Unit 2 business organization
The world is a chain, one links another.
Warming up
1. Why do people try to «organize» themselves?
What formal and informal organizations do you know?
Comment on the following statement: ”An organization is only as good as the person running it” To what extent do you agree?
TEXT 1
Read the text. Be ready to answer the questions that follow.
Organization
Early in human existence people found that they were unable to accomplish many tasks that require more than individual effort. Therefore the necessity of group activity or cooperation was discovered.
Cooperation is a prime element of a group of people who want to achieve more than they can acting individually. This system of cooperation consists of several parts: the human element, the physical element, the work element, and the coordination element. All of these elements, taken collectively, can be thought of as an organization.
Thus, organization is an open, dynamic, purposeful social system of cooperation designed to enhance individual effort aimed at goal accomplishment; consists of the human element, the physical element, the work element, and the coordination element; transforms resources into outputs for users.
It is important to examine the various parts or components of organization theory. These components are: goals, work, power and authority, delegation, structure.
Every organization is initially built to accomplish some goal. Goals are the starting point for the design and maintenance of the organization itself. Once the goal of an organization is established, it is time for the members to decide on the type of work activity that will be necessary to accomplish these goals. Basically, any organization must perform two fundamental types of work: primary and secondary. The primary work (it also commonly referred to as line work) consists of production and distribution of goods and services that will satisfy consumer needs. The secondary work (it is often termed staff work) consists of all those activities that support and extend the operations of primary work. For example, in a manufacturing firm, the secondary work would include accounting, personnel and quality control.
No theory of organizations would be complete without a treatment of the roles that power and authority play in organizational activity. Power is the ability to influence others successfully. For example, one can have power over others because of one’s intelligence, skill, or money. Authority can be defined as power that has been given official recognition by the organization. Every member of the organization has some amount of authority to take action necessary to carry out his responsibility. The authority is delegated by managers.
In general, delegation may be defined as the process of transferring an obligation (responsibility) and an accompanying right (authority) from a superior to a subordinate position in the organization. Without delegation, an organization simply cannot exist and prosper.
The patterns of work divisions and their hierarchical arrangements constitute the basic components of structure. Structure, then, is the hierarchical pattern of authority, responsibility, and accountability relationships designed to provide coordination of the work of the organization. It is basically a managerial tool that aids in guiding the organization towards its goals and can be considered the skeleton of the organizational body. Organizations create an officially sanctioned structure known as the formal organization or de jure organization. This structure is often depicted by a chart as that seen in Fig. 1.
Fig 1. A formal organizational structure
A formal organization is only half the story, for superimposed on these relationships is a whole series of informal or de facto relationships that are not sanctioned by the organization. These include informal work groupings of employees, informal leaders, informal channels of communication and informal power and status differentials. Usually the structure of an organization is rather permanent and stable but in some cases a temporary, ad hoc, organization may be created.
1.What did people find early in human existence?
2.Give the definition of an organization.
3.What are the components of organization theory?
4.What role do power and authority play in building every organization?
5.What is the starting point for the design of an organization?
6.What is delegation and why is it necessary in today’s organization?
7.Which is more important: formal or informal structure?
8.Can you give an example of an ad hoc organization?
TEXT 2
Read the text. Explain: what a business entity is. Describe three main types and forms of business organizations.