Human Resources Management is directed mainly at management needs for human resources (not necessarily employees) to be provided and deployed. It is totally identified with management's interests and is relatively distant from the workforce as a whole.
Underpinning Personnel Management are the twin ideas that people have a right to proper treatment as dignified human beings while at work, and that they are only effective as employees when their job-related personal needs are met.
Underpinning Human Resources Management is the idea that the management of human resources is much the same as any other aspect of management, and getting the deployment of right numbers and skills at the right price is more important than interfering with people's personal affairs.
Task 30. Vocabulary 6
The box below contains a number of areas related to Personnel Management and Human Resources Management. Classify them according to their primary focus within these two areas.
Table 4
Unit 2. Company Structure
Learning outcomes
▪ Understand different types of organizing activities in a company, the functions they carry out, get to know about structures for organizations and decide which of them is the best for effective management
▪ Learn to study information presented in diagrams and support your talks with the information given in them
▪ Participate in discussions using your personal experience
Task 1. Reading 1
Getting started
▪ Before reading the text, discuss in small groups how many people must be responsible for the effective managing of the company? In what way should they inform the staff about important solutions, decisions, innovations, restructuring, etc.
▪ All organisations have this or that structure. Do you know anything about the structures? What are they? What are the principal differences between them?
▪ Discuss in groups of three how many departments can be in a big organisation and what they are responsible for. How is the work among departments organised?
▪ Read the text below about the different ways of organising companies, consult Vocabulary p. 142–143, and then label the diagrams, according to which of these they illustrate:
Figure 2
Most organisations have a hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below them at each successive level. There is a clear line or chain of command running down the pyramid. All the people in the organisation know what decisions they are able to make, who their superior (or boss) is (to whom they report), and who their immediate subordinates are (to whom they can give instructions).
Some people in an organisation have colleagues who help them: for example, there might be an Assistant to the Marketing Manager. This is known as a staff position: its holder has no line authority, and is not integrated into the chain of command, unlike, for example, the Assistant Marketing Manager, who is number two in the marketing department.
Yet the activities of most companies are too complicated to be organised in a single hierarchy. Shortly before the First World War, the French industrialist Henry Fayol organised his coal-mining business according to the functions that it had to carry out. He is generally credited with inventing functional organisation. Today, most large manufacturing organisations have a functional structure, including (among others) production, finance, marketing, sales, and personnel or staff departments. This means, for example, that the production and marketing departments cannot take financial decisions without consulting the finance department.
Functional organisation is efficient, but there are two standard criticisms. Firstly, people are usually more concerned with the success of their department than that of the company, so there are permanent battles between, for example, finance and marketing, or marketing and production, which have incompatible goals. Secondly, separating functions is unlikely to encourage innovation.
Yet for a large organisation manufacturing a range of products, having a single production department is generally inefficient. Consequently, most large companies are decentralized, following the model of Alfred Sloan, who divided General Motors into separate operating divisions in 1920. Each division had its own engineering, production and sales departments, made a different category of car (but with some overlap, to encourage internal competition), and was expected to make a profit.
Businesses that cannot be divided into autonomous divisions with their own markets can simulate decentralization, setting up divisions that deal with each other using internally determined transfer prices. Many banks, for example, have established commercial, corporate, private banking, international and investment divisions.
An inherent problem of hierarchies is that people at lower levels are unable to make important decisions, but have to pass on responsibility to their boss. One solution to this is matrix management, in which people report to more than one superior. For example, a product manager with an idea might be able to deal directly with managers responsible for a certain market segment and for a geographical region, as well as the managers responsible for the traditional functions of finance, sales and production. This is one way of keeping authority at lower levels, but it is not necessarily a very efficient one. Thomas Peters and Robert Waterman, in their well-known book In Search of Excellence, insist on the necessity of pushing authority and autonomy down the line, but they argue that one element – probably the product – must have priority; four-dimensional matrices are far too complex.
A further possibility is to have wholly autonomous, temporary groups or teams that are responsible for an entire project, and are split up as soon as it is successfully completed. Teams are often not very good for decision-making, and they run the risk of relational problems, unless they are small and have a lot of self-discipline. In fact they still require a definite leader, on whom their success probably depends.
Task 2. Comprehension 1
Which of the following three paragraphs most accurately summarises the text, and why?
First summary
Although most organisations are hierarchical, with a number of levels, and a line of command running from the top to the bottom, hierarchies should be avoided because they make decision-making slow and difficult. A solution to this problem is matrix management, which allows people from the traditional functional departments of production, finance, marketing, sales, etc. to work together in teams. Another solution is decentralisation: the separation of the organisation into competing autonomous divisions.
Second summary
Most business organisations have a hierarchy consisting of several levels and a clear line of command. There may also be staff positions that are not integrated into the hierarchy. The organisation might also be divided into functional departments, such as production, finance, marketing, sales and personnel. Larger organisations are often further divided into autonomous divisions, each with its own functional sections. More recent organisational systems include matrix management and teams, both of which combine people from different functions and keep decision-making at lower levels.
Third summary
Most businesses are organised as hierarchies, with a clear chain of command: a boss who has subordinates, who in turn have their own subordinates, and so on. The hierarchy might be internally divided into