Business Co-ordination (Flattened and Centric structures) : Business Co-ordination (Flattened and Centric structures) Dr. H. Kwame Afaglo
©2010
Business Co-ordination : Business Co-ordination The act of identifying, allocating and co-ordinating of resources (both materials and human) with evaluation as an integral function is defined as organising.
Identification process
Prior to managers appointing an individual into a role, he or she is first to design a job description that establishes the functions and its correlation into the
Business Co-ordination : Business Co-ordination entire organisational plan.
Job descriptions – are written documents that spells out the title and expectations or obligations of the job holder. Job holders must ensure they are aware of their duties right from their expression of interest or intent of joining the firm through submission of completed application forms.
Business Co-ordination : Business Co-ordination Managers design the job description along functional and reporting lines.
Functional lines of job description take into account the expectations of the employee and it indicates the human hours that goes into completion of task. All functions of each role must be clearly quantified in human hours. Such explicit expression of role and functions in
Business Co-ordination : Business Co-ordination human hours must go into completion of task, that fits into the organisational plan like a jig saw activity. Line managers or middle level management are expected to design work schedules based on functionality. With the quantification of role based on human hours, it ensures flexibility of work and increases job opening.
Business Co-ordination : Business Co-ordination Organisational structure and Control – As line of authority and unit of command is an integral part of organisational structure and has direct relation with co-ordination. Besides other established organogram, the author opts for the flattened organisational structure. The flattened organogram accommodates scientific management with optimisation
Business Co-ordination : Business Co-ordination of production and avoidance of waste as core practices. Prior to defining control under the flattened organisational structure, it is management’s role to identify which of its functions are core and auxiliary services. In other to attain optimised returns, it is recommended that auxiliary services are outsourced. The following industrial illustrations thus
Business Co-ordination : Business Co-ordination explain control and surplus returns from the flattened organogram.
Financial services
Core services include: Direct transactions (retail, corporate and investment)
Auxiliary services include: telephone services and internet banking, people and culture, book keeping, auditing and taxation, marketing and sales, Human Resource Department (HR Dept), Supply Chain Department, Debt Collection, Legal etc.
Business Co-ordination : Business Co-ordination Proposed Financial Services Pentagonal Organogram For Effective Control (Figure 1)
Customers
(Individuals and organisations) Direct transactions Book keeping Data Entering Internet banking HR Dept Supply Chain Dept Auditing and Taxation Marketing & Sales
Business Co-ordination : Business Co-ordination Keys
= stands for core service or activity
= could be core or auxiliary activity
= stands for auxiliary services or activity
= arrow indicates relation
The schematic representation as Figure 1 can be expanded to accommodate all departments based on the understanding of the differentiation of services. Activity Activity Activity
Business Co-ordination : Business Co-ordination Besides direct transactions as the core function of a financial institution, all other services are categorised as auxiliary and can easily, and must be outsourced or contracted to agents.
In other for the flattened organisation structure to be effective, control is highly dependent on integration of
Business Co-ordination : Business Co-ordination Management Information Systems. Computers, internet, intranet and decision making software are the tools for effective control and also are critical success factors of the organisation.
Internet serves as the vehicle for sourcing for prospective clients, suppliers and agents.
Business Co-ordination : Business Co-ordination Intranet is useful in keeping internal communication open and links staff, agents and outsourced organisations within the pentagonal loop.
Management Information Systems aid in decision making at various levels, be it strategic, tactical, or contingency.
Business Co-ordination : Business Co-ordination Job identification and allocation
Primarily, the pentagonal organogram for
financial institutions, makes it is relatively easy to allocate core jobs and ensure job share is in place based on defined job obligations for each role.
Business Co-ordination : Business Co-ordination Staffing
Secondly, the flattened pentagonal organogram unambiguously keeps management informed of the staff strength at each stage of growth. In other words, the number of staff needed for each defined role and the total number of efficient staff to be recruited, without wasting resources.
Business Co-ordination : Business Co-ordination Thirdly, the organisation maintains a thin staff and outsources all the auxiliary and support services (catering, security, cleaning, works etc).
Fourthly, the pentagonal structure of control ensures management operate with the focus of surplus in returns or profit.
Business Co-ordination : Business Co-ordination Management think simply as the formula below:
Returns = Production – Cost
Imperatively, if cost reduction is achieved by ensuring effective control;
Business Co-ordination : Business Co-ordination from outsourcing auxiliary services,
minimal staffing forming the core services,
while, implementing the use of decision making tools (MIS).
then, it is expected that returns will inevitably increase. Which is the expectations of shareholders and staff.
