A social unit of people, systematically

structured and managed to meet a need or to

pursue collective goals on a continuing
basis.
• Impacts effectiveness and efficiency.
• Reduces redundant actions.
• Promotes teamwork.
• Improves communication.
• Contributes to success or failure.
• Divides work to be done in specific jobs & dept.
• Assigns tasks and responsibilities associated with
individual jobs.
• Coordinates diverse organizational tasks.
• Establishes relationship between individuals,
groups and departments.
• Establishes formal lines of authority.
• Allocates organizational resources.
• Clusters jobs into units.
It is a framework within which an Organization
arranges its lines of authorities and
communications and allocates rights and
duties.
All organizations have a management structure
that determines the relationships between
functions and positions and subdivides and
delegates roles, responsibilities and authority
to carry out defined tasks.
 Constructing an Organization Structure

• Organization structure is defined as "the logical

arrangement of task and the network of relationships
and roles among the various positions established to
carry out the activities.

• Organisation structure constitutes the arteries and

veins through which the blood of work flows in the
body of organization.
 How to Choose from Different Types of
Organizations
Size - a major determining factor when deciding which type of
organization to adopt. A small to medium-sized business does
not require a vast and highly-detailed organizational structure.
On the other hand, larger companies require more intense
frameworks to ensure that operations run smoothly. Such firms
employ more staff and, therefore, require more managers. For
such companies, a matrix organization is the most suitable.

Life Cycle - A firm’s life cycle is another essential factor to

consider when setting up a company’s organization. Business
owners who are trying to grow and expand their operations
should choose a structure that allows for flexibility and smooth
expansion.
 How to Choose from Different Types of
Organizations

Business Environment - Another factor that comes

into play when determining the type of organization
is the external business environment. A dynamic
business setting where the consumers’ needs change
constantly requires a stable and sound organizational
structure that can weather the storm of a rapidly-
changing marketplace.
1. Flat Organizational Structure
2. Functional Organizational Structure
3. Divisional Organizational Structure
4. Matrix Organizational Structure
 Functional Organization Structure

 Divides a firm’s operations based on specialties,

there’s an individual in charge of a particular
function.
 Every employee receives tasks and is accountable to
a particular superior.
 There’s a total specialization of work and work is
performed more efficiently since each manager is
responsible for a single function.
 All the functional managers must be consulted when
making major decisions, which can take time.
• Flat structures have fewer management
levels, with each level controlling a broad area or
group.
• Flat organizations focus on empowering
employees rather than adhering to the chain of
command.
• By encouraging autonomy and self-direction, flat
structures attempt to tap into employees’ creative
talents and to solve problems by collaboration.
THE DIVISIONAL STRUCTURE
THE MATRIX STRUCTURE

 This is a structure, which has a combination of function

and product structures.

 This combines both the best of worlds to make an

efficient organizational structure.

 Most complex organizational structure.

 THE MATRIX STRUCTURE
 A grid of functional & divisional for two chains of
command
 Ethics for
Entrepreneurs
Ethics: moral principles that derive from beliefs about right
and wrong used to judge concrete actions
*Ethics is the moral values and behavioral standards
business and people draw on as they make decisions and
solve problems. Moreover, it provides the basic rules or
parameters for conducting any activity in an “acceptable”
manner.
“The owner’s value system is critical to the ethical
considerations that surround a business decision”
(Hornsby 1994)
Successful entrepreneurs operate on sound business ethics which
are approved and accepted in any society.

Entrepreneurial ethics are those codes of conduct, employed by

entrepreneurs which impact society positively, thereby increasing
the entrepreneur’s chances for greater success.

Entrepreneurial ethics would lead to positive attitudes towards

raising successful entrepreneurs, who would, in turn, build
entrepreneurial institutions for societal growth and advancement.
The Importance of Ethics in
Key Areas of Business
Integrity

 It is important that entrepreneurs today don’t get caught up in moneymaking

schemes and lose sight of the importance of doing the right thing for the
common good.

 Any entrepreneur who willfully and dishonestly engages in business activity

with the motive of ripping people off or profiting at the expense of others,
creates a harmful business environment of distrust and antagonism.

 When you build a business on integrity, and set off with an attitude of
nobility, humility and service, and the intention of making a living by
providing your community with needed goods and services, you contribute
to, rather than detract from, the general good. An early and consistent stand
against questionable conflicts of interest is an important aspect of any
entrepreneur’s ethics effort.
Labor
How a company treats its workers is a good indication of its ethical
practices. An entrepreneur who sets out to cheat or underpay his employees will
indefinitely cause his organization to suffer and be subject to high staff turnover,
low morale, dishonesty among other negative things that could cause the downfall
of the business.

It is important to treat all employees well as they represent the business

daily, but it will also benefit the entrepreneur because most people are more likely to
reciprocate what behavior and attitudes they receive. It goes without saying, that
when good work habits are developed and practiced by all within an organization, a
special bond is formed and a loyalty to the company becomes apparent.

Entrepreneurs who manage to keep open lines of communication with their

employees, grow to understand their feelings about things taking place within the
workplace, and they work together to ensure that everyone is in alignment to benefit
from their association with the organization.
Clientele

Your clients are your key stakeholders and it should be quite

obvious as to how dependent your business is on its customers. The
entrepreneur today should seek out the opportunity to personally treat
all clients well, and express great and humble appreciation when they
support your business.

The ideal way to do this is to always strive to provide goods

and services that are of the best quality and service, as good as you
can make or get them, for your clients. An entrepreneur with an
honest motive and good ethical sense will realize that doing and
giving the best to clients every day is not only a good business
decision, but a wise and ethical choice as well.
Environment

It is difficult, and possibly unavoidable, to engage in business

while having no impact on the environment. Even if you’re in the
craft business, your clients are looking on to see how you utilize
resources or recycle products. If you are truly invested in reducing
your business’s Eco-footprint, then you can have a much greater
impact, not just in the business world, but in the community and
environment as a whole.
The ethical entrepreneur today should explore, welcome, and
employ the many ways that a business can reduce its Eco-footprint on
the environment, including recycling, reducing energy waste,
carpooling, minimizing paper packaging and usage, and reducing
wasteful business practices among other things.
 Ethics Reality Check
for the Entrepreneur Ethics
Entrepreneurs must first recognize that there are
ethical dilemmas surrounding them within the
culture of entrepreneurship.
 They must decide to make ethics a principle value of their
business’s objectives and mission. The entrepreneur today
should embrace doing business ethically in order to improve
their standards.
 Not every situation can be anticipated, but the ethical
entrepreneur must always keep an open door policy so that new
and uncommon ethical issues can be worked out as they arise.
 The ethical entrepreneur looks for opportunities to
engage the business as a whole and align them to the
community and its needs. This aids in team building
and strengthening interpersonal relationships
 The ethical entrepreneur
thinks and talks about the
ethical values that matter at
any given opportunity.
 The ethical entrepreneur challenges growth and
renews the commitment to ethical practices. Businesses
change as they grow, and so to, do their objectives. As the
entrepreneur and his/her business grows, re-valuation is
important and needed where ethics is concerned.

Ethical values and the commitment to continued

ethical practices must be reworked and re-communicated
every time change occurs, thereby preparing all involved
in the business to deal with the changing and evolving
ethical dilemmas. The ethical entrepreneur looks for
opportunities to engage the business as a whole and align
them to the community and its needs.