Monday, July 20, 2009

Committees in the business organisation

What is committee?
Committee is a group of people to which some matter is committed.
-have authority
-follow procedures
-provide way to resolve difficult decisions

Rigid procedures:
-voting right
-proposing motion which is a formal proposal for action made to deliberative assembly for discussion and vote
-right of attendance
-the construction of a agenda
-quorum which is a gathering of a minimal number of members of an organisation

-to promote smooth running of a committee
-to ensure consistency are maintained
-to enable both sides debating for cases
-to minimise the effect of bullying tactics
-to ensure record of proceedings is kept

* A formal meeting should be convenced in accordance( go along) with Articles of Association.
-to make the meeting a discussion group instead of taking decision
-To adjourn/ delay the meeting
-simply add words
*Point of order
-an objection about preceived irregularity
-in conducting meeting

Size of committee:
-Large, lack of individual time to give of point of view for everybody
-Small, lack of breadth of expertise

A successful committee should have:
-be representative of all interest
-have a capable chairman
-choose suitable subjects for action
-circulate reports prior to the meeting
-have clear cut terms of reference
-have skills and experience
-be worth the cost of its operation

Purpose of committee
-Creating new ideas
-have excellent means of communication
-combining abilities/ gather information
-coordination the efforts of people from divergent disciplines
-making recommendations

Types of committee
-Excecutive committee/ Board of directors, appointed by shareholder
-Standing committee, to deal with routine business
-Ad-hoc committee, temporary formed to complete specific task
-Sub- committee, to relieve the parent committee of routine work
-Joint committee, to coordinate the activites
-Management committee

Board of Directors
-a group of people legally charged.
-govern a company.
-elected by shareholders.
  • lay down strategy,generally policy and broad sectional policies.
  • ensure legal standards are net and the company is operating in accordance with its Articles of Association.
  • sanction capital expenditure and the method of disposal of profits.
  • ensure sufficient capital is available and maintain an efficient system to control the affairs of the company.
Steering Committee
-oversee a major project.
-allocate scarce IT resource and planning for future system development.
  • ensure that all IT activities are in line with the strategic plans of the organisation as a whole.
  • provide leadership at senior level for the exploitation and management of IT
  • ensure that resource allocation decisions are effective
  • co-ordinate requirements in any organisational restructuring.
  • create the terms of reference for the project teams.
  • monitor the progress of the various projects.
Work Safety Committee
  • human resources manager
  • safety officer
  • department representatives
  • union representatives
  • works manager
The Accounting Standards Board(ASB)
-setting accounting standards from the Accounting Standards Committee(ASC)
-promote consistency in corporate reporting by creating financial reporting standards.

Ethics Committee
  • conflict of interest
  • confidential information
  • complaints of customers
  • transactions involving related parties of the company.
Advantages of Committee
  • responsibilities are shared.
  • ability to undertake larger volume of work
  • decisions are based on groups
  • Pool talent,judgement and allows specialisation
  • Improve coordination between work groups
  • provide focal point for information and action within organisation.
  • Improve communication.
Disdvantages of Committee
  • slower decision making
  • decisions may represent compromise solutions rather than optimum solutions
  • waste time and resources
  • managers may abdicate their personal responsibility for decision making
  • some 'experienced' committee members may dominate.
  • excess procedural matters reduces the time available for the discussion of substantive matters.
  • cannot act quickly and flexible to meet sudden changes
The Chair
  • Keeping the meeting to a schedule and to the agenda.
  • Maintaining order.
  • Ensuring correct procedure.
  • Ensuring impartiality.
  • Ascertaining "the sense of the meeting"
  • Depending on the level of formality of the meeting.
-Skills and knowledges should have:-
  • Skills in communicating rulings clearly but tactfully
  • Ability to decisive
  • Ability to silence people in a firm and friendly manner.
  • Skills of summarising.
  • Awareness of non-verbal behaviour
  • Sound knowledge of the relevant regualations.
The Secretary
(i)Before the meeting:-
-fixing date and time.
-book the venue.
-preparing and issuing the agenda and other relevant documents.

(ii)During the meeting:-
-assisting the chairperson.
-making notes.
-advising the chairperson on points of procedure.

(iii)After the meeting:-
-preparing minutes
-acting on and communicating decisions.
dealing with correspondence.

