Organization of the firm

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History of organization
Company efficiency: everything is about evolution and development.
What is organization?
• 17th century: mercantilism
• 18th century: start of manufacturing, Adam Smith (1776 research on nature and causes of wealth of the nation). Adam Smith: essential tenants of capitalism.
• 20th century: Henry Fayol (rationalization of models of structures of authorities), F.Taylor(rationalization of production model).

Different types of organizations
• Non commercial organizations
• Liberal professions
• Specific status professions (insurance agents…)
• Public officers (bayliffs: notaires)
• Public and private non lucrative organizations
• Public organizations
Public services are in general under public power and have to assure security or non lucrativeeconomical needs.
Public organizations have to have the service activity, a big size and structure, be controlled by a supervision organism such as state, or national institution.
Third sector organizations: organized, private, no distribution of benefits, autonomous, volunteer.
Associations, unions (syndicats), federations, foundations, NGA’s.

The classical analysis of organizations
20th centuryHenry Fayol 1842 – 1926
3 main points in his theory
• The authority which commands has always to be present or represented.
• The administrative capacity is growing when climbing in the hierarchy.
14 major principles of organizations
• Work division: produce more and better with the same effort. It applies not only to technical activities but to all collective works.
• The principle ofauthority. The people who give orders have not only the right to give orders but have as well to take responsibility for it.
• Discipline: people have had to obey to be in time, to have a good activity, to have tenue and to have respect according to the conventions established between the company and its agents.
• Command unit: each employee has only one boss, but to some other possibilities existsas long as it is efficient.
• The unit of management: one boss only and only one program for all operations which have the main target.
• General interest has still to be more powerful than individual one.
• The remuneration has to be proportional to the efforts.
• Centralization is essential: however any other is possible as long as it is efficient.
• Hierarchy has to be clear and informationcentralized.
• Order has to be clear, one place for everything in its place, one place for every person and every person in his place.
• Equity: according to established rules with a good sense and good will according to experience.
• Stability of personnel: conditions efficiency of the training which is long and because you have to wait a long time before planning an action and a program asyou have to take confidence and inspire confidence with the others.
• Initiative which is the liberty to propose and deliver. Initiative of all added to the one of the boss is a major strengths for the company.
• Union of the personnel which means harmony of the relationships. However written communication may be a source of conflicts and of costs.

There are always 6 groups of activities /functions
• Technical
Production and transformation
• Financial
Research and management of money
• Buy and sell
• Security
Protection of goods and persons
• Accountancy
Inventory costs statistics and balance sheet
• Administrative Forecast: look at future and prepare an action plan.
Administrative organize: Both material and social of the company.
Administrative command: topersonnel
Administrative coordinate: unit and harmonize all actions and efforts.
Administrative control: check that everybody is in accordance with the rules and orders given.

Frederick Taylor 1856 – 1915
Engineer by evening courses after having health problems M. Freud, are you there?
Here is at the origin of scientific organization of work.
‘The objective of management is to assure a...
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