Eg.

The first aspect of planning involves:

a. The activities that have to be executed

b. The conscious deliberation and visualisation of what the business and its departments should
achieve.
c. Developing a framework to indicate how people and other resources should be deployed to
achieve the goals.
D. Checking and evaluating the results of the company to make sure that the plans are being met.

Eg. The second aspect of planning involves creating a plan which will spell out the activities that
have to be executed and the resources that will be needed to reach the unstated objectives and
goals.

True
False
INTRO TO FUNCTIONAL AREAS OF MANAGEMENT

Unit 1- KCQ examples

1. Management can be defined as the process of planning, organising, leading and controlling the
resources of the organisation to achieve stated organisational goals as unproductively as possible.

True
False

2. Organising involves:

a. The activities that have to be executed

b. The conscious deliberation and visualisation of what the business and its departments should
achieve.
c. Developing a framework to indicate how people and other resources should be deployed to
achieve the goals.
D. Checking and evaluating the results of the company to make sure that the plans are being met.

3. Management is about human beings. Its task is to make people capable of joint performance, to
make their strengths effective and their weaknesses relevant.

True
False

4. Managers enforce control by obtaining feedback from the actual performance and compare it
with the standards and objectives set during the organising process, and take corrective action.

True
False

5. Top management have final authority and responsibility for executing the management process.

True
False

6. The broad functional categories of management in organisations are Planning, Organising,

leading and controlling?

True
False

7. An example of the manger found in middle management is:

A. The Managing Director

B. Team leader
C. Supervisor
D. Human Resource Manager

8. The primary concern of lower management is to apply policies and procedures, and rules to
achieve a high level of productivity.

True
False

9. Middle management is concerned with:

A. long-term planning, designing the company’s structure.

B. link between the upper and lower levels of the organisation.
C. responsible for all departments of the organisation.
D. spending a lot of time supervising the work of subordinates.

10._______________ managers are not associated with any particular management speciality.

A. Human Resource
B. Financial
C. Administrative
D. Marketing
THE POSSIBILITY OF A LONGER QUESTION EXISTS ANYWHERE IN THE STUDY GUIDE:

Eg.

Mintzberg argues that the traditional POLC approach oversimplifies the complexity of the manager’s
job and that it is more useful to view the manager’s relation to the organisation in terms of their
roles. Based on this, discuss Mintzberg TEN (10) managerial roles with suitable examples.

Mintzberg’s (1990) ten managerial roles include: (10 marks) – Remember to look at the mark
scheme when answering a question, then you can judge how much content to add on.

• Interpersonal Roles

 Figurehead Role:

The manager is involved in the performance of ceremonial duties, such as officiating at a long-
service award evening.

According to Mintzberg “Three of a manager’s roles arise directly from formal authority and involve
basic interpersonal relationships. First is the figurehead role. As the head of an organizational unit,
every manager must perform some ceremonial duties.”

“In Mintzberg’s study, chief executives spent 12% of their contact time on ceremonial duties; 17% of
their incoming mail dealt with acknowledgments and requests related to their status. One example
is a company president who requested free merchandise for a handicapped schoolchild” (Mintzberg
1990. P 167)

It is clear from the above definition that a figurehead role in any organisation involves one of
communication, status and responsibility and example of this in my organisation is: My Human
Resource Manager, since Mr Dhlamini is the first point of contact for any employee entering my
organisation, it is only fair that he performs long service awards and ceremonial duties, he also
develops good interpersonal relations with all employees in the organisation.

Leader Role: the manager works with and through his/her subordinates in order to achieve the
work of his/her department. For example, the manager appoints, trains, motivates and promotes
his/her subordinates.

Liaison Role: the manager makes contacts outside of the vertical chain of command to maintain
good relationships within and without the organisation, such as the forming of a sound relationship
with a supplier or distributor.

Information Roles
Monitor Role: the manager is involved in constantly seeking pertinent information through, for
example, scanning the environment and receiving information from his network of contacts.
 Disseminator Role: the manager passes on information that he has received to individuals within
the organisation who would benefit from it, such as subordinates and colleagues.
Spokesperson Role: the manager communicates information to people outside the organisation,
for example, the Marketing Director may ensure that the press is kept informed about the
organisation’s social responsibility initiatives.

Decision-Making Roles

Entrepreneur Role: the manager seeks to maintain and extend the unit’s/ organisation’s
sustainability through adapting it to changes within the environment. For example, the CEO and the
management team may decide to change strategy and reengineer the organisation as a result of
influential changes within the organisation’s environment.
Disturbance Handler Role: the manager is involved in involuntarily responding to pressures and
solving problems. For example, the HR Director may be required to address an unexpected situation
within the company which may lead to strike action.
Resource Allocator Role: the manager decides what quantities of resources such as people,
equipment and money each part of the department / organisation should receive. For example,
during the company’s budgeting period, the CEO approves a budget for the Information Technology
department which is considerably larger than the other departments’ budgets.
Negotiator Role: due to his/her authority to allocate resources and his/her access to information,
the manager is involved in negotiations within the company. For example, a supervisor may
negotiate changes to job specifications with his/her subordinates.

BIBLIOGRAPHY

Mintzberg, H. (1990). “The Manager’s Job: Folklore and Fact.” Harvard Business Review, March–April
1990, p. 167.
ESSAY QUESTION:
QUESTION 1 [20
MARKS]
1.1 Tall and flat organisational structures are two of the most common types of organisational
structures. Conduct a research and discuss the distinction between Tall and Flat organisational
structures and outline the merits and demerits thereof. [15 Marks]
According to Du Toit (2012) An organisational structure defines how tasks and responsibilities are
divided, work roles and relationship among members in the organisation and channel of communication
within an organisation. It provides the framework for the organisational activities. (Author, year, page
number)
(Du Toit et al., 2012:172)
From the definition provided above it is clear that an organisation can be structured in many different
ways depending on the organisation‟s goals.
What if you were asked to select your own organisation?
In my organisation of choice we use a………….. Structure, the reason why this works best for the
selected organisation is………
Flat and Tall Structures
For the most part, successful organisations will have flat structures, that is, few levels of management.
This has the effect of flattening the structure by reducing the number of management layers between
the chief executive officer (CEO) and the first-line managers. This broadens the span of control with a
much larger number of people reporting to each manager.
The vertical co-ordination is important to the degree to which managers can interact with and supervise
subordinates. The less subordinates, the more effective the manager can be, but the costlier the unit
becomes.

1
Where there is a large number of levels in the management hierarchy, the organisation is said to be
„tall‟. This will tend to result in narrow spans of control. Where there is a small number of levels in the
hierarchy, the organisation is said to be „flat‟. Flat organisations will tend to have wide spans of control.
In tall organisations, managers have smaller spans of control (i.e., fewer people reporting directly to
them). This reduces the number of people they have to manage, but means it takes longer for
information to travel through the layers of the organisation. In flat organisations, the opposite is true:
communication can be quicker because of fewer layers, but the spans of control are larger. In recent
years, tall organisations have tended to be associated with large bureaucracies. Communication will be
formal and middle managers may be in a position to use information as a device to retain control. On
the other hand, smaller spans of control may mean that managers have more time to manage.
Furthermore, there are more explicit career paths, with opportunities for promotion.
In flat organisations, the opposite is true: communication can be quicker because of fewer layers, but
the spans of control are larger. In recent years, tall organisations have tended to be associated with
large bureaucracies. Communication will be formal and middle managers may be in a position to use
information as a device to retain control. On the other hand, smaller spans of control may mean that
managers have more time to manage. Furthermore, there are more explicit career paths, with
opportunities for promotion.
Flat organisations have developed because there is a belief that communication is impaired by
additional levels of management. Flatter organisations are thought to be able to react to change more
quickly. Managers may be forced to delegate if their span of control is enlarged. This can be motivating
for those to whom work is delegated. On the other hand, career paths are less explicit: employees may
have to look sideways or even outside the organisation for career development opportunities.

