The Nature of
Organisation
Chapter 2, page 55
The Nature of
Organisations
The concept and role
of organisations
Elements of an
organisation
Structure of Part 1:
The Concept and Role of Organisations
What is it?
What does it serve?
Why do organisations need it?
An Organisation is:

Allows individuals to come together to achieve a
common goal

An organized group of people with a particular
purpose, such as a business or government
department

A group of people who come together to achieve
something they have in common
◦ Can be informal – parents meeting
◦ Can be formal – A school offering education to the
community
Whether informal or formal – it has developed to
provide its members with means to fulfil their goals
Elements of Organisation

To function effectively and achieve
goals – organisations require a
combination of elements:
◦
◦
◦
◦
◦
People who can work together
A formal organisation structure
Strategies to help guide decision making
Environmental understanding
Technological understanding and access
Elements of an organisation
 THE
PEOPLE
 THE STRUCTURE
 THE STRATEGY
 ENVIRONMENT
 TECHNOLOGY
Elements of an organisation to
remember – write in work
books….
Answer questions 1 -4 in your work books
 Once you have finished remain silent so I
know we can continue on

Activities page 56

Organisation = collection of people
achieving similar goals and objectives

How people work together is the essence
of the organisation
◦ Remember the concept of ‘corporate culture’
The People

Every organisation needs a formal
structure to coordinate work activities and
to set out the roles and responsibilities of
members of the organisation.

Formal structure usually represented as an
organisational chart (visual representation
of the formal structure that coordinates
work activities and sets out roles and
responsibilities)
The structure

Structures can be developed over time based
on ideas

Structures can be based on a particular
model

Some structures are a mixture of different
ideas and models

http://www.youtube.com/watch?v=0ghoia9_
B0Y
Structure continued…

Structure must be linked to organisations
strategies

Without close fit between structure and
strategies, inefficiencies occur

Structural design should be evaluated against
the purposes it is intended to serve
◦ Does the structure assist the organisation to
achieve its particular objectives, would a different
structure work better?
The Structure…
The Structure – Vertical
Specialization

Hierarchy of formal authority and decision
making power within the organisation
◦ Chain of command from top management down
to front line operations
◦ With vertical specialization, the main difference
between organisations is the extend to which
decision making power is centralized at the top or
decentralized throughout the organisation
Vertical Specialization
The Structure – Horizontal
Specialization

Divisions of people and resources within the
organisation (departmentation)

Departments can be organized on the basis of:
◦ Function: Staff organized in to different departments
based on functions such as production, HR, finance,
marketing, sales
◦ Decision: Staff organized into divisions – product,
service, customers
◦ Matrix: Combination of function and divisions. It
allows specialisation by product while each member
of staff remains part of a department. Matrix is useful
in very complex or fast moving businesses
Horizontal Specialisation
In your work books

Copy down the vertical structure on page 58

Copy down the 3 types of horizontal structures on
page 69-70

In pairs, complete a SWOT chart for the different
types of organisation structures – you will need to
read pages 58-60 provide a more in depth response
◦
◦
◦
◦
Strengths
Weaknesses
Opportunities
Threats

Managers daily tasks including making
decisions

May be long term strategic decisions about
business direction or may be day to day
operational decisions

To make informed, reliable decisions – a
variety of techniques may be used
◦ Cannot simply make a decision based on how they
feel – there must be a specific process followed and
reasoning behind the choice
The Strategy

Decision making is central to management
activities

Top management makes decisions about matters
such as expansion of organisation, financial, what
products will be marketed etc

Operational level management – decisions made
regarding what and how to source raw materials
to develop products

Front line management decisions – technical or
practical natured decisions such as output levels
or control of inputs
Decision making and Problem
solving…

Decisions are made either to solve a
problem or to take up a new opportunity

Decision making involves making choices
among possible courses of action whereas
problem solving consist of making a series
of decisions
Decision making continued…

Problem solving consists in looking at the
potential causes of the problem.

Decision making consists in the method of
approaching to resolve the problem
Difference between decision
making and problem solving..

No decisions in business are based on
accidents

Managers use a step by step approach for
making decisions and solving problems
Decision Making and Problem
Solving continued…

Step by step approach guarantees the
best quality decision making

Page 64-65 – six step approach to
decision making
Step by Step approach

Define the objective

Outline the facts

Decide on the cause/s

Develop several solutions

Select the preferred alternative and
implement it

Evaluate the effectiveness of the solution
6 step approach to decision
making and problem solving

Create ‘decision making model’ p. 64 in
WORD on laptop. Email kelsie.huntly@ais.ae

Guided Reading p. 64 – 65

Complete Activities 2-3 p. 67-69

Copy Q4 table as your example for the
exam

Complete Q4 as this is a practice exam Q
Decision Making & Problem
Solving Review

When strategic planning – SWOT analysis is
often used:

Strengths of the organisation (Internal)

Weaknesses of the organisation (Internal)

Opportunities available to the organisation
(External)

Threats to the organisation (External)
◦ Check list for the SWOT analysis on page 69 –
copy this down as will assist in exam
SWOT Analysis

Strengths and weaknesses are within the
organisation

Opportunity and threats are outside the
organisations
SWOT analysis
Strengths
Strengths may include the range of skills
among staff, the range of work related
training they have experienced and positive
attitudes or cultures among staff

Weaknesses
Weaknesses may include shortage of
necessary skills, lack of specific training
and less than positive attitudes within the
organisation

Strengths and Weaknesses

Opportunities may include developing new
markets in popular products

Threats may include declining markets or
competitors whose products are more
popular
Opportunities and Threats

Conduct an individual SWOT Analysis on
the case p. 68 also practice exam Q

Question 2 page 70

Question 4 as a class
Activities

Internal/external environments have a
major impact on the way organisation
operate

How organisations responds to
environment determines success
Environment

To remain competitive or to produce a
service more efficiently and effectively,
large organisations have to make creative
use of modern technology available to
them

The introduction to new technology aims
to achieve greater productivity in the
workplace
Technology