Case Study ‘Business Organisation & Structure’

Tasks:

Examine, and gather information on the structure of a business organisation in the private sector with which you are familiar, and identify the various job roles within the structure.

You have been asked by your personnel manager to produce induction material for new employees. The material should be in the form of an attractively designed brochure, produced with the aid of appropriate computer software. The brochure should contain the following information:

• A brief history of the organisation and its objectives

• Some data on output and sales over time

• The sector of the economy in which it operates

• The type of organisation, for example, private limited company or plc

• The objectives of the business

• The structure of the organisation, for example, hierarchical, flat, tall, matrix, centralised or decentralised

• An organisation chart

• Why the organisation has chosen this type of structure

• The various departments and their functions

• Line and staff relationships in the organisation

• The advantages and disadvantages of the organisation structure

• If relevant, how and why the organisation has changed its internal structure over time

• Why the internal structure may be reorganised in the future

Unit 4. Administrative systems

Key words: administration, administrative system, re-engineering, multi-tasking

4.1. The Purpose of Administrative System

What is administration?

In a typical business, like a restaurant, there are a large number of important jobs which need to be done, and in most cases these will be the same each week or month. A restaurant will need to place regular orders for stocks of food and drink; it will need to check and pay invoices for stock, bank takings, maintain accounts, pay bills and wages, hire and/or train new staff, chase up payments from expense account customers, arrange advertising in the local press, etc. These are the routine tasks which must be carried out repeatedly, but unless they are managed properly, the business will fail. Dealing with these tasks is known as administration. Administration is all about the organisation and control of business.

The need for good administration

Any business needs to ensure that its administration system is both efficient and effective:

• Efficiency refers to how the organisation uses its resources. The aim will be to combine them in the best possible way to maximise output and minimise costs.

• Effectiveness refers to how well an organisation achieves its objectives, such as increasing sales and/or profits. Good administration lies at the heart of all successful firms.

In the case of the restaurant, if administration is poor, the business may be slow in paying for supplies. This will mean that suppliers may refuse to trade with them and electricity and telephone services may be cut off because bills remain unpaid. Wages, salaries and overtime of staff may not be calculated correctly and the wrong amounts could be paid at the wrong times, leading to unhappy and poorly motivated employees. The restaurant may not keep proper records of its credit customers and so be unable to chase late payers. In the worst case, it may not be able to organise the ordering and delivery of its stocks of food and drink.

The functions of an administrative system

The way in which a business organises itself in order to cope with day-today tasks is known as its administrative system.

An administration system may be defined as a sequence of activities necessary to achieve an objective – for example, to order new stock or to pay for goods received. Administration requires that decisions and procedures follow a set of laid-down guidelines based on past good practice. People who carry out these procedures are called administrators.

The main function of an administration system is to provide support for routine and non-routine functions. An administrative system provides support services for the entire organisation. The main business functions of production, sales and marketing could not operate efficiently without this support.

Routine functions are those carried out on a regular basis, such as:

• Organising financial, physical, and human resources.

• Assisting with the smooth production of goods and services.

• Assisting with marketing, advertising, and promotions.

• Providing accurate and timely information on which to base decisions

• Maintaining sites, buildings, and equipment.

• Recording and monitoring business performance.

• Meeting external demands for information and legal requirements

• Provide customer service support and dealing with inquiries.

• Providing support for quality assurance.

Many of these support functions may be organised into separate departments, for example, finance and accounting, human resources, customer services.

Non-routine functions are those tasks which need to be carried out only at irregular intervals, for example, restructuring the organisation, organising staff cover for absentee workers, dealing with accidents or emergencies, machine breakdowns, legal actions, etc.

The vast majority of business transactions – for example, placing orders for stock, paying wages, loan repayments – occur on a regular basis. Where tasks are routine and predictable, rules and procedures can be established so that the minimum of staff time and thought needs to go into completing the task.

Administrative systems are designed primarily to cope with routine work. However, there will always be some non-routine tasks. For example, a supplier with whom a firm has previously had no contact may require cash payment for their first order. In this case, instead of passing the order through the administrative system, it may need to be passed on to the manager in order that a check can be made on the firm before any money is paid.

A good administrative system will highlight these exceptional or non-routine cases and will have a procedure ready to deal with them.