2
1.2 Briefly explain the key factors to consider in determining the best span of management for
the organisation.
[5 Marks]
Don’t forget your in-text references!
Five key factors determine the best span of management for any situation, these are:

 The competence of the manager and the employees. If a manager/employees are new to the
task, they obviously require more supervision than experienced staff. The less experienced the
narrower the span of control should be.
 The similarity or dissimilarity of tasks being supervised. A product focus means more
standardization, whereas a process focus means widely varying products.
 The incidence of new problems in the manager‟s department. The more the manager knows
about the operations of the department, to understand precisely the various problems that can
occur, the broader the span of control can be.
 The extent of clear operating standards and rules. Clear rules & standards leave little to
chance. The greater the reliance on rules, the broader the span of control may be.
 The complexity of the subordinate‟s job. The more complex the job, the fewer subordinates that
the manager should supervise.

3
1.3 Identify any 2 (Two) distinct organisations from your community that have adopted different
organisational structures. Critically discuss the effectiveness, merits and demerits of the
organisational structures adopted by these entities. Provide recommendations on other
structures that may be adopted by the identified organisations to achieve operational efficiency

Answers may vary:

Introduction
Name of the organisation and a brief overview of the organisation’s business.
The essence of organising a business into departments, is to create specialists. These specialists can
perform a job much more efficiently than a group of generalists who are not trained to do a particular
job. (e.g. an accountant ) As we have seen, in the previous section, as soon as a business grows an
reaches a particular size, it becomes impossible for the owner-manager to supervise all the employees.
He/she then creates a series of managerial positions and groups the organisation logically to achieve
its goals.
The identified organisation may use any of the following types of Organisational Structures
 Functional structures
 Geographic structures
 Product structures &
 Customer based structures

Functional Organisational Structures

The functional organisation structure is the most basic structure type. Activities belonging to each management
function are grouped together.
Therefore, under the Marketing Function are grouped activities such as:-

 Advertising
 Marketing Research
 Sales
 Public Relations

This specialisation is necessitated by the logical grouping of activities, which belong together, which split the
management process into smaller more manageable units.

4
Advantages of a Functional Organisation Structure
 Promotes skill specialization
 Enhances career development & training within the department
 Promotes high-quality technical problem-solving
 Reduces duplication of resources & increases co-ordination within the functional area
 Centralizes decision making

Disadvantages of a Functional Organisation Structure

 Emphasises routine tasks
 May create conflict over product priorities
 Focuses on departmentalization rather than organizational issues & goals
 Reduces communication between departments
 May make interdepartmental scheduling difficult
 Develops managers who are experts in narrow fields (Hellriegel et al., 2001:205)

Geographic Organisational Structures

This is a logical structure for a business that manufactures and sells its goods in different geographic
regions, for example, all over the country as well as internationally. This structure gives autonomy to
area management, which is necessary to facilitate decentralised decision-making and to adjust to local
business environments.
Companies such as Unilever and Holiday Inns have set up regional and district offices. Multinational
firms often use this form of departmentalization to address cultural and legal differences in various
countries.

5
Advantages of Geographic Departmentalization
 Equipment used for products is all in one place, saving time and costs
 Managers know customer‟s problems
 Managers develop expertise in solving problems unique to one location
 Method is suited to multinational companies
 Production might find it useful to locate near to suppliers/ raw materials

Disadvantages of Geographic Departmentalization

 All functions-accounting, purchasing, manufacturing, customer service- are duplicated at each
location, very costly
 May cause conflicts between each location‟s goals and corporate goals.
 May require extensive rules and regulations to co-ordinate and ensure uniformity of quality
among locations (e.g. McDonald‟s).

2. Human Resource Professionals must demonstrate expertise and competence in the execution
of their duties. In light of this statement, evaluate the relevance of FOUR sets of competencies
required by Human Resource Professionals in order to effectively fulfil their role in any
organisation of your choice.
Human Resource Management Competencies
Yeung, Brockbank and Ulrich (1994) assert that the Human Resource Professional requires four sets of
competencies in order to effectively fulfil his / her role in the organisation. These sets of competencies
are diagrammatically presented below.
Human Resource Management competencies

6
As the diagram above shows, Human Resource professionals require a variety of competencies:
 Business Mastery skills are required as the Human Resource professional must know and
support the organisation for which he / she works for.
 Human Resource Mastery skills are required so that the Human Resource professional may
effectively carry out all of the Human Resource functions (e.g. recruitment, selection, training,
etc.).
 Change Mastery skills are required to enable the Human Resource professional to assist
individual employees and the organisation to deal with and harness change.
 Personal Credibility is essential to the Human Resource professional being accepted and
trusted by both the organisation‟s employees and management (Yeung, et al, 1994).

3. Identify and research any organisation from your community. Based on your research,
evaluate the responsibilities and functions performed by the Human Resource Management
Section to attain and maintain business excellence for the organisation. (20 marks)
Introduction: Introduction of the organisation in terms of type of business, market, size, vision and
mission must of the organisation must be provided.

Some definitions of Human Resource Management;

7
 • “Human Resource Management includes activities that managers engage in to attract and
retain employees and to ensure that they perform at a high level and contribute to the
accomplishment of organisational goals”.
• “Human Resource Management refers to the policies, practices and systems that influence
employees‟ behaviour, attitudes and performance”.
• “The organisation‟s human resource management function is that part of the management
process that specialises in the management of people in the organisation. It consists of
practices that help to achieve the organisation‟s objectives and thus to gain and sustain
competitive advantage”

HUMAN RESOURCE MANAGEMENT RESPONSIBILITIES

Human Resource professionals need to work together with line management in the management of the
organisation‟s human capital. The Human Resource professionals‟ key responsibilities in this regard are
to formulate and implement policy, advice and counsel, render a service, control personnel affairs,
communicate, as well as be an employee advocate.
Formulate and Implement Policy: Human Resource professionals draft policies and procedures
relevant to the organisation‟s people management. Once accepted by management these policies and
procedures then need to be implemented together with line management. The Human Resource
department is responsible for monitoring the implementation of HR policy by line departments. They
also assist line management in the interpretation of the policies.
Advice and Counsel: The Human Resource professional acts as an internal consultant to employees,
supervisors, managers and executives. Their knowledge of internal people management issues and the
dynamics of the external environment allow the Human Resource professional to provide invaluable
advice for the making of organisational decisions.
Render a Service: Human Resource professionals provide a range of services such as recruiting,
selecting and training. The services offered by HR should be directed towards facilitating the
achievement of the organisation‟s goals.
Control Personnel Affairs: The Human Resource professional monitors and controls the
implementation of Human Resource related policies and procedures. Examples of control functions
which Human Resource professionals perform include the following:
 Analysis of employment related data (e.g. recruitment, training, promotion statistics) to identify
the degree to which employment equity goals are being achieved.
 Analysis of data from performance appraisals for the purposes of determining whether
performance management is being fairly conducted
 Analysis of absenteeism and grievances to determine problem areas.

