Opportunities and threats are uncontrollable by management because they are external to the firm. Opportunities provide the firm the possibility of a major improvement. Threats may stand in the way of a firm reaching its mission and objectives.

Organizing

Organizing is establishing the internal organizational structure of the business. The focus is on division, coordination, and control of tasks and the flow of information within the organization. Managers distribute responsibility and authority to job holders in this function of management.

Organizational Structure

Each organization has an organizational structure. By action and/or inaction, managers structure businesses. Ideally, in developing an organizational structure and distributing authority, managers' decisions reflect the mission, objectives, goals and tactics that grew out of the planning function. Specifically, they decide:

1. Division of labor

2. Delegation of authority

3. Departmentation

4. Span of control

5. Coordination

Management must make these decisions in any organization that has more than two people. Small may not be simple.

Organizational structure is particularly important in family businesses where each family member has three hats (multiple roles): family, business and personal. Confusion among these hats complicates organizational structure decisions.

Division of Labor

Division of labor is captured in an organization chart, a pictorial representation of an organization's formal structure. An organization chart is concerned with relationships among tasks and the authority to do the tasks. Eight kinds of relationships can be captured in an organization chart:

1. The division/specialization of labor

2. Relative authority

3. Departmentation

4. Span of control

5. The levels of management

6. Coordination centers

7. Formal communication channels

8. Decision responsibility

To improve organizing managers should listen to the opinion of Bernard L. Erven. «Organization charts have important weaknesses that should be of concern to managers developing and using them:

1. They may imply a formality that doesn't exist.

2. They may be inconsistent with reality.

3. Their usual top down perspective often minimizes the role of customers, front-line managers and employees without management responsibilities.

4. They fail to capture the informal structure and informal communication.

5. They often imply that a pyramidal structure is the best or only way to organize.

6. They fail to address the potential power and authority of staff positions compared with line positions.» [1]

Delegation of Authority

Authority is legitimized power. Power is the ability to influence others. Delegation is distribution of authority. Delegation frees the manager from the tyranny of urgency. Delegation frees the manager to use his or her time on high priority activities. Note that delegation of authority does not free the manager from accountability for the actions and decisions of subordinates.

Delegation of authority is guided by several key principles and concepts:

Exception principle - Someone must be in charge. A person higher in the organization handles exceptions to the usual. The most exceptional, rare, or unusual decisions end up at the top management level because no one lower in the organization has the authority to handle them.

Scalar chain of command - The exception principle functions in concert with the concept of scalar chain of command - formal distribution of organizational authority is in a hierarchical fashion. The higher one is in an organization, the more authority one has.

Decentralization - Decisions are to be pushed down to the lowest feasible level in the organization. The organizational structure goal is to have working managers rather than managed workers.

Parity principle - Delegated authority must equal responsibility. With responsibility for a job must go the authority to accomplish the job.

Span of control - The span of control is the number of people a manager supervises. The typical guideline is a span of control of no more than 5-6 people. However, a larger span of control is possible depending on the complexity, variety and proximity of jobs.

Unity principle - Ideally, no one in an organization reports to more than one supervisor. Employees should not have to decide which of their supervisors to make unhappy because of the impossibility of following all the instructions given them.

Line and staff authority - Line authority is authority within an organization's or unit's chain of command. Staff authority is advisory to line authority. Assume a crew leader reports to the garden store manager who in turn reports to the president. Further assume that the crew leader and store manager can hire and fire, and give raises to the people they supervise. Both the crew leader and store manager have line authority. To contrast, assume that the president has an accountant who prepares monthly financial summaries with recommendations for corrective action. The accountant has staff authority but not line authority.

«Departmentation is the grouping of jobs under the authority of a single manager, according to some rational basis, for the purposes of planning, coordination and control. The number of departments in an organization depends on the number of different jobs, i.e., the size and complexity of the business». [3]

Directing

Directing is influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives.

Managers give this function a variety of names. Higgins calls it leading. Other labels are: influencing, coaching, motivating, interpersonal relations, and human relations.

The directing function gives the manager an active rather than a passive role in employee performance, conduct and accomplishments. Managers accomplish their objectives through people. In blaming others for her or his human resource problems, a manager is denying the management responsibilities inherent in the directing function.

The directing function gives managers a second responsibility: helping people in the organization accomplish their individual career goals. Organizations do not succeed while their people are failing. Helping people in the organization with career planning and professional development is an integral part of the directing function.

Motivation

Selection, training, evaluation and discipline cannot guarantee a high level of employee performance. Motivation, the inner force that directs employee behavior, also plays an important role. Highly motivated people perform better than unmotivated people. Motivation covers up ability and skill deficiencies in employees. Such truisms about motivation leave employers wanting to be surrounded by highly motivated people but unequipped to motivate their employees. Employers and supervisors want easily applied motivation models but such models are unavailable.

Three ways of looking at motivation are: needs, rewards and effort. The needs approach stems from the notion that peoples' unsatisfied needs drive their behavior. Figure out a person's needs, satisfy the needs and the person will be motivated. For example, a person with a high need to satisfy goals is motivated by production targets. The rewards approach is based on the expectation that rewarded behavior is repeated. Giving a person a bonus for excellent performance during a difficult harvest period encourages the person to make a special effort during the next difficult harvest. The effort approach to motivation is based on the expectation that effort brings the worker what he or she wants. The thought that working hard leads to advancement and new career opportunities is consistent with the effort approach. The effort approach includes a presumption that the employer is fair, i.e., effort is recognized and rewarded. Managers cannot reduce motivation to a simple choice of one of these approaches. Each of the three approaches contributes to an understanding of motivation and how motivation varies person to person and over time.

«The most effective motivation for employees comes from within each employee, i.e., self-motivation. Possible indicators of self-motivation include: past accomplishments in school, sports, organizations and work; stated career goals and other kinds of goals; expertise in one or more areas that shows evidence of craftsmanship, pride in knowledge and abilities, and self-confidence; an evident desire to continue to learn; and a general enthusiasm for life.» [2]

Communication Model

The process starts with a sender who has a message for a receiver. Two or more people are always involved in communication. The sender has the responsibility for the message.

The sender's message travels to the receiver through one or more channels chosen by the sender. The channels may be verbal or nonverbal. They may involve only one of the senses, hearing for example, or they may involve all five of the senses: hearing, sight, touch, smell, and taste. Nonverbal communication, popularly referred to as body language, relies primarily on seeing rather than hearing.

The sending of a message by an appropriate channel to a receiver appears to have completed the communication process or at least the sender's responsibility. Not so! After sending the message, the sender becomes a receiver and the receiver becomes a sender through the process of feedback. Feedback is the receiver's response to the attempt by the sender to send the message. Feedback is the key to determination by the sender of whether or not the message has been received in the intended form. Feedback involves choice of channel by the receiver of the original message. The channel for feedback may be quite different from the original channel chosen by the sender. A puzzled look may be the feedback to what the sender considered a perfectly clear oral instruction.

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