Class 2

Principles of Administrative Office Management

GOALS

After completing this chapter, you should be able to:

1. State and describe briefly each of the seven basic principles of management.

2. Identify the main characteristics of the five styles of leadership that may be displayed by administrative office managers.

3. Show how the organization chart is an important tool for the administrative office manager.

4. Describe each of the following forms of organization: the formal organization, especially the line, functional, line and staff, committee, and matrix forms; and the informal organization.

5. Prepare an organization chart for the commonly used line-and-staff form of organization.

6. Distinguish between centralization and decentralization of managerial authority and note the difference between decentralized authority and physical decentralization.

Basic principles of management

From your introduction to administrative office management, it should be clear that management is a complex process. In order to manage the office with minimum physical and mental effort, and at the lowest possible cost, the AOM has to consider many persons. In a corporation these persons include stockholders, the board of directors, managers and supervisors, and workers. In less complex firms, such as proprietorships and partnerships, the manager-owners, supervisors, and workers need to be considered. Outside each firm, customers, suppliers, the government, and many others must also receive the attention of management.

Each business firm designs its own structure as a means of organizing the various resources needed to meet its goals. However, a good structure does not guarantee sound organizational health. In the words of Peter F. Drucker, "The test of a healthy business is not the beauty, clarity, or perfection of its organization structure. It is the performance of people." On the job, managers and workers apply management principles using various techniques. Techniques are ways of doing assigned tasks or methods of accomplishing work. Figure 2-1 outlines the main principles associated with good management along with examples of practical application techniques used by managers and workers. The effectiveness of these principles is measured by the performance of people in achieving desired results, which is the ultimate test of good management.

Figure 2-1 Management Principles and Techniques for Applying Principles

Principle 1: Define Objectives

The objectives of an organizational system and all of its subsystems must be clearly defined and understood.

Summary of Management Principles	Techniques Used in Applying Management Principles
1. Objectives clearly defined and understood	Develop and explain policies, objectives, and budgets to workers in meetings and organization manuals.
2. Responsibility for proper organization of work	Analyze functional needs of the organization and create a sound organization structure including an organization chart in line with the objectives.
3. Unity of functions	Emphasize in meetings and group projects the interrelationships among the functional areas in the firm.
4. Use of specialization	Assign work to persons with highest levels of aptitude, interest, work experience, and education.
5. Delegation of authority	Schedule meetings involving managers, super­visors, and workers to clarify the responsi­bilities assigned to each level.
6. Unity of command	Explain flow of authority to workers and identify the person from whom they must take orders.
7. Span of control	Study the work being performed by workers and the organization chart to determine how many persons report to each supervisor; expand amount of participative decision making.

An objective is a desired goal, some­times considered a target or an aim. Objectives range from broad, general statements about an overall organization to specific, narrow statements about a de­partment or an employee's activities. For example, company-wide objectives are commonly stated in this way:

• To earn a fair return on investment for our stockholders.

• To improve our share of the market.

• To provide the best possible service to customers.

More specific objectives, which are easier to understand and to measure, may be stated as:

• To increase the productivity of word processing operators by 10 percent during the current year (department goal).

• To reduce by 15 percent the costs of operating the mailing center (department goal).

• To improve attendance on the job (individual worker's goal).

Often objectives are established as part of the planning process for one- and five-year periods. As conditions require, such objectives are revised on a regular basis in order to adjust to major unexpected changes. For example, objectives may be altered because of reduced earnings from sales or an increase in the prime interest rate.