Communicate: Communication is critical to the effective functioning of any organisation, and Human
Resource professionals play a critical role in the designing and implementing companywide
communication strategies. Examples of types of communication methods which the Human Resource
department facilitates are New employee orientation, Bulletin boards, Communication meetings,
Newsletters, Employee handbooks and Surveys.

8
Employee Advocate: An important responsibility of the Human Resource professional is to be an
employee advocate. This involves actively listening to employees‟ concerns and addressing these with
management. In this way, Human Resource professionals can facilitate greater fit between the
employees and the organisation and in so doing promote employee satisfaction.

HUMAN RESOURCE MANAGEMENT FUNCTIONS

The Human Resource department performs a number of functions which may either be categorised as
providing for Human Resource provision or Human Resource retention. While Human Resource
provisioning provides for bringing human capital into an organisation, Human Resource retention
involves strategies and practices to maintain the existing human capital within the organisation while
tapping into their full potential.
Human Resource Provisioning Functions
The functions involved in Human Resource Provisioning include human resource planning, job
analysis, recruitment and selection, placement and incorporation. Each of these will be discussed
below.
 Human Resource Planning: Human Resource Planning may be defined as “the process of
anticipating and making provision for the movement of people into, within and out of an
organisation”. For Human Resource Planning to be effective, it is critical that it is linked to the
organisation‟s strategic goals. Forecasting the number of Human Resources required in the
short, medium and long term is influenced by factors such as:
o the current and future profile of the existing workforce (e.g. retirements, skills levels)
o the current strategic plans of the company (e.g. planned restructuring, planned future
expansions)
o the external environment (e.g. economic climate, technological advancement).
• Job Analysis & Design: Job analysis may be defined as “the systematic process of collecting,
evaluating and arranging of information about tasks, duties and responsibilities of a job”. Job
analysis results in the generation of two types of documents: �Job description, which outlines
the tasks, responsibilities and duties of a particular job. �Job specification, which details the
competencies required of the incumbent who is to hold the position. Job analysis and design is
an important component of Human Resource Management, in that well designed jobs, which
provide a sufficient level of challenge, can contribute considerably to an employee‟s satisfaction
and motivation, thereby influencing productivity and contributing to the achievement of
organisational goals.
• Recruitment and Selection: While recruitment involves the search for a variety of qualified
candidates to fill a particular position, selection involves a process of choosing the most
suitable individual from a group of applicants. Sources that are used to attract and recruit
candidates for a particular job include newspaper advertisements, electronic recruitment sites,
unsolicited applications (e.g. walk in candidates who drop off their CVs) and educational
institutions. Legislation, particularly the Employment Equity Act and Labour Relations Act,
impact significantly on recruitment practices. Selection follows recruitment activities. A typical
selection process may entail a preliminary selection interview, the completion of an application

9
 form and application assessments, the checking of references, a final interview and a medical
examination. Following this, a choice of candidate will be made and an offer of employment will
be extended to him / her. If the candidate accepts the offer, this will result in appointment. The
Human Resource department will fulfil a staff role in the selection process – they will coordinate
the process, screen the applicants and make a recommendation as to who they believe is the
most suitable candidate. Unions and workplace forums may be involved in the interests of
transparency, but it is the line manager who makes the final decision on the candidate to be
appointed.
• Placement: Placement involves the process by which a newly appointed employee is placed in
an organisation, or where existing employees are transferred to new positions, demoted or
promoted. So as to ensure that the employee contributes to the achievement of the
organisation‟s goals it is imperative that there is “fit” between the new job incumbent and the
job itself. If “fit” is achieved between the job incumbent and the position, there should be lower
turnover and more motivated and productive employees.
• Incorporation: The process of incorporation is important to ensure that the new employee
settles into his / her new position and socialises effectively into the work environment.
Incorporation is facilitated by the following initiatives:
o Orientation, where the employee is provided with information regarding the
organisation and its culture.
o Induction, where information specific to the employee‟s position and his / her
department is provided. Orientation is usually implemented by the Human Resource
department and induction by the employees‟ new supervisor.

Human Resource Retention

The functions involved in maintaining and retaining an organisation‟s Human Resources include
training and development, performance management, remuneration and benefits, job design and re-
design and HR administration. Each of these are discussed below.
• Training and Development: While training is the “planned systematic and organized process
of providing employees with the specific knowledge and skills needed for them to perform their
present jobs effectively”, development refers to the “systematic, planned experience to provide
employees with knowledge, skill, abilities, insights and attitudes to prepare them to perform
jobs the organisation will need in the future”. Therefore, training has a short term objective,
while development has a long term objective. Some training and development methods include
job rotation, programmed instruction, videos, simulation, role-playing and interactive media.
• Performance Management: Performance management provides information that guides the
training and development function in an organisation. Performance appraisal may be defined
as “the process of systematically evaluating every employee‟s job-related strengths,
developmental needs, and progress toward achieving goals, and then determining ways to
improve the employee‟s job performance”. The appraisal process involves:
o Setting agreed work standards
o Assessing the employee‟s work performance against the agreed work standards
o Giving feedback to the employee about his / her performance in relation to the work
standard with the aim of improving the employee‟s existing performance.
10
• Remuneration and Benefits: Employees receive remuneration in return for their services. The
remuneration package is both financial (monetary) and non-financial (e.g. amount of leave,
type of working environment). Remuneration is determined after conducting a job analysis
followed by job evaluation. Comparisons are also made with remuneration packages offered by
other companies. Following this, the remuneration package of the job is determined.
Remuneration may or may not be increased following performance appraisal. Benefits, also
known as indirect compensation or indirect remuneration, are what employees receive over
and above their wages or salaries. They are generally not linked to performance and are
usually accepted as part of the conditions of service. South African legislation compels
organisations to provide certain benefits, such as workmen‟s compensation and unemployment
insurance. In order to attract the best employees, a company may decide to offer additional
benefits such as group insurance and housing subsidies.
• Labour Relations: Labour relations is concerned with “the relations (primarily collective but
also to a lesser extent individual) between employer(s) (and / or manager(s) as the
representatives of the employer) and workers (and/or their representatives such as trade
unions) which develop from employment relationships and which are essentially concerned
with balancing the various interests of, and regulating the levels of cooperation and conflict
between, the parties involved. In all of this, the government and its relevant representatives,
institutions, structures, systems and laws play an important, though secondary role”
(Swanepoel, Erasmus, Van Wyk and Schenk, 2003: 616). Labour unions as well as South
Africa‟s labour legislation has a considerable impact on the drafting and implementation of
Human Resource policies and procedures.
o The following pieces of legislation impact on all the functions of the Human Resource
department:
o Labour Relations Act
o Basic Conditions of Employment Act
o Unemployment Insurance Act
o Occupational Health and Safety Act
o Compensation for Occupational Injuries and Diseases Act
o Employment Equity Act
o Skills Development Act
o Skills Development Levies Act
• HR Administration: The Human Resource department is also responsible for the
administration of personnel affairs, such as updating records, calculating and paying wages
and salaries, administering benefits, and recording leave. In recent years HR‟s administrative
tasks have become streamlined and more efficient as a result of the implementation of Human
Resource Information Systems (HRIS).

