Business Management

Back to Basics
First edition

Willy Engelbrecht and Conrad van Greunen

 Chapter 7 Organising within the Business

 Objectives
• Define the term organising in the business context.
• Discuss the importance of organising.
• Explain the difference between authority, accountability,
responsibility, and delegation within the context of organising.
• Describe the role of organising in the business context.
• Discuss the key fundamentals of the organising process.
• Illustrate and explain the various types of organisational structures.
• Explain the influence of the fourth industrial revolution (4th IR) on
the organising activity of a business within a southern African
context.

Business Management Back to Basics 2

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Introduction
The way in which organisations develop, implement and
monitor the business activities and use resource required
to produce products.
This chapter will introduce the concepts of organising and
how it is used with in the business context.

Business Management Back to Basics 3

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 The importance of organising

 Allows an organisation to setup a structure in which the allocation and responsibilities of
tasks are delegated.
 Ensures that departmental managers and employees take accountability for the
outcomes of their completed tasks.
 Establishes clear reporting channels and communication lines across organisational
departments and between managers and employees within departments.
 Creates an environment in which resources are utilised in the best possible way to meet
the objectives of the organisation.
 Organising creates a collaborative working environment between organisational
departments and employees.
 Breaks down the task to be completed into smaller activities that are completed by
various departments or employees and, in so doing, divides the workload distribution.
 Groups tasks, processes, and procedures within the organisation to create a work
environment and structure that promotes effectiveness and efficiency.
 Enables managers to carefully monitor and co-ordinate the activities and tasks that
must be completed by employees and departments within the organisation.

Business Management Back to Basics 4

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Principles of organising
Co-ordination
 It is the most important activity of organising as it
connect and integrate various levels of
management.
It has three elements: Chain of Command (line of
authority), Unity of Command (each employee
with one line manager) and Span of Control
(number of subordinate a manager can lead –
Narrow and wide)

Business Management Back to Basics 5

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Principles of organising
Designing jobs
 It’s about structuring roles and responsibilities so that people can perform well and
the organisation runs smoothly.
 Managers should consider four key elements
1. Job Specialisation: Breaking down tasks into smaller parts and assigning them to
individuals based on expertise.
2. Job Rotation: Periodically moving employees between jobs.
3. Job Enlargement: Adding more tasks at the same level of responsibility.
4. Job Enrichment: Adding more tasks and the level of their control over the job.

Business Management Back to Basics 6

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Principles of organising
Authority and responsibility
a) Line authority
• Between employee and manager
b) Staff authority
• Staff departments support line departments (HR, Legal, Finance).
c) Line and staff authority
• When line and staff authorities collaborate to ensure that line departments
are successful
d) Functional authority
• Specialist responsibilities, enable them to give orders to employees within
parameter of responsibilities
e) Project authority
• Horizontal line of authority that stretch across various departments (Project
Based – inclusive of different departments)

Business Management Back to Basics 7

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Principles of organising
Delegation
• Employees taking up delegated tasks and making a success of it,
are often promoted and given more responsibilities based on the
delegated tasks completed
a) Decentralisation
This concept covers tasks, as well as the power and authority required to
complete the task that is systematically delegated down the chain of command
within an organisation to a specific employee.
b) Centralisation
Happens when the managers on the chain of command retain the level of
power and authority without delegating it with the task.

Business Management Back to Basics 8

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Functional departmentalisation
• This is the first and most basic departmentalisation structure
found within an organisation.

Managing
Director

Systems and
Debtors General Financial
Fleet Manager HR Manager procedures
Manager Manager Manager
Director

Business Management Back to Basics 9

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Product departmentalisation
• Is specifically designed to group together all activities that relate to a
particular product.

Pioneer
Foods

Essential Internationa
Groceries
foods l

Business Management Back to Basics 10

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Location departmentalisation
– Location departmentalisation is used in organisations
that produce and sell products or services in different
geographical locations.
– The workers, together with the work-related activities,
are grouped per regional area.
– This allows for employees at both middle- and lower-level
management to take ownership of their tasks and
perform at optimal levels as certain levels of decision-
making rest within the regions in which the organisation
operates.

Business Management Back to Basics 11

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Customer departmentalisation
 Customer departmentalisation is used by organisations
that target a specific sector of the market.
 Customer departmentalisation differs from functional
departmentalisation in that activities relating to the
product, location and customer are grouped in such a
way that it can be perceived as small business inside the
organisation.

Business Management Back to Basics 12

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Matrix departmentalisation
– Matrix departmentalisation is a complex structure to follow as
employees have two reporting lines that could create confusion
within the organisation.
– This structure is mostly applied in large corporate organisations
where individuals are assigned to a specific functional area and
allocated a project in which collaboration with other functional
areas and employees is required.

Business Management Back to Basics 13

© 2018 Juta and Company (Pty) Ltd
 Chapter 7 Organising within the Business

 Organisational structures
 Divisional departmentalisation
• Divisional departmentalisation is mostly used in
organisations where there are distinctive, unrelated
business divisions that are managed as separate entities
and require decision making functionalities.
• The executive management in organisations that adopt
a divisional departmentalisation structure focuses on
acquiring more businesses rather than on the
operational and strategic activities of the various
business units

Business Management Back to Basics 14

© 2018 Juta and Company (Pty) Ltd