Page 348 - Business Principles and Management

Chapter 13 • Planning and Organizing

and human resources. For effective management and control, even small busi-
nesses benefit from organizing work into related and manageable units.
As a business grows, the number of major divisions will increase or existing
divisions will be reorganized. When the small retailer expands, the basic selling
division may be subdivided. A larger marketing division may be established and
subdivided into advertising and promotion, personal selling, and customer
service. Determining how to divide work into efficient units is based on (1) the
type of work to be done in each unit and (2) the amount of work to be done.
The organization charts shown in Figures 13-5, 13-6, and 13-7 (see p. 336) point
out how a business may grow from a one-person enterprise into a partnership
with specialized duties, then expand as additional employees are hired and assigned
specialized duties including supervision and management.
A small business needs good organization just as much as a large organiza-
tion. Management problems often begin to occur in a small business when
employees are added but work responsibilities and relationships are not clear.
Making organizing decisions as a small business expands may not at first re-
sult in a formal organization chart. However, the business’s work should be
carefully examined and assigned to specific employees. If there is not an orga-
nization chart, the work responsibilities, the relationships among employees,
and their authority should be made clear to everyone.
For example, the owner of a retail business that sells and services home appli-
ances hires two employees, A and B. The owner is responsible for management of
the business and is involved in both selling and service as time permits. Employee A
is given responsibility for appliance sales and is the contact with the businesses
from which the company purchases appliances. Employee A is also in charge of the
business when the owner is absent. Employee B is responsible for appliance service
and repair and has the authority to make decisions related to customer relation-
ships after the customer has purchased a product from the business. These orga-
nizational decisions clearly identify the work to be done by and the relationships
among the people involved. The example illustrates how even very small organiza-
tions can develop an effective organizational structure and manage work.

FACILITIES AND WORKING CONDITIONS While divisions of work are being established,
the physical aspects of organizing must also be considered. These aspects include
providing the necessary equipment and materials for employees to be able to com-
plete their work, and arranging the layout of the facilities so that all work flows facts
smoothly and provides the best working conditions possible. &
Work should move through the business as efficiently as possible. Employees
should not have to waste time, and the work of one group should not delay the figures
work of others. A mechanic repairing an automobile, for example, should have
ready access to the needed tools and parts close to the work area. If special parts
are needed, a system to quickly order and obtain the parts should be in place so Employees gain satisfaction from
the repairs are not delayed. Most auto repair companies have computer systems having a say in what affects their
that can quickly locate auto parts from area suppliers and an express pickup careers. One expert suggests
and delivery service to immediately obtain the needed parts. When a customer asking these questions to deter-
comes in for service, an expert service writer will consult with the customer to mine how much power employ-
identify problems and write a service order that identifies the work needed, the ees have in an organization:
time and personnel required to perform the repairs, and the parts and supplies What kind of access do they have
required. If the items are not in stock in the repair facility, an emergency order to decision makers? How does
will be placed and quickly filled. the organization encourage
Physical working conditions also have an effect on the morale of workers. Job employee participation? What
satisfaction is influenced by lighting, temperature, ventilation, and cleanliness of systems are in place to act on
the work areas, as well as the quality and maintenance of tools and equipment. employee suggestions? Do
Even facilities outside the work area should be carefully planned, such as conve- employees feel they can try
nient and safe parking facilities and easy access to cafeterias and break rooms. new things and take risks?

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