Business Organization, Decision-Making, and Personnel Management
Business Organization
The company is the operator that coordinates production factors to achieve predetermined goals. This definition applies to any economic system. Organizing production factors involves making business decisions about responsibilities, resources, financing, sales, distribution, etc.
Decision Making
Decision-making involves establishing or reforming something to an end, coordinating people and resources. Organizations have two major tasks:
- Define departmental tasks.
- Assign individual responsibilities.
Decision-making is crucial for planning tasks and solving problems. Routine decisions are made quickly, while complex ones require more thought. The decision-making process generally involves:
a) Information Gathering: Search for information on the issue and clearly identify the problem.
b) Information Analysis: Determine if the information is sufficient and valid. Identify alternatives and propose solutions.
c) Solution Selection: Consider risk, acceptance by stakeholders, feasibility within the timeframe, and resource limitations. Personal creativity is often valuable.
Models of Business Organization
Companies use human and material resources to produce goods and services. Key organizational principles include:
- Division of labor.
- Unit-end goal (profits or other priorities).
- Decentralization of tasks.
- Communication between groups and individuals.
Business organization can be formal or informal:
a) Formal Organization: Defined rules and roles for each group, established by the company and imposed on staff.
b) Informal Organization: Relationships based on friendship, kinship, or shared interests. Understanding informal organization is essential for leveraging strengths and mitigating negative impacts.
Organization of Single Management: Best for small businesses, with power concentrated in one person or group. Main forms include:
a) Hierarchical Organization: Pyramid of authority, clear lines of command.
b) Functional Organization: Specialization of departments and functions.
c) Mixed Organization: Combination of hierarchical and functional.
Advisors, staffs, or ad hoc committees may be added for specific tasks.
Organization of Multiple Management: For complex companies with diverse products and markets. Decisions are made by multiple people or groups.
Organizational models can be structured by:
- Times or shifts
- Geographical area
- Product
- Territory
- Customer-oriented markets
- Different production processes
- Matrix or mesh (shared responsibility for specialties and products)
Organizational Charts: Represent the company structure, areas, departments, divisions, etc., showing dependencies and communication channels. Charts should be flexible for growth and development.
The Personnel Department
Companies need a dedicated personnel department (also called Human Resources, Labor Relations, Social Department, etc.). It manages people and consists of members with varying responsibilities. Its main tasks are to plan, organize, manage, evaluate, and control personnel activities.
Duties of the Personnel Department
Creating Jobs: Based on the organizational chart, the department creates jobs and defines staff qualifications. This involves:
- Knowing the tasks in each section.
- Calculating time and resources needed.
- Quantifying necessary personnel and categories.
- Identifying required qualifications.
Job Profiles and Profesiographic Profiles: Job profiles define duties, responsibilities, qualifications, and other job specifications. Profesiographic profiles identify the characteristics, aptitudes, and attitudes needed for each position, including physical, technical, and psychological skills.
Staff Recruitment
Labor laws require employment contracts to legalize employer-worker relationships. Social legislation allows parties to propose terms while protecting workers. Employment contracts are:
- Consensual (agreed upon by parties)
- Bilateral (obligations for both parties)
- Onerous (economic obligations)
- Subject to labor standards
Choosing the Type of Contract
Companies choose contracts based on their aims, considering:
- Legal form of the company
- Type of job
- Temporary needs
- Incentives for hiring (e.g., long-term unemployed, women in underrepresented sectors, disabled individuals, young people)
- Social costs (settlements, allowances, exemptions, subsidies, tax cuts)
- Other conditions of interest to the company and worker
Subsequent Procedures
After hiring, companies must complete legal procedures, including:
- Social Security affiliation of the worker
- Communication of new contracts to relevant authorities
- Compliance with labor laws
Financial Management and Social Costs
Labour Costs
Salary includes all economic benefits (monetary or otherwise) received by employees. Its structure includes:
- Base salary
- Allowances (seniority, expertise, incentives, etc.)
- Fringe accruals (benefits, allowances)
Employers must calculate social contributions and withhold income tax from these amounts.