CONTROL PROCESS &
ORGANIZING FUNCTIONS
THE CONTROL PROCESS
• Set measurable goals
• Assess progress (regularly assess the progress toward the achievement of
these goals)
• Adjust performance (adjust the performance to meet the goals, if necessary)
SET MEASURABLE GOALS
• Past performance: Using last year’s budget figures, referencing the
achievements of previous fundraising campaigns or examining a
school’s historical failure rate can help companies understand their past
performance.
• Standardized comparisons: The answers to questions such as “What
can other employees achieve?” “What do similar fundraising
organizations collect?” and “How do other schools perform?” provide a
sound basis for setting goals when compared with other organizations’
standards.
• Scientific approach: Scientific research finds optimal performance
standards (benchmarks) in a variety of organizations. Call centres,
parcel-delivery companies, and ambulance services are examples of
organizations that have discovered the best possible performance
standard that each of these industries can expect, and which use those
standards as benchmarks to help set their goals.
SET MEASURABLE GOALS
• Performance outputs include measurable indicators, such as sales figures, inventory, market share, and profit.
• The control mechanism to measure these outputs is usually a series of checkpoints to determine how close the
company is to reaching its goal.
• This series of checkpoints acts very much like your educational goals. Are you on target to get the grades you
desire? If not, then perhaps you should increase your output – that is, your effort (such as studying) – to achieve your
goal.
• Performance inputs include the amount of hours an employee spends on a task, how efficiently an employee works,
and how well an employee does the job.
• Once the goals have been included in the plan and that plan includes control systems, the organization develops
support structures to implement both the plan and the built-in controls. Part of the organizing function of management
deals with designating who should be responsible for the control mechanisms and how these mechanisms will affect
the organizational structure when they are needed.
• Planning sets the controls; organizing determines how the controls are implemented; and leading assesses both
work inputs and outputs. The human resources manager or other leader creates assessment tools to measure
efficiency, punctuality, time-on-task, and other indicators of performance.
ASSESS PROGRESS
• While attempting to reach their goals, managers must at various times pause and check their progress at a number
of specific checkpoints. This is a fundamental part of the control process.
• If things are going well, no action is needed. If, however, there is a discrepancy between the desired outcome at one
of the checkpoints in the task and the actual outcome at that point, then remedial action must be taken. Fixing
problems before they escalate is, after all, the main reason for the control system in the first place.
• The checkpoints are the moments in the process when managers can determine the variables for the control
equation:
Required action = Where you should be – Where you are
• Return to the educational goals you set at the beginning of this activity. If you are meeting your goals, then no action
is required. If, on the other hand, you are not meeting your goals, then you will need to take action and change your
behaviour and patterns.
• Planning includes the checkpoints as part of the plan. The control process has an impact on organizing at these
checkpoints as well. The team manager is prepared to restructure some committees and add others if necessary.
Control also affects the leadership function. The fundraising team manager develops a pool of possible additional
team members in case the organization has to add new committees or refocus its efforts.
ADJUST PERFORMANCE
• You have learned about contingency planning and scenario planning. Both of
these types of plans have built-in control mechanisms that deal with the
question, “What happens if…?” Good plans should always include at least one
alternative course of action in case the plan does not work.
• Within the organizational structure, the management should also incorporate
control points during the plan’s execution to allow for changes in the plan, if
necessary.
• Planning sets measurable goals, includes control systems, sets up checkpoints
to measure actual performance against desired performance, and provides at
least one alternative plan to adjust performance if actual performance does not
equal desired performance.
• Organizing provides flexible structures that can accommodate adjustments in the
plan and builds alternative organizational designs that will be ready if the control
systems record discrepancies between actual performance and desired
performance.
INTERNAL CONTROLS
• Internal controls are the controls people use to manage themselves. Managers who want self-directed employees
try to recruit workers with a strong set of internal controls. These include:
• Self-discipline: A self-disciplined individual works diligently to accomplish a task with little or no supervision. The
same employee uses initiative to solve problems and does not depend on others to get the job done. The manager
can trust that a self-disciplined employee will complete a task as quickly and as efficiently as possible.
• Personal goal setting: Another form of internal control is personal goal setting. Have you ever decided to exercise
more, for example? You may have set yourself a target of exercising three times a week for an hour each time.
Perhaps you decided to join a fitness club, or walk to work or school more often, or ride your bike for exercise. If you
stuck to your goals, you were obviously using internal control, because no one was forcing you to do the exercise.
• Self-assessment: Internal control requires realistic self-assessment. If you skip your fitness class week after week,
and still insist you are exercising regularly, then you are not being realistic about your own performance. Fitness clubs
earn a great deal of money from people who sign up to exercise and then never return after their first week or so. To
truly use internal controls, you must be truthful with yourself, and accurately and regularly measure how close you are
to achieving your goal. Be prepared to use your self-discipline to adjust your performance to meet the goals you set
for yourself. Managing yourself is harder than having someone else manage you.
EXTERNAL CONTROLS
• External controls are the rules, regulations, and procedures that
managers and supervisors use to control the performance of their
employees. A manager sets a goal for the worker, and the worker then
accomplishes the goal in the time allocated. If the worker doesn’t
complete the task or takes longer to complete it than they should within
the assigned time, then managers discipline the employee, usually with
verbal or written reprimands. If these infractions continue, then the
penalties for them become increasingly more severe. This is referred to
as progressive discipline and is discussed in more detail a little later in
this learning activity.
• External controls, then, are external to the employee in that the
employee follows the direction of superiors.
