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INTERNAL ORGANISATIONAL BEHAVIOUR
FUNCTIONAL AREAS IN THE BUSINESS
Most businesses have various functional areas that work together to achieve the business
goals. These include: Marketing, Production and Finance.
Functional Area Activities Performed
MARKETING This department is responsible for finding out what consumers
want and need and thus perform these functions:
• Setting Price
• Promotion and Sales
• Distribution of Goods
PRODUCTION • Purchasing of Raw Materials
• Actual production of goods
• Storing materials and finished goods
• Product testing
PERSONNEL / HUMAN • Responsible for the welfare of mployees
RESOURCE • Recruitment and selection of employees
DEPARTMENT • Motivation of staff
• Arrange staff training
• Resolve conflict among staff
FINANCE • Keeping accurate financial records
• Budgeting and forecasting
• Arrange finance when needed
• Payment of wages
MANAGEMENT
Management is the art of directing and controlling of an organisation’s resources to achieve the
goals of the business.
FUNCTIONS OF MANAGEMENT
Managers will have to perform the following functions for the effective operations of the
business.
1. PLANNING - means looking ahead and preparing resources and ideas for achieving the
goals of the business.
2. ORGANISING – ensuring resources , machinery and people are in the right place at the
right time for production to take place.
3. DIRECTING – giving instructions to employees inorder to carry out the required task.
4. CONTROLLING – monitoring employees and ensuring the right task is being done the right way
5. COORDINATING – ensuring all the departments in the business are working together in order
to achieve the goals of the business.
6. DELEGATING – involes the assigning of tasks to employees
7. MOTIVATING – encouraging employees to perform task efficiently by implementing
motivational strategies.
RESPONSIBILITIES OF MANAGEMENT
Management through its operations will have the following responsibilities to its stakeholders.
STAKEHOLDERS – any group which is affected by the operations of a business.
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STAKEHOLDERS MANAGEMENT RESPONSIBILITIES
Owners/ Shareholders • Maximise profits
• Efficient use of resources
• Provide financial statements to owners
• Protect assets
employees • Provide fair wages
• Ensure good working conditions
• Offer training opportunities
• Cultivate good communications
customers • Ensure fair prices
• Ensure good quality goods
• Provide after sale service
• Deliver goods on time
Society • Provide stable employment to local citizens
• Avoid damage to environment
• Sponsor events to keep culture ongoing
government • Observe all laws
• Pay taxes when due
• Honour state contracts professionally
ORGANISATIONAL CHART
An organizational chart display the internal structure of a business
Definition – An organizational chart is a diagram which shows the internal structure of the
business and the lines of authority.
TERMS
1. CHAIN OF COMMAND – the unbroken line of authority in the organization showing
who reports to whom.
2. SPAN OF CONTROL – the number of employees a manager supervises. WIDE SPAN
OF CONTROL a manager will have to supervise a large number of employees.
NARROW SPAN OF CONTROL a manager will have to supervise a small number of
employees.
LINE ORGANISATION / FUNCTIONAL STURUCTURE
A traditional structure where authority is flowed from top to bottom. The business is orgnised
into departments and each has a responsibility for a specific function in the business.
Leave out 6 lines
LINE AND STAFF ORGANISATION
A line structure but some business operations cut across the traditional lines.
Leave out 6 lines
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COMMITTEE ORGANISATION
An organizational structure based on groups of specialist in committes to advise senior
management.
Leave out 6 lines
LEADERSHIP
Leader – someone who influences and direct workers towards achieving the goals of the
business.
LEADERSHIP – influencing and directing the performance or workers towards achieving the
goals of the business.
CHARACTERISTICS OF A GOOD LEADER
A good leader must display the following qualities :
• Ability to exert influence
• Able to motivate and influence others
• Have knowledge of the business
• Be confident
• Willing to work long hours
• Not being bias
• Have unquestionable character
EFFECTIVE LEADERSHIP WILL REQUIRE THE FOLLOWING SKILLS
• Proper communication skills
• Proper listening skills
• Capable of critical thinking
• Proper motivational skills
LEADERSHIP STYLES
Different leaders will practice leadership styles.
