Business Studies · Ch 5 — Organising
Key Terms
Key Terms
- Organising – The process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships so that people can work together effectively to accomplish objectives.
- Organisational Structure – The framework within which managerial and operating tasks are performed; it specifies the relationships between people, work and resources, and is depicted in an organisation chart.
- Departmentalisation – The grouping together of activities that are similar in nature, once work has been divided into small and manageable jobs, so as to facilitate specialisation (commonly on the basis of function, product or territory).
- Delegation – The downward transfer of authority from a superior to a subordinate; it lets the manager use time on high-priority work, yet the manager remains accountable for the assigned task.
- Authority – The right of an individual to command subordinates and take action within the scope of the position; it flows downward from superior to subordinate.
- Responsibility – The obligation of a subordinate to properly perform the duty assigned to him; it flows upward from subordinate to superior.
- Accountability – Answerability for the final outcome of the assigned task; it cannot be delegated and flows upward from subordinate to superior.
- Functional Structure – An organisational design that groups jobs of a similar nature under major functions (such as production, marketing, finance and personnel) as separate departments, all reporting to a coordinating head.
- Divisional Structure – A structure in which the organisation is split into separate, self-contained divisions (usually by product line), each headed by a divisional manager and internally multifunctional.
- Formal Organisation – The organisation structure deliberately designed by management to accomplish a task; it clearly specifies the boundaries of authority and responsibility and coordinates activities to achieve goals.
- Informal Organisation – The network of social relationships among employees that emerges spontaneously from their interaction, beyond officially defined roles; it has no written rules and no fixed lines of communication. …