DE LA ENTREVISTA A DIRECTIVOS

Generally, the design of a new organization is simple. Initially, the entrepreneur may find that he or she performs all the functions of the organization alone. Regardless of whether there is one or more individuals involved in the start-up, as the workload increases, the organizational structure will need to expand to include additional employees with defined roles in the organization.

Effective interviewing and hiring procedures will need to be implemented to ensure that new employees will effectively grow and mature with the new venture. A job analysis that may be included in the initial business plan is discussed below.

Regardless of the number of actual personnel involved in running the venture, the organization must identify the major activities required to operate it effectively. The design of the organization will be entrepreneur’s formal and explicit indication to the members of the organization as to what is expected of them.

Generally these expectations can be grouped into the following five areas.

1. Planning, measurement, and evaluation schemes: All organization activities should reflect the goals and objectives that underlie the venture’s existence.

The entrepreneur must spell out how these goals will be achieved (plans), how they will be measured, and how they will be evaluated.

2. Rewards Members of an organization will require rewards in the form of promotions, bonus, praise, and so on. The entrepreneur or other key managers will need to be responsible for these rewards.

3. Selection criteria: The entrepreneur will need to determine a set of guidelines for selecting individuals for each position.

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4. Training: Training on or off the job, must be specified. This training may be in the form of formal education or learning skills.

5. The organization’s design can be very simple – that is, one in which the entrepreneur performs all the tasks (usually indicative of start-up) – or more complex, in which other employees are hired to perform specific tasks. As the organization becomes larger and more complex, the preceding areas of expectation become more relevant and necessary.

In the initial stage (or stage one), the new venture is operated by basically one person, the entrepreneur. This organizational chart reflects the activities of the firm in production, marketing/sales, and administration. Initially, the entrepreneur may manage all these functions. At this stage, there is no need for sub-managers; the owner deals with everyone involved in all aspects of the operation. In this example, the owner manages production, which may be administrative tasks such as bookkeeping, purchasing, and shipping. Planning, measurement and evaluation, rewards selection criteria, and training would not yet be critical in the organization.

As the business grows and expands, the operations may be more appropriately described by stage two. Here, sub-managers are employed to coordinate, organize, and control various aspects of the business. The marketing manager develops promotion and advertising strategy and coordinates the efforts of the expanding rep organization. The administrative manager then assumes the responsibility for all administrative tasks in the business operation. Here the elements of measurement, evaluation, rewards, selection, and training become apparent.

The next stage which is the third stage exists when the firm achieves a much larger size in terms of operations and strength of employees. The operational activities below each manager in stage two would then be represented by a third level of management such as the managers for quality control, assembly, sales, promotion and advertising, finance and accounting, purchasing, etc.

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As the organization expands, the manager or entrepreneur’s decision roles also become critical for an effective organization. As entrepreneur, the manager’s primary concern is to adapt to changes in environment and seek new ideas.

When a new idea is found, the entrepreneur will need to initiate development either under his or her own supervision (stage one figure 7.1) or by delegating the responsibility to someone else in the organization (stage two in figure 7.2).

Figure 7.1:

Stage 1

Figure 7.2:

Stage 2

In addition to the role of adaptor, the manager will also need to respond to pressures such as an unsatisfied customer, a supplier reneging on a contract, or a key employee threatening to quit. Much of the entrepreneur’s time in the start-up will be used in contending with emerging operational issues.

Owner

Production Marketing/sales Administration

Quality Control

Owner

Production Manager

Marketing Manager

Administrative Manager

Assembly Sales Promotion/

Advertising

Finance/

Accounting

Purchasing

Shipping/

Receiving

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There is yet another role for the entrepreneur which is that of allocation of resources. The manager must decide who gets what. This involves the delegation of budgets and responsibilities. You should note that one decision in business can significantly affect other decisions.

The final decision role of the manager is that of negotiation. These are negotiation of contracts, salaries, and prices of raw materials, among others. All these are an integral part of the manager’s job and since he or she can be the only person with appropriate authority, it is an essential aspect of decision making.

Self Assessment Exercise 1:

Discuss the expectations of employees from organizational design.