In progressive firms, top management is responsible for setting quantifiable (measurable), attainable objectives and then directing the organization toward meeting these objectives.
For each of the organization's objectives, a policy — a broad guideline for operating the organization — should be developed. A common policy in most firms stresses the continual need to maximize profits in a just, reasonable manner. As a result, the corresponding objective of such a business firm would be to earn the highest possible profits by increasing sales, an objective that, in turn, determines how the operations of the sales department are carried out. A related objective of the production function is to create the right, amount of goods at the lowest cost to / fill the increased sales orders. A main objective of the administrative office management function is to coordinate and communicate the information activities of each of the organization's main functions so that unit costs of production may be reduced and productivity increased. Here, administrative office management provides a support service for all other functions. Several techniques used to achieve Principle 1 are outlined in Figure 2-1.
Principle 2: Accept Responsibility
Responsibility for organization exists with managers at all levels, beginning with top management and extending to first-line supervisors.
Responsibility is the obligation and accountability for properly performing work that is assigned. At the top level, the chief executive officer must determine the major functions and the responsibilities for organizing each division that is responsible for these functions. At this same level the company's long-range plans and objectives are formulated. Sound organization is necessary if these plans and objectives are to be achieved. Thus, top management must identify and accept the many responsibilities that accompany such high-level work.
In the same way, each succeeding level of management — from middle management to first-line supervision — must accept an appropriate amount of responsibility. In order to do so, each level should first:
Identify its major objectives.
Determine the activities necessary to carry out these objectives.
Develop the most logical pattern of organization to carry out its activities and to meet the needs of its workers. A technique for applying this point is summarized in Figure 2-1.
Assign responsibility to workers for the accomplishment of these objectives. Where similar but not identical assignments are given to several individuals, the similarities and differences should be carefully explained to prevent misunderstanding.
5. Establish proper communication channels among all responsible parties to unify efforts and to develop team spirit.
These same steps are used at every level of management throughout the company. The only difference in their use lies within the scope of authority and responsibility of the job and the supervision of detailed work. Authority is the right to command, to give orders, and the power to make decisions. Figure 2-2 shows that as you move down the levels in the company, there is less authority and responsibility but more supervision of detailed work. As you move up, the reverse is true.