Sunday, July 19, 2009

Chapter 13:stakeholder

Stakeholder divided into internal, connected and external. But all of them is a group or individual, who interesting in the organization


Someone intimately connected to the organization
  • They will care about the working position of them in company and also the salary of them. If the strategic manager pay according to the employee's responsibility, the employee will not leave the company
  • They take care about the company growth, so if the growth is occurring they able to get more bonus and can keep the job security

Connected stakeholder mean to contractual relationship, and also the primary objectives of the company to be succeed

  • Shareholder invest the capital into the business is want to gain the contribution and growth of the business
  • Strategic manager have to forecast the each customer's need and provide the value-for-money products and service to meet the request of customer
  • Without the supplier supplying the goods, the business also cannot survive, so the payment to them need to paid promptly but also will not block the company's run
-Finance Providers
  • If the company planned to enlarge their company's scale, so the providing the loan from bank is unavoidable, so the company have to repay the finance to show the ability of the firm to generate money


The group does not directly influence the organization
-Community At Large
  • General public is a very powerful group to make sure the organization exist
-Environmental Pressure Groups
  • This group have a very big force to let the organization growing, so the strategic manager have to make the project's decision to meet the standard of the group to avoid the obstruct from the group
  • the strategic manager have to make sure all the activities of the company follow the government's law to ensure can continuously existed
-Trade Unions
  • Take care about all the employee to avoid the butt in of the Trade Unions


Different in need will bring in conflict of the different stakeholder
  1. Employees versus manager
  • Employees only want finish their job but the manager want them to more hardworking to achieve organization's goals and then the manager can get the bonus from company
2. Customers versus shareholders
  • Shareholders want to earn a lot of money from their customer with providing the low quality of goods but the customers needs high quality goods in low price
3. General public versus shareholders
  • Shareholders want to make a big profit from the business with make something that will damage the global environment
4. Managers versus shareholders
  • The manager just want the organization growth in safety stage but slower than the shareholder want

It is very important of the organization make every decision because the decision have to meet all the needs of the stakeholders. When the organization having the difficulty to make decision, they will use Mendelow's power-interest matrix

low interest + low power = Minimal effort
low interest + high power = Keep informed
high interest + low power = keep satisfied
high interest + high power = KEY PLAYER

From above, the dominant stakeholder can be identified from the key player. The need of the key player will be consider first in the decision making later.

Saturday, July 18, 2009

Chapter 3:Organisational Culture

Defining organisational culture
The way we do things around here (by Handy)
elaboration: Sum total of belief,knowledge,attitudes,norms and customs in an organisation.
-different organisations adopt different culture
-culture develop and change with relevance to time

Components of culture
Norms guide people's behaviour to behave appropriately
regarding rituals
portraying the importance of beliefs

The factors that shape the culture of the organisation
There are 6 major influences:
1)Size(of the organisation-turnover, physical size and employee numbers)
2)Technology(depending on how technologically advanced)
3)Diversity (in terms of product range, geographical spread or cultural make-up of its stakeholders)
4)age(depending on how old is the business or the managers)
5)history(related to mistakes commited)
6)Ownership(depending on how many stakeholders are there)

Writers on Culture
-1st leader create the culture of an organisation and the culture will be followed by the other leaders.
-if leaders are to lead, they have to understand the culture of the organisation.
-3 levels to describe an organisation:
a)artefacts(eg:how people dress)
b)espoused values(strategies and goals of an organisations that were chosen to be followed)
c)basic assumptions and values(difficult to identify as it van hardly be seen, normally exist at the unconscious level). New employee find it difficult to understand and causes the failure to implement change.

There are 4 cultural types:
1)the power culture
-The owner(s) of the organisation have absolute control over the subordinates.
-major source of power and influence
-require few procedures and formal rules
2)the role culture
-job is described by duties not by its purpose
-bureaucratic organisation(structure determines the authority and responsblity of individuals)
-strong emphasis on hierarchy and status
3)the task culture
-teams established to achieve specific tasks
-results driven
-nothing is allowed to failed the accomplishment of goals
-individuals who failed to perform are replaced
4)the person culture
-exists to satisfy the requirements of particular individual(s) in the organisation
-found in small organisation
-individuals undertake all the duties themselves

