Introduction to Business - Organizing Your Business

Topic 4 - Organizing Your Business

Organizing is defined as dividing a business into subgroups to increase productivity and communication.

Organizing People

• Organizational Structure

-Clarifies the subgroups in the business, the people assigned to these groups, and their interrelationship.

• Organizational Chart

-Visual diagram of a business' organizational structure.

Types of Organizational Structure

• Functional structure 

Business is divided into departments and each are headed by a department manager. Suitable for small business.

• Divisional structure

Business is broken into divisions, with each headed by a divisional manager. Suitable for large business.

• Staff and Line Structure

 A variation of divisional structure. Some departments are under the control of the divisions whereas other departments are under the head office’s. 

The Comittee

A group, usually comprised of managers from different divisions and departments, whose purpose is work together to achieve a common business goal. Help the subgroups to focus on a single common goal, and thus eliminate rivalry and hostility amongst each other.

• Managing Committee 

1. Comprised of the top level managers only.
2. Has full authority and responsibility to act.
3. Deals with highly important decisions.

• Sub-Managing Committee 

1. Comprised of mostly middle level managers.
2. Deals with middle-level decisions.
3. Also advise to the managing committee from time to time. 

• Advisory Committee 

1. Its main purpose is to advise the managing and sub-managing committee.
2. It does not make any decisions.
3. Comprised of members who are experts in certain fields and are not necessarily managers.

• Ad Hoc Committee 

1. It deals with specific events (e.g. company crises, launching a new product).
2. Depending on the importance of the event, it could be comprised of high, middle or low-level managers.
3. It is dissolved once the event has concluded/resolved

• Conciliation Committee

1. To resolve various disputes that arise between workers; or between workers and managers

• Coordinating Committee

1. If coordination among different parts of a business is poor, this committee will resolve that problem.

Advantages:

Since the final decision is made by everyone in the committee, this avoids power concentration in the hands of a few people. Otherwise, power abuse, favoritism and stupid decisions may occur.

Disadvantages:

Committees usually operate via meetings. If the meetings are poorly managed, it can be a big drain on committees’ time and resources.

Class Activity

We are told to draw an organizational structure and our group chose the amusement park. 

Below will be our organizational chart.