Organizing, Directing and Controlling

the Small Business

JESSA BASADRE & LOREN RANQUE
 CONTENTS
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Organizing the Small Business
ORGANIZING
the means by which management blends human and
nonhuman resources through the design of a format structure of
tasks and authority. the objective of this function is to produce as
organizational structure for the firm which indicates who performs
which task and who supervises whom.
The Appropriate Organizational Structure
 Every enterprise has its own objective, so an appropriate
organizational structure must be adopted by each. The type of
organization which has to be considered will depend on how many
persons are needed to assist in accomplishing the firm.
The Owner's Concern in the
Organizational Structure
 In designing the firm's organizatinal
structure, the owner needs to
consider the following:

1. activities necessary to reach

the goals must be identified;

2. an analysis of the jobs to be

performed must be made; and

3. the placement of people with

the interest and qualification in
performing the jobs.

SPECIALIZATION
the first task of the owner is to
determine the total function of the
organization. then he divides the
total worl into small, specialized
tasks and assigns employees to
specifi tasks.
DEPARTMENTALIZATION
jobs are grouped together into
working units. the units formed are
called, departments, units, groups
or divisions, it may be organized
according to function.
DELEGATION OF
AUTHORITY
when an organization grows beyond
phase one (the one-man
organization) some of the tasks will
have to be assigned to subordination
who will be delegated with
commensurate authorities.
SPAN OF MANAGEMENT
the small business operator must consider the
number of subordinates reporting to a supervisor or
to himself. narrowing the span, however, will mean
hiring more supervisors and this will increase
overheas cost.

HEIRARCHY OF OBJECTIVES
an entrepreneurial venture is expected to achieve
certain objective which most often related to
realization of profits. this is made possible through
the achievement of subordinate objectives. in turn,
these subordinate objectives will be possible if lower
level objectives are achieved.

DEGREE OF CENTRALIZATION
authority is often required to be delegated to lower
level units if work is expected to be accomplished.
however, in many cases, managemnet has to
decide on whether authority would be centralized
or decentralized
Adapting a Small Business
Organizational Structure
 COMMITTEE ORGANIZATION
a formal organization group created
FUNCTIONAL TYPE to carry out a specific organizational
task. Group of individuals vested
there are a number of functional with authority and responsibilty and
FORMAL
specialists supervising the activities performs a specific task
ORGANIZATION
of a single subordinate. authority is
relationships, channels of vested on qualified managers to
communication, and provide expertise to each
responsibilities resulting from specialized functions
the delegation of authority
from one level of organization
to another. LINE AND STAFF
characterized by line functions directly
responsible for the achievement of
organizational objectives. Fuses the
advantages of the line type and the
LINE TYPE functional type
based on the direct flow of authority from
the chief executives to subordinates. The
manager of eaach unit can make decisions
quickly based on a clear chain of command.
 【 INFORMAL
ORGANIZATION 】
The performance of individual employee depends
on how successful management is in motivating work
groups that are formally vested with authority. In many
ways, however, employee performance is affected either
positively or negatively by the influence of group not
fornally sanctioned by the firm.
 【 Importance of Organizational
1. its simplicity is conducive Structure 】 in operations.
to an immediate start-up
2. it is a good mechanism for the more sophisticated organizational structures.
3. it is adaptable to small-scale operations as all employess will be fully
occupied with work.

As the organization grows, however, the nedd for specialists is felt,and as

affordability is increased, they are hired. The small business may finally adapt
the line and staff structure becomes bigger and more stable.
 【 Directing the Small Business 】
Directing refers to guiding and motivating employess to accomplish
organizational objectives.
The small business operator needs to use the following skills that are required
for effective directing:

1. communicating with subordinates,

2. counseling,
3. motivating, and
4. disciplining.
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