ORGANIZATIONAL CONTROL SYSTEMS
HUMAN RESOURCES (HR)
• Staff motivation and control are part of the human resources department’s mandate. There are two major
approaches to controlling staff behaviour:
• Compensation: Compensation acts as a control for positive behaviour in that it encourages employees to do
better work. Pay should be tied to performance in every level of an organization to ensure that highly motivated
and successful employees are rewarded and less motivated employees who do not perform well are not
rewarded. Managers can use perks and benefits, such as time off work, a company car and credit card, or free
travel, as motivators that will cause employees to stay longer, work harder, or be more efficient, thus controlling
their work performance.
• Discipline: Discipline acts to control negative behaviour by punishing it whenever it is noticed. The severest
penalty is dismissal, which is most often reserved for serious infractions such as theft or sexual harassment.
Managers can control minor infractions such as careless work, lack of effort, and repeated lateness by
documenting each infraction and increasing the severity of the discipline as the list increases. This is
termed progressive discipline.
FINANCE
• Budgets: a written prediction of financial input and output. It consists of
previous financial history, both budgeted and actual, as well as current
predictions for specific times in the future.
• Once these times have passed, the actual results are available and
added to the budget. Managers compare the budgeted amounts with the
actual amounts to act as a financial control. If the actual amount
disagrees with the budgeted prediction, then management must act to
adjust performance before the situation becomes worse.
FINANCE
Notice that, at the end of this January,
the organization was severely over
budget on their expenses and slightly
under budget on their revenue. This
could develop into a major problem, and
certainly management should be aware
of the increase in expenses and work to
reduce them. Once this February’s
actual revenue and expense figures
have been entered, the organization will
see whether the expense reduction
efforts were successful. If this situation is
not controlled, expenses could continue
to escalate, and the organization would
be in serious financial difficulty.
Last February
This January
This February
Actual
Budget
Actual
Budget
Actual
Budget
Revenue
30,000
26,000
14,000
15,000
30,000
31,000
15,000
Expenses
18,000
16,000
8,500
9,000
26,000
18,000
8,500
Last January
Actual
Budget
TYPES OF CONTROLS
• The control process builds controls into the overall plan, utilizes control
points throughout the performance to ensure that everything is under
control, and relies on previous history to set the targets and goals that
require controls in the first place. Each of these elements of the control
process is one of three types of controls:
 Feedforward controls
 Concurrent controls
 Feedback controls
FEEDFORWARD CONTROLS
• Feedforward controls anticipate an organization’s requirements before a specific task or operation begins and
help managers ensure that they have everything required on hand to maximize the operation’s chance of
success. Feedforward controls include:
 Planning
 Determining staffing requirements and hiring staff
 Deciding on organizational structures and organizing teams, if required
 Preparing workspaces
 Forecasting the levels of inventory and supplies required and ordering what’s needed
 Preparing a marketing plan and creating advertising and promotions
 Training staff
• By maximizing attention to feedforward controls, the organization can avoid many future problems.
CONCURRENT CONTROLS
• Concurrent controls are also called steering controls, because they steer the organization in the proper direction.
• Concurrent controls are checkpoints built into the overall plan that allow management to monitor the performance of
a task as it takes place and to correct any problems during its completion.
 Concurrent controls consist of:
 Budgets
 Quality control systems
 Inventory control methods
 Personnel schedules
• If problems are discovered in any of these areas, managers can make changes in each area to avoid an escalation
of the problem. Even success needs control occasionally, for example, if an organization is understaffed. Concurrent
controls provide managers with a list of employees who are available for overtime or extra shifts whenever the need
arises. An unforeseen increase in sales requires inventory controls that maintain inventory levels, even in extreme
situations. This type of control initiates production that will keep pace with demand.
FEEDBACK CONTROLS
• Successful organizations always examine
their performance after they have completed
the task. The debriefing session informs
management of what went right and what
went wrong. It provides information that will
be very valuable to future planning, when
management considers what to do the same
way, what to try to improve, and what to
avoid.
• Feedback also helps employees see how
they are performing by indicating the areas
they can be proud of and the areas where
they may need to improve. Information from
feedback will often become part of the next
feedforward controls.
ORGANIZATIONAL STRUCTURES
IN THE MODERN WORKPLACE
This is a hierarchical organizational structure. The connecting
lines on the chart indicate:
• who does what
• who is supposed to talk to whom
• who has power over whom
• who is connected to whom
The levels in a hierarchical organizational structure indicate
authority. The higher up the person is on the organizational
chart, the more authority they have. The company president is
the most powerful, followed by the vice-presidents, the
department heads, the area supervisors, and finally, the general
staff.
Note: A flat organization refers to an organization structure
with few or no levels of management between management
and staff level employees. The flat organization supervises
employees less while promoting their increased involvement in
the decision-making process.
INFORMAL STRUCTURES
• The term “watercooler chat” is used to describe workers taking a break
and chatting with coworkers near the watercooler. The term is also a
figurative one because these chats can exist anywhere in the office.
They are usually about work but can also be friendly and informal.
Colleagues share office gossip and news in this forum, as well as
personal stories. The relationships that are formed here may even
continue outside of the department and formal organizational structure.
Regardless, managers acknowledge the importance and power of these
informal relationships.
• It is always hard to know how powerful informal structures are in any
organization, but they are always there. Certainly, they help expedite
certain projects and create support groups within the organization. But
they can also exclude those whom the power group doesn’t like. If the
informal structure gets to be too powerful, it can do serious damage to
an organization, alienating certain employees and creating totally
different plans than the ones that company executives had envisioned.
FORMAL STRUCTURES
• Functional Structure
• Divisional structure, which includes:
 product
 geographical
 customer
 hybrid
 matrix
• Hybrid structure
• Matrix structure
FUNCTIONAL STRUCTURES
• Staff who perform the same type of function form work units or
departments. These departments become the core of a functional
organizational structure.
• Functional structures ensure that resources are used efficiently. Each
department argues for a fair portion of the organization’s budget, with
evidence and justification. Each department head in a secondary
school, for example, makes a case for courses, textbooks, and other
resources for his or her department, based on enrolment numbers
and previous budget allocations.
• The functional structure also organizes the staff into subunits based
on knowledge and skill. History teachers teach history, and
custodians repair classrooms. Skills are focused on specific problem
areas where experts are available to solve them. For example,
students will go to the Guidance department when they start planning
for post-secondary education and need to determine which courses
to take.
• Functional structures also set up a clearly defined hierarchy that can
act as a career path. Teachers who want to become school
administrators, for instance, realize that they need to work as
department heads first.
DIVISIONAL STRUCTURES
• A divisional structure organizes staff into work groups for reasons other
than common functions.
• There are five typical divisional categories:
 Product structures
 Geographical structures
 Customer structures
 Hybrid structures
 Matrix structures
DIVISIONAL STRUCTURES - PRODUCT
• Product structures form separate groups for all staff working on the
same product or in the same product category. Each division is
supervised by a brand manager, who is responsible for all of the
marketing activities supporting a specific brand: advertising, distribution,
packaging, sales, research, shipping, and product development.
• Product structures can also be broader than brands and include entire
product categories or markets. Rogers Communications is organized by
its four major areas of business: broadcasting, publishing, telecom, and
distribution.
DIVISIONAL STRUCTURES - HYBRID
• A hybrid structure either combines functional structure and divisional structure or combines more than one type of divisional structure. Most
hybrid structures divide the company into smaller versions of the larger whole, so that each division operates almost autonomously and acts as an
independent company with a traditional functional structure.
• In the example of General Motors, the company had a divisional structure because it has branch offices in several different countries. But each of
these branch offices would have a functional organizational structure and operate like an independent firm in a foreign market. Some companies
have two or more types of divisional structures. Coca-Cola has both geographical and product divisions. Coca-Cola Company Great Britain is
responsible for 20 brands, for example.
• Hybrid structures can be somewhat complex. Their biggest problem is communication across divisions. It is very difficult for the German division to
know what the Brazilian division is doing, and yet the Brazilian division might have some excellent marketing ideas or new product features. As
each division is a small version of the company within the larger version of the company, one subunit could be in direct competition with another for
resources.
• The inter-departmental and divisional competitiveness spurs creativity, however, and hybrid organizations can focus resources on the most talented
and potentially successful competitors.
DIVISIONAL STRUCTURES - MATRIX
• The matrix structure is a very interesting method that combines both functional and
divisional structures. The matrix structure divides the work output into different projects
or tasks. Each project or task has a separate strategy and objective. Each task has a
task manager (or group leader or project coordinator) who creates a functional team. To
create the team, the project manager draws people required for the project from each of
the functional departments.
• Each team member reports to their manager, as well as the project manager, so they
have, in effect, two bosses. In the following chart, representatives from the marketing
and production departments form the energy-drink team and the bottled-water team.
The team members report to both their team managers and their functional department
managers.
• Matrix structures take the best from both the functional and the divisional organizational
models. The team model of matrix structures uses members of other departments as
members and thus creates loyalty, focus, and accountability from different functional
areas, as well as improved communications and cooperation across functions. A team
approach usually produces creative solutions and better decision making. Each team
works within the overall strategy but is free to develop its own plans, which allows upper
management to concentrate on the big picture. A matrix structure is very flexible, as
teams can be constructed or disbanded at any time.
• The major drawback to the matrix structure is that each team member has two bosses:
a project manager and a department manager. This could create conflict or some task
confusion.
TEAM STRUCTURES
• Teams are cross-functional organizational units developed to serve a temporary purpose or to act as permanent
creative think tanks: combinations of creative people with different abilities who meet to work on new ideas.
• The primary goals of team structures are to create competitive advantages and increase market share. Usually a team will
include a group of people with technology expertise, a few marketing people, one or two representatives from research and
development, and, if the business is a manufacturing firm, some production people. Many firms provide teams with space
and time to work together, and offer them a great deal of freedom. It would be counterproductive to create a team of
experts and then tell them how to achieve their goals.
• Certainly the major advantage of teams is that they are created specifically for a purpose, and the members of the team
are together only for that purpose. Each member has a function and a talent that adds necessary skills and experience to
the team. The selection process can confer status on team members, and that, along with the excitement inherent in a
challenging assignment, boosts morale and improves productivity. Because communication is so easy, objectives are so
clear, and the members are so motivated, creative, and competent, the team works very efficiently and effectively.
• The biggest disadvantage of using teams is that they occasionally don’t work. Infighting, grandstanding, control issues,
poor communication skills, personality clashes, jealousy, power struggles, or loyalty to the functional department rather
than the team can cause a team to break down and cease to function. The team therefore requires a talented manager:
someone who is knowledgeable about group dynamics, can motivate staff, and is a strong leader.
• The group works longer and longer hours and becomes more and more obsessed with creating the new product or solving
a specific problem. This can lead to group collapse as well as a result of overwork and burnout.