Looked for national diferrences between over 100,000 of IBM's employees in different part of the world to find the 5 different traits that might influence business behaviour.
1)Individualism vs collectivism
-some cultures are more cohesive than others
-Anglo Saxon cultures are more individualistic than the collectivist cultures of South America
-countries like Japan and France use bureaucracy to reduce uncertainty because they dislike it
3)Power Distance
-the degrees to which cultures are willing to accept an inferior position
-eg. South American societies tolerate the differences of power more than North Europe cultures.
4)Masculinity vs feminity
-the distinction between the roles of genders are great
-in Japan, the role of males are greater, males focus on work,power and success
-in Finland, there is no vast difference between both genders.
5)Confucianiam vs dynamiam
-related to the change in attitude over a long term

Thursday, July 9, 2009

Organisational Structure

Further aspects of organisational structure

  • Ownership and management of larger organisations are often separated.
Main reason: Managers do not have sufficient funds so they rely on banks and markets(the owner)to provide the investment.
Scalar chain
  • Definition: Line of authority which can be traced up or down the chain of command thus relates to the number of management levels within an organisation.
Span of control
  • number of people whom the manager is directly responsible.
  • Tall structure-many managerial levels(hierarchies) and narrow span of control.
  • Flat structure-few managerial levels and a wide span of control.
Factors that influences the span of control(SOC):-
  • nature of the work : more repetitive the work,more wider the SOC.
  • type of personnel : the better the manager and the personnel are,the wider the SOC.
  • location of personnel: the more widely spread the personnel the narrower the SOC.
Centralisation and decentralisation

-upper levels of an organisation's hierarchy retain the authority to make decisions.
-authority to make decision is passed down to units and people at lower levels.

  • management style
  • ability of management/employees
  • location spread
  • size of the organisation/scale of activities.
  • senior management free to concentrate on strategy.
  • better local decisions due to local expertise.
  • better motivation due to increased training and career path.
  • quicker responses/flexibility due to smaller chain of command.
  • Loss of control by senior management.
  • Dysfunctional decisions due to a lack of goal congruence.
  • Poor decisions made by inexperienced managers.
  • Training costs.
  • Duplication of roles within the organisation.
  • Extras cost in obtaining information.
Informal Organisation
-Arise due to common interets or friendships.

  • better motivation
  • better communication
  • inefficient organisations
  • opposition to change can be intensified
  • the 'grapevine effect'
Impact on business
Managers need to:-
  • adapt the formal structure to complement the informal one.
  • maintain a looser formal structure.
  • take account of the informal structure in decision making.

Organisation structures

There are 5 types of structure

1. Entrepreneurial
-someone who organise a business venture of it, assume the risk
-built around the owner manager
-small company in the early stage
-example: owner of business

-fast decision making
-good control
-close bond to workforce
-more respomsive to marker
-good congruence

-lack of career structure
-dependant on the capability of the manager
-cannot sope with the diversification

2. Functional
-organisation that have outgrown the entrepreneurial structure
-organise the business on a functional basis
-Appropriate to small companies
-example: business of one type of component

-economies of scale( the more u buy, the cheaper u get)
-specialists more comfortable
-career opportunities

-empire building
-conflicts between functions
-cannot cope with diversification

3. Product/ Division/ Department
- in accordance with product lines, divisions, departments
-profit centres
-strategic business
-example: ac/cs will be centrallised

- enables growth
- clear responsibility for products
- training of general managers
- easily adapted for further diversification
- top management free to concentrate on strategic matters

- potential loss of control
- lack of goal congruence
- duplication
- specialists may feel isolated
- allocation of central costs can be a problem

4. Geographically structured
-based on location
-operate over a wide geographic area
-example: Kaplan

- enables geographic growth
- clear responsibility for areas
- training of general managers
- top management free to concentrate on strategic matters

-the divisional structure

5. Matrix
-combine the benefits of decentralisation with co-ordinations
-employees from various departments
-dual reporting to managers

- advantages of both functional and divisional structures
- flexibility
- customer orientation
- encourage teamwork and the exchange of opinions and expertise

- dual command and conflict
- dilution of functional authority
- time-consuming meetings
- higher admin costs

Getting organized.

What's an Organisation?

