energy and resources are required to accomplish this goal?
The Advantages of Planning
If you fail to plan, you plan to fail. Gives an organisation a sense of direction Focuses attention on objectives and results Establishes a basis for teamwork Helps anticipate problems and cope with change Provides guidelines for decision making A prerequisite to all other management functions
Criteria for an Effective Goal
Specific and measurable Covering key result areas Challenging but not too difficult Time deadline Linked to rewards (motivational)
SMART Goals
Work smarter, not harder Specific Measurable Agreed/achievable Realistic/Relevant Timebound
Coordination of Goals
Top-level managers strategic goals Middle-level managers tactical goals First-level managers operational goals
Types of Plans
Operational plans (single use or ongoing a policy, procedure or rule) Tactical plans (concerned with what each dept or division must do, time span 1 year or less) Strategic plans (designed with the goals of the entire organisation as a whole in mind, looking ahead for the next 2, 3, 5 or even more years) Contingency plans what could go wrong?
Barriers to Planning
Inability to plan or inadequate planning Lack of commitment to the planning process Inferior information Focusing on the present at the futures expense Too much reliance on the planning department Concentrating on controllable variables
Part 2: Creating an Organisational Structure
From planning to organising The plan is in place now allocate the resources to achieve the goal Tasks must be assigned and coordinated Organising transforms plans into reality through the deployment of people and resources within a framework known as the organisational structure
The Organisational Process
1. Review plans and objectives 2. Determine the work activities required to achieve the objectives 3. Group the necessary work activities into manageable units 4. Assign activities and delegate authority 5. Design a hierarchy of relationships
Concepts of Effective Organising
Work specialisation (a more efficient way of working?) Chain of command (line of authority who reports to whom) Management authority (formal and legitimate right to make decisions, issue orders and allocate resources) Span of control (wide or narrow number of workers reporting to a manager) Delegation (downward transfer of authority)
Why the Reluctance to Delegate?
I can do it quicker myself! I can do it better than you! You might do it better than me (embarrassing)! Its risky you might do it wrong! I wont be needed any more! Ill be unpopular only giving the dull jobs out! Theyll think I cant do it myself! I dont know how to delegate!
Benefits for the Delegator
More free time Increase in knowledge, skills & experience Builds relationship with delegatee If over-specialised, can pass on knowledge and skills Enhances upward mobility within company Higher earning potential Can provide a refresher for delegator Job satisfaction
Benefits for the Delegatee
Increase in knowledge and skills, more versatile Motivation and greater job satisfaction Improved promotion prospects Builds relationship with delegator Less likely to leave company
Benefits for the Organisation
More flexible/versatile/productive workforce Higher staff morale Lower staff turnover Lower sickness/absenteeism rates Costs savings on recruitment Higher productivity and revenues Enhanced company image/reputation When recruiting, more applicants to choose from
Key Principles of Delegation
Match the employee to the task Be organised and communicate clearly Transfer authority and accountability Choose the level of delegation carefully
Centralisation versus Decentralisation
Centralised organisation = authority concentrated at upper levels Decentralised = authority spread to lower levels External environment (complex, unpredicable?) Nature of the decision (important, risky?) Abilities of low level managers (strong decision making skills?) Organisations tradition of management (what has been done before?)
The Informal Organisation
The hidden side of the organisation! Defined by the behaviours and interactions that stem from personal rather than official relationships within the company Individuals can possess a lot of informal power Its not what you know, its who you know! The grapevine the informal communication network; usually much faster than formal channels!
Factors Affecting Organisational Design
Organisation size (small = simple, large = need for formal structure) Organisation life cycle (birth, youth, midlife, maturity) Organisational strategy Environment (stable or dynamic) Technology
Five Approaches to Organisational Design
Functional structure Divisional structure Matrix structure Team structure Network structure
Functional Structure
Divisional Structure
Matrix Structure
Team Structure
Network Structure
Any Questions?