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STRUCTURE OF A BUSINESS

Commerce (SS)

Organizational structure is the framework by which tasks are divided, grouped and co-ordinated.  It entails the division of the activities of a business organization into departments, division, units and sub-units and the allocation of positions, responsibilities and authorities to the official of a business.

 

USES (PURPOSES) OF AN ORGANISATION CHART

  1. It shows the line of authority and responsibilities in an organization.
  2. It shows the relationship between the various departments and functionaries in an organization.
  3. It is used to show the channel of communication/information within the organization.
  4. It shows the various positions in an organization.
  5. It also shows the status and role of each member of organization.
  6. It shows the span of control of each supervisor or manager.
  7. The whole organization structure of the form can be seen at a glance.
  8. It is easier to analyze and review the structure of the organization when it is represented graphically.

 

ORGANIZATION CHART OF XYZ LTD.

 Shareholders

Board of Directors

Managing Directors/

Chief Executive Officer

General Manager                   General Manager                   General Manager

            Admin.                                          Finance                             Production

 

Manager                                 Manager                     Manager         Manager

Admin                                     Accounts                    Cosmetics       Food/Drinks

 

Admin                         Account              Cashiers

Officers                       Clerks

 

EVALUATION

  1. What is an Organization Chart?
  2. Draw the organization chart of a named business organization. 

TYPES OF ORGANISATIONAL STRUCTURE

  1. Line Organization: This refers to the direct working relationship between the subordinates and the superiors in which the line of authority and responsibility flow from the top executives to the lowest subordinates.
  2. Functional Organization: This applies where the activities of the organization are arranged according to the basic functions of the business undertaken.  Therefore similar or related activities are grouped together under each department.
  3. Committee Organization: This applies where a group of people are appointed to carry out special duties.  A committee, for instance may be set up to make recommendations or to execute projects.

 

EVALUATION

  1. Explain the term organizational structure
  2. List and explain three types of organizational structure.

 

THEORY

  1. What is an Organization Chart?
  2. State two functions of the Administration Department of a business organisation.

 

See also

DEPARTMENTS IN A BUSINESS ORGANISATION

MANAGEMENT OF BUSINESS

INTRODUCTION TO BUSINESS MANAGEMENT

GOVERNMENT REGULATION OF BUSINESS

AGENCY

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