The definition of an organisations remains unclear as there are two synonymous meaning that it can be related to. To most of us, organisations simply means a how a group of people are arranged in a hierarchy manner to work efficiently. Not knowingly, organisations can also be treated as a process of planning appropriate activities for a particular enterprise to get the objectives achieved. As for my point of view, and by relating both of it, organisations are divided into 2 process, an early stage and a follow-up stage. In the early part, a group of capable people are appointed or elected to run the daily errands effectively. The follow-up stage revolves around the plannings towards getting missions accomplished by those elected, in a very orderly manner. In short, both the definitions can be treated as structuring. Structuring of manpower and structuring of activities to strive for aims.

As quoted by Buchanan and Huczynski, organisations are social arrangements for the controlled performance of collective goals. Social arrangements is a form of structure that enable people to work together in order to achieve goals. Every organisations divide responsiblities among the workers though larger organisations may normally have more formal structures. Controlled perfromance refers to an organisation's systems and procedures to contribute towards goals achieving. As for collective goals, they are the reason why an organisation exist. However, the setting of goals need to be SMART. (S-specific, M-measurable, A-attainable, R-realistic, T-timely)

Exapmles of organisations are: service companies, factories, retail companies, political companies, charities, local councils, the army and schools.

Why are organisations needed?

It is simply because an organisation can deliver results that is unattainable by individuals on their own. This is because an organisation enables the sharing of skills and knowledge, makes specializations possible and allows people to pool resources.

The sharing of skills for example, leads to the gathering of poeple of the same interest to start an organisation. People like to be in an organisation as they feel more secure and successful; want to be better of than the rest; and not forgetting about having more needs satisfied. So in short, organisations are needed to satisfy social needs.

Specialiasatioin is among the oldest organisational device whereby organisations or individual workers concentrate on a limited type of acvtivity. By concentrating in an aspect of work, they will build up a greater level of skill and increase their efficiency. Normally, an organisation will plan and arrange its output to use their resourses to the optimum so as to maximaise the profit. As we already know the idea of organisation enable poeple to work more efficiently, through the employment of the specialisation techniques. Specialization techniques involve the divison of labour. Both of the techniques enable an organisation to save time (task can be done more quickly than lone individuals), pool knowledge (knowledge and skills are shared between members in a particular organisation) and act as a power centre (an organisation have greater influence than a lone individual).

The specialisation of labour developed as industrialisation adavnced and popularized larger organisations. Manufacturers who run the manufacturing department of an organisations are greatly benefitted as:

  • Simple tasks encourage the usage of highly specific equipment.
  • Semi-skilled workers are substitutes for the highly skilled operatives.
  • Workers are in charge of a particular procesds. This will enable them to develop a high level of expertise and increse the rate of output.

*Modern industrialised economies apply the use of specialisation and the division of labour. However, both the techniques can only be benefitted along side with hierarchy, which is another organisational device.

How organisations are classified?

1.By Profit Orientation


Main objective: maximise the wealth of the owners

Exapnded objective: to continue in existence(survival) ; to maintain growth and development; to make profit

Peter Drucker's suggestion on profit-seeking company:

  • market standing
  • innovation
  • productivity
  • physical and financial resources
  • profitability
  • manager performance and development
  • worker performance and attitude
  • public responsiblity


Main objective: any objective apart from profit seeking as primary

NFP view financial matter as constraint to operate.

Objective: aim to satisfy particular needs of their members or a society. However, the objectives of NFP can vary tremendously. For example: hospital aims to treat patients while a charity aims to provide relief for flood victims.

NFP is a mutual organisation. It is an organisation with no share holder and it is established by a group of people for the purpose of raising funds by the subscriptions of members. Mutual organisations are a voluntary NFP. Examples of mutual organisations: some building societies and trade unions.

Examples of NFP: schools, hospitals clubs, charities and government agencie.

2. By Ownership/ Control


An organisation that control the public sector which provide basic government services.

Public sector includes services such as :police, military, public roads, public transit,primary education and healthcare for the poor.


An organisation that comprise of private sector that is not controlled by the government.

Organisation are divided into profit-seeking and not-for-profit organisations.

Private sector includes : businesses, charities and clubs


A jointly owned and democratically controlled enterprise by an autonomous association of people.

An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations.

They are organised solely to meet the needs of the member-owners, not to accumulate capital for investors.

*co-operatives and mutual organisations are similar in the sense that both are owned by the members that they exist for. However, they deal with different goods. Co-operatives deal with tangible goods and services (agricultural comodities or utilitie) while mutual organisations deal with intangible goods and services ( financial services).