Business organization, its structure, governance and social responsibility designed by CRE-A-TEAM
Contents • • The definition of organization Organization structures Social responsibility Governance
Organizations are social arrangements for the controlled performance of collective goals. The key aspects of this definition are as follows: • collective goals • social arrangements • controlled performance
Organizations enable people to: Share skills and knowledge Specialize Pool resources
Types of organizations by profit orientation: 1) Profit seeking organizations Core objectives: • to continue in existence (survival) • to maintain growth and development • to make a profit 2) Non-profit organizations Core objectives: • to satisfy particular needs • to support particular sectors of society
Types of organizations by ownership/control: 1) Public sector organizations - provide basic government services, thus controlled by government organizations. police military
public roads public transit primary education healthcare
2) Private sector organizations – nongovernment organizations, thus they are not controlled by the government. This sector includes: • businesses • charities • clubs 3) Co-operatives by their members. – are owned and controlled
ORGANIZATIONAL STRUCTURE TYPES CENTRALISATION Entrepreneurial Centralized Functional/ Department Decentralized Divisional/ Product Geographical Matrix INFORMAL ORGANIZATION
Entrepreneurial Entrepreneur Employees
Functional structure Board of directors Marketing department Production department Finance department Personnel department
Product/Division/Department Board of directors Division 1 Functions Division 2 Functions Division 3 Functions
Geographically structured Board of directors Northern division Functions Eastern division Functions Southern division Functions
Matrix Senior management Functional structure Production manager A Production manager B Production manager C Production department Sales department Finance department R&D department
Centralization or decentralization? Centralized structure – the upper levels of an organization's hierarchy make decisions. Decentralized structure – the authority to make decisions is passed down to units and people at lower levels. The factors that will affect the amount of decentralization are: • management style • ability of management/employees • locational spread • size of the organization/scale of activities
Informal organization is a network of relationships that exist within an organization. The relationships arise due to common interests or friendships.
Social responsibility Company should be sensitive to the needs and wants of: • Shareholders • Directors • Other employees • Customers • Suppliers • The government • Lenders of funds • Community organizations
Good CSR strategy can help company to: • • • Monitor changing social expectations Manage operational risks Identify new market opportunities Retain key employees Improve company’s reputation
Corporate governance includes: • Appropriate role of the board of directors and auditors of a company
Conclusion Type of organizations : By ownership/control: By profit orientation: Profit seeking organizations Non-profit organizations Public sector organizations Private sector organizations Co-operatives
Conclusion 5 types of organizational structure : 1. Entrepreneurial 2. Functional / Department 3. Divisional / Product 4. Geographical 5. Matrix
Conclusion Nowadays social responsibility and governance are the key aspects of organizations’ functioning.
Thank you for your attention!
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