Understand Employer Organisations

Transcription

1 What s included? Organisational Structures Types of organisational structures The Organisational Environment Organisational Structures Employer organisations vary from those that supply goods and services to those that manufacture goods. Some make profits to satisfy their shareholders whilst others are non-profit making. Private, public and voluntary sector organisations, features, differences and legal structures Private sector - These organisations are directly or indirectly privately owned and usually aim to make profits from the products and services they provide to their customers and the benefits go to the shareholders. They may be: Sole trader One person who is the exclusive owner of the business who keeps all the profits after tax has been paid and is liable for all losses and debts of the business with risks to their property. Partnership - Two or more individuals manage and operate the business and are equally and personally liable for debts from the business. Partners share profits or as agreed in a deed or partnership agreement. This is common in accountants, solicitors and veterinary surgeons. Organisational differences depend on ownership, aims and objectives and funding sources.

2 Limited company - A private company who is responsible for everything it does. Owners are legally responsible for its debts but only to the extent of the amount of capital they invested and these are separate from personal finances. They must be registered as a company (Articles of Association, Memorandum of Associated) and submit accounting statements on an ongoing basis. Public limited company Two or more people are required to form such a company. The company s shares are offered to the general public and have limited liability. A public limited company s stock can be acquired by anyone and holders are only limited to potentially lose the amount paid for the shares. These companies are owned by the shareholders. They must be registered as a company (Articles of Association, Memorandum of Associated) and their financial records published. They must hold annual general meetings and any Director reappointments or new appointments are voted on. Public sector These organisations are largely funded by central or local government through public and business taxes and are set up and managed by government ministries and departments who in return influence their policies and strategies. E.g. police, council, education, NHS and they provide a service to the public. Voluntary sector These organisations are usually non-profit making or charities they often have strong principles and beliefs and are not motivated to make a profit but benefit the public. They are funded from donations, money raised from publications, selling products and services and sometimes funding from local councils. E.g. Trust : Housing Associations, Charities: Oxfam, Red Cross, Local community interest organisations: Neighbourhood watch schemes, Societies: local sports clubs, scouts, guides, theatre groups. A limited company has shared ownership through investment by shareholders. The voluntary sector falls into a number of legal structures: Unincorporated Association - These organisations do not have to register with a regulatory body and are not obliged to keep a list of members. If they are a charity and have an income of above 5,000 they are required to register with the Charity Commission. Charitable Trust - These organisations are run by a small group of people (trustees) who can be appointed for life or changed on a regular basis. Trustees do not receive any personal benefits for their activities. A Charitable Incorporated Organisation - These organisations are registered and regulated by the Charity Commission. Their annual accounts and a trustees annual report must be submitted to the Charity Commission. A Charitable Company - These organisations are limited companies with charitable aims. Directors are not personally liable for any company debts. They have members and their own Memorandum and Articles of Association. ii

3 Types of organisational structures The operational functions of organisations differ depending on their size and structure. Larger organisations have more specialised roles and responsibilities than small organisations. Organisation charts help to show the internal structure of a business and make it easy to identify the roles and responsibilities of staff and how these relate to one another. Flat hierarchical - These organisations are usually small as they have few levels of hierarchy and few members of staff. The lines of communication are short and the areas of responsibility are wide and flexible. Such organisations are more responsive to market needs. COE Most Power Manager Manager Manager Worker Worker Worker Tall hierarchical - These organisations are usually large organisation with onesite or across sites and countries. They have more people and therefore many levels with long lines of communication and more focused and narrow areas of responsibility. Employees have an in-depth knowledge of their roles and functional area and a general knowledge of other companies. COE Least Power Most Power The structure of an organisation defines how activities such as work allocation, coordination and supervision are directed to achieve the aims of the organisation. Marketting finance Ops Mgrs Mgrs Mgrs Team Sup Team Sup Team Sup Team Ldrs Team Ldrs Team Ldrs Least Power iii

4 Functional - Usually suited to smaller companies or those that focus on a single product or service so may also apply to large companies with one site. They have an in-depth knowledge of a particular product or service they provide. The employee has a single manager that they report to and they are often grouped to a specialised or similar set of roles or tasks i.e. functional areas. Any issues or queries will be directed to one point of contact and employees will know who to speak to. They are clear on their own responsibilities and those of other departments across the business. Board of Directors Development Production HR IT Finance Marketting Matrix - These organisations combine the traditional departments as in the functional structure with project teams. They are usually large one site or across sites and countries organisations. Employees work across teams and projects as well as within their own department or function, ie product A sales department and product B operations department. Employees have a dual reporting relationship generally to both a functional manager and a project manager. They have an in-depth knowledge of a product within the functional area and a general understanding of other areas of the business with focused responsibilities. It may be difficult for employees to find a point of contact for other business areas yet they are able to build relationships with colleagues across sites and business areas. Board of Directors D ment Production HR IT Finance Marketting Programme Manager Project Manager Project Manager Project Manager iv

