Allen defines organising as an entrepreneur as “the process of identifying and grouping of work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing their objectives.’’
HERE’S WHAT YOU’LL LEARN:
- The main purpose of organizing as an entrepreneur
- The process of organisation as an entrepreneur
- How to organise an organisation as an entrepreneur
Koontz and O’ Donnell defined organization ‘’as the establishment of authority and relationships with provision for coordination between them, both vertically and horizontally in the enterprise structure.’’
- Organising is the task of mobilizing resources
- A structure involving a large number of people engaging themselves in multiplicity of tasks, a systematic and rational relationship with authority and responsibility between individuals and groups.
Nature of organization:
Specialisation and division of work:
The entire philosophy of organization is centred on the concepts of specialization and division of work. The division of work is the assigning of responsibility for each organizational component to a specific individual or group thereof. It becomes specialization when the responsibility for a specific task lies with a designated expert in that field. The efforts of the operatives are coordinated to allow the process at hand to function correctly. Certain operatives occupy positions of management at various points in the process to ensure coordination.
Orientation towards goals:
Every organisation has its own purpose and objectives. Organising is the function employees to achieve the overall goals of the organisation. Organisation harmonizes the individual goals of the employees with the overall objectives of the firm.
Composition of individuals and groups:
Individuals form a group and the groups form an organization. Thus, organisation is the composition of individual and groups. Individuals are grouped into departments and their work is coordinated and directed towards organizational goals.
The organization divides the entire work and assigns the tasks to the individuals in order to achieve the organizational objectives; each one has to perform a different task and tasks of one individual must be coordinated with the task of others. Collecting these tasks at the final stage is called integration.
An organization is a group of people with a defined relationship in which they work together to achieve the goals of that organisation. This relationship does not come to end after completing each task. Organization is a never ending process.
Purpose of organization:
Helps to achieve organizational goals:
Organization is employed to achieve the overall objectives of entrepreneurial firms. Organization focuses attention of individual’s’ objectives towards overall objectives.
Optimum use of resources:
To make optimum use of resources such as men, material, money, machine and methods, it is necessary to design an organization properly. Work should be divided and right people should be given the right jobs to reduce the wastage of resources in an organization.
To perform managerial functions:
Planning, organizing, staffing, directing and controlling cannot be implemented without proper organization.
Facilitates growth and diversification:
A good organization structure is essential for expanding business activity. Organization structure determines the input resources needed for expansion of a business activity. Similarly organization is essential for product diversification such as establishing a new product line.
Human treatment of employees:
Organization has to operate for the betterment of employees and must not encourage monotony of work due to higher degree of specialization. Now, organization has adapted the modern concept of systems approach based on human relations and it discards the traditional productivity and specialization approach.
Process of organizing:
Organizing, like planning must be carefully worked out and applied as a process. This process involves determining what work is needed to accomplish the goal, assigning those tasks to individuals and arranging those individuals in a decision-making framework (organizational structure). The end result of the organizing process is an organization—a whole consisting of unified parts acting in harmony to execute tasks to achieve goals, both effectively and efficiently.
Fixing the objectives of the organisation:
At the top level, administrative management first fixes the common objectives of organisation. At the middle level, executive management fixes the departmental objectives. Lastly, at the lower level, supervisory management fixes the day-to-day objectives. All the objectives of the organisation must be specific and realistic.
Finding activities for achieving objectives:
After fixing the objectives, the top-level management prepares a list of different activities or works which are requires to be carried out for achieving these objectives. This list is prepared at random without following any sequence or order. This is a very important step because it helps to avoid duplication, overlapping and wastage of efforts.
Grouping the similar activities:
All similar or related activities having a common purpose are grouped together to make departments. For instance, all activities or works which are directly or indirectly connected with purchasing are grouped together to make the purchase department. So various departments such as purchase, production, marketing, finance etc. are established, the grouping of similar activities leads to division of labour and specialization.
Defining responsibilities of each employee:
The responsibilities (duties) of each employee are clearly defined. This will result in the selection of a right person for the right post or job. He or she will know exactly what to do and what not to do. Therefore, it will result in efficiency.
Delegating authority to employees:
Each employee is delegates (surrender or given) authority. Without authority, the employees cannot carry out their responsibilities. Authority is the right to give orders and the power to get obedience. The authority given to an employee should be equal to the responsibility given to him.
Defining authority relationship:
When two or more persons work together for a common goal, it becomes necessary to clearly define the authority relationship between them. Each person should know who his superior is, from whom he should take orders and to whom he will be answerable to. Similarly, each superior should know what authority he has over his subordinates.
Providing employees with the required resources:
After defining the authority relationships, the employees are provided with all the material and financial resources, which are required for achieving the objectives of the organisation. So in this step, the employees actually start working for a common goal.
Coordinating efforts in order to achieve goal:
This is the last stage or step in the process of organisation. Here the efforts of all the individuals, groups, departments etc.. are brought together and co-coordinated towards the common objectives of the organisation.
ORGANIZING AS AN ENTREPRENEUR:
I’m done today again with my piece on organizing as an entrepreneur. I hope I delivered and in case you didn’t get the delivery, here’s an after sale service in the mode of some of the major points on organizing as an entrepreneur
- Entrepreneurs engage in organization to maintain orderliness and focus in achieving of business goals
- Organization helps entrepreneurs to discover and utilise judiciously the tool of division of labour
- Organization leads to specialisation
- Organisation helps to form organisation structure
What do you think an entrepreneur should do to organize his enterprise?