Business Organizations

Partnership

Partnership is the relation between persons who have agreed to share the profits of the business carried on by all or any of them acting for all

Features Of Partnership

a) NUMBERS OF PARTNERS

Maximum of 2 members ordinary business have 20 and for bank it is 10.

b) BUSINESS

Any business can be started but it should be legal one.

c) TO RUN THE BUSINESS

Can run them or can keep agent

d) Division of profit

e) Unlimited liability

f) Legal entity

g) TRANSFER OF RIGHTS

Partners cannot transfer his share without concerning the partner.

Free from restriction of audit.

h) PAYMENT OF TAX

Every partner has to pay his own tax.

i) LACK OF CONTINUITY

MERITS OF PARTNER SHIP

1. Easy formation

2. Large financial resources as compared to sole trades

3. Better management ability

4. Flexible organization can change any strategy or policy.

5. Ease of raising loan

6. Personal interest

7. Mutual consultation

9. Protection of minorities

10. Employer and employee relationship

DEMERITS OF PARTNER SHIP

1. Unlimited liabilities

2. Limited capital

3. Transfers of rights

4. Lack of confidence as no audit, people do not trust

5. Instability

6. Delay in decision

7. Possibility of disagreement

8. Undeserving employees, including of relations

9. Negligence: every partner runs where he gets more profits

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Functions of Conflict Within an Organisational Structure

a) Conflict generates new values, norms, and subsystems within an organisation.
b) Conflict within bureaucratic structures provides the means for growing ritualism and stagnation that could threaten such structures.
c) Conflict could attack and overcome the resistance towards change and innovation, but may be a threat for people managing the organization.
d) Conflict has personal or social value within an organization. Interest and curiosity are stimulated, problems could be aired and timeous solutions arrived at. Suppressing or disregarding conflict within an organization could easily lead to an intensification of a more pronounced type of conflict.

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What are the positive effects of conflict?

There are Stages of Conflict Development in dealing with and facing conflict. Conflict does not appear suddenly. As tension builds up, the signs and essence of conflict pass through a series of progressive stages.

  1. Latent conflict. At this stage, the basic conditions for potential conflict exist.
  2. Perceived conflict. One or both parties recognize the cause of conflict.
  3. Tangible conflict. Strain and tension is beginning to build up between the parties, although there are no real signs of mental or physical  struggle.
  4. Manifest conflict. The struggle is beginning to manifest and non-participants become aware of perceptible signs of conflict between the participating parties.
  5. Aftermath of conflict. The conflict has been ended by either resolution or suppression. This could lead to greater understanding or coöperation among the participants, or to an even more intense and prolonged conflict than the first one.

Possible Effects of Conflict.

The negative effects of conflict could be that:

a) Productivity of the movement may suffer
b) A loser may resign or work with  minimum allowable efficiency
c) Other staff members may choose sides
d) An essential feeling of belonging could be irreparably damaged
e) Manner in which we approach interpersonal conflict
f) Larger problems and deeper personal resentments may occur

The positive effects of conflict could be that:

a) It is an educational experience for participants to know and understand the other party’s functions and problems.
b) It may lead to energizing people
c) Helps towards better understanding and better channels of communication
d) The air is cleared since conflict is a safety valve for pent-up tensions which could otherwise cause explosive damage.
e) The necessary changes in an organizational system may be discovered and implemented.
f) Promotes growth in a relationship
g) Allow for healthy release of feelings
h) Increases motivation and self-esteem

 

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Centralization vs decentralization

Centralization

Where all office procedures are done at one central point within the organization

Central office functions
Manager is responsible for
1. Planning of clerical activities
2. General office services
3. Maintenance and replacement of office equipment and machinery



Advantages

1. Specialized services
2. Economical use of expensive machinery and equipment
3. Less backlog of work
4. Possible personal contact and easier consultation and communication

Disadvantages

  1. office systems may not be suitable to all departments
  2. Monotonous work – boring
  3. Rigid / inflexible office procedures
  4. Increase in paperwork and form filing

Decentralization

• Localized activities and operation
• Suitable if geographical distance from centre is great

Advantages
• Work done and decision made more practical
• Better service
• Promptness in delivery

Disadvantages
• Duplication of services/duties
• Extra information processing

Structure of a typical office

Internal structure of an organization depends very much on:-
1. Size of the enterprise
2. Nature and type of business
3. Number of employees
4. Involvement in import and export

An organisation chart

• A diagram of the formal relationships and communication flow between positions within an organisation
• Shows names of personnel
• Line /chain of command
• Level of authority/responsibility
• Supervisory structure
• Communication lines

Knowing who and where personnel are allows:-

• Better communication
• Accuracy in delivering messages, telephone call, instructions etc
• Effective handling of queries

• An organisation is always subdivided into different units or departments to provide specialised services.

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Organization Structure

QUICKSTART FLOW CHART MAKERMeans bringing people and resources together to achieve a common objective. An organizational structure identifies the different functions in an organization and sets out the power structure. This can be represented in an organizational chart.

The simplest organizational chart is the functional structure, which divides a business according to management functions at senior, middle management and junior levels.

There are three layers of management in this chart: top, middle, and junior management.

