Organizational Principles and Administrative Processes

Organizational Classifications

Relationships Between Firms

• Independent companies.
• Joint ventures.

Economic Criteria

• Amount of capital.
• Number of staff employed.
• Volume of sales.

Organizational Structures

Formal Organization

It is the structure that arises from the delegation of authority from one level to another.

Informal Organization

Administrative Functions

Management is the process of planning, organizing, directing, and controlling the activities of members of the organization and the employment of all other organizational resources, in order to achieve the targets set for the organization.

Administrative Process Interaction

1. Planning

Planning is a process to establish goals and an appropriate course of action for their attainment.

2. Organization

Organizing is the process of ordering and distributing work, authority, and resources among members of an organization, so that they can achieve the organization's goals.

The organizational design involves determining the structure of the organization that is best suited for its strategy, people, technology, and tasks.

The organizational structure defines how to divide, organize, and coordinate the activities of the organization.

3. Directing

Directing is a function that involves commanding, motivating subordinates, influencing individuals and teams as they conduct their work, choosing the best communication channel, and otherwise dealing with employee behavior.

4. Control

Controlling is a process to ensure that actual activities conform to planned activities.

The basic elements of this control function are:

• Establish performance standards.
• Measure current performance.
• Compare results with set standards.
• Take corrective action when deviations are detected.

Methodological Design Structure

1. Division of Labor and Specialization

This involves assigning specific tasks to members, for which they are trained and specialized to perform.

2. Chain of Command

Authority: This refers to the rights inherent in a managerial position that allow one to give orders to staff and expect them to obey.

Responsibility: The obligation to perform any task assigned.

Unity of Command: One of the principles of management that helps maintain the concept of a continuous line of authority, indicating that each person must report only to one superior.

3. Scope of Control

It refers to the extent of control a manager or employee has over units under their command.

Three main cases of scope of control: