How range of functional activities are managed in small and micro businesses
Just a business doesn’t mean that it shouldn’t have specialists. It is not possible for one or two people to handle all of the necessary functions listed above. The specialists may need to be hired to manage important activities, such as marketing or IT. Some small businesses also contract out some of their functions. E.g. they might pay an accountant to produce the annual accounts – paying them for just a few days work.
Organisational structures: The structure of the two organisations is best exposed by probing the organisational chart. The chart shows the main parts of the business, and the relationship between the various parts. Note that necessary parts of the structure are the production department and the sales department selling direct to other business.
Purposes: If we look at an organisational chart it should give us a clear picture of what the relevant sections of the business are and who reports to whom. When Microsoft refers to line management and is talking about a person who is directly responsible for somebody else. E.g. the production manager reports to the general managers.
Division of work: The structure of the two businesses can show clearly how work will be divided up in an organisation. For example:
- Who is responsible in Oxfam for dealing with customer complaints
- Who is responsible in both companies for dealing with the payment of wages
- Who should be responsible in Microsoft for making sure that the IT systems in an organisation are working smoothly
There are integers of ways of structuring an organisation:
Functional: Functional structure is probably the most common way of grouping employees. Functional organisation means that the business is divided into specialism, such as sales and production.
Geographic: Oxfam is a national, international or global business. For example, the company may have a Europe, North American and Asian division. These divisions will report to Head Office.
- By customers: The Oxfam company are divided into areas that deal with different kinds of customers. E.g. there may be department that deals specifically with regular customers and another with the general public.
- By process or equipment: In Microsoft work area may be divided up into various kinds of software’s machinery and activity. E.g. in a Microsoft company one department can be responsible for software’s recordings or burnings.
Span of control: Span of control is the term for the number of Oxfam subordinates directly accountable to a manager. The larger the number of employers a production manager controls the wider his span of control in Microsoft. Wide span: The production manager controls more than six employers. Managers are forced to delegate work, and tasks may be less closely supervised. There are possible problems with the overloading of work and with loss of control. However, there are fewer levels of management.
I created an organisation chart for both businesses and it’s following below:
Flow of work: Controlling the flow of work between the functions of a company is necessary. For example, in Microsoft an advertising campaign for new product, specialist input may need to come from various sources. Production may need to explain how the goods works and what key features have been built into it.
Interdependencies: This is often achieved by arranging employees into cross functional teams in Oxfam. It is approach broadly used in managing projects. E.g. when doing research and bringing out a new product it makes sense to have a team consisting of:
- Financial specialists who is carrying out costing and set out the financial implications of a particular project.
- The quality specialists who emphasis quality related issues.
Outsourcing of functions: These organisations have two main kinds of activities. Examples of activities that businesses outsource today include call centres, administration, delivery and production.
-
Call centres: Microsoft outsource call centre work to private call centres. The business would establish the routines and patterns of work that it wants the call centre to do for it and will establish minimum standards for the call centre to meet. The centres have many duties handling the work on behalf of the company and also handling consumer complaints to selling products.
-
Administration: The administration is also outsourced. E.g. Microsoft might outsource work including the photocopying of materials, the word processing of documents, the maintenance of databases, etc and can also outsource work including the setting up and maintaining of websites.
-
Delivery: The business can outsource work which includes the delivery of company goods, or packaging and storing products. It is rather than a business having the problems and duties of owing Lorries or vans itself but it can cut its costs by outsourcing. Which are cut involve the costs of obtaining, insuring and maintaining vehicles.
-
Production: The Microsoft outsources the production of their products. Then they can concentrate on core activities such as selling, advertising and marketing goods. For example, the Microsoft sold their software’s on PC world or other software stores and is typically produced by firms who are contracted to work either for own or other retailers.
Influencing factors
Size: Microsoft is the largest organisation, its structure tends to become more formal, in order to coordinate larger numbers of workers, departments and diversity of goods and services.
Business environment: The company environment is a main fact of organisational structure. The company environment consists of all those factors which lie outside the company.
- Static and dynamic environments: for example, in Microsoft the sales can have peaked and remain steady over a period of time. The organisation can therefore feel little need to restructure. In Oxfam, dynamic environments the pace of change may be rapid. The structures are required that can enable rapid change. The flexible teamwork structures are more beneficial in dynamic environment. The team members may be encouraged to come up with ideas for themselves rather than being told what to do.
Strategic plans: The kind of business structure also depends on business plans. E.g. Microsoft that seeks to become more market oriented will develop structures that place an emphasis on marketing and customer focus. Both Microsoft and Oxfam seek to develop globally will develop structures that allow geographical specialisation. If strategy related to increasing sales then the number of sales people is likely to increase in Microsoft.