Strategic Planning, Ethics, and Organizational Design
Strategic Planning
Strategic planning is a systematic process of evaluating the nature of a business, defining long-term goals and objectives, developing strategies, and allocating resources to carry out these strategies. Key characteristics include maximizing current yield, capital profits, social responsibility, equity liquidity, and attitude to risk.
Ethics in Administration
Ethics is a set of moral principles and norms governing human activities. Within administration, an organizational culture forms a management philosophy based on organizational behavior principles and values.
Importance of Ethics
Creating standards and policies for individual and group coexistence facilitates the development of members in meeting those standards.
Key elements of ethics include:
- Institutional (group behavior)
- Personal (individual behavior)
- Professional (e.g., medical ethics)
Ethical Theories
- Utilitarian Theory: A manager’s plans should be evaluated by their consequences, aiming to benefit the greatest number of people in the organization.
- Rights-Based Theory: All people are entitled to fundamental rights.
- Theory of Justice: Decision-makers should be guided by equity and impartiality.
Institutionalizing Ethics
Aspects of institutionalizing ethics include:
- Establishing a code of ethics (policies, principles)
- Establishing an ethics committee
- Providing ethics education in training and development programs
Social Responsibility
Social Responsibility refers to the obligations and commitments to be met by the company under normal operating conditions (legal or moral).
Corporate Social Responsibility (CSR) refers to the active and voluntary contribution to social, economic, and environmental improvement by enterprises, with the objective of improving their competitive position and organizational values.
Perspectives on Social Responsibility
- Efficiency Perspective: A manager’s responsibility is to maximize company profits.
- Social Responsibility Perspective: Society allows for the existence of firms; therefore, businesses have a responsibility to society.
Organizational Design
Organizational design is the process of assessing the organization’s strategy and environmental demands to outline appropriate organizational structures.
Organization illustrates the relationships between units and lines of authority.
Authority is the ability to control a person or position within the structure (high, medium, low).
Differentiation is the degree to which an organization divides activities and sub-activities (cognitive = thinking, quick decision-making).
Integration: Those parts interact and cooperate with each other.
Interdependence: The degree to which a person depends on another to perform a task.
Unity of Command: The notion that every employee should have only one boss.
Span of Control: No employee will report to more than one supervisor.
Types of Organizational Structures
- Tall (Vertical) Structure: Has multiple layers, high in terms of vertical differentiation (e.g., military).
- Flat (Horizontal) Structure: Fewer hierarchical layers than a tall organization.
- Functional Structure: Based on work areas.
- Product Structure: Organized around a product or related products; depends on the type of manufacturing organization.
- Customer Structure: Organized according to the category of customers.
- Geographical Structure: Can be formed in several regions based on national (vineyards, regions, or industries) and international factors.
- Production Process Structure: Represents the stages of product development.
- Matrix Structure: Composed of two superimposed structures; decision-making is given by two directorates at the same time.
Outsourcing
Outsourcing: Contracting companies to perform a service; subcontracting. It involves taking one of the organization’s relevant activities and assigning it to an unrelated party.
Profit Center
Profit Center: A unit or product line in which related expenses are subtracted from generated revenues.