Organisation & People
Quarter 1, management and organisation 1
Introduction
The basics of management and organisation
Management means: the leading and steering of an organization. Managerial responsibility
is given to key people, normally being the owner’s or most senior persons in an organization,
plus anyone else delegated to take the role. Their main task is, combining the principles of
‘organisation’ and ‘management’.
- Manager:
o Stimulates and
o Directs the behavior of other people within an organization
o Is responsible for the financial results of a department
o Is in charge of a group of employees
- Organisation:
o A group of people Working together Towards a common goal. The three
elements of an organization can be seen as: people, cooperation and common
purpose/goal
- Company:
o An organization that offers a product or service on the market
- Enterprise:
o A company which task it is to make a profit
A profit is money you make, as opposed to money you lose. Businesses need to make a
profit, or they’ll have to fire employees, cut expenses and maybe go out of business entirely.
If more money is coming in than going out that’s a profit. Profit = winst!
Structure of definitions:
- Organising is bringing people together to perform tasks.
- Management ‘different meanings’
o The activities to steer an organisation: planning, organising, coordinating,
leading and controlling.
o The people who are in charge
o A group of people in an organisation (management team)
o The theory of the science and art of managing an organisation.
A company is often an organization that produces goods or services, and an enterprise is a
company that aims to make a profit. From these descriptions, it is evident that enterprises
are a category of a company, which in turn is a category of organisation.
,The evolution
The topic is organisation and management. However, the original and more widely used
name for this field is Organisational bahaviour!
- Organizational behaviour, can be defined as ‘an interdisciplinary science concerned
with the study of the behaviour of organisations, as well as with the factors that
determine this behaviour, and the manner in which organisations can be directed
with maximum effectiveness’. (actions and reactions within organisations)
o A descriptive aspect: this is a description of the behaviour of organisations,
including motives and consequences.
o A prescriptive aspect: this is advice about recommended organisational design
and course of action.
The term interdisciplinary is sometimes linked with organisational behaviour although the
term is often misused. An interdisciplinary approach takes matters one step further. That is
to say: the various contributions from the other subject areas (financing, accounting,
marketing etc.) are individually evaluated and then used to develop a new insight, one that
reviews the subject in its entirety. Here, the existing disciplines cease to be recognisable in
their original forms (contrastingly, this situation does not apply to a multidisciplinary
approach). The interdisciplinary approach, therefore, is an ambitious one. It is an often
pursued ideal, which tends to be unattainable. Often, it is impossible to move past the
multidisciplinary approach, even in organisational behavioural research.
Two other aspects of the definition organisational bahaviour are:
- Direction: you can describe this as ‘attempted targeted persuasion’. Giving direction
to the processes occurring within an organisation. This direction refers to a goal
which should be determined in advance. Development and adjustment of this
structure is an important directional aspect.
- Effectiveness: the matter of who should carry out which tasks is expressly
disregarded, whether they be formal organisational management, a consultant, a
member of the board of consultants, or an employee who comes up with a
suggestion during a staff meeting.
Conclusion of organisational behaviour: it is a science that is still developing, there is no
established system of knowledge of theory and it is just a subject to a collection of
approaches.
Development of trade and emergence of multinational enterprises
The first examples of international trade can be traced to the so-called ‘trade routes. The Silk
road, one of the oldest trade routes, was established in the 1st century BC. It connected
Europe, the Middle East and Asia. The silk road ensured that commodities like silk, fur,
pottery, iron, bronze from Asia could be transported to the west, also gold, metals etc. The
trade was mainly carried out by commission agents: middlemen who travelled part of the
route in caravans.
In 20th century, the number and size of multinational was growing and growing all because of
the historical perspective, influence on trade, technological developments, more knowledge
of financial things for your company etc.
,The term multinational enterprise is used to refer to organisations that operate
internationally.
Schools of thought and personalities
The most significant contributors in the history of organisational behaviour on a lifetime.
These individuals have all another thought about organisational behaviour. We still use their
theoretical thoughts at school now. The theories are all different, because their personalities
are also different and they all have a different view of organisational behavior.
Figure 1
Frederic Taylor and scientific management (c. 1900)
He was the first suggest at systematic, coherent approach to determining the manner in
which factories should be organized. Taylor proposed the managers adopt a broader view of
their tasks within the organisation: planning, coordinating, overseeing and verifying results.
Looked at systems primarily from a production angle.
- Scientific management: several key elements of the theory of management and
control of organisation
1. Scientific analysis of the activities that should be carried out, and the time and
motion studies to be used. The results can be used to standardize and
normalize the production process and machines and materials are used.
2. Extensive division of labour and workface training, with each task and
operation clearly prescribed. This results in work routines and leads to
improved production standards.
3. Close and friendly work relationships between managers and workers.
4. Managers need to be responsible for seeking and analysing working methods
and for creating optimum conditions for production. (Implementation phase)
5. Use of careful selection for the best person for a job.
6. Financial rewards for using the prescribed methods and targets in orders to
reduce production costs.
, - ‘eight-bosses system’: responsibilities of a boss
1. Time and costing
2. Task instructions
3. Processes and their order
4. Work preparation and allocation
5. Maintenance
6. Quality control
7. Technical guidance
8. Personal management
Consequences of Taylor’s ideas:
- The improvement in management and control of production departments across the
industrial world.
- Planning techniques were developed and applied more than ever.
- He changed working methods in organisations and has become an important figure in
the history of organisational behaviour.
Henri Fayol and general management-theory (C.1900)
Henri Fayol was the person that developed a set of guidelines regarding the way
organisations should manage their operations as a whole. His theory of general
management: affecting the organisation as a whole.
His general management theory was indended to be an educational model. Fayol identified
six independent management activities:
1. Technical
2. Commercial
3. Financial
4. Security (understood to mean the safety of people and possessions)
5. Accounting
6. Direction
Direction ensures the combinations between the other activities (figure 2). Naturally,
direction comprises the mainstay of the function of managers. It consists five tasks:
1. Planning and anticipating setting up an action plan for the future.
2. Organising: structuring the organisation using people and resources.
3. Commanding: ensuring full employee participation.
4. Coordinating: aligning each activity to the plan.
5. Controlling: ensuring that the results conform to the planning.
