CHAPTER 5

MANAGEMENT AND ORGANIZATION IN BUSINESS

UNDERSTANDING ORGANIZATIONAL MANAGEMENT

Management and organization are two key concepts in running a successful business.
Management is related to the process of planning, organizing, directing and controlling
resources in an organization to achieve predetermined goals. Meanwhile, organization
is related to the structure, culture and governance of a company.

The organization will run well if the management used in the organization is
appropriate. This can be called organizational management. Almost all companies need
good organizational management. If management is good, then it is very likely that the
company's goals can be achieved.

Reporting from My Accounting Course, organizational management is management

activities carried out to fulfill company goals, including dealing with existing problems.
Organizational management functions Why is the organizing function considered an
important function in management? Because management forms an organizational
system that makes it easier for management to control and supervise the ongoing
organization. That way, management itself can find out where management deficiencies
lie so that they can be corrected and management goals can be achieved.

UNDERSTANDING MANAGEMENT
The term management has many meanings. The definition of management according to
Daft (2003; 4) is: "Management is the attainment of organizational goals in an effective
and efficient manner through planning, organizing leading and controlling
organizational resources." The meaning of the definition of management above is that
management is achieving goals in an effective and efficient manner through planning,
organizing, directing and monitoring resources. Universally, management is defined as
the use of organizational resources to achieve targets and high performance in various
organizational activities.

Management is a process of planning, organizing, mobilizing and monitoring resources

(both people, time, money, etc.) to achieve the goals set by the organization efficiently
and effectively. Management plays an important role in every organization, whether
business, government, or non-profit.

MANAGEMENT FUNCTIONS
Management functions are basic elements that are always present and inherent in the
management process which will be used as a reference by managers in managing an
organization or business in order to achieve planned goals. This is a basic concept in
management theory developed by Henri Fayol at the beginning of the 20th century. The
following is a brief explanation of each management function along with examples of
its implementation:
1. Planning (Planning): Planning is the process of formulating objective organization And
determine steps For achieve it . This covers identification target , determination
strategy , development plans , and allocation source power . Example : A person
manager planning in a company Possible plan launching product new with set sales
targets , determine budget marketing , and designing timetable production .
2. Organizing (Organizing): Organizing involve arrangement source Power And
structure organization to achieve goals that have been set . This covers distribution
task , determination authority , and creation framework Work organization . Example
: A person director operational organize team production with determine role And not
quite enough answer each member team as well as define How team the will interact
in chain production .

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 3. Staffing (Staffing): Staffing involves procurement , development , and processes
maintenance source Power man in organization . This including recruitment , training
, assessment performance , and management personnel . Example : A person HR
managers can planning the recruitment process employee new , do interview selection
, and develop training programs For increase Skills employees .
4. Direction (Directing): Briefing is the process of giving instruction And guide to
employee in carry out task them . This covers communication , delegation , motivation
, and leadership . Example : A person manager project give instruction to his team
about How finish tasks project , deliver bait back , and give motivate the team still
focus on objective project .
5. Motivation (Motivating): Motivation is business For inspiring And push employees to
work with productive And dedicated . This involve introduction incentives ,
recognition , and effort For understand need individual . Example : A person manager
Can provide performance bonuses to employees who achieve monthly targets they or
give award to employees who have contribute in a way special in project .
6. Implementation (Actuating): Implementation is what stage _ plan And instructions
that have been made in function planning implemented . This involve implementation
task , retrieval decision , and solution problem everyday . Example : A person manager
production ensure that machines operate in accordance with standards that have been
set And take action If There is problem production .
7. Supervision (Controlling): Supervision is a monitoring process performance
organization And compare them with standards that have been set . The goal is For
identify deviation And take action corrective If required . Example : A person manager
supervision Possible use report daily production For monitor efficiency production and
, if found problem , take steps repair .
UNDERSTANDING ORGANIZATION
Organizations are social entities that are structured and have certain goals.
Organizations can be companies, government agencies, non-profit institutions, or social
groups that seek to achieve common goals through coordination and allocation of
resources. Organizations have structures, roles and procedures that define how
activities and decisions are made within a defined context. By getting to know the
organization, it is hoped that:
1. Creating good relationships between members of the organization.
2. Each member knows their duties and responsibilities in order to achieve the stated
goals.
3. Specialization in carrying out tasks

ORGANIZATIONAL FUNCTIONS
Organizational function refers to the tasks and roles carried out by each section or
department in the organization, including:
1. There is a division of tasks and classification of company activities.
2. Division of company activity tasks to predetermined groups.
3. Determine the activities carried out to achieve company goals.

Organizational functions generally include:

1. Production or Service : Make product or give appropriate service _ with objective
organization . Example : Department production in the factory or department home
service _ sick .
2. Marketing : Promote product or service And sell it to customer or market . Example :
Marketing team designing campaign advertisement .
3. Finance : Manage finance organization , incl budgeting , accounting , and reporting
finance . Example : Part financial management _ payment wages employees .
4. Source Power Human (HR ) : Manage power Work organization , incl recruiting ,
training , and management performance . Example : The HR department does it interview
selection .

