Organization of the firm
Company efficiency: everything is about evolution and development.
What is organization?
• 17th century: mercantilism
• 18th century: start of manufacturing, Adam Smith (1776 research on nature and causes of wealth of the nation). Adam Smith: essential tenants of capitalism.
• 20th century: Henry Fayol (rationalization of models of structures of authorities), F.Taylor (rationalization of production model).
Different types of organizations
• Non commercial organizations
• Liberal professions
• Specific status professions (insurance agents…)
• Public officers (bayliffs: notaires)
• Public and private non lucrative organizations
• Public organizations
Public services are in general under public power and have to assure security or non lucrative economical needs.
Public organizations have to have the service activity, a big size and structure, be controlled by a supervision organism such as state, or national institution.
Third sector organizations: organized, private, no distribution of benefits, autonomous, volunteer.
Associations, unions (syndicats), federations, foundations, NGA’s.
The classical analysis of organizations
20th century
Henry Fayol 1842 – 1926
3 main points in his theory
• The authority which commands has always to be present or represented.
• The administrative capacity is growing when climbing in the hierarchy.
14 major principles of organizations
• Work division: produce more and better with the same effort. It applies not only to technical activities but to all collective works.
• The principle of authority. The people who give orders have not only the right to give orders but have as well to take responsibility for it.
• Discipline: people have had to obey to be in time, to have a good activity, to have tenue and to have respect according to the conventions established between the company and its agents.
• Command unit: each employee has only one boss, but to some other possibilities exists