BLD 809: HUMAN RESOURCE

MANAGEMENT
COURSE UNIT: 2
COURSE DESCRIPTION
Understanding Organizations
Organizational Culture
Manpower planning
Recruitment
Selection and engagement of personnel
Education and training
Employee motivation and human relations
Safety, health and welfare
Industrial relations.
1
LEARNING RESOURCE
 Methods of Lecture Delivery/Teaching Aids

 Lecture Delivery Methods

– Power point presentation, division of students into
study groups in the class for effective class
participation in problem solving
 Method of Grading
– Continuous Assessment 30 marks
– Examination 70 Marks
Total 100 Marks

3
 UNDERSTANDING ORGANISATION
Definition of Organization
 Organon (Greek) meaning a tool or
instrument. Organisation therefore is a tool or
instrument for meeting goals and objectives
Organisation has also been described as ‘a
system of consciously coordinated activities of
two or more persons’(Barnard, 1938: 73).
Kreitner and Kinicki (2001) give this
‘conscious coordination’ aspect four
characteristics, which are: hierarchy of
authority; coordination of effort; common goal;
division of labour.
4
An organization is a social unit of people
that is structured and managed to meet a
need or to pursue collective goal
(Business dictionary)
In summary,
An organization is a collection of people
working together in a coordinated and
structured fashion to achieve one or more
goals.

5
 CLASSIFICATION OF
ORGANISATION
On the basis of relationship, organisation
may be classified into formal or informal.
FORMAL ORGANISATION
Formal organisation is characterised by
established rules to govern procedures and
operations. These rules are generally in
written form and very specific, leaving little
discretion for interpretation.
In summary, formal organisation has clearly
defined rules and regulations, objectives and
policies, limitation of individual activities, scalar
chain of command 6
INFORMAL ORGANISATION
This is a network of personal and social
relationship (Alliances, cliques, friendships)
that arise as people associate with each
other in a work environment

On the basis of over-arching purpose or

primary objectives, organisation may be
classified as:
Profit (commercial) organisation
Non-profit organisation
7
Profit organisation
The purpose is to increase the wealth of the
owners through provision of goods and
services. Example, private educational
institutions, commercial banks, all private
enterprise
Non-profit organisation
This include charity clubs and public sector
organisations like the police, teaching hospitals
and government departments. They exist to
provide services which for various reasons is
considered impractical or undesirable for the
commercial sector to provide.
8
ORGANISATION STRUCTURE
Organisation structure refers to the
relationship between the various function
and positions in the organisation. The
structure determines:
Authority and hierarchy of command
Roles and responsibility of each person
for particular tasks/activities
Specifies the routes of communication
between different parts of the organisation
9
 PRINCIPLES OF
ORGANISATION STRUCTURE
Certain principles are basic to the operation of
any organisation.

The principles of organisation structure are

the methods by which the organisation
maintains the structure, and processes it uses
to keep the structure efficient

10
 Specialisation: The work of the
organisation is divided into separate
activities or tasks and particular
individuals concentrate on specific tasks
or activities.
This enables the application of specialised
knowledge and so improve organisational
efficiency and organisational
effectiveness.
E.g. Construction organisation is divided
into Civil & Building operations. Under
Building: Design & Construction
Management division 11
 Coordination: This ensure that the
different specialized operations are
tailored toward the same organisational
objective
 Henri fayol (1949) proposed management
principle of hierarchy of authority for
facilitating the coordination of various
activities. The detail of some of these
principles are as follows:

12
Division of work
Henri Fayol’s key points There is a limit to the number of activities or
people that can be supervised effectively. Reduce
the span of attention or effort for any one person
or group. Effective span of control will be
determined by:
Similarity of tasks
Proximity of the tasks
Complexity of the task
The direction & control needed by the subordinate

Authority The right to give an order should not be

considered without reference to responsibility

Discipline Outward mark of respect in accordance with

formal or informal agreement between firm and its
employees

Unity of command Every person should receive order and be

accountable to only one man supervisor.

Unity of direction One head and one plan for a group of activities
with same objective

Subordination of individual interest to general The interest of one individual or group should not
interest prevail over the general good

13
remuneration Pay should be fair to both the employee and the
Order A place of everything and everything in its place i.e
the right man in the right place

Equity A combination of kindness and justice toward the

employee

Initiative This infers that within the limit of authority and

discipline, all level of staff should be encouraged to
show initiative

Centralization Centralization is always present to a greater or less

extent depending on the size of the company and
the quality of the managers

Stability of Tenure of personnel Which mean employee should be given time to

settle into their job, even thou this may be a
learning period. In case of managers, this can be
described as probation period.

Espirit-de-corps This means harmony. It is the great strength of an

organization and team work should be encouraged
Scalar Chain This is a line of Authority from the Top to the
bottom linking all managers at all levels

14
 CATEGORIES OF ORGANISATION
STRUCTURE

 CENTRALIZED STRUCTURE
 Degree to which the authority to make
decisions is restricted to higher levels of
management
 The top layer of management has most of
the decision making power and has tight
control over departments and divisions

15
 Advantages & Disadvantages
 Advantages:
• More opportunity for advancement because of
many levels within the organisation
• Closer supervision
• More advanced specialization
 Disadvantages:
• Communication quality is poor because of the
many employees/level involved
• Decision making takes much longer
• High overhead cost
16
 DECENTRALIZED STRUCTURE
 Degree to which the authority to make
decisions is given to lower levels in an
organization’s hierarchy
 The decision making power is distributed
and the departments and divisions may
have different degrees of independence.
 This will tend to have wide span of
control.