NETWORK
STRUCTURES
• In the traditional model, the
manufacturer, processor, or retailer
buys inventory and stores it until it is
converted into a new product and/or
sold. This requires a heavy investment
in staff and a store or factory. In the
network model, the company requires
no inventory. This requires one staff
member, a computer, an Internet
connection, a cellular phone, and office
space.
Traditional structures
Network structures
They buy raw
materials.
They source product
manufacturers.
They convert them
into a saleable
product.
They contract a
distribution deal
using information
technology.
They sell the product. They connect to
customers using the
Internet. They
arrange shipping
using the Internet.
TRADITIONAL VS NETWORK
NETWORK STRUCTURES
• Network structures have a number of advantages:
 Efficiency
 Scalability
 Broad product range
 Flexibility
• Network structures are very efficient; one person can operate an entire business. If Salvador’s business were to get
larger, he’d only need to add one more computer operator. Networking saves money by allowing firms to search for the
product or service provider that is the least expensive and contract the work out to them. It is incredibly flexible because
the company can change suppliers instantly.
• One of the potential problems with the network structure is the computer network. If the computer system crashes, the
company could be out of business. In a networked business, information technology is often a critical component.
• The other potential problem is outsourcing, which, while efficient, places control of sensitive business issues into the
hands of another firm. If the outsourcing company has problems, its clients also have problems.
BOUNDARYLESS ORGANIZATIONS
• A combination of team structures and network structures can lead to a boundaryless organization. The boundaries
that traditionally kept staff apart, such as functional structures, geographical separation, hierarchies, and even
office cubicles, are all gone in this organizational system. Teams come together spontaneously online whenever a
member has an idea. They focus on the solution to a problem, then disband, and may reform in a different
configuration to solve another problem.
• The organization is boundaryless because it has no geographical definition; it does not have a form. All of the
functions of the traditional organization are performed by outsourcing firms or by forming strategic alliances with
online suppliers, distributors, website designers, financial institutions, logistics firms, and any other company that
wishes to be a part of the project.
• The boundaryless organization is very creative. Data is filtered to obtain the best ideas as solutions to problems.
Trained experts are constantly at hand. Market data, trends, and shifting expectations are well monitored all over
the globe. Speed of response is instantaneous, as new experts are recruited for a new team. The only expenses
involved are payment for creative work.
• The lack of hierarchy can cause confusion. A boundaryless organization is spontaneous and therefore difficult to
create. It is not a structure that can be imposed on any business, but, for companies that need input from
numerous sources, it could be encouraged.
TRENDS IN ORGANIZATIONAL
STRUCTURES
• As new governments, new beliefs, new technologies, and new
inventions force a business to change its focus, strategies, culture, or
values, the structure of the organization changes as well. As more and
more organizations adjust to similar forces, trends emerge. Managers
have to learn new ways to manage and adapt to each of the new trends
that come along. Lately, the trends that have had an impact on
management are:
 Upside-down pyramid
 Shorter chain of command
 Reduced unity of command
 Wider span of control
 Increased empowerment
 Decentralization
UPSIDE-DOWN PYRAMID
• While some traditional companies prefer this
model, a progressive and successful
organization recognizes that the true power lies
with its customers.
• In the upside-down pyramid that follows, the
needs of customers are at the top, while staff is
in the middle, and management is at the
bottom. Such a model focuses the
organization’s attention on the consumer and
the market, rather than on management orders
and control.
SHORTER CHAIN OF
COMMAND
• The classical organizational model will show a chain of command
from president to vice-president, through divisional manager,
subunit manager, area manager, and line manager. Each of these
represents a level of management. The old chain-of-command
model is shown on the left.
• Recently, businesses have realized that multilevel organizations
are more expensive to run, hinder communications, make multilevel
co-operation difficult, hamper flexibility because of the multiple
layers of decision making, and separate upper management from
the customers. The solution was obvious: remove unnecessary
layers of middle management. Firm after firm wiped them out,
making a much flatter, more responsive, productive, and efficient
organization. The new chain-of-command model, shown in the
chart, has two levels.
• The remaining managers must work harder to make up for the loss
of their colleagues, and need to adjust to a leaner, more responsive
organization. Managers now have more accountability and more
responsibility. The role of manager in the flatter, more horizontal
structure is as a team leader and motivator, no longer taking
directions from upper management (as there are few members of
upper management left), but setting direction and making
decisions. This new role has been overwhelming for many
managers who were used to relaying to staff the decisions that
upper management had made, and then acting as a watchdog to
make sure that the workforce obeyed the rules and accomplished
the task. For others, however, the change was liberating and
empowering.
REDUCED UNITY OF
COMMAND
• Another foundation of classical management has been
the unity-of-command principle, which states that each
person in an organization should report to only one boss.
In the traditional divisional and functional structures, this
principle was crucial to avoid confusion; when they are
not self-directed, employees need to know whose
directions to follow.
• You will have already realized that the matrix structure,
team structure, and network structure do not adhere to
the unity-of-command principle. The role of the manager
in these new two-boss systems can be very challenging.
The manager must not focus on control, but on
empowerment. Employees who function as part of project
teams or task groups do not need direction as much as
they need support.
• Think of the manager’s role in these structures as being
similar to that of the snowplow driver who cleans the
highways so others can get to their destination: a modern
manager makes it easier for staff to reach their goals. Of
course, in boundaryless organizations the role of
manager disappears completely.
WIDER SPAN OF
CONTROL
•
With the flattening of organizational structures and the shortening
of the chain of command, a manager’s span of control widens.