11
4. When a business wants to customise their products and services to cater for more specific
consumers, they turn to Business Development Managers to develop innovative campaigns and
take their products to a new direction. Conduct research on markets and discuss at least FOUR
types of customer markets that managers need to understand in order to grow the market share
of the business. (20 marks)
The marketplace is physical; the market space is digital. Sawhney (2001) has proposed the concept of
meta-markets to describe a cluster of complementary products and services that are closely related in
the minds of consumers but are spread across a diverse set of industries. An example is the motor car
industry that consists of physical locations (car dealers) and marketspace locations (Internet locations)
that consumers use in deciding what car to purchase.
Different Types Markets

Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell goods.
Economists describe a market as a collection of buyers and sellers who transact over a particular
product or product class (such as the housing market or the grain market).
Manufacturers go to resource
Markets (raw materials markets, labour markets, money markets), buy resources and turn them into
goods and services. The government collects tax revenues to buy goods from resource, manufacturer,
and intermediary markets and uses these goods and services to provide public services. Each nations
economy, and the global economy, consists of complex interacting sets of marketers linked through
exchange processors.
Marketers often use the term Markets to cover various groupings of customers. They view sellers as
constituting the industry and buyers as constituting the market. They talk about need markets (the diet
seeking market), product markets (the shoe market), demographic markets (the youth markets), and
geographic markets (the French market); or they extend the concept to cover other markets, such as
voter markets, labour markets, and donor markets.

12
Sellers and buyers are connected by four flows. The sellers send goods and services and
communication such as ads and direct mail to the market; in return they receive money and information
such as customer attitudes and sales data. The inner loop shows an exchange of money for goods and
services; the outer loop shows an exchange of information.

Key customer markets: consumer, business, global and non-profit.

Consumer markets
Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and
athletic shoes and equipment spend a great deal of time trying to establish a superior brand image.
Much of brand‟s strength depends on developing a superior product and packaging ensuring its
availability, and backing it with engaging communications and reliable service.
Business Markets
Companies selling business goods and services often face well-trained and well- informed professional
buyers who are skilled at evaluating competitive offerings. Business buyers buy goods in order to make
or resell a product to others for a profit. Business marketers must demonstrate how their products will
help these buyers achieve higher revenue or lower costs. Advertising can play a role, but the sales
force, price and the company‟s reputation for reliability and quality may play a stronger one.
Global Markets
Companies selling goods and services in the global marketplace face additional decisions and
challenges. They must decide which countries to enter; how to enter each (as an exporter, licenser,
joint venture partner, contract manufacturer, or solo manufacturer); how to adapt their product and
service activities to each country; how to price their products in each country; how to adapt their
communications to fit the different cultures. They make these decisions in the face of different
requirements for buying, negotiating, owning, and disposing of property; different culture, language, and
legal and political systems; and currencies that might fluctuate in value. Yet, the payoff for doing all this
additional legal work can be huge.

13
Non- profit and governmental markets
Companies selling their goods to non-profit organisations such as churches, universities, charitable
organisations, and government agencies need to price carefully, because these buyers have limited
purchasing power. Lower selling prices affect the features and quality the seller can build into the
offering.
Much government purchasing calls for bids, and buyers often favour the lowest bid in the absence of
extenuating factors.
5. Analyse the marketing environment, beliefs and practices of any organisation that you are
familiar with and discuss the FOURTEEN major shifts in marketing management, beliefs and
practices that the organisation has experienced over the years. (20 marks)
Answers may vary however the following fourteen major shifts according to Kotler and Keller
(2006:27-28) should be discussed:
A number of important trends and forces are eliciting a new set of beliefs and practices on the part of
business firms. These fourteen major shifts according to Kotler and Keller (2006:27-28) are:
 From marketing does the marketing to everyone does the marketing
 From organisation by products units to organising by customer segments
 From making everything to buying more goods and services from outside
 From using many suppliers to working with fewer suppliers in a “partnership”
 From relying on old market positions to uncovering new ones
 From emphasising tangible assets to emphasising intangible assets
 From building brands through advertising to building brands through performance and
integrated
communications
 From attracting customers through stores and salespeople to making products available online
 From selling to everyone to trying to be the best firm serving a well-defined target market
 From focusing on profitable transactions to focusing on customer lifetime value
 From a focus on gaining market share to a focus on building customer share
 From being local to being “global”- both global and local
 From focusing on the financial scorecard to focusing on the marketing scorecard
 From focusing on shareholders to focusing on stakeholders

6. With reference to the organisation identified in question one, you are tasked to give a
comprehensive overview of the relevance of Operations Management in an organisation. The
discussion must include the importance of operations management, critical decision areas and
the contribution thereof to organisational productivity at large. (20 marks)
Introduction and definition of terms
Operations Management (OM) is best defined as the set of activities that creates goods and services
through the transformation of inputs into outputs. Activities creating goods and services take place in all

14
organisations. In manufacturing firms, the production activities that create goods are usually quite
obvious.
The importance of Operations Management
 It can reduce the costs of making the products or offering the services.
 It can increase the revenue the business receives for offering its products and services to its
customers/clients.
 It can reduce the amount of investment (capital) needed to manufacture the type and quantity
of the products or to offer the service required.
 It can provide the impetus for new innovation by using its solid base of operational skills and
knowledge to develop new products and services.

Critical decisions of operations management

DECISION AREA ISSUES
 Quality Management  Who is responsible for quality?
 Service and Product Design Process  How do we define the quality we want
and capacity design in our service or product?
 Location  What product or service should we
 Layout design offer?
 Human resources and job design  How should we design these products
 Supply chain management or services?
 Inventory, MRP, JIT  What equipment and technology is
 Intermediate, necessary for these processes?
 short-term and project scheduling  Where should we put our facility?
Maintenance  How should we arrange our facility?
 Returns  How do we provide a reasonable work
environment?
 Should we make or buy a component?
 How many suppliers should we have?
 How much of inventory should we
keep?
 Is subcontracting production a good
idea?
 Who is responsible for maintenance?
 How do we deal with returned goods?

Operations and Productivity

There is a strong inter-relationship between the four major functions within an organisation:
 Marketing, which generates the demand, or at least takes the order for, a product or
services (nothing happens until there is a sale).
 Production/operations, which creates the product.

15
  Finance/accounting, which tracks how well the organisation is doing, pays the bills, and
collects the money.
 Human resource management, which attempts to motivate employees to do their jobs.
 Universities, churches, temples, mosques or synagogues, and businesses all perform
these functions. Any institution, even a volunteer group such as the Boy Scouts
Association is organised to perform these basic functions.

Exciting new trends in Operations Management

One of the reasons why OM is such an exciting discipline is that the operations manager is
confronted with an ever-changing environment.
These dynamics are the result of a variety of forces, from globalisation of world trade to the transfer
of ideas, products and money at electronic speeds. We now introduce some of the challenges of
OM:
 Global Focus: The rapid decline in communication and transportation costs has, of course,
made global markets more accessible. However, at the same time, resources in the form of
materials, talent, and labour have also become global. Contributing to this rapid
globalisation are countries throughout the world that are vying for economic growth and
industrialisation. Operations managers are responding with innovations that generate and
move ideas, parts, and finished goods rapidly, wherever and whenever needed.
 Just-in-Time performance: Vast financial resources are committed to inventory. Inventory
impedes the response of dynamic changes in the marketplace. Operations managers are
slashing inventories at every level, from raw materials to finished goods.
 Supply-chain partnering: Shorter product life cycles, as well as rapid changes in material
and process technology, require more participation by suppliers. Suppliers usually supply
up to 80% of the value of products. Consequently, operations managers are building long-
term partnerships with critical players in the supply chain.
 Rapid product development: Rapid international communication of news, entertainment,
and lifestyles is dramatically chopping away at the life of products. Operations managers
are responding with design technology that is faster and design management that is more
effective.
 Mass customisation: Once we begin to consider the world as the marketplace, then the
individual differences become quite obvious. Cultural differences, in a world where
consumers are increasingly aware of options, places substantial pressure on firms to
respond. Operations managers are responding with production processes that are flexible
enough to cater to individual whims of consumers. The goal is to produce individual
products, whenever and wherever needed.
 Empowered employees: More sophisticated employees and a more technical workplace
have combined to require more competence at the workplace. Operations managers are
responding by moving more decision making to the individual worker.