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Apart from having a function, organizing also has objectives, namely:
1. Ease of carrying out tasks.
2. Ease of leadership in carrying out supervision.
3. Ease of determining people who are trusted to carry out tasks.

PRINCIPLES OF ORGANIZATION
Organizational principles are guidelines or rules that help organizations achieve efficiency,
productivity, and their goals. Organizational principles include:
1. Hierarchy Principle: Establishes different levels of power and responsibility in the
organizational structure. Example: CEO above director, director above manager.
2. Coordination Principle: Ensure effective communication and collaboration between
departments and individuals within the organization. Example: Coordination meeting
between sales and production departments.
3. Flexibility Principle: Able to adapt to changes in the external and internal environment.
Example: A technology company that changes quickly to keep up with market trends.
4. Responsibility Principle: Establish clear duties and responsibilities for each member of
the organization. Example: A job description explaining the duties of a project manager.

ORGANIZATIONAL DESIGN
Organizational design is the process of designing or changing structures, roles, and
processes in an organization to achieve goals effectively. Some organizational design
principles include:
1. Principle of Specialization: Break down tasks and responsibilities into smaller,
specialized jobs to increase efficiency. Example: Automotive factories that have special
jobs to install certain components.
2. Principle of Unity of Command: States that each member of the organization must
receive instructions from one authorized superior. Example: An employee only has one
direct supervisor.
3. Scalarity Principle: Shows the hierarchy and levels of authority in the organization.
Example: Management structure with clear levels such as CEO, director, manager and
staff.

ORGANIZATIONAL MANAGEMENT STRUCTURE

Organizational Management Structure refers to the hierarchical layout, responsibilities, and
relationships between parts or units in an organization. This structure regulates how
decisions are made, information flows, and how organizational members interact with each
other. Management structure is an important element in designing and managing an
organization, because it will influence the organization's efficiency, productivity and ability
to achieve its goals.

ELEMENTS OF ORGANIZATIONAL MANAGEMENT STRUCTURE

1. Organizational Hierarchy: It determines the levels of authority and responsibility at
various levels in the organization. Generally, the hierarchy consists of top level
management, middle level management, and operational level management.
2. Section or Department: Organizations are usually divided into departments or sections
based on function, geographic area, product, or customer.
3. Chain of Command: This is the official path through which information and decisions
flow from the highest level of management to the operational level. It also describes who
reports to whom in the organization.
4. Specialization and Coordination: The management structure also determines the level
of specialization within various departments and how coordination between
departments is carried out.

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TYPES OF ORGANIZATIONAL MANAGEMENT STRUCTURES
1. Functional Structure: Here, the organization is divided based on functions or
departments such as production, marketing, finance, and human resources. Example: A
manufacturing company with separate production, marketing, and finance
departments. Each department is led by a department head who reports to the company's
CEO.
2. Matrix Structure: This structure combines elements from functional structures and
project-based structures. Team members may have two bosses: a functional manager
and a project manager. Example: A technology company with a product development
team that works cross-functionally. Each team member has a functional manager and a
project manager to whom they report.
3. Product Based Structure: The organization is divided based on different products or
product lines. Each product line has a dedicated team responsible for their products.
Example: A company that produces a number of different products. Each product line
has a dedicated team to manage the development, production and marketing of that
product.
4. Region Based Structure: Here, the organization is divided based on geographical regions.
Each region has separate management and operations. Example: Retail companies
operating in various cities or countries. Each region has a separate management and
operational team to manage the business in that region.

Organizational Management Structure is the basic framework that determines how an

organization is organized and operates. Selecting the right structure is critical to achieving
organizational goals and maximizing efficiency. Organizations can choose a structure that
suits their size, goals and operational environment.

CONSIDERATIONS IN CHOOSING AN ORGANIZATIONAL MANAGEMENT STRUCTURE

1. Organization Size: Larger organizations tend to have more complex structures. They
may need deeper hierarchies and more departments to manage different aspects of their
business.
2. Organizational Goals: The type of business and organizational goals will influence the
choice of structure. Organizations focused on product innovation may prefer a matrix
structure, while organizations focused on operational efficiency may prefer a functional
structure.
3. External Environment: Changes in the external environment, such as increased
competition or changes in technology, can influence decisions about structure.
Organizations that need to adapt quickly may choose a more flexible structure.
4. Organizational Culture: The values, norms, and culture of the organization must also be
considered. Some cultures favor collaboration and cross-functional work teams, while
others may be more hierarchical.
5. Human Resources: Availability and skills of staff should also be considered. The structure
must be appropriate to the employees' abilities and experience in operating the
organization.