1. AUTHOCRATIC / AUTHORITARIAN LEADER
• The leader makes all the decisions
• Employees are not allowed to contribute to the decision making processs
• Workers are supervised closely
• Workers tend to feel demotivated
2. DEMOCRATIC / PARTICIPATIVE LEADER
• Workers are allowed to contribute to the decision making process
• The leader makes the final decision
• Employees are motivated as their opinions are valued
• Consulting with staff can be time consuming especially when major decisions are
needed
3. LAISSEZ FAIRE LEADERSHIP
• Little or no management supervision
• Employees are allowed to make most decisions
• Can be ineffective as workers may stray
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INTERNAL SOURCES OF CONFLICT IN THE ORGANISATION
Conflict means disagreement. Conflict between management and employees is inevitable and
can arise from:
• Levels of workers’ pay
• Working conditions
• Business change – eg . relocation or new technology
• Cutting cost – which might result in cutting cost
STRATEGIES USED DURING DESPUTE:
During dispute in the industry both employers and employees can engage in various strategies in
order to reach a compromise.
EMPLOYER STRATEGIES
1. Negotiations – in order to reach a workable solution face to face conversation with both
parties can take place.
2. PUBLIC RELATIONS – using the media to try to gain public support for the company
and place pressure on Trade Union.
3. Threats of Redundancies – by threatening to dismiss employees, pressure is placed on
employees to stop action.
4. Closure – closure of the business will place pressure on employees to show that their jobs
can be taken.
5. Employment of other workers to break the strike – this term is called SCAB LABOUR,
so as to intimidate employees.
EMPLOYEE STRATEGIES
1. Go slow – a form of industrial action where workers work slower than usual so as to
agitate employers.
2. Work – to – rule - here workers refuse to do any work that is not in their contract
3. Overtime bans – workers refuse to work extra hours although they will be paid extra
money
4. Strike action – employees absent themselves from the job and site sickness as their reason
for absence. Also they can congregate outside the premises.
INDUSTRIAL ACTION – measures taken by the workforce or trade union to put pressure on
management to settle an industrial dispute.
TRADE UNION – organization of workers in a trade that take collective action to improve
workers’ conditions.
SHOP STEWARD – a union representative
COLLECTIVE BARGAINING – negotiation between representatives of employers and
employees.
GREVANCE PROCEDURE – the process of attempting to solve a dispute in the organization.
SOLVING CONFLICT
1. Conciliation (Mediation) – the use of a third party to encourage both parties to reach a
settlement.
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2. Arbitration – resolving a dispute by using an independent body (COURT) to solve the
dispute. The court ruling is final.
BENEFITS OF JOINING A TRADE UNION
1. To improve wages
2. To improve working conditions
3. Unions can provide an effective communication channel between management and
workers
WAYS BY WHICH MANAGEMENT CAN IMPROVE / ESTABLISH GOOD
RELATIONS WITH EMPLOYEES
1. Improve communication in the organization to discuss issues effectively.
2. Provision of good working conditions
3. Adopt effective management and leadership skills
4. Implement motivational schemes
TEAMWORK IN THE ORGANISATION
Teamwork – grouping workers together to work cooperatively to achieve the same goal
ADVANTAGES OF TEAMWORKING
1. More ideas will be generated
2. Less experienced workers can learn from more experienced workers
3. The team can feel a sense of accomplishment
DISADVANTAGES OF TEAM WORKING
1. Conflict may occur among team mates
2. Most people do not like working with teams and so will not work to their fullest potential
3. The team can easily stray from their goal
COMMUNICATION IN THE BUSINESS
Effective communication – the exchange of information between people or groups with
feedback.
WHY IS EFFECTIVE COMMUNICATION IMPORTANT
1. More ideas will be generated by staff and problems will be reduced
2. Decision making can be done immediately
3. Errors can be reduced
4. Departments in the organization can be properly coordinated
TYPES OF COMMUNICATION METHODS
1. Oral Communication – one to one communication, interviews, appraisal and meetings
• The message was instantaneous
• There is no record of what was said
2. Written Communication – letters, memos, notices and reports
• There is evidence and can be referred to
3. Electronic Media – internet, email, fax, video conferencing and telephones. Both oral and
written forms are used.
• Breakdowns and errors are prone
• Users must be adequately trained
4. Visual Communication – diagrams, pictures, charts using projectors. Also uses oral and
written means
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NON VERBAL COMMUNICATION
Are the use of gestures when communicating eg facial expressions and hand movements.
INFORMAL COMMUNICATION – unofficial channels of communication that exist between
the informal groups in the organization.
MANAGEMENT INFORMATION SYSTEM
The use of computer based systems to help management plan and control operations in an
organization.
USES OF MANAGEMENT INFORMATION SYSTEMS
• To record accounting transactions
• To store and access data easily
• To support decision making
ADVANTAGES OF MIS
• Timely and accurate information is obtained
• Labour cost can be reduced
• Decision making speeds up
• Errors are easily dected
DISADVANTAGES OF MIS
• Too costly to implement and is seen as an extra cost to the organization
• Employees must Be properly trained
• Breakdowns can hamper productivity
• Unemployment may result