5 The Organisational Environment - Internal and external influences on organisations Internal influences - The internal environment of an organisation refers to events, factors, people, systems, processes, structures and conditions. This environment influences activities, decisions and employee behaviour and attitudes. Internal influences are all within the control of the organisation and may have a positive or negative effect on the company. These influences include: Communication: Positive influence There are good lines of communication with important information being given to and received by employees so there is no confusion. Negative influence There are bad lines of communication with important information not being given or received by employees and confusion about what needs to be done. Manage motivation: Positive influence are recognised for their achievements at work so they are motivated and complete work well and on time. Negative influence There is a lack of recognition for the achievements of staff and staff become demotivated and work is completed poorly and not at all. Company image or reputation: Positive influences - The company has a good image or reputation with repeat business and new business. The company may need to expand the business and recruit more staff. Negative influence The company has a poor image or reputation so people stop using them and they lose business. The company may need to down size and staff may lose their jobs. Policy making: The internal environment of an organisation refers to events, factors, people, systems, processes, structures and conditions. Positive influence - will know how to carry out their work and what is expected of them. Negative influence - will not know how to carry out their work or what is expected of them. Recruitment processes: Positive influence Skilled and experienced staff who complete work appropriately. Negative influence Unskilled or inexperienced staff who do not complete work appropriately so that work needs to be re-done by more qualified or experienced people. v

6 Management skills: Positive influence are budgeted for and the work flow will be controlled. The company will succeed. Negative influence are not budgeted for and the work flow will not be controlled. The company will fail. External influences - External influences are those factors that occur outside the company that cause changes inside the organisation and are beyond the control of the company. Even though external factors occur outside the organisation they can have a significant influence that the organisation cannot control. Such influences include: Lending conditions: Good lending conditions that enable good investment opportunities for the development of products and/or services with a choice of financial services. Tight lending conditions that make it difficult to find investment opportunities and difficult conditions for product or service development with a need to explore alternative financing sources. Interest rates: Decreased interest rates support spending and loan repayments are decreased. Increased interest rates support saving and investments and loan payments are increased. Taxes: Decrease in taxes mean increased profits. Increase in taxes mean decreased profits. Government regulations: Plans need to be developed for compliance with regulations. Competition from similar companies which necessitate the need to enhance innovation and service to stay ahead of the competition. Customers, competition, the economy, technology, political and social conditions and resources are common external factors that influence the organisation. Did you know? Even though external factors occur outside the organisation they can have a significant influence that the organisation cannot control. vi

7 Models of analysis in understanding the organisational environment In order to understand the organisational environment research and analysis needs to be conducted on the business environment within which the organisation operates and the organisation itself. This enables organisations to improve efficiency and effectiveness and use resources intelligently. Examples of analytical methods include SWOT and PESTLE analysis. SWOT analysis A SWOT analysis is a widely used tool that helps understand the strengths, weaknesses, opportunities and threat involved in a business activity or project. SWOT analysis supports business planning and decision making and provides an understanding of a situation. It starts by defining the objective of the project or activity and identifies the internal and external factors that are important in achieving the objective. Strengths and weaknesses are usually internal to the organisation and opportunities and threats external. Strengths What the organisation is good at and what is going well e.g. brand image, market growth, good customer service. Weaknesses Where there is a need to improve and make changes in the organisation. Opportunities These may be new markets, new products, new customers, new technology. Treats These may come from new competitors or an increase in the cost of raw materials, energy and taxes. PESTLE analysis This is a useful tool for understanding the political, economic, socio-cultural and technological environment that the organisation operates in. It can be used for evaluating market growth or decline and the potential and direction for a business. PESTLE analysis examines each factor to assess what the impact or potential impact will be on the organisation. Political factors taxes, VAT rates. Economic factors inflation rates, foreign exchange rates, interest rates, supply and demand. Social factors high or low employment, culture, age demographics, gender Technological factors be up to date, cost of new equipment or methods, staff training, web developments. Legal factors new sector legislation affecting manufacturing costs, meeting legal standards. Environmental factors - recycling, ethical implications, carbon footprint, sources of timber, contribution of organisation to the community, ecological influences, and regulations. vii

8 Change in a business environment Businesses should embrace change. It is important so the businesses do not lose the competitive edge or fail to meet the needs of a growing base of loyal customers. To continue to be successful change is important for organisations, it enables them to: Keep up with competitors. Adapt to changes in the market. Adapt with changes in structures, recruitment, new departments/areas created or lost. Keep up with legislation and political decisions such as employment law, health and safety and EU trading. Keep up with technology to help business become more productive, streamlined and efficient. Businesses should embrace change. Principles of Administration Babcock Skills and Learning R7901a v