EVANGELINE TAROMA

BSAT – lll / BOM

I. Introduction of Business Organization and Management

Organization is two or more people work together in a structured way to achieve a specific goal or set of
goals. Organization is the foundation upon which the whole structure of management is built.
Organization is related with developing a frame work where the total work is divided into manageable
components in order to facilitate the achievement of objectives or goals. Thus, organization is the
structure or mechanism (machinery) that enables living things to work together. In a static sense, an
organization is a structure or machinery manned by group of individuals who are working together
towards a common goal.

Goal: the purpose that an organizational strives to achieve: or organizations often have more than one
goal; goals are fundamental elements of organizations.

Alike ‘management’, the term ‘organization’ has also been used in a number of ways. Broadly speaking,
the term ‘organization’ is used in four different senses: as a process, as a structure of relationship, as a
group of persons and as a system, as given below:

Organization as a Process: Organization is treated as a dynamic process and a managerial activity which
is essential for planning the utilization of company’s resources, plant an equipment materials, money
and people to accomplish the various objectives.

Organization as a Framework of Relationship: It refers to the structure of relationships and among

position jobs which is created to release certain objectives. The definitions of Henry, Urwick, Farland,
Northcourt, Lansburgh and Spriegel Breach, Davis, Mooney and Reily etc., come under this group. For
example: According to Mooney and Reily, “Organization is the form of every human association for the
attainment of a common purpose.”

Organization as a Group of persons: It is very often viewed as a group of persons contributing their
efforts towards certain goals. Organization begins when people combine their efforts for some common
purpose. It is a universal truth that an individual is unable ability and resources. Barnard has defined
‘Organization’ as an identifiable group of people contributing their efforts towards the attainment of
goals.

Organization as a System: The organization is viewed as system. System concepts recognize that
organizations are made up of components each of which has unique properties, capabilities and mutual
relationship. The constituent element of a system are linked together in such complex ways that actions
taken by one producer have far reaching effect on others.

In short, organizing is the determining, grouping and arranging of the various activities deemed
necessary for the attainment of the objectives, the assigning of people to those activities, the providing
of suitable physical factors of environment and the indicating of the relative authority delegated to each
individual charged with the execution of each respective activity.
While, on the other hand, Management: is the process of planning, organizing, leading and controlling
the work of organization members and using all available organization resources to reach stated
organizational goals. Management can be defined as the process of organizing, planning, applying and
sustaining resources by the human, natural, technical and economic, for the achievement of stated
organizational goals. Simply put, management is about integrating and directing human and natural
resources, equipment’s and more, coordinating their functions and processes to arrive at stated targets.

It is about putting everything needed together in the most skillful and cost effective combination to
meet the organizations’ targets. Another definition of management, this one by a management expert,
Mr. Peter Drucker, states that management is about the arrangement and alignment of the activities of
an enterprise in accordance with certain policies and for the achievement of clearly defined objectives.

Management is often included as a factor of production along with machines, materials and money. The
basic task of management is twofold creation and marketing. Generally both managers and directors
take the responsibility for leadership and power in making decisions and managing enterprises when
vested with the authority by the organizations’ shareholders.

Organizations have grown into mind boggling sizes today, operating in multiple continents and
employing millions of people, nevertheless all these processes and persons must work towards a unified
goal. Management is about coordinating these diverse processes, usually divided into departments such
as the technical, financial, sales and security departments of the single being, the organization.

II. Characteristic of Business Organization and Management

• Characteristics of Business Organization

From the study of the various definitions given by different management experts, we get the following
information about the characteristics or nature of organization:

(1) Division of Work

Division of work is the basis of an organization. In other words, there can be no organization without
division of work. Under division of work, the entire work of business is divided into many departments.
The work of every department is further subdivided into sub works.

(2) Coordination

Under org anization different persons are assigned different works but the aim of all these persons
happens to be the same the attainment of the objectives of the enterprise. Organization ensures that
the work of all the persons depends on each other’s work even though it happens to be different.
Hence, it helps in establishing coordination.

(3) Plurality of Persons

Organization is a group of many persons who assemble to fulfill a common purpose. An individual
cannot create an organization.

(4) Common Objectives

There are various parts of an organization with different functions to perform but all move in the
direction of achieving a general objective.

(5) Organization is a Machine of Management

Organization is considered to be a machine of management. It is that machine in which no part can

afford to be ill- fitting or non-functional. In other words, if the division of work is not done properly or
posts are not created correctly the whole system of management collapses.

