Key Aspects of Corporate Organization, Operating Policies

Key Aspects of  Corporate Click to edit MasterOrganization, subtitle style Operating Policies and Gab Arellano Control Liezel Veluz Hanz E. Bollozos

Organization

Forms of Industrial Organizations 1. One-man Operation

2. Father-son or Manager-assistant 3. Functional Organization 4. Functional Organization With Central

Headquarters and Geographical Dispersion 5. Multi-divisional Firm 6. Conglomerate

1. One-man Operation

Has a single manager -who may make vague strategies and plans -make all decisions on the basis of experience or limited knowledge -concentrates all responsibility & authority to himself  -issues orders to all operating personnel -knows all the workers personally -information flows directly to him from individual workers and vice versa Has a very efficient type of management usually of  Paternalistic type Cannot function well when the number of workers exceeds 30 – 40. 

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2.Has aManager-assistant single manager but with 1 or more assistants -the manager or “boss” retains authority and makes all type decisions 

-the assistants’ jobs are merely to transmit orders and gather information  This type of organization is still efficient and can grow up to 300 or  400 employees Generally restricted to having operations at 1 location It poses a number of dangers: -the boss losses direct contact with workers, which could affect motivation -assistants may vie for popularity or give false report to the boss. -usually it doesn’t develop the abilities of the assistants 

3. Functional Introduces the concept of delegation of authority Organization Functional managers (the delegated authority) make  

all operating decisions within their department   They may participate in the development of strategy and plans but strategic decisions remain as responsibility of the CEO or GM CEO or GM coordinates the work of functional managers and resolve conflicts   This organization permits growth up to several thousand employees but is generally limited to firms with a small number of closely related products/ services restricted to one location

4. Functional Organization w/ HQ and Geographical Dispersion  This organization is an extension of the 3rd form but permits manufacturing or sales operations in 2 or more locations Each geographical manufacturing plant or sales office has its own production or sales manager directly responsible to the production or sales manager in its central headquarters All major strategic plans and decisions are made at the HQ Only the routine operating decisions are delegated to the field functional managers Some very large companies with tens of thousands of employees operate efficiently under this form However effectiveness begins to lose once product lines of the firm become too numerous or varied 

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5. Multi-divisional Firm  This organization has separate divisions for each product line or geographical location  Each division has its own functional organization with its own GM  Central HQ management maintains temporary responsibility for the delineation of the goals of individual division  Division managers are responsible for developing their own strategies and long-range plans subject to approval of HQ  Its division’s strategies and long-range plan should be in line with the total corporate commitment and objectives  HQ allocates resources among the divisions and seeks coordination between the divisions  ROI is the overriding criterion for expectation from each division  HQ can exercise to reduce or eliminate divisions with declining performance  Many multinational firms have “divisions” which are separate corporations themselves 

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6. Conglomerate  This organization has central HQ that only maintains financial control over a number of wholly-owned companies. Each subsidiary has different product line and marketing system Each subsidiary acts independently in setting its goals and in developing its plans and strategies Each subsidiary controls its own funds and makes its own investments HQ management’s major role is selecting the CEO of each subsidiary and requiring a certain return on capital or achievement of some corporate goal 

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Organizational Structure Companies may fall into a variety of degrees and combinations from among the given 6 forms of  organizational structure Each grows naturally out of the preceding one as the firm becomes larger and more complicated leading to changes in the organizational structure Reorganization sometimes is needed in an organization and there is a need to change its organizational structure Organizational charts is usually required to effectively plan and analyze alternative organizations 

Operating Policies

Two Types of  Business Policies Major Business Policy - deals with the fundamental nature of the company, which set the general directions in which the firm is expected to move Ø Operating Policies - guides to decision-making for effective, efficient, and  smooth operation of the organization - provide a value system and personality to an organization Ø

Operating Policies

Provide a value system and personality to an organization   Take the form of statement which tell managers how they should act in specific frequently-recurring situations   They are usually confused with rules and procedures It has been the trend for well-managed firms to put their policies down in writing 

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Some advantages in writing down policies Greatly promotes delegation of authority

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 There will be less delays in obtaining decisions Promotes consistency and reduce arbitrary bases of decisions Supports continuity Increases the ability of the different levels of  management to cooperate with each other Reduces misunderstanding among the different levels of management thus improving morale 

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Some precautions about written policies Highly confidential company policies should be

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protected from being exposed to competitors or other threats   There should be a periodic review of all the policies because their effectivity could remain long after they have become obsolete Avoid writing policies that might permit insufficient discretion to decision-makers making them inflexible 

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Managerial Control of Operations

Managerial Control of  Operations 4 Step 1. Standard of performance is established Process: 2. Actual performance is measured in relation to the standards 3. Performance information is channeled to the person responsible for controlling that operation 4. Where discrepancies between standards and performance occur, corrective action is initiated

Managerial Control of  Operations 4 Step Process: Establish standards of performance

Measure actual performance vs. standards

Performance information is channeled to the person responsible for control of that operation

Determine need for corrective actions

Maintain status quo Change the deviation Change standards

Management Information Systems

What is M.I.S.? M.I.S. is an integrated information system, which is used to provide management with needed information on a regular basis . It is needed to manage an organization efficiently and effectively. It is distinct from other information systems in that they are used to analyze operational activities in the organization Originally, M.I.S. doesn’t necessarily mean it must be computerized, but nowadays M.I.S. and computers are identified with each other. Depending on the technology acquired, a small business organization today can set-up an automated or semi-automated M.I.S. with just a single affordable PC 

Why Buying a PC Makes Business Se ns e Tod ay About 30 years ago, before the advent of the PC, computers were very expensive and it was very rare even for large corporations in developing countries, to justify the installation of a computerized M.I.S. That era was ruled by IBM and their mainframe computers. These computers would often take up whole rooms and require teams to run them.

Why Buying a PC Makes Business Se ns e Tod ay With the proliferation of the PC in the market, it began to compete with mainframes and mini-computers and accelerated the process of decentralizing computing power from large data centers to smaller offices. At first, there were still few SMEs who can afford to buy PCs for their business but the price of the PC continued to go down. Then came also powerful applications and rapid-application-development software that made computerized M.I.S. an ever more affordable alternative.

Why Buying a PC Makes Business Se ns e Tod ay

 Today, as the complexity of the technology continue to increase and the costs decreased, we find technologies such as interconnecting wireless networks, high speed mobile cell phones, and the popular internet, already at the fingertips of many small business entrepreneurs.

Some examples of what a single PC can do for a small business: do automatic calculations store data using the lowly spreadsheet can prepare a simple payroll, GL etc. keep track of expenses prepare communications provide owner with many financial analysis tools download from the internet free business applications reduce manpower and other functions that help the business operation effective and efficient 

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Thank   You.