17
 Tall (centralize)
Vs
Flat(decentralize)
Hierarchy of Authority
• Tall organizations have many
levels
• Narrow span of control

• Flat organizations have few levels

• Wide span of control

18
 FORM OF ORGANISATIONAL
STRUCTURE
• Functional: Based on functions performed (e.g., production,
sales, research)
• Departmental or Divisional Structure: Base on semi-
autonomous units – service or product oriented.
• Product: Based on products and services produced (e.g., food,
cleaning supplies, pharmaceuticals)
• Market: Based on customers served (e.g., convenience stores,
supermarkets)
• Geography: Based on physical location
• Matrix: Based on a combination of function, product, customer
and/or geography. Creates dual authority and dual
responsibility
19
 Functional Structure
CEO

M a n u fa c tu r in g S a le s R&D A c c o u n tin g &

F in a n c e

Advantage: efficiency, communication

Disadvantage: isolation of units

20
 DIVISIONAL Organisation Structure
• A divisional structure gives a large organisation the
ability to segregate large sections of the company’s
business into semi autonomous groups (each with
its own top executive-often a vice president and
typically manage their hiring, budgeting and
advertising.
• These groups are mostly self managed and focused
upon a narrow aspect of the company’s product or
services.
• Example of product line are various product under Dangote Nig Ltd: Cement,
Oil & Gas, Floor, Sugar, Salt etc
• Example of service are Nigerite technical services, sales division, production,
R& D 21
 DIVISIONAL or DEPARTMENTATION
Managing Director

R&D
Technical
Services

Production
Account & Audit Sales Unit
Unit Division

22
 Product Structure

Managing
Director

CEMENT
FLOUR
SUGAR
OIL & GAS SALT

Manager

23
 Market Structure

CEO

C o rp o ra te In d iv id u a l
C u s to m e rs C u s to m e rs

S a le s C u s to m e r S a le s C u s to m e r
S e r v ic e S e r v ic e

24
 Geographic Structure

CEO

W est E ast

S a le s C u s to m e r S a le s C u s to m e r
S e r v ic e S e r v ic e

25
 Matrix structure
• Is an organization that attempts to place equal emphasis
on departmental (function) and
product/customer/geographical location and is a major
departure from traditional structures.
• This is achieved by having a structure in which
responsibility for reporting from within is to two
authorities
• This form is frequently used as a temporary expedient. In
it, each group of specialist reports both to (1) functional
head & (2) project/service/regional manager.
• It is expensive and difficult to manage
• No well defined hierarchical structures.
26
 Matrix Structure
General Manager

R&D Engineering Manufact’ing

Product A

Product B

Product C

27
 Matrix structure
CEO/General
Manager

Design Estimating Purchasing

Construction

Project
Manager

Project
Manager

Project
Manager

28
 Merits of matrix structure
• Result in efficient information exchange b/w
departments as individuals from different dept
confer with one another to formulate strategies
leading to quick decision making and enhance
productivity
• It encourage democratic leadership style as team
members contribute valuable information before
decisions are made by managers leading to
employee satisfaction and increased motivation

29
 Problems of a matrix structure
• Internal complexity: some employee may become
confused due to overlapping responsibilities
• Dual authority and communication problem may
lead to conflict among employees & managers
• It can create gridlock in decision making if one
managers disagrees with another manager
• Can result in employee dissatisfaction & low
morale
• Expensive to maintain: it can increase company
overhead cost
30
 MANAGERIAL SPAN OF CONTROL
• Within the limit of an organisation, the groups,
section or department will be ruled and guided by
a leader who will have the responsibility of
ensuring that his section carries out it objectives
to a final satisfactory conclusion
• The number of persons under ones control
efficiency could be referred to as:
– Narrow span of control
– Wide span of control
• Span of control can affect efficiency and
productivity of the unit due to:
– a. Poor communication and co-ordination, which in turn
may lead to:
– b. Lowering of morale and the breaking down of team
spirit or;
– c. Unofficial sub-groups forming within the main group;
– d. Lowering of standard of work due to lack of effective
supervision;
– e. Poor time keeping and lengthy breaks, etc.
• In normal circumstances, between five and seven is
the maximum number of persons to effectively
come under a person’s span of control
 BEFORE ASSIGNING SPAN OF CONTROL
The following conditions must be considered when
assigning span of control:-
• a. The method of communication
• b. The speed in which decision most be made and
their importance
• c. Whether the work is competitive or complex in
nature
• d. The leader workload and capacity
• Proximity and or similarity of tasks
• The literacy level of the subordinate
 RELATIONSHIP IN ORGANISATION
In any organisation structure or span of control,
certain relationships exist . These are:
• Horizontal relationship persons being on equal
footing, e.g. two general foremen.
• Vertical relationships one person able to give an
instruction or order that must be carried out, e.g.
foreman to operative.
• Staff relationship no authority but gives
assistance generally to any organisation member
to aid efficiency. e .g assistant to marketing
director by technical services director.