Productivity

16
The difference between production and productivity: Production is the conversion of raw materials into
finished goods that can be used by the customer, whereas Productivity is a ratio of Output /Input.
 Productivity of land By improving methods of planting, fertilisation and harvesting of crops,
we can increase the harvest tonnage from 1 to 1.5 tons per hectare. We can then say that the
productivity of the land will have increased by 50%.
 Productivity of materials A team of skilled carpenters with accurate equipment uses 4 metres
of timber to construct a dining room suite. A second group of carpenters uses 4.5 metres of
timber to produce the same dining room suite. Which group has the higher material
productivity?
 Productivity of machines A forming press has a process time of 7 minutes and a load and
unload time of 3 minutes. Therefore, for every hour 6 units can be produced. If we had to
improve the method of loading and unloading, we may be able to reduce this time to 1 minute.
We can now produce 7.5 units per hour. Our machine productivity has now increased by 25%
(7.5/6).
 Productivity of labour A bricklayer can lay 500 bricks per day. After improving the method, he
can now lay 700 bricks per day. This is an increase of 40%.

Factors that affect productivity

Several factors can affect productivity and these include:

 Methods; Capital; Quality; Technology and Management

A common mistake that people make is that they believe workers are the main determinant of
productivity. According to that theory, productivity gains are achieved by getting employees to work
harder. However, many of the productivity gains have come from technological improvements.
Examples: Paint rollers, power lawn mowers, copying machines, microwave ovens, washing machines,
calculators, computers, email, and many other electric and electronic items/goods.
Improving Productivity There are a number of ways to improve productivity:
 Develop productivity measures for all operations; measurement is the first step in managing
and controlling an operation.
 Consider the system as a whole in deciding which operations to concentrate on. Find
bottleneck operations in the system and try to improve them.
 Develop methods for achieving productivity improvements such as getting ideas from the
workers, studying how other companies have improved productivity and re-examining the way
work is done.
 Establish reasonable goals for improvement.
 Obtain support of top management.
 Measure improvements and publicize them

7. Using practical examples from any one of the organisations selected in the question above,
critically evaluate the usage and benefits of technological systems throughout the value chain
to enhance operational excellence and competitive advantage of the business.
17
Information Technology
In the context of business, these technologies perform five information functions:
 Acquisition is a process of capturing data about an event that is important to the organisation.
 Processing is an activity that manipulates and organises information in ways that adds value to
the information so it is useful to users.
 Storage and retrieval is an activity that systematically accumulates information for later use and
then locates the stored information when needed.
 Presentation is the process of showing information in a format and medium useful to the user.
 Transmission is the process of sending and distributing data and information to various
locations.

The value Chain:

According to the value chain model, an organisation performs a series of activities to provide products
and services for customers. There are five primary activities in the value chain:
 Inbound logistics receives and stores supplies and materials from the firm‟s environment and
distributes them when and where they are needed in the organisation.
 Operations use the supplies and materials to create or manufacture the organisation‟s products
and services.
 Outbound logistics delivers the products and services when and where needed by customers.
 Marketing and sales investigates customer needs and promotes the value of and sells the
products and services in the environment (marketplace).
 Service maintains and enhances the product or service usefulness to customers through, for
example, training and maintenance.
 The value chain model includes four support activities of an organisation to ensure that the
primary activities can function efficiently and effectively:
 Management and other administrative services such as accounting, finance, and legal.

18
  Human resources.
 Research and technology development.
 Procurement.

Each of the primary and support activities can be viewed as a subsystem of the organisation. The
specific combination of primary and support activities an organisation uses to accomplish a specific
objective is often referred to as a business process.
Benefits of Information Systems
 High-quality information.
 Access to information.
 Utilisation of information.
 Perform organisational work efficiently.
 Better communication and decision-making.
 Better products and services for customers.

Information Systems for Business Transactions

A transaction is an event that occurs in any of the primary activities of the company. A transaction
processing system (TPS) is a firm‟s basic accounting and record-keeping system that keeps track of
routine daily transactions necessary to conduct business. Transaction processing systems typically
involve large amounts of data stored in large databases; they require high processing speeds to
manipulate large volumes of data. A transaction processing system must ensure a high level of
accuracy and security of the data.
The Transaction Processing Cycle
Transaction processing is a cyclical process with five steps:
 Entering the data. This involves online data entry or transcribing paper source documents. Data
entry can also use electronic data interchange (EDI) to electronically exchange business
transactions.
 Processing the data. Data can be processed in two ways: batch processing or real-time
processing.
 Storing and updating the data. This step involves storing the transaction data in database files.
Many large organisations use data warehousing software to create and maintain very large
databases containing data on all aspects of the company.
 Document and report preparation. A transaction processing system produces several types of
action documents and reports. An action document initiates an action by the recipient or
verifies for the recipient that a transaction has occurred.
 User inquiry. Managers and other workers can use a database query language to ask
questions and retrieve information about any transaction activity.

Enterprise Resource Planning

Transaction processing systems exist in all functional areas of a business. Each subsystem is itself a
transaction processing system. The subsystems exchange information; the output of one subsystem is

19
the input to another subsystem. Many managers in organisations look for ways to create cross-
functional information systems by reengineering, or combining and integrating, two or more transaction
processing systems. This approach of creating information systems to support an organisation‟s
operational business processes is referred to as enterprise resource planning (ERP).
Automated Information Systems for Design and Manufacturing
Computer-Aided Design (CAD)
Product designers and engineers use computer-aided design (CAD) with computer workstations and
software to draw product or process designs on the screen. CAD is used in a wide variety of industries,
but a prime example of the importance of CAD is its use in the design of the Boeing 777, the first
commercial aeroplane to be designed entirely with CAD software.
Computer-Aided Manufacturing (CAM)
Computers and other information technology are used to automate the manufacturing process with
computer-aided manufacturing (CAM). The software in a CAM system retrieves the design
specifications of the product from the CAD database; controls specific tools, machines, and robots on
the factory floor to manufacture the product; and monitors the overall physical process of manufacturing
the product.
Computer-Integrated Manufacturing (CIM)
Computer-integrated manufacturing (CIM) is a concept, or management philosophy, emphasising the
co-ordination of CAD and CAM systems along with other information systems in the company.

Bibliography

Du Toit, Erasmus and Strydom (2013) Introduction to Business Management, 9th Edition,
Oxford University Press: Southern Africa

20
 Unit 2- KCQ examples

1. The business’s organisational structure indicates the work to be done and the connections
between the various positions and tasks.

