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Answer the questions on the texts below:
What do we mean by “organization”?
What guidelines does top management set up?
How many groups can industrial or commercial organization be divided into? What are they?
Who is meant by shareholders?
What does the loan creditor group include?
What interest does the employee have?
What specialists does the analyst adviser group consist of?
What is the business contact group interested in?
Why is the Government’s involvement with management considerable?
What is the interest of the public?
When talking about any organization, in particular what it is doing or planning at the moment, it is important to remember that what we mean by 'organization' in this respect is the top management. Organizations such as limited companies are inanimate — they do not think and act themselves. It is either a powerful individual or more usually a group of individuals who control the top decisions that really form what we mean by the organization. Often the organization is represented by an employee who is not a senior manager — such as a salesman or a police constable. Our contacts with individuals like these, good or bad, will certainly influence our view of the organization as a whole. However, people at these lower levels of management have only got authority to act for the organization within guidelines or limits set by top management. If they act outside these guidelines you can complain and usually obtain some redress if they are at fault. Top management sets these guidelines — which are generally called objectives — in order that those working in the organization know what is expected of them. When we are talking about 'top management' it is something like talking about the 'Government'. Whilst in business organizations there are no general elections, nonetheless the composition of the 'cabinet' of senior managers changes regularly, and from time to time there may be a complete change — if the business is taken over by another organization. Thus whatever the type of organization the top management will always change from time to time, which means that their objectives and therefore those of the organization will also change.
Although top management set the objectives of the firm they cannot do this in isolation from the world outside. They are dependent for their continuing existence on their ability to survive. Survival as a top manager will depend on satisfying a wide range of competing interests in the affairs of the organization. Whilst it is unlikely that every outside interest will always be happy with how things are being run, if too powerful an opposition is created, management will be replaced.
If we are thinking about an industrial or commercial organization then the interested groups can be conveniently divided into seven sets. For non-commercial organizations many of these groups will also apply. The seven groups which will be discussed in turn are
1. The equity investor group
2. The loan creditor group
3. The employee group
4. The analyst adviser group
5. The business contact group
6. The government
7. The public
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