Topic 1 Organisational Structure

In the exam you are expected to:

Understand the basic concepts of organisational structure as they impact on/affect ICT systems.

 An organisation is any body that manages, organises and coordinates human and technological resources to perform a particular objective:

·         A company produces a product to sell to its customers.

·         An army is there to keep the peace between mutually hostile groups of people.

There are three pillars of resources for all organisation, which are shown in the table:

Successful organisations are those that:

• Have people of vision and champions of change to lead them;
• Unlock the potential of their staff.  This is done by creating a culture of genuine empowerment of staff to focus on the customer.  They also encourage good communication, teamwork and training.  They flatten any hierarchical pyramids.
• Know their customers – constantly learning from others and rising to the challenges placed by demanding customers.  This leads to innovation and competitiveness.
• Produce new and successful products or services by a good knowledge of competitors, encouraging innovation to exploit new ideas.
• Focus on the core business, complemented by strategic alliances.
• Exceed their customers’ expectations.

A good company will regard its people as a key resource, not a economic cost.  It is a mark of good management that all employees are empowered to realise their potential, and benefit from training to do so.

Managements of all organisations have four internal functions they need to control:

1. Production to make the goods or services;
2. Sales and marketing to get the product sold;
3. Human resources (personnel to you) to hire and train workers;
4. Finance to pay for the activities.

Here is a traditional staff structure:

At the top is the managing direct (big boss man) who is at the top of many tiers of management.  Such structures are based very much on social order, and a low-ranking worker may have to go through many layers in order to approach the MD.  Organisations that have large and bureaucratic structures tend to be dysfunctional and have a reduced competitiveness.  At worst they have appalling industrial relations, with long and protracted labour disputes.  Some very large British companies that were characterised by these structures are no longer in business or are now pale shadows of their former selves.

More farsighted managements have turned the pyramid upside down.

The most important people are the employees who are at the forefront of serving the customers.  The rest of the hierarchy is there to enable the employees to do their job.  So rather than the workers being responsible to their bosses, the bosses are there to service the needs of the workers as they go about their company’s business.

External Pressures

All businesses have to work in the context of their customers, competitors, government regulation, and other interested parties.  These have quite a profound effect on the way a business is run.  A business that causes a lot of pollution in a local waterway is being run every bit as badly as one that pays little attention to its customers.  The diagram sums up the pressures both external and internal that act on a business.

Technology in the Business Environment

The diagram shows a typical pyramid hierarchy and the technology that is there to serve its needs:

Data Processing Systems are also known as transaction processing systems.  A transaction is any event that is recorded, whether it’s a sale, or signing up to a college course.  The data is recorded and dealt with by some process.   There are two ways in which transactions can be dealt with:

• In batch systems, a number of transactions are collected over a period of time and dealt with all in one go.  For example goods ordered at a mail-order warehouse may have the tickets collected into a batch of 50 and the details are keyed in and save onto disk.  Only when that has been done is the stock-control program run.  It may take several hours for this to happen, but when someone is waiting for four or five days for delivery, this is not so critical.
• On-line systems where updates of data are done immediately.  This is important when time is critical.  The sensors feeding in data for the management of a production line need to update the program constantly, so that imbalances can be checked immediately.  When you buy a ticket at a travel agent, the airline’s computer is updated almost immediately.  This is pseudo-on-line processing, where a delay of a few seconds is neither here nor there.

Knowledge work systems are there to help to deal with problems requiring technical  expertise or knowledge.  Software includes:

• Word-processing for clerical staff;
• Spreadsheets for accounts, and sales staff;
• Database managements systems for keeping records;
• CAD for designers;
• Project management systems;
• Expert systems for specialist staff.  An example of this may be a system that enables an engineer to select a particular metal alloy for a bearing.  He could type in the parameters he needs and the system can suggest several different alloys.  It is then up to the engineer to us his knowledge and experience to decide what alloy he will use.

Management Information Systems are designed to help managers monitor and control organisational performance, and plan for the future.  We will look at this in the next topic.

In most organisations computers are networked, and in large organisations there will be several local area networks linked together.  These will contain hardware and software to allow groups of staff to communicate, using e-mail, document scanning, web-cams, and video conferencing.

Question 1

(a) a data processing system; (3 marks)

(b) a management information system. (3 marks)

(AQA Jan 03 Q2)

Answer

Now try the Topic Quiz