True
False

2. Which of the following is a managerial technique utilised in the organisational structure:

a. Implement the plan or strategy

b. Arrangement of furniture
c. Assigning authority
d. Resources to be employed

3. Organisational structure is an informal system of working relationships that separates and

integrates tasks.

True
False

4. How does organisational structure encourage consistent work between employees and
departments?

a. The job specifications which explain what he/she are expected to do have to be drawn up
b. Clarifying employee’s responsibilities and how their efforts should mesh through job descriptions,
organization charts, and lines of authority
c. By Promoting the productive deployment and utilisation of resources.
d. An organisational structure results in a mechanism which co-ordinates the activities of the
business as a whole

5. A full time bookkeeper will be most relevant for a small business in terms of evolution of
business grow.

True
False

6. The unity of command principle should aim to create confusion in the work place regarding
reporting lines between subordinates and superiors?

True
False

7. The scalar principle aims to:

a. minimize confusion as to who makes decisions and implements them,

b. cope with conflicting requests or priorities from different superiors.
c. supervise a large number of subordinates.
d. trace his/her immediate superior all the way upward, level-by-level, until the upper reaches of the
board of directors.

8. Flat structures requires managers to control a larger number of subordinates?

True
False

9. The more the manager knows about the operations of the department the broader the span of
control can be.

True
False

10. Line authority belongs to those who advise, recommend, research and offer technical
expertise.

True
False
 INTRO TO FUNCTIONAL AREAS OF MANAGEMENT

Unit 4- KCQ examples

Note to students: Kindy note the KCQs, and longer questions are a form of reference and practice.
The answers are incomplete and is not a memorandum. The questions and answers aim to provide
structure on how to answer longer and shorter questions. Copying and pasting the answers and
examples verbatim constitutes a form of plagiarism.

1. Marketing has been defined as an organisational function and a set of processors for creating
communicating and delivering value to customers.

True
False

2. Each year, companies market countless numbers of fresh canned, bagged, and frozen food
products and millions of cars etc, these are known as services?

True
False

3. Which are not part of the five basic markets and their connecting flows?

a. Intermediary markets
b. Tertiary markets
c. Resource markets
d. Consumer markets

4. A prospect is someone who seeks a response- attention to a purchase, a vote, a donation- from
another party, called the marketer.

True
False

5. A Latent demand can be defined as:

a. consumers begin to buy the product less frequently or not at all.

b. consumer purchases vary on a seasonal, monthly, daily, or even an hourly basis.
c. consumers may share a strong need that cannot be satisfied by an existing product.
d. too many consumers would like to buy the product that can be satisfied.
6. A marketer can rarely satisfy everyone in a market. Not everyone likes the same cereal, hotel
room, restaurant, automobile, college, or movie. Therefore, marketers start by dividing the
market into Needs, Demands and Wants.

True
False

7. Value reflects the perceived tangible and intangible benefits and costs to customers.

True
False

8. To reach a target market, the marketer uses three kinds of marketing channels:

a. Economic, Political, Services

b. Broad, Physical, Demographic
c. Supply, Distribution, logistics
d. Communication, Distribution, Service

9. The selling concept is one of the oldest concepts in business. It holds that consumers will prefer
products that are widely available and inexpensive.

True
False

10. The __________________concept is based on the development, design, and implementation of

marketing programmes, processors, and activities that recognise their breadth and
interdependencies.

a. Selling
b. Holistic marketing
c. Relationship
d. Integrated marketing
Note to students: Kindy note the KCQs, and longer questions are a form of reference and practice.
The answers are incomplete and is not a memorandum. The questions and answers aim to provide
structure on how to answer longer and shorter questions. Copying and pasting the answers and
examples verbatim constitutes a form of plagiarism.

Unit 5- KCQ examples

1. The Financial Function is concerned with this flow of funds, in particular with recording all
transactions and reporting on financial matters for the sake of organising and leading.

True
False

2. Current assets take the form of:

a. equipment
b. machinery
c. land
d. resources

3. An enterprise needs funds, also called human capital, to obtain the required assets.

True
False

4. The capital that is made available by non-owners of an enterprise can be in the form of
commercial banks.

True
False

5. At times the enterprise requires more and at times less capital:

a. Interest
b. Borrowed capital
c. Variable capital needs
d. Fixed capital needs

6. The capital that is made available by the owners of the enterprise is known as own capital or
inequity.

True
False
7. The money market refers to the market where the demand and supply of long-term funds are
brought together.

True
False

8. Long-term funds which is further divided into:

a. Financing
b. Shareholder’s interest
c. Investment
d. Solvency

9. Investment refers to the way in which a firm can attract capital, for example, bank overdraft, in
order to meet the capital needs of the enterprise.

True
False

10. The financial leverage effect influences the effect of borrowed capital in the long term?

True
False
Note to students: Kindy note the KCQs, and longer questions are a form of reference and practice.
The answers are incomplete and is not a memorandum. The questions and answers aim to provide
structure on how to answer longer and shorter questions. Copying and pasting the answers and
examples verbatim constitutes a form of plagiarism.

Unit 6- KCQ examples

1. Human Resource Management includes activities that managers engage in to attract and detain
employees and to ensure that they perform at a high level.

True
False

2. From the definitions the following is evident about Human Resource Management:

a. The focus of Human Resource Management is the management of people or capital

b. Human Resource Management ensures fit or congruency between the executives, job,
organisation and environment.
c. People are managed in such a way so as to ensure that employees are satisfied and the
organisation achieves its goals and attains an uncompetitive advantage.
d. Human Resource Management involves policies, practices, systems and activities directed
towards the management of people.

3. The Human Resource department performs a number of responsibilities which may either be
categorised as providing for Human Resource provision or Human Resource retention.

True
False

4. An example of a control function which Human Resource professionals perform include analysis
of data from performance appraisals

True
False

5. The Human Resource professionals’ key responsibilities in this regard are to:

a. job analysis
b. advice and counsel
c. placement and incorporation
d. recruitment and selection

6. Human Resource provisioning provides for strategies and practices to maintain the existing
human capital within the organisation while tapping into their full potential.
True
False

7. Forecasting the number of Human Resources required in the short, medium and long term is
influenced by factors such as the external environment?

True
False

8. This piece of legislation requires that South African workforces need to transform to reflect the
economically active population in terms of race and gender.

a. The Employment Equity Act

b. Labour Relations Act
c. Basic conditions of Employment Act
d. Occupational Health and Safety Act

9. Job description details the competencies required of the incumbent who is to hold the position.

True
False

10. The process of incorporation is important to ensure that the new employee settles into his /
her new position and socialises effectively into the work environment

True
False

LONG QUESTION FOR HR

Identify any organisation from your community. Based on your research, evaluate the
responsibilities and functions performed by the Human Resource Management Section to attain and
maintain business excellence for the organisation.

 The keys word highlighted will help guide you to the correct heading in the study guide
 The inception or start of the organisation,
 The main business or service it provides
 The mission and vision statement
 The size of the organisation and the staff compliment it fulfils (why would I do this?
because this is relevant to the question of human resources)
 Its main customers
 It is always good to start with a definition when answering a research based question such
as this. Human resources is your focus point so start with that!
 The words of Responsibilities and Functions are very important
“Human Resources Management is the process through which an optimal fit is achieved among
employee, job, organisation and environment so that employees reach their desired level of
satisfaction and performance and the organisation meets its goals”. (Du Toit, Erasmus and Strydom
2013).

