ENGM115 – Organisations and

Systems

Session 2b: Introduction to

Organisations
 Introduction to Organisations

• The Business Environment

• What is an Organisation?
• Aims, Objectives and Values
• Mission Statements
• Planning: Strategic Decisions
• Types of Organisations
• References
 The Business Environment

Environmental Influences

Economic, Technological, Social, Political, etc.

Suppliers Inputs The Organisation Outputs Customers

The Main Elements of a Business
Organisation’s Environment

The Macroenvironment

Political The Microenvironment Economi

/ legal c forces
forces

Suppliers The Internal Customers

Environment
Marketing
Production
Finance
Other Personnel Competitor
stakeholder R&D s
s Source: Palmer and Hartley (2006)
Social/ Technologica
cultural Intermediaries l forces
forces
What is an Organisation?

“ An organisation is a formal collection of

people and other resources established to
accomplish a set of goals”
Stair and Reynolds (2008)

“An organisation is a stable, formal social

structure which takes resources from the
environment and processes them to produce
outputs”
Laudon and Laudon (2006)
 Why do Organisations Exist?
• To meet the ‘financial and other objectives and
constraints imposed by key stakeholders’
(Haperberg and Rieple, 2001)
• Creation of value – more effective within organisations
• Efficiency and effectiveness – success of an
organisation combines:
– People
– Economic factors
– Knowledge and learning
– Resources
 Aims, Objectives and Values
• Aim (goal)
– Broad statement of purpose

• Objectives
– Statement of specific outcomes that are to be achieved
– Measurable? SMART (Specific, Measurable, Agreed, Realistic,
Time specific)
– Plans can be made to achieve the objectives set

• Values
– What a company/organisation stands for
– Philosophical principles held in common
• Company behaviours, procedures, business
decisions and relationships
Business Objectives

Source: www.bized.co.uk
 Mission Statements

• Defines the purpose of a business or organisation

– in line with values and expectations of major
stakeholders
– concerned with scope and boundaries of the
organisation
(Palmer and Hartley (2006)
 Mission Statements
• Should consider
– What is our business?
– Who is the customer?
– What is value to the customer?
– What will our business be?
– What should our business be?
(Palmer and Hartley (2006)

Emphasises Creates
A Mission business direction for
purpose business
strategy

Source: www.thetimes100.co.uk
Examples of Mission Statements
“We have absolute clarity about what we
"To be the most successful do. ‘WE SELL HIGH QUALITY FOOD AND
computer company in the world at BEVERAGE PRODUCTS’ Our success will
delivering the best customer ensure: customers will build their
experience in markets we serve." business, employees will build their
Dell futures and shareholders build their
wealth.”
Pepsi

“To bring inspiration and innovation “We create happiness by

to every athlete* in the world providing the finest in
entertainment for people of all
* If you have a body, you are an ages, everywhere.”
athlete” Disney
Nike
Examples of Mission Statements
“To build a place where “To provide a global
people can come to find and trading platform where
discover anything they want practically anyone can
to buy online” trade practically anything.”
Amazon eBay

“To provide our customers with safe, good value, point-to-point air
services. To effect and to offer a consistent and reliable product and
fares appealing to leisure and business markets on a range of
European routes. To achieve this we will develop our people and
establish lasting relationships with our suppliers.”
easyjet
 Planning: Strategic Decisions

• Strategic decisions are about

– The long term direction of the organisation
– The scope of an organisations activities
– Gaining advantage over competitors
– Addressing changes in the business environment
– Building on resources and competences
– Values and expectations stakeholders
 Planning: Strategic Decisions

• They are likely to

– Be complex in nature
– Be made in situations of uncertainty
– Affect operational decisions
– Require an integrated approach (inside and outside
the organisation)
– Involve considerable cha
Source: Johnson, Scholes and Whittington (2005)
 Types of Organisations
• For-profit organisations
– Maximise shareholder value
• Non-profit organisations
– e.g. social groups, religious groups, charities
• Classification of organisations according to
– Size (e.g. turnover, assets, employees, geographical spread)
– Ownership (e.g. public, private, cooperative)
– Legal form (e.g. sole trader, limited company, small business)
– Industry sector (e.g. retail, banking, service)
 ‘Private’ sector ‘Public’ sector
orientation orientation

Small
Classification of Organisational Types
Sole Source: Palmer and Hartley (2006)
Trader

Local Authority
Typical size of organisation

Partnership
direct labour
organisations

Co-
operatives

Private
limited Charities
compan
y

Quangos

Nationalised
Building
industries
societies

Public
limited
company
Government
department
s
Large
 Examples of Types of Organisations

• Sole Trader
• Partnership
• Private limited company (Ltd)
• Public limited company (PLC)
• Small Business (SME)
 References
• Haberberg, A and Rieple, A (2001) The Strategic
Management of Organisations, Prentice Hall
• Johnson, G, Scholes, K and Whittington, R (2005)
Exploring Corporate Strategy (7e), Prentice Hall
• Laudon, K.C. and Laudon J.P. (2006) Management
Information Systems: Managing the Digital Firm, Prentice
Hall
• Palmer, A and Hartley, B (2006) The Business
Environment (5e), McGraw Hill
• Stair, R and Reynolds, G (2008) Fundamentals of
Information Systems (4e), Thompson.