The span of control is the number of staff who report directly to a
single supervisor.
•
Companies with multi-levels of management would have narrow
spans of control that are, as you know, costly, inflexible, and less
efficient. As the span of control widens, managers have more staff
who report directly to them.
•
The span-of-control principle, which states that there is a limit to
the number of employees that one manager can control
effectively, holds true for the more traditional forms of
management, but not for the newer forms. Managers are now
responsible for more staff, but in a very different way. The role of
the new manager in wider span-of-control systems is to delegate
control to subordinates and empower them to be self-directed.
INCREASED EMPOWERMENT
• Empowerment is the act of conferring or giving power to others. In order to truly empower an employee, a
manager needs to clarify the goals inherent in a specific task.
• The manager then transfers all authority for the completion of the task to the subordinate, which includes access
to necessary resources, power to lead others, and the right to use previously unavailable information. Along with
this authority comes the burden of responsibility to use the resources thoughtfully and the obligation to be
accountable to the manager for the results of the task.
• Managers in more enlightened organizations are increasingly delegating authority to others primarily because it is
a more efficient and effective way to accomplish tasks. The underlying assumption here is that employees have
talent and ability; if they didn’t, they would not have been hired. Also, the evolution of the workplace has meant
that even more junior members of staff are highly skilled, enabling this empowerment.
DECENTRALIZATION
• The growth in technology has provided a unique opportunity for
businesses to decentralize. In the traditional organizational model,
control was often centralized in the executive suite, with
pronouncements and directives filtering down through the numerous
management levels until they found their way to the people who were
required to act on these orders. In non-traditional models, central
management can formulate a strategic plan and then decentralize the
task performance by passing the authority to act and the responsibility
for success along to managers. The manager’s role in this
decentralized organization is that of team builder and project
manager. The manager selects creative, self-directed employees to
become members of work groups, provides them with the necessary
power and authority, and works with the team to formulate and carry
out functional plans.
• Decentralized businesses are closer to customers. A Vancouver
clothing manufacturer can be much more successful in Germany if the
company has a distribution branch in Germany, staffed by German
employees, who manage the clothing distribution as a German
business.
• Decentralization is essential in a global economy. It provides the
cultural fluency that businesses need to succeed in foreign markets.
The advancements in information technology keep the central
company constantly in touch with the subunits, so that inventory
figures, style reports, market data, and shipping information are
available whenever they are needed.
ORGANIC VS MECHANISTIC
Organic Organizations
Definition
Characteristics
Examples
Mechanistic Organizations
Organizational structure characterized by:
Traditional firms composed of formal structures that demands strict
(1) Flatness: communications and interactions are horizontal,
adherence to the classical management concepts of hierarchy, division
(2) Low specialization: knowledge resides wherever it is most useful, and of labour, and centralized, top-down control.
(3) Decentralization: great deal of formal and informal participation in
decision making.
A positive corporate culture is one that is creative, flexible, and
empowering. Managers need employee input and rely on a cooperative
spirit within the firm. Each member of the organization feels like an
important contributor. Each employee feels valued. The organization
supports and encourages individual differences in the knowledge that
competitive advantages and increased market share emerge from
creative people who are working with the same corporate beliefs and
values, and who are focused on the same corporate goals.
Organizations tailored to a stable market environment, they grew out of
the Industrial Revolution and provided a revolutionary way to create
goods. Management makes the decisions, and workers become part of
the machinery.
Teams, networks, and boundaryless organizations
Assembly lines
ORGANIC VS MECHANISTIC
• Source of Authority: organic organizations provide decentralized authority that empowers workers; mechanistic
organizations centralize authority, which does not empower people.
• Number of Rules & Procedures: organic organizations have few rules, which encourages employees to be more
self-directed than those in mechanistic organizations, which have many rules and procedures.
• Span of Control: the wide spans of control in organic organizations reduce the amount of direction given to
employees and increase individual empowerment. The narrow spans of control in mechanistic organizations rely
heavily on managerial directives.
• Execution of Tasks: organic organizations share tasks across functional and divisional lines in matrices, networks,
and teams. These structures provide empowerment and flexibility. Mechanistic organizations have specialized tasks
that need direction from a hierarchical management system and are relatively inflexible.
• Nature of Teams: organic organizations have numerous teams and project-based assignments, which encourage
creativity and cooperation. Mechanistic organizations have few teams and project-based assignments and therefore
have less opportunity for creativity and cooperation among departments.
• Nature of Coordination: the formal and impersonal coordination among divisions and functions in mechanistic
organizations does not provide the same opportunities for creativity and cooperation as organic structures, which
encourage more informal coordination that supports creative thinking and cooperation among divisions.
WORK
• Work is any physical or mental activity that is performed to make or achieve something other than personal
pleasure or relaxation.
• A psychological contract is the belief (unwritten expectations) on the part of both parties that they give (through
obligations) and receive (through rights and benefits) equal value from each other.
• The psychological contract between an employer and an employee involves an exchange of work output (from
the employee) for acceptable compensation (from the employer).
• The major principle that drives any psychological contract is fairness. Problems arise when one of the parties
thinks the psychological contract is unfair; for example, when one employee earns more or gets more time off
than another, or when the boss is nice to one person and displays dislike toward another. Any of these things can
destroy the psychological contract and cause an employee to leave, or at least be unhappy and angry with the
situation. Employees in this position might do things that undermine the business, such as complain to outsiders
about the place or provide poor customer service.