  • It indicates where authority and responsibility have been delegated.
  • It illustrates the chain of command, i.e., who is answerable to whom.
  • It shows the managing director’s span of control (the number of people reporting directly to a manager).
Other relevant organisation structures that exist are
a)   Line and staff structure
b)   Matrix structure
c)    Shamrock structure
De-layering the organisation refers to the reduction in the number of layers in the management structure of the organisation. 
           This process has the following advantages:
  • It simplifies the structure.
  • It increases the speed and accuracy of internal communication, which means the organisation can respond more rapidly to change.
  • De-layering gives more power to subordinates. This increase in responsibility can release creativity and initiative.
  • It reduces the total wage bill paid to managers.
The disadvantages of de-layering are:
  • Senior managers have to deal with a wider span of control and an increased workload. This may cause stress.
  • Managers’ jobs may be lost through redundancies and this may lead to industrial relations problems.
  • Control becomes more difficult as the span of control increase.

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Organization Structure

QUICKSTART FLOW CHART MAKERMeans bringing people and resources together to achieve a common objective. An organizational structure identifies the different functions in an organization and sets out the power structure. This can be represented in an organizational chart.

The simplest organizational chart is the functional structure, which divides a business according to management functions at senior, middle management and junior levels.

There are three layers of management in this chart: top, middle, and junior management.

  • It indicates where authority and responsibility have been delegated.
  • It illustrates the chain of command, i.e., who is answerable to whom.
  • It shows the managing director’s span of control (the number of people reporting directly to a manager).
Other relevant organisation structures that exist are
a)   Line and staff structure
b)   Matrix structure
c)    Shamrock structure
De-layering the organisation refers to the reduction in the number of layers in the management structure of the organisation. 
           This process has the following advantages:
  • It simplifies the structure.
  • It increases the speed and accuracy of internal communication, which means the organisation can respond more rapidly to change.
  • De-layering gives more power to subordinates. This increase in responsibility can release creativity and initiative.
  • It reduces the total wage bill paid to managers.
The disadvantages of de-layering are:
  • Senior managers have to deal with a wider span of control and an increased workload. This may cause stress.
  • Managers’ jobs may be lost through redundancies and this may lead to industrial relations problems.
  • Control becomes more difficult as the span of control increase.

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Allocating roles and diversity

Size of teams:- Ideally a team should have seven to nine people. Generally speaking, the most effective teams have fewer then 10 people. minimum four to five members may be necessary to develop diversity of views and skills. When teams have excess members, cohesiveness and mutual accountability declines, social loafing increases and more and more people do less, talking more with others.
Member flexibility:- Teams made up of flexible individuals have members who can complete each others tasks. This makes it less reliant on any single member.
Member preference:– Not every employee is a team player. When people who would prefer to work alone are required to team-up, there is a direct threat to the team’s moral and to individual member satisfaction. Hence when selecting team members individual preferences should be considered.
Context:- Four contextual factors that appear to be most significantly related to team performance are the presence of adequate resources; effective leadership, a climate of trust end a performance and reward system that reflects team contribution.

Process:– The final category related to effectiveness is process variables. These include member commitment to a common purpose, establishment of special team goal, team efficacy, a managed level of conflict and minimizing social loading.

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Nine potential team roles

Nine potential team roles have been identified. These are:-

  1. Organizer(Provides structure)
  2. Producer(Provide direction and follow through)
  3. Controller(Examines details and enforce rules)
  4. Maintainer(Fights external batter)
  5. Advisor(Encourages the search for more information)
  6. Linker(Coordinates and integrates)
  7. Creator (Initiates creative ideas)
  8. Promoter (Champions ideas after they are initiated)
  9. Assessor (offers insightful analysis of options)

Successful work teams have people to fill all these roles and have selected people to play in these roles based on their skills and preferences.

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The key components making up effective teams

The key components making up effective teams can be subsumed into four general categories:-

  1. Work design:- Effective teams need to work together and take collective responsibility to complete significant tasks. The work design category includes variables lake freedom and autonomy, the opportunity to use different skills and talents, the ability to complete a whole and identifiable task or product and working on a task or project that has a substantial impact on others.
  2. Composition:- This category includes variables that related to how teams should be staffed. It includes the ability and personality of team members, allocating roles and diversity, size of the team, member’s flexibility and member’s preference for team work.
  3. Ability of members:- To perform effectively, a team requires three different types of skills. First it need people with technical skills, second, people with problem solving and decision making skills and finally people with good listening, feedback conflict resolution and other interpersonal skills.
  4. Personality:- Personality of members has a significant influence on the individual employee behavior. This can also be extended to team behavior. Hence, five basic dimensions i.e. extroversion, agreeableness, conscientiousness; emotional stability and openness to experience are relevant for the success of a work team.

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Four most common types of work teams found in the organization

  1. Problems Solving Teams:- Groups of 5 to 12 employees from the same department who meet for few hours each week to discuss ways of improving quality, efficiency and the work environment. Rarely, however, are these teams given the authority to unilaterally implement any of their suggested actions.
  1. Self Managed work teams:- Are group of employees 10 to 15 who performs highly related or interdependent jobs and take on many of the responsibilities of their former supervisors. Typically this includes planning and scheduling of work, assigning tasks to members, taking action on problems, and working with suppliers and customers. Fully self-managed work teams even select their own members and have the members evaluate each others performances. As a result, supervisory positions take on decreased importance and many even be eliminated.
  1. Cross functional teams:- Employees from about the same hierarchical level but from different work areas who come together to accomplish a task.
  1. Virtual teams:- Teams that use computers to tie together physically dispersed members in order to achieve a common goal.

Three primary factors that differentiate virtual teams from face to face teams are

    1. The absence of preverbal and non verbal cues.
    2. Limited social context
    3. The ability to overcome time and space constrains.

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