Glossary of management terms

An organisational structure is a way of dividing a business into jobs, tasks and responsibilities. There are lots of different ways of doing this. One way is to use a shamrock structure. This is used with outsourcing, when temporary employees and contractors support longer-term or core staff. The model is based on a three-leaf clover.

At the start of the planning process you should always analyse the situation that the organisation is in. This will give you the best information for making decisions about future goals.

A situation analysis includes as a minimum the following two steps:

Step 1. Study the strategic goals of the organisation, especially the goal(s) that set the amount of profit that the organisation is trying to achieve. These goals should be supported by strategies about how they are going to be achieved.

Step 2. Study the environment, both external and internal . You may find it useful to do what is known as a SWOT analysis, which is an analysis of the organisation’s Strengths and Weaknesses (internal environment) and Opportunities and Threats (external environment).

Span of control is the number of people managers are directly responsible for: their direct reports. The flatter the organisation is, the larger the span of control. To calculate the span of control, divide the number of managers into the number of those who report directly to them.

STEEP stands for Social, Technological, Economic, Environmental, and Political influences. Any of these external influences could force an organisation to change itself in some way. Managers need to keep track of the changes in the external environment.

A strategy is a plan for achieving something. Strategies can be small or large. Larger strategies are about how an organisation’s vision can be achieved. They should answer questions such as:

• What direction should the organisation take?
• Should the organisation just improve what it already does?
• Should it change its products or its customers?
• Should it add other products to its range?

SWOT analysis is a strategic planning tool used to evaluate Strengths, Weaknesses, Opportunities and Threats for a project or a business. To start a SWOT analysis the objective of the business venture needs to be stated upfront to be able to identify the internal and external factors that are favourable or unfavourable to achieving the objective.