• On the other hand, if an employee is happy and satisfied with working conditions and pay, then he or she usually
will go above and beyond in their performance and customer service. It is therefore in the best interest of
management to ensure employees have a positive psychological contract.
QUALITY OF WORK LIFE
• The way people feel at work has an impact on how they treat customers, their relationship with
fellow employees, and how they do their job (their productivity). Unhappy employees are not as
productive or as efficient as happy employees. They take more sick days and their attitude can
cause lost sales. It is, for the most part, the responsibility of a manager to make sure that employees
are receiving a positive experience in the workplace. Management can use many ways to ensure
that positive experience: thoughtful colours and decoration in the overall workspace design;
amenities such as an employee dining area, lounge, or recreational facilities; social programs such
as barbecues or potluck lunches; employee assistance programs to help employees with financial,
emotional, or health-related issues.
• By far, the most common and important cause of employee unhappiness is a challenging manager:
the insensitive, non-empathetic, demanding, poorly trained, humourless tyrant who takes credit for
other people’s ideas, feels distinctly superior to every subordinate, and has bad manners.
Employees who must face such a person every day come to hate their job and constantly look for
ways to leave or to undermine the person who is making their life miserable. That boss’s manager is
also responsible – for not being aware of how seriously this person is damaging the company and
the personal lives of many of the people in it. When bad management, poor working conditions, and
a struggling economy combine, workers can become very unhappy.
JOB SATISFACTION
• There is a very high correlation between job performance and job satisfaction; one is dependent on the other. However,
there is no one method of bringing job satisfaction to every employee. Even high pay, which seems the most obvious
motivation and solution, does not necessarily make an unsatisfying job more satisfying. A combination of factors
contributes to job satisfaction:
 Supervisor & Co-worker relationships - Poor working relationships can create job dissatisfaction very quickly. Careful
team building and smart leadership will prevent most relationship issues from becoming problematic for the participants
and the company.
 Work Setting - Flexible work-time programs, whereby an employee can set his or her own work schedule, are a positive
step toward creating a supportive work setting. A positive work setting also makes the working day more comfortable for
employees: furniture, equipment, supplies, an eating area, a relaxation centre, and even a fitness area provide comfort
levels that increase job satisfaction.
 Task Value & Task Complexity – When a worker gets the big picture and sees how his or her efforts contribute to the
success of the entire company, job satisfaction increases. Tasks should not be too complex for the individuals performing
them, nor should they be too simple. Complexity produces frustration, and simplicity produces boredom. Both decrease
job satisfaction. A good manager matches an employee’s tasks to his or her abilities.
 Advancement Opportunities - If an employee wants a chance to advance within an organization to earn more
responsibility, more self-esteem, and higher pay, the organization should provide such opportunities. Often, the greater
the professional challenges, the higher the job satisfaction.
JOB SATISFACTION & JOB DESIGN
• Companies can improve job satisfaction by selecting the appropriate job design for each employee. Each job design
involves three common principles:
 Job Scope – the number of specific tasks assigned to one employee.
 Job Depth – the amount of influence an employee has within a specific task, including planning, organizing, controlling,
and leading.
 Job Specialization – the amount of training and expertise a job requires.
• The following three job designs incorporate different combinations of scope, depth, and specialization:
 Simplification – implies that job tasks are simple, repetitive, and easy to learn. The traditional job design of creating a
division of labour incorporating human beings as part of the machine or the assembly line is efficient and productive, as
long as employees perform their assigned tasks. Job satisfaction, however, is usually low with job simplification, and this
leads to high absenteeism and employee turnover.
 Rotation – assumes that employees perform a variety of tasks with varying degrees of complexity, which, on one hand,
contributes to a sense of accomplishment and, on the other hand, allows employees to understand the whole operation
they are part of.
 Enrichment – Job enrichment provides challenging opportunities and engages the worker. Employees feel that they are
accomplishing something significant and that they are making a contribution to the firm. They can make decisions and take
responsibility for their work. In other words, job enrichment empowers employees, and that increases job satisfaction
immensely.
JOB SHARING
• In job sharing, the company splits one job between two employees: one
employee might come in for the morning, while the other works
afternoons. One day on and one day off is another arrangement.
• The strength of this type of schedule is that it retains employees who
might otherwise face a layoff – two employees share what was once
one full-time job. Many workers want only a part-time schedule, and job
sharing provides part-time work hours with full-time benefits and status.
• The major weakness in this arrangement is the potential for adjustment
problems between workers. The two workers sharing the job need to coordinate their activities and make sure that the transition each day (or
each alternate day) is as smooth as possible.
SELF-MANAGED TEAMS
• Companies form work teams around specific projects or tasks. The
team sets its own schedule; success is measured by results, not hours
worked. Teams can (and often do) work long into the night, solving
problems. The team approach empowers employees and increases
creativity and motivation.
• Its major weakness, in fact, is that a particularly results-oriented team
can become obsessed about a project and work too hard on it, risking
burnout.
WORK SCHEDULES
• Compressed workweek: Employees can arrange to complete their 40-hour week in fewer than five days. For
example, you could work three 12-hour days and one four-hour day. Or you could work four 10-hour days. In both
cases, you would have a three-day weekend. Some employees choose to work an eight-day shift of 10-hour days
and then get an entire week off. Vacation time or time off can be a strong incentive, either to join a specific
company or to remain with that company. This incentive is often more powerful than money. In a manufacturing
setting, there is often an increase in efficiency with a 10-hour shift, as the week has at least one fewer day in it, and
therefore one fewer start-up and shutdown, the two most unproductive times of the day. A firm using compressed
workweeks must arrange for multiple schedules and accommodate a variety of requests, which can be very
complex, and can increase the workload of the human resources department.