Business Co-ordination : Business Co-ordination Other organisational structures also have a direct relation with controlling activities.
Advantages of Flattened organogram with MIS as an integral component
Line of authority is co-operative - Here both staff and management share an open door policy with information sharing enhanced.
Business Co-ordination : Business Co-ordination Reduced interdepartmental conflict – Departments depend on each other in a relatively fluid manner, since most of the management staff or departmental heads and staff are all on the same floor and preferable houses in accessible cubicles.
Improves personal relationship building – It also improves interpersonal relation
Business Co-ordination : Business Co-ordination building between staff and management. Such firms, normally, call each other by names and not necessarily by titles. The phrase colleagues is entrenched and it replaces management and subordinate or senior staff and junior staff, or the ‘We’ versus ‘Them’ antagonistic attitude is minimised.
The use of the term ‘colleagues’ does not undermine respect among staff instead it
Business Co-ordination : Business Co-ordination challenges and opens the creative mental windows for the organisation to tap into them.
Opportunity for change and innovation – The liberal though co-operative nature of the flattened organogram tactically challenges the worker(s) and motivates them to give-off their best to the organisation. The latter sentence is
Business Co-ordination : Business Co-ordination the expected attitude of all organisations, since it leads to optimising production and attainment of organisational goals.
Beside financial services, production or manufacturing coordination based on the centric organogram is another illustration of control.
Business Co-ordination : Business Co-ordination Production
The core section are: production floor,
research and development departments, and total quality control.
Auxiliary services includes: finance, administration, human resources, training, and supply chain, cleaning, security, legal, call centre, data centre, etc.
As earlier indicated, organisations must do well to identify their auxiliary services
Business Co-ordination : Business Co-ordination and where applicable base on optimisation of human resources and positive returns, there must be outsource auxiliary services pulling from the globally specialisation market as source. When outsourcing auxiliary services, organisations must ensure the cost is matched with quality of services as ascribed by some global standards as: ISO 9000, American National Standards
Business Co-ordination : Business Co-ordination Institute (ANSI), etc. Some advanced developing economies have well established private firms that are specialised in auxiliary services as: India, China, Hong Kong, Morocco, Tunisia, Malaysia among others.
With the organisation handling the core section directly and auxiliary services
Business Co-ordination : Business Co-ordination remotely (contractually), control is relatively more effective, than directly handling all activities with it attendant regular trouble shooting activities.
As part of the control mechanism of the centric production or manufacturing organogram, periodic visit by way of evaluation or checks on outsourced firms
Business Co-ordination : Business Co-ordination is carried out. Periodic external checks of performance of outsourced activities globally, complements the internal checks, which invariably moves the firm (outsourcing organisation) a notch up in its control mechanism that favours it.
The scheme (figure 2) overleaf illustrates the centric production organogram.
Business Co-ordination : Business Co-ordination Centric Organogram For Manufacturing Or Production Oriented Forms (Figure 2)
Customer Production floor Research & Development Evaluation & Quality control Quality control & Evaluation Marketing & Sales H.R. Dept. Cleaning, security, etc Finance Dept Supply chain Legal
Business Co-ordination : Business Co-ordination Keys
= Core activity
= Auxiliary activity which is outsourced
= Quality control activity link with departments
= Link between auxiliary services and quality control of core services
= Approved link between outsourced organi- sations by outsourcing organisation Core Activity Outsourced activity Quality control & Evaluation
Business Co-ordination : Business Co-ordination The inner circle of figure 2 presents direct control with core activities that operate on functional lines. Also, there exist a continuous relationship between core activities as production or manufacturing and research and development based on quality control, monitoring and evaluation as the linkage activities. This process ensures effective internal control system.
Business Co-ordination : Business Co-ordination All outsourced services are auxiliary and the outsourcing organisation relies on agreement or contractual bases of control.
Here the relational is virtual and may be remote, hence management must ensure all outsourced auxiliary services are based on well crafted legal agreements and contract must capture all terms of reference including scenarios and cost ramifications in case of a fall out.
Business Co-ordination : Business Co-ordination Premium must be placed on the outsourced legal services in signing all agreements with other auxiliary services that are outsourced or contracted out. The relative strength of control between the outsourcing firm and the outsourced one is directly proportional to potency of the legally binding relationship.
Business Co-ordination : Business Co-ordination With flattened and centric organisational structure showing the way into the future, it is becoming inevitable for organisations not to operate virtually (online).
The online business growth is significantly on the ascendance in terms of positive returns as compared to physical based trading activities. Hence, organisations need to have their virtual brands as another source of returns.
Business Co-ordination : Business Co-ordination Thank you