ORGANISING

1.0 INTRODUCTION

Every organisation is made up of human and physical resources. These resources are brought together in order to accomplish a predetermined goal. In order to accomplish these objectives, tasks must be identified, the tools and technology required must be provided and a structure of relationships must be identified. It is the function of the management to determine the best structure that will optimise the utilisation of resources. Management organises these resources. The organisation is a means of achieving the best result from concerted effort. Organisation deals with people and their relationship in an enterprise. It is the organisation that determines the types of people required and their relationships. Thus, the type of personnel and structure required in a hospital is different from the personnel and structure required in a weaving enterprise or a university. In this unit, efforts will be made to take you through this topic with the sole aim of giving you a complete overview of this important and the first management function.

table of content A

2.0 OBJECTIVES

At the end of this unit, you should be able to:

define the concept - organisation
differentiate between formal and informal organisation
describe organisational charts, structure, line and staff organisation
explain what is meant by authority and relationship, power and influence and sources and limits of authority
discuss kinds of organisation, levels in organisation, superior authority, subordinate acceptance and responsibility.

3.0 MAIN CONTENT

3.1 Meaning of Organisation

An organisation can be seen as an entity. This is true of all business enterprises, churches, hospitals, or clubs. It can be seen as a process of coordinating individuals’ efforts to accomplish a common objective. An organisation is a group of people bound together to provide unity of action for the achievement of a predetermined objective. All management theorists – Fayol, Follet, etc., recognise this important management function. Organisation is very fundamental to human nature. Man is a social animal and shares relationship with his neighbours. The subject of organisation is central to sociology, psychology and even anthropology.

3.2 Kinds of Organisation

Organisations can be classified into two broad headings - (a) formal and (b) informal organisations.

a. Formal organisation

Formal organisation can be seen as a direct opposite of informal organisation. It is a planned pattern of group behaviour designed to achieve an objective. Most relationships found in many business enterprises are formal. The main reasons for formal organisations are:

to establish logical patterns of inter-relationships among members of the group;
to secure advantages of specialisation or division of labour whereby the optimum utilisation of talents can be realised;
to coordinate activities of the component parts in order to facilitate the realisation of the goals of the organisation (Massie and Douglas, 1977).

In Nigeria, the problem of formal organisation is not so acute because of the nature of Nigerian businesses. As an organisation grows, the component parts become more complex, the technology changes and requires special expertise and consequently, more attention. Small enterprises do not require the same magnitude of tasks as large ones, and are therefore easier to design.

b. Informal organisation

Informal organisation can be described as the human interaction that occurs simultaneously and naturally without overt influence.

3.3 Organisational Charts

An organisational chart is a visual device that shows the various departments and how they relate to one another. The chart helps the employees, the board of directors and stockholders to see - at a glance, the division of responsibility and lines of authority. One of the major advantages of an organisational chart is that it helps in studying how to modify or improve the relationships and areas of responsibilities within the organisational structure. An organisation can operate without a formal, organisational chart, but the presence of the chart gives evidence of a thoughtful, planned structure. The chart does in no way indicate the existence of certain positions identified by boxes and line of authority shown by solid straight lines connection.

3.4 Organisational Structure

Sound organisational structure involves dividing activities into departments, divisions, units and sub-units, defining relationships between the heads and members that make up the units. A good structure:

identifies the operating departments (sales department, production department and finance department)
isolates the service department (personnel, research)
places emphasis on balancing the structure
shows the role of committees in the organisation.

One of the major problems confronting management is to decide the organisational structure to be adopted. Important questions relating to duties and role of each department and line executive have to be clearly defined. A decision has to be made if the organisation is to be decentralised or centralised and the number of staff required for each task has to be determined. As experts succinctly summarise it, the important features of an organisation to be designed include division into sections and units, number of levels, locations of decision-making authority, distribution of and access to information, physical layout of building, type of people recruited, what behaviours are rewarded and so on (Robert, Simon, 1960).

A good organisational design is one that leads to the attainment of organisational objectives. A good organisational design is one that is fixed and will never require a change. The system is created to change when the environment in which it operates contracts or when the company is expanding or reducing its operations/objectives or during the process of re-organisation. A good organisation is judged by its economic performance, ability to operate in a dynamic environment and the growth and satisfaction of the members.

