Being a manager is one of the most difficult — and potentially one of the most rewarding — jobs that anyone can take on in an organization. A successful manager must continuously improve systems and processes to make them more efficient, more effective, and less costly. Because the environment of business is always changing — new employees, new technology, new sources of supply, new competitors — managers always have to be alert to the need of restructuring their organizations to keep them competitive in the marketplace.
As you work to design a better organization, be sure to consider the following factors.
Division of labor
The very first step in organizational design is assigning specific employees to specific jobs, called division of labor.
In a one-person organization — say, a home-based public relations agency — only one person completes all the jobs that need to be done. The business owner types the letters, answers the phone, places advertisements for her business, designs promotional materials for clients, writes press releases, schedules clients for media interviews and radio and television appearances, does the accounting, pays the bills, and even takes out the trash!
Once the owner of the public relations agency hires an employee, however, then she can make her operation more efficient through effective division of labor. The new hire can take on tasks that the owner is not so good at or that require a lot of work but don't generate revenues — perhaps typing letters and answering phones. This way, the owner can concentrate her efforts on the things that she is best at and that have a better cash return on the investment of her time.
In his book, Wealth of Nations, Adam Smith made a very clear case for the division of ...