Human resources (HR) is the division of a business that is charged with finding, screening, recruiting,
and training job applicants, as well as administering employee-benefit programs. HR plays a key role
in helping companies deal with a fast-changing business environment and a greater demand for
quality employees in the 21st century. (Kenton 2020)

HUMAN RESOURCE MANAGEMENT RESPONSIBILITIES

Human Resource professionals need to work together with line management in the management of
the organisation’s human capital. The Human Resource professionals’ key responsibilities in this
regard are to formulate and implement policy, advice and counsel, render a service, control
personnel affairs, communicate, as well as be an employee advocate.

Formulate and Implement Policy: Human Resource professionals draft policies and procedures
relevant to the organisation’s people management. Once accepted by management these policies
and procedures then need to be implemented together with line management. The Human
Resource department is responsible for monitoring the implementation of HR policy by line
departments. They also assist line management in the interpretation of the policies.

Evaluation:

The policies are drafted by the CEO, since it is a small company he believes that all policies will be
implemented by himself and this will provide a sense of direction for new employees, especially
when the leader follows his own policies. As the company grows he will employ a more senior
manager to draft policies.

Some of the policies written by the owner are:

 Standard operating procedures (start and finish times, the mixing of chemicals, quality
control)
 Movement of equipment
 Choosing of suppliers
 Customer policies
 Etc.…….

Advice and Counsel: The Human Resource professional acts as an internal consultant to employees,
supervisors, managers and executives. Their knowledge of internal people management issues and
the dynamics of the external environment allow the Human Resource professional to provide
invaluable advice for the making of organisational decisions.

Evaluation:

There is one human resource manager (HRM) who performs all advisory functions with
employees. He has a good working relationship with all employees which is an added benefit for
smooth work flow and employees’ retention however the work load becomes too much on a daily
basis and filters to the next day.
  Most employees and the CEO rely on the human resource manager for daily decisions with
regards to closing times, salaries, payments, choice of suppliers, any contractual
information, etc.…….
 Render a Service: Human Resource professionals provide a range of services such as
recruiting, selecting and training. The services offered by HR should be directed towards
facilitating the achievement of the organisation’s goals.

Render a Service: Human Resource professionals provide a range of services such as recruiting,
selecting and training. The services offered by HR should be directed towards facilitating the
achievement of the organisation’s goals.

Evaluation:

 This service is also rendered by the HRM mentioned above

 He Recruits, selects and trains new employees together with oversight by the operations
manager, and CEO
 There are standard operating procedures in facilitating the recruitment process
 Example: Forecasting, Advertising, Screening, Shortlisting, interviewing, etc.…………..

After completing the responsibilities you can move on to the functions

HUMAN RESOURCE MANAGEMENT FUNCTIONS

The Human Resource department performs a number of functions which may either be categorised
as providing for Human Resource provision or Human Resource retention. While Human Resource
provisioning provides for bringing human capital into an organisation, Human Resource retention
involves strategies and practices to maintain the existing human capital within the organisation
while tapping into their full potential.

Note that the human resource functions are broken up into two different functions (Provisioning
functions and Retention functions)

HUMAN RESOURCE PROVISIONING FUNCTIONS

The functions involved in Human Resource Provisioning include human resource planning, job
analysis, recruitment and selection, placement and incorporation. Each of these will be discussed
below.

Human Resource Planning

Human Resource Planning may be defined as “the process of anticipating and making provision for
the movement of people into, within and out of an organisation”. For Human Resource Planning to
be effective, it is critical that it is linked to the organisation’s strategic goals. Forecasting the number
of Human Resources required in the short, medium and long term is influenced by factors such as:

The current and future profile of the existing workforce (e.g. retirements, skills levels)

The current strategic plans of the company (e.g. planned restructuring, planned future expansions)

The external environment (e.g. economic climate, technological advancement).

Evaluation:
 Planning is also known as forecasting in business jargon
 There are three different types of plans that are implemented in Kelnik (namely: short,
medium and long term plans)

Bibliography

 Du Toit, Erasmus and Strydom (2013) Introduction to Business Management, 9th Edition,
Oxford University Press: Southern Africa
 Available at: https://www.investopedia.com/terms/h/humanresources.asp, date accessed: (
1 February 2022)
I=2( + N – 1)

I=2( + 2 – 1)

I = 2 ( + 2 – 1)

I= 2 (2 + 2 – 1)
I= 2 (3)
I= 6
Read carefully and follow the instructions. [20 marks]

“Organizations can be structured in various ways, with each structure determining the manner in
which the organization operates and performs.”

Critically discuss the various organisational structures and provide recommendations of the best
structure for your organisation to be effective.

FORMS OF ORGANISATIONAL STRUCTURES

Types of Organisational Structures

 Functional structures
 Geographic structures
 Product structures &
 Customer based structures

Functional structure

The functional organisation structure is the most basic structure type. Activities belonging to each
management function are grouped together. Therefore, under the Marketing Function are grouped
activities such as:-

 Advertising
 Marketing Research
 Sales
 Public Relations
  Most common and basic type of structure
 Each management function are grouped together
 Each department can be sub-divided, eg. Marketing department and be broken up
into segments.

Advantages of a Functional Organisation Structure

 Promotes skill specialization

 Enhances career development & training within the department
 Promotes high-quality technical problem-solving
 Reduces duplication of resources & increases co-ordination within the functional area
 Centralizes decision making

Disadvantages of a Functional Organisation Structure

 Emphasises routine tasks

 May create conflict over product priorities
 Focuses on departmentalization rather than organizational issues & goals
 Reduces communication between departments
 May make interdepartmental scheduling difficult
 Develops managers who are experts in narrow fields (Hellriegel et al., 2001:205)

Now have a look at how I link this structure to my organisation

My organisation of choice is Mancosa, I think the functional structure will be best suited to my
organisation. My recommendations of this being the most effective structure are explained below:

 Mancosa is an organisation that has many different departments, this actually compliments
the functional organisational structure.
 Each department has different employees with different skills and qualifications that are
grouped together, this is most beneficial for problem solving and development amongst
employees.
 Employees now have the chance to learn technical skills from senior or more experienced
employees. Eg. (An HR generalist with 10 years’ experience can help develop a newly
graduated HR employee with 1 year experience.
  Then benefits of this:
 All departments would be efficient in problem solving since there are professionals making
decisions all the time. Decision making becomes centralised. (One department makes the
decision, there would be no conflict of interests.)
 Job rotation becomes much easier in times of absenteeism since everyone can do the job.
 Limits resource wastage, Mancosa uses many resources such as paper and internet, in this
structure each department is responsible for their own resources, this way resource wastage
it becomes easily identifiable.

Product departmentalisation

In this model all activities are grouped together in product sections, where all the specialists
associated with the product are grouped. So, for example, the specialists in marketing, financing and
personnel for the production of aircraft engines will be grouped together because their needs are
totally different from the marketing, financing, personnel and production needs for (FMCG) Fast
Moving Consumer Goods such as Coca-Cola.

Even with the brand itself, products can be broken further down according to departments. An
example of this can be seen in Coca- Cola, eg. Did you know that vitamin water is owned by coke,
vitamin water is portrayed as a health drink whereas coke is very unhealthy and just for the taste
buds, since these are two different brands the departments that run these brands may need to be
separated since they have different target markets and consumers and may need to employ
different types of specialists.