3.4.1 Types of Organisation

Organisational structure can be subdivided into two, namely - line organisation and staff organisation. This is described further below.

Line organisation

In a typical line organisation, authority is divested downward in a straight line from the Board of Directors to the Managing Director and to lower management levels. Every line executive has assigned responsibilities and authority assigned to him and has its supporting staff to execute the functions. A manager with line authority is answerable for the performance of his subordinates. The employees with line function are responsible for the immediate attainment of the organisation’s objective. The flow of authority and responsibility is usually straight or direct, and accountability is established. There are three basic advantages-as listed below.

This structure is simple and easily understandable by all, accountability is easily established. Conflict of authority is reduced to a minimum.
It lends itself to quick decision-making. Decision-making is vested in one person who is in charge of the department.
Expenses related to overhead are reduced to a minimum as the role of executive specialists is eliminated

Line and staff organisation

This form of structure resembles the line structure, only that specialists are included in the organisational arrangements. Decisions are made by line executives with the advice of staff executives. Staff executives are experts in their fields – (accountants, lawyers, personnel specialists, engineers, etc.) they advise the line executives who are directly responsible for the immediate attainment of the organisational goals. Figure 1.2 shows the line and staff structure.

3.5 Authority Relationships

This is further divided into three, namely-line authority, staff authority and functional authority.

a. Line authority

As pointed out, line authority connotes “command” relationship. This is the authority that makes one to expect obedience from subordinates. Line authority has been described as the chain of command as it flows from the stockholders to the Board of Directors, to the Managing
Director all the way to the employees. As Fox observes, “line positions in an organisation are those concerned directly with the creation and distribution of utilities or with the management of such activity.

b. Staff authority

This position is advisory in nature. Generally, a staff executive is a specialist who studies a problem, identify the alternatives and make recommendations to the chief executive for decision. He advises, and to advise is not to decide – only the line executive is vested with that authority, unless this power is delegated to him.

c. Functional authority

This process allows a staff executive (engineers, lawyers, accountants, and advertising managers) to make decisions and implement them within clearly defined guidelines. This process reduces the workload of line executive by taking advantage of the expertise of the staff executive. The staff authority aims at supplementing the activities of line authority. This process helps to reduce the usual conflict between line and staff executives

3.6 Authority and Responsibility

Authority, as used here, is the right to act or decide. It describes the relationship between and among people or groups. A person has authority if he has the right to command and expect obedience from the subordinate.

No organisation can survive if authority is not vested in some people. In fact, an organisation is nothing but a structure of authority relationships. In business organisations, authority flows from the top downward. In designing an organisation, the authority relationship is clearly defined. It is the responsibility of those in whom authority is vested to coordinate the activities of the organisation in order to accomplish organisational goals.
Organisational authority is vested in the position not on individuals. The authority is given to an employee because he needs a degree of authority in order to achieve a given level of productivity or sales. When the individual resigns, the authority is inherited by another employee who occupies the position. In this case, we speak of the authority of the manager, the powers of the president or the governor.

3.7 Power and Influence

At this juncture, it is necessary to distinguish between power and influence, in order to contrast them with authority. Power is the ability an individual has to compel another to do something against his wish, despite any resistance. A man who holds a businessman at gunpoint demanding that the businessman should surrender his goods has power to take possession of the goods. Power is evident in a situation where A has control over B or can force B to do something he does not want to do despite resistance.
Influence, unlike authority, is not vested in an individual. A has influence over B if he can modify or affect B’s behaviour. Thus, influence is a very moderate form of power. A person influences his friend because of the rapport they have established over the years. One, who influences, uses persuasion and suggestion to achieve a desired end. Influence takes place in all interpersonal relationships. Unlike power which implies a fear of punishment, harm or loss of status, influence does not.