• Flextime: With flextime, employees can have some choice in how they schedule their work day: coming in early and
leaving early, or coming in late and leaving late. This reduces the stress on employees, especially those with young
families. With flextime, they can enjoy a more relaxing morning with the kids, or pick them up right after school and
thus save money on special after-school care. Some commuters find it much more relaxing and efficient to come in
to work at 6:00 a.m. and leave at 3:00 p.m. The disadvantage is that managers must extend their day to supervise
employees who arrive early or who leave late. This could push costs up and reduce the quality of life for those in
upper management.
OFF-SITE WORK
• With the development of the Internet, many jobs can be done from
home. Some employees work four days a week at home and visit the
office one day a week. Others, in a network organization, for example,
never visit the office at all. Home-office workers find working at home
and avoiding the daily commute far less stressful and less expensive
(saving on clothing, lunches, and gas and car repairs or public transit
costs). They must be able to cope with the myriad of distractions at
home, however, such as neighbours, friends, and family.
CONTRACT WORK
• With contract work, a company hires an employee to work on one
project for a specified period of time. When the project is over, the
employee needs to find another contract. In this arrangement, the
company has flexibility in hiring, and the employee has a commitment
for a certain salary over a specific time frame. Many contract employees
love the freedom that comes after a contract is over. The lack of
permanent job security would bother many people, however, and it is
not an ideal arrangement for many employees. The corporation, too,
loses out with contract workers, in that they are not at all committed to
the corporate culture.
HUMAN RESOURCES PROCESS
• If you have ever worked for a medium- or large-sized business, you
were probably hired by someone in their human resources (HR)
department. In smaller organizations, the human resources process is
handled by the firm’s owner or a designated assistant within the
organization. Individuals performing a human resources function are
considered to be human resources managers.
• The HR process includes the following functions, which more or less
follow this particular order: planning for staffing needs, recruiting new
staff, selecting new staff, training staff, retaining staff, appraising staff,
managing staff departures, dismissals, and retirements
PLANNING FOR STAFFING NEEDS
• The human resources process includes predicting an organization’s staffing
needs. Based on the strategic plans for the company, the HR people create
detailed outlines of what skills and experience employees should have to work
in various departments, analyze the skills and experience their current
employees already possess, and then plan on how to fill any gaps.
• If there are any gaps, the human resources department tries to promote a
qualified person from within the company to fill the position. To make the
process easier, HR managers prepare succession plans, which record the
experience, skill level, confirmation of training received, and performance
evaluations of each employee to determine his or her suitability for promotion.
• In many cases, the HR department has staff ready to fill a vacancy as soon as
there is one. If there are no suitable candidates within the company, the human
resources department searches outside the organization. Of course, a newly
founded business must always hire people from outside the business.
RECRUITING NEW STAFF
• The process of recruiting new employees can occur in a variety of ways:
 Advertise in newspapers, journals, and magazines
 Recruit on university and college campuses
 Post the job on an online recruiting site such as Workopolis, Monster, or LinkedIn
 Post the job on the company website
 Use secondary school or university co-op programs
 Hire an employee search firm (often called a headhunter)
• An organization looking for an accounting manager, for example, would recruit graduates of
accounting programs at various universities and community colleges in the area, as well as advertise
in local newspapers and trade publications such as accounting magazines. If the company decided to
promote its own employee, it would need a person with entry-level accounting skills to replace her,
and would probably post the job in the paper, on the business’s website, or on one or two online
recruiting sites.
SELECTING NEW STAFF
• The human resources department receives all the applications from people who want the job and feel qualified
to ask for it. An application will often include a cover letter that asks for an interview and a resumé listing the
applicant’s education, experience, interests, and abilities.
• Usually, the firm makes a hiring decision based on at least one interview, which is conducted by the human
resources manager or another member of the human resources department.
• The interview team asks questions of each candidate to determine the applicant’s personality, work habits,
values, interests, and other qualities. After all the interviews have been conducted, the interview team agrees on
one candidate. The interview process may include a second or even a third interview (depending on the overall
importance of the job).
• Once the interview team has made its hiring decision, a reference check is conducted by contacting the
applicant’s references to ensure the information in the application is accurate and truthful. The team will often
ask questions of the former colleagues the applicant listed as references to get their candid opinion about the
applicant. If the reference check does not support the team’s initial decision, it will consider someone else.
TRAINING STAFF
• A major part of the human resources process is to provide some direction and training for all new
employees. This usually begins with an orientation, where new employees meet other employees and
tour the workplace. During the orientation, the HR manager outlines company policies on compensation,
work hours, benefits, rules of behaviour, dress codes, health and safety procedures, and so on.
• If professional trainers are part of the process, they help each department design a professional training
program for employees to familiarize them with the equipment and tools that they will use. Training leaders
often institute training programs for all staff to introduce any new technology, software, and equipment.
• Some HR managers arrange or even conduct motivational presentations, leadership workshops, or stressmanagement seminars designed to increase productivity and management skills.
• One of the most common training methods for on-the-job training is mentoring, which is a form of
coaching whereby an experienced senior employee in a specific area acts as an adviser and trainer for a
new employee in the department.
RETAINING STAFF
• Well-trained, efficient, productive employees are a valuable asset to any company. It
makes a great deal of economic sense for HR managers to focus time and energy on
keeping them.