Another example is Nike. Its structure is based on its varied product lines, which include athletic and
dress/casual footwear, sports apparel and accessories, and performance equipment.

 Departments are designed so that all activities concerned with manufacturing of a product
are grouped together in product sections.
 Specialists are associated with each product department
 Note that each product department may have its own HR, finance and marketing
department

Advantages of Product Departmentalisation

 Suited to Fast changes in a product

  Fosters a concern for customer demand
 Develops managers who can think across functional lines
 Allows greater product viability

Disadvantages of Product Departmentalisation

 May not use skills and resources effectively

 Fosters politics in resource allocation
 Limits career mobility for personnel outside their product line
 Doesn’t foster co-ordination of activities across product lines
 Restricts problem-solving to a single product

You can link this to your company depending on the line of products your company offers. Retail,
clothing brands in particular can benefit from this. So when linking this up to your organisation you
can state that by separating products for the company it becomes more viable for consumers, in
other words customers have easy access to their favourite product, take for example Uzzi, Daniel
Hector and Truworths.

Another recommendation for this structure can be the advantage of product grouping, this increases
accountability for product performance, because all activities related to a specific product are under
the direction of a single manager. This makes:

 Performance appraisals much easier

 Companies can assess which product is generating highest profits
 Some products can be closed down or reinvented if it is under performing in the market
share environment.

Geographic Organisational Structures / Location departmentalisation

This is a logical structure for a business that manufactures and sells its goods in different geographic
regions, for example, all over the country as well as internationally. This structure gives autonomy to
area management, which is necessary to facilitate decentralised decision-making and to adjust to
local business environments.

Companies such as Unilever and Holiday Inn have set up regional and district offices. Multinational
firms often use this form of departmentalization to address cultural and legal differences in various
countries.
  Used in larger organisations, eg. Car manufacturers, Beverage companies

Advantages of Geographic Departmentalization

 Equipment used for products is all in one place, saving time and costs
 Managers know customer’s problems
 Managers develop expertise in solving problems unique to one location
 Method is suited to multinational companies
 Production might find it useful to locate near to suppliers/ raw materials

Disadvantages of Geographic Departmentalization

 All functions-accounting, purchasing, manufacturing, customer service- are duplicated at

each location, very costly
 May cause conflicts between each location’s goals and corporate goals.
 May require extensive rules and regulations to co-ordinate and ensure uniformity of quality
among locations (e.g. McDonald’s).

For instance, the organization structure of Coca-Cola reflects the company’s operations in two broad
geographic areas—the North American sector and the international sector (which includes the
Pacific Rim, the European Community, Northeast Europe and Africa, and Latin America).

Customer
departmentalis
ation

When an organisation splits up its organisation according to its customers, this is very close to the
Marketing Concept “The Customer is King”. In this way the organisation sends out the signal which
factor is most important? Product, Place or Customer and by structuring according to customers, the
company is adapting to their needs, which is the essence of good marketing.

 Is adopted where a business concentrates on some special segment of the market or group
of consumers, Used in insurance companies
 Not a popular structure
 Most companies use the product structure instead as it makes more sense
Advantages of Customer Departmentalization

 Allows greater customer focus

 Suited to understanding customer needs
 Clearly identifies key customers
 Develops managers who become customer advocates

Disadvantages of Customer Departmentalization

 Doesn’t foster co-ordination between customers

 Employees feel pressure from customers to give them privileges
 Fosters politics in resource allocation
 Restricts problem solving to a single type of customer

The particular type of customer an organization seeks to reach can also dictate employee grouping.
The sales activities in an office supply firm, for instance, can be divided into three departments that
serve retail, wholesale, and government customers. A large law office can segment its staff on the
basis of whether it serves corporate or individual clients. The assumption underlying customer
departmentalization is that customers in each department have a common set of problems and
needs that can best be met by specialists.

Note to students: be careful when using the next structures as they are not reflected in your
module guide and you could be marked down for an oversupply of content however these are
structures that are used in different industries and are valid.

Matrix organisational structure

 A matrix organizational structure is a company structure in which the reporting relationships

are set up as a grid, or matrix, rather than in the traditional hierarchy. In other words,
employees have dual reporting relationships - generally to both a functional manager and a
product manager.
 This structure is suited to complex projects
  Matrix structure could be permanent or used until the completion of a project
 It was developed in the U.S for aerospace projects, since astronauts are of few and limited,
they were broken up into different matrix structures and tasked with different projects and
always cut across lines to help.
 This Structure is used much in construction.

Advantages
 One of the biggest pros of using a matrix organizational structure is that it allows the sharing
of highly skilled resources between functional units and projects. Communications are open,
which helps knowledge move throughout the organization with less obstruction.
 This structure can serve as a great boon for employees who are looking to widen their
experience and skill sets. They can be part of many different aspects of various projects. It
puts them in an environment that facilitates learning and gives them an opportunity to grow
professionally.

Disadvantages

 There can be some confusion when a team member is subject to two managers. That can
also create unnecessary conflict. This is especially true if both managers have equal
authority.

 Then there is the functional manager and project manager. There can be some sparks flying
between these two managers in terms of what they believe to be the authority in the
organization. That confusion can show up with team members, too, if their roles and
responsibilities aren’t clearly defined.

 There can be a financial downside to that too. Having more people in managerial positions is
going to have an impact on the organization’s profit margins.

 Team members can feel the strain of working in a matrix organizational structure, in that
their workload can be heavy. Often, they’re tasked with their regular assignments and then
additional work, which can lead to burnout or some tasks being ignored.

Network departmentalisation

 The network structure is a newer type of organizational structure viewed as less

hierarchical (i.e., more "flat"), more decentralized, and more flexible than other structures.
In a network structure, managers coordinate and control relationships that are both internal
and external to the firm.

Basically there is not much structure!

  A network form of organization is concerned with collection of members that pursue
repeated, enduring exchange relations with one another and resolve disputes repeated,
enduring exchange relations with one another and resolve disputes that may arise ding the
exchange.
 It is also known as virtual or modular organization structure.
 The main objective of network structure is to eliminate unnecessary departments and to
perform specialized works through outsource experts. These works consist of marketing,
logistic, human resource management, technical support, accounting etc.
 In network form of organization there is a very small staff in head office to perform
administrative work. On the basis of necessity it manages temporary workers and
outsources basic support service to meet the demand of changing situation.

Advantages

Eliminate over departmentalisation

 One of the advantages of network organization is to eliminate over departmentalisation. The

management identifies its core competency, and then it outsources non critical tasks to
other organizations. Tasks are given to those institutions that have core competencies for
performing tasks on the basis of contract.

 It helps to minimize administrative cost of the organization.

 It is the flexible form of organization. The management can hire new employee’s whey they
have needed for specialized tasks. Similarly, non-critical tasks can outsource on agreement.
Disadvantages

 In network organization there is the possibility of conflict between management and work
assigned organization. The non-critical tasks are given to outside organization on the basis of
agreement. There is possibility of conflict due to many reasons such as not completion of
assigned task on specified time, deficiency in quality of work, lack of coordination, financial
aspects etc.

 It is difficult to maintain secrecy about the internal matters of the organization. The
management needs to work with other organization for non-critical performance.

 Network organization increases over dependency of the management on other organization.

It emphasizes on strategic alliance and outsourcing agreement for some of non-core
competency tasks. In such situation, management needs to depend on other organizations
for fulfilment of the needs of the customers.