In an organisation, the interpersonal relationship sometimes dictates the use of authority, power of influence. A supervisor has power over an employee because he has authority to use reward or punishment. A supervisor can also influence an employee to accept a position. Authority is a source of influence and a potential source of power.
A physician may persuade a patient to submit himself to operation. He has, in this instance, knowledge-based influence; just as personal characteristics such as self-confidence, honesty, appearance, or dynamism can give one charisma-based influence. In Nigeria, a person’s appearance influences the receptionist to decide whether the visitor will see a manager without waiting or not. This is commonplace in service establishments such as the post-office, banks, and even restaurants and hotels.

3.8 Sources of Authority

As pointed out, organisational authority is a right to act, to punish and to reward. A person who possesses this authority passes through the following phases.

1. Positional source

It is often said that authority is derived from the ownership of property. This is the case because, in Nigeria, the constitution allows the ownership of private property and its management. An entrepreneur has been given a license to operate a business, he has authority from the country to own and manage the enterprise. He can delegate this authority to his agents or sub-agents as he deems fit. Any person who accepts employment with the organisation is subject to the authority of the owner or his representatives.

In organisations, people often refer to responsibility being used instead of authority because authority and responsibility go together. One cannot operate without the other. An entrepreneur cannot operate his business without authority to use it. In the use of this labour he owes them a reasonable wage and has authority to enforce compliance with the rules and regulations that govern interpersonal relationships. The origin of authority - whether in an economic institution or in a social institution where private property is non-existent may be traced to the rules of basic group behaviour. As these elements change, the position must change. This authority which is transmitted from the basic social institution to entrepreneurs and managers is aptly called formal authority. This authority so granted can be called institutional or private.

2. Subordinate acceptance source

The acceptance of authority theory postulates that the source of managerial authority emanates from the acceptance of authority that the manager holds over subordinates. One of the authorities in the field of management, Chester I. Barnard made the following observation on the acceptance of authority theory:

… Disobedience of such a communication is a denial of its authority for him. Therefore, under this definition the decision as to whether an order has authority or not lies with the person to whom it is addressed, and does not reside in “person of authority” or those who issue these orders.

The acceptance theory places great emphasis on subordinate acceptance of the authority of the superior. Generally, a subordinate will recognise and accept his supervisor’s authority if he perceives that his directives are in keeping with organisational purposes and will lead to the attainment of his own objectives. The authority an individual has to effect compliance can be reinforced by other means such as persuasion, coercion, use of power, economic or special sanctions. A manager does not depend on acceptance for the execution of his functions; if he does, there will be conflicts and organisational objectives will suffer.

The basic error of acceptance theorists consists not only in conceiving authority, without sanctions, but also in overlooking the powerful effect of social institutions, which confer powers that supersede individual desires. The effectiveness of one’s authority can be influenced by acceptance but may not necessarily be nullified by the accepting agent’s attitude. Acceptance theory appears to place emphasis on leadership which deals with the ability to influence others’ behaviour in order to achieve a given objective. Management has authority and if this authority is not fully accepted by subordinates, it can use power or sanctions to secure compliance. The acceptance of employment in an organisation implies the acceptance of authority in the establishment.

The acceptance of authority is enhanced by the personal qualities of the manager, such as technical competence, supportive behaviour and dynamism. These qualities of leadership are fundamental to the effectiveness of management and not, necessarily, in the source of authority.

3.9 Limits of Authority

Formal authority is very fundamental to the attainment of organisational objectives. All managers who occupy positions of responsibility are vested with it. Effective utilisation of authority promotes organisational harmony and, consequently, the realisation of intended goals. Certain factors limit the amount of authority a particular executive possesses These factors include one’s level in the organisation, superior authority and subordinate acceptance.

3.10 Levels in Organisation

As mentioned earlier on, authority is delegated from top to bottom. The higher a manager is within the organisational hierarchy, the more authority he possesses. The managing director has more authority than his deputy and the deputy possesses more authority than the managers and supervisors. The higher the functions a manager has, the more the authority that is vested in him for the effective execution of these functions.

4.0 CONCLUSION

Organising is the second in the hierarchy of functions exercised by management after planning. This unit has given a complete overview of organisation - as it affects mobilisation of human and material resources and structuring of relationships within an organisational set up.

6.0 TUTOR-MARKED ASSIGNMENT

Write short notes on the following:

Authority
Power and Influence
Responsibility.