ORGANIZATIONAL CHART FORMS

Hemy G. Hodges proposed four forms of organizational charts, namely:
1. Form pyramid , chart This form A pyramid Where all arrangement position
pursed to on with amount more positions _ little .
2. Form Vertical , chart This form arrangement position Where delegation power
from on to bottom .
3. Shape , chart this forming stream authority from shoots leader highest until by
department the lowest arranged from left to right or vice versa.
4. Form Circle , chart This describe position Lowest arranged from outside field
circle to direction point middle center circle , where at the point middle is leader
highest .

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 VERTICAL PYRAMID SHAPE

HORIZONTAL FORM CIRCLE SHAPE

Successful implementation of an organizational management structure involves a good

understanding of the organization's needs and goals, selection of an appropriate structure,
effective communication, employee development, performance measurement, and
readiness to adapt to change. With these steps, organizations can achieve the efficiency,
effectiveness, and flexibility necessary to succeed in a dynamic business world. A good
management structure is the foundation for the long-term success of an organization.

RELATIONSHIP BETWEEN MANAGEMENT AND ORGANIZATION

Management and organization are two important aspects of running a successful business.
Management involves the process of planning, organizing, directing, and controlling
resources to achieve goals, while organization involves corporate structure, culture, and
governance. Both work together to achieve goals and ensure good business continuity.

After understanding the basic concepts of management and organization in business, the
next step is to implement these strategies and principles in daily practice. Here are some
important steps to implement management and organization in business:
1. Identify Goals and Strategies:
a. Determine your company's short-term and long-term goals.
b. Create strategies that will help achieve those goals, including marketing, financial, and
operational strategies.
2. Effective Organizing:
a. Arrange an organizational structure that is in accordance with the company's goals
and strategy.
b. Distribute tasks and responsibilities clearly to employees.
c. Make sure each employee has a role that suits their skills.

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3. Human Resource Management:
a. Recruit, train and develop employees according to business needs.
b. Manage employee performance and evaluation regularly.
c. Provide incentives and recognition to employees who excel.
4. Control and Monitoring:
a. Implement an effective control system to monitor company performance.
b. Use KPIs (Key Performance Indicators) to measure goal achievement.
c. Establish a continuous improvement mechanism if there are any discrepancies with
the plan.
5. Strong Organizational Culture:
a. Form a culture that is in line with the company's values and vision.
b. Facilitate open communication and collaboration across the organization.
c. Provide examples of leaders who support the desired culture.
6. Good Governance:
a. Ensure transparency in decision making and reporting.
b. Establish a competent and independent board of directors if necessary.
c. Adhere to high standards of business ethics.
7. Crisis Management:
a. Prepare a business continuity plan to deal with emergency or crisis situations.
b. Handle problems and conflicts proactively and professionally.
8. Evaluation and Improvement:
a. Conduct regular evaluations of organizational performance and strategy.
b. Revise and refine strategic plans according to changes in the market and business
environment.
9. Innovation and Development:
a. Facilitate innovation at all levels of the organization to remain competitive in the
market.
b. Invest in research and development of new products or services.
10. Training and development:
a. Continuously encourage employee learning and development to improve their
competencies and skills.

By following these steps, you can create a business environment that is efficient, productive,
and goal-oriented. Good management and strong organization are the keys to long-term
success in business. Don't hesitate to adapt strategies and tactics to suit your company's
unique needs.

APPLYING ORGANIZATIONAL MANAGEMENT CONCEPTS IN BUSINESS ORGANIZATIONS

COMPANY MANAGEMENT ORGANIZATION

Apple Inc. - Apple has a highly skilled - Apple has an organizational
management team that directs the structure that focuses on
company in achieving its goals. product and design
- The company is known for its excellence. This allows
consistent innovation strategy,
departments such as design,
including the introduction of
engineering, and marketing to
revolutionary products such as the work together to produce
iPhone, iPad, and MacBook. superior products.
- Apple's organizational
culture is highly innovative
and focused on creativity,
which is reflected in the
company motto "Think
Different."
Toyota Motor - Toyota is known for the lean - Toyota has a flexible
Corporation production system they created, which organizational structure,

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 involves tight inventory control and which allows them to adapt
continuous improvement. production to changing
- Their high quality management has market demands.
created a reputation for reliable, high - Toyota's corporate culture is
quality cars highly process-oriented and
continuous improvement,
with employees involved in
problem identification and
solution search.
Google - Google has highly decentralized - Google is known for its
(Alphabet management and gives autonomy to its collaborative and relaxed
Inc.) employees to drive innovation. company culture. This is
- They adopted the "20% Time" reflected in an innovative and
philosophy, where employees can employee-oriented work
spend 20% of their time pursuing environment.
personal projects that could benefit the - Google's organizational
company. structure supports a wide
range of initiatives, from
search engines to AI projects
and hardware development.

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