• Compensation packages usually include benefits in addition to wages. These benefits
can be more important to employees than their actual salary. Human resources
managers create benefit packages that may consist of paid vacation time; sick leave;
bereavement and personal days (for moving, errands, child or elder care, and so on);
employee discounts; company car; health, dental, and optical plans; group life
insurance; long-term disability insurance; accidental-death benefits; daycare; profit
sharing; stock options; expense accounts; and free parking.
• Benefit plans can be a major incentive for retaining employees. Stock options (a right to
buy company stock at less than the market price) and profit sharing (whereby the
employer uses the company profits to buy stock for the employees) have made some
employees rich. Employees with major investments in stock options or profit sharing will
not want to leave, as they will be obliged to sell the shares they have in profit-sharing
plans or exercise their stock options (buy the shares), perhaps at an inopportune time
RETAINING STAFF
• Health & Safety – Both federal and provincial laws require all businesses to make
sure that the workplace is healthy. However, a safe and healthy workforce is more
than a legal responsibility; it is good business. A sick or injured employee has to
take time off work and is unproductive during that period – but gets paid in any
event. Any business that provides a healthy and safe work area also creates
positive employee attitudes.
• Businesses lose twice when an employee becomes ill: a worker who is sick at home
is non-productive, and yet they continue to receive full wages as sick pay. Healthy
employees are productive employees, which is why many companies offer wellness
programs. These programs promote the physical and emotional well-being of
employees and help reduce absenteeism. The more provisions an employer makes
for employees’ well-being, the more likely the employees will remain healthy and
productive and stay with the firm.
• Canadian law requires employers to maintain a safe workplace. The Canada Labour
Code (CLC) and various provincial acts are intended to prevent accidents, injury,
and disease related to workplace activities.
RETAINING STAFF
• Career Development – ambitious workers want to advance in an organization.
When opportunities for advancement are not part of a career, employees may
transfer to another company, taking their expensive skills and valuable
experience with them. Obviously, a human resources manager cannot create
opportunities if none exist; in that case, the manager must rely on other
incentives, such as more-than-competitive compensation and benefit packages,
to retain employees.
• If career advancement is possible, then the HR manager can develop
personalized career development schedules for employees. These are personal
flowcharts that an HR manager completes in consultation with the career
candidate, who is often a management trainee or an obviously talented worker.
The employee suggests where he or she would like to be in five, 10, or 20 years
with the firm. Someone in production, for example, might wish to be production
head or divisional manager. The HR interviewer often attempts to find other, less
obvious career paths. The production worker, for instance, might like to attempt
working in sales.
APPRAISING STAFF
• It is not only important for HR managers to recruit, hire, train, and retain
good employees, but it is also important for them to know how good
their employees are at their jobs.
• A performance appraisal (also called a performance review) is a formal
assessment of an employee’s work, including skill, efficiency,
productivity, and attitude. It both evaluates the performance and works
with the results. Often, a positive performance review will result in a
promotion; a poor performance review usually requires a corrective
solution to assist the employee in developing missing skills and/or
adjusting his or her attitude.
DEPARTURES, DISMISSALS, RETIREMENT
• Departures occur when an employee leaves the job voluntarily. The departure could be because of personal or family
needs, overall job dissatisfaction, or a better offer from another firm. Good HR managers arrange exit interviews with
departing employees. During the exit interview, an employee can discuss his or her future goals and make sure that
leaving is the best way to achieve these goals.
• The exit interview is used to establish those things that can be done to improve conditions to make other employees
happier. Since these employees are leaving (and therefore need not fear reprisals), they may be prepared to provide
honest, valuable feedback during the exit interview.
• Some dismissals, such as layoffs that occur during downsizing, are not the employee’s fault. However, when a business
decides that an employee is not fulfilling his or her duties as required, the employee may be fired. Prior to this point,
employers should have conducted one or more performance appraisals of the employee, which provide the worker with
an assessment of his or her work habits and point out to the employee any problems or concerns that might eventually
lead to dismissal, such as repeated lateness, absenteeism, or poor work habits. Many firms consider these to
be corrective interviews, in which the employer discusses the performance appraisal with the employee and, together,
they make a plan for improvement. After a set period of time, the employee must show improvement or face dismissal.
• Retirement occurs when an employee voluntarily withdraws from the labour market after reaching a certain age – usually
between the ages of 55 and 65. People generally only consider retirement when they qualify for some type of pension,
which is a regular income that employees earn from investments that they have made and that have been made for them
in a special pension fund during their time of employment.
ONTARIO HUMAN RIGHTS CODE
• Inspired by the 1948 Universal Declaration of Human Rights, the
Ontario Human Rights Code protects employees from discrimination
and harassment based on race; ancestry; place of origin; colour; ethnic
origin; citizenship; creed (religion); sex (including pregnancy status);
sexual orientation; disability; perceived disability; age; marital status;
same-sex partnership status; family status; and record of offences.
• You can find the Ontario Human Rights Code by doing a simple online
search.
MANAGEMENT CAREER
• Experience – management is rarely an entry-level position within an
organization. Even people with a university degree in management
almost always begin their management career as an assistant manager,
learning the job. The first requirement of a management position, then,
is experience. You can obtain management experience by working for a
recognized chain and demonstrating leadership qualities.
• Education – most organizations require a secondary-school diploma for
entry-level jobs. For management positions, a college or university
education is most often a requirement. Algonquin College in Ottawa, for
example, offers management-related programs such as: Museum
management, Marketing management, International business
management, Financial administration, Business administration,
Materials, and Tourism and travel management.