• Characteristics of Business Management

1. Management is an on-going activity primarily concerned with the most efficient employment of
resources to produce results. If it is to stand any chance at accomplishing objectives, organizations must
apply the basic principles of having a goal, developing an organizational structure and having firm
control of all its resources, effectively combining them to achieve the set goals.

This is the function of management, given the nature of business as an on-going activity, management
too never ceases, continually directing and combining men, processes and materials to create products
and meet targets.

2. Management is ‘an unseen hand that guides an organization towards its targets’. The duty of
management is to co-ordinate and controls the activities of sometimes large numbers of people.
Ultimately, the result of management’s tireless efforts reflects in the effectiveness or otherwise of the
people and resources put to use. Management acts as a force that coordinates and brings order to the
combination of man, resource and materials, skillfully directing like a rider on a horse, the organization
to goals.

3. Given this unique task of management, it combines knowledge from several fields to effectively
assert control and order in any organization. Managers need a wide range of skills to carry out their
duties, such as knowledge in the resources and materials used by the organization to ensure their most
productive dispensation, knowledge of the nature of the human psychology, ways to motivate and
direct workers to ensure their most effective output and knowledge of machines and processes to
determine the most cost effective and ideal way to produce. Thus, management is a combination of
knowledge from different areas, skillfully blended and tailored to fit the specific needs of any
organization.

4. Management is universal. No matter the company, line of business or size, every organization
requires some form of management, to coordinate activities, combine and transform materials into
products and meet targets. This makes management perhaps the most important part of any
organization. At every level and in every line of business management is essential to ensure a maximum
return on investments and productivity.

5. Management is aimed at an objective. As every organization has targets, both immediate and long
term, management is about stimulating resources; human and materials, into the most effective
processes and direction that will ultimately lead an organization to its goals.

6. In the past, due to the size and resulting relative simplicity of businesses, owners acted as managers
for their establishments. Today, businesses can grow into elephantine sizes and owned by a lots of
people in different places (shareholders).

Directing and co-coordinating the processes and activities of the large amounts of people needed to
effectively run such businesses, is impossible for any individual. So most organizations are split into
departments, with a different manager as the head of each department, specifically responsible for the
needs and processes of the individual department, but liaising and working with other departments to
create products and forward processes.

Businesses are about processes, the most effective combination of which defines the health or
otherwise of the venture, management is at the heart of business for this reason. The purpose of
management is to realize, enact and control processes in the most efficient and productive combination
of man, machine an materials to create products, satisfy customers, make profits and meet
organizational objectives.

III. Importance of Business Organization and Management

1. Living in the present - organization contributes to the present standards of living of people
worldwide. We rely on organizations daily for food, shelter, clothing, medical care, business
communications and employment.
2. Building the future – organization build toward a desirable future and help individuals do the
same. new products and practices are developed as a result of the crative that can emerge when
people work together in the organizations. The impact –positive and negative – on the future
business environment.
3. Remembering the past – organization and management help connect people to their pasts. We
can be thoughts of as patterns of human relationships. Every day that people work with others
add to the history and to the business company history.

“Some underestimate the importance of management in business but the latest researches have shown
that it is certainly not the case. The input of the labor, capital and raw materials can never become
production without the catalyst of management. ”

A business cannot survive without management because management is its means of support.
Management is concerned with acquiring maximum prosperity with minimum efforts. Management is
essential wherever group efforts are required to be directed towards achievements of common goals.
In this management conscious age, the significance of management can hardly be over emphasized. It is
said that anything minus management amounts to nothing. There is no more important area of human
activity than management since its task is that of getting things done through others.

Some underestimate the importance of management in business but the latest researches have shown
that it is certainly not the case. The input of the labor, capital and raw materials can never become
production without the catalyst of management. Management is a dynamic life-giving element in an
organization. In its absence, the resources of production remain underutilized and can never become
production. In fact, without efficient management, no country can become a nation.

Business is basically a group activity and management plays an important role in making it more
effective. The group as a whole cannot realize its objectives unless and until there is mutual cooperation
and coordination among the members of the groups.

Management creates teamwork and team spirit in an organization by developing a sound organizational
structure. It brings the human and material resources together and motivates the people for the
achievement of goals.

The available resources of production are put to use in such a way that all sort of wastages and
inefficiencies are reduced to a minimum. If the managers in any business are not considerate and good
at their job, nothing worthwhile can be expected of the subordinates. The motivation level of the
employees is directly related to good management. Management creates and maintains an environment
conducive to higher efficiency and performance.

A business enterprise operates in a constantly changing environment. Changes in the business

environment create risk and also provide opportunities for growth. A conducive and encouraging
environment is indispensable for any business and sound management makes it possible easily.