BUSINESS PLANNING

ENT550

MODULE 5 :
ORGANIZATIONAL PLAN

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

DEFINITION OF MANAGEMENT
According to Mary Parker Follet it is the art of
getting things done through other people.
A process of planning all the resources
efficiently, organized the resources effectively,
leading then controlling the resources. Resources
here refer to capital, manpower, technology and
materials.

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

FUNCTIONS OF MANAGEMENT
Planning
A proper planning need to be developed in order to
make sure all the resources is being fully
utilized.
Planning involved goal setting and defining the
action those need to be taken in order to
achieve goals.

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

FUNCTIONS OF MANAGEMENT
Managers that involved in planning require
knowledge of the company, information on the
factors of the environment, e.g. economic
condition, good judgment in reducing risk and
decision making.

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

Organizing
Organizing involves determining the task to be
done, who will do them and how those task will be
managed and coordinated
The managers role in this situation is to
coordinate the effort of the workers of different task
and create the conditions to find solutions

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

Directing/Leading
Managers must be also capable of leading their
subordinates to work together to achieve the
organization goals.
Effective managers must try to understand
individuals and group behavior, be able to motivate
and discuss with their subordinates

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

Controlling
Controlling is to identify between planned and
actual result, whether the organization is
performing as what had been planned.
If the organization is not going towards the goal,
corrective action need to be taken in order to
adjust the plan to the existing situation

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

BUSINESS VISION
A vision statement describes what the
organization aspires to be in the long term.
It is a description of the way in which the
business wants to be perceived by others at
some future date.
For example, TNB vision is To be among the
Leading Corporations in Energy and Related
Businesses Globally"

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

BUSINESS MISSION
Many businesses also have mission.
Mission statements are statements of how
entrepreneurs will achieve their purposes in the
environments in which they conduct business
It is also the reason why an organization exists.
For example, TNB mission is We Are Committed
to Excellence in Our Products and Services
Entrepreneurship Dept, FBM
(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

BUSINESS OBJECTIVES
It is the starting point in effective management.
Defined as what does a business hopes and
plan to achieve.
In other word, goals are performance target.
Goals differ from business to business
depending on its purpose and mission.
Any business functions systematically because
it sets goals and plan accordingly.

Entrepreneurship Dept, FBM

(2009)

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10

GOAL SETTING
Purposes

To provides direction and guidance for all entrepreneurs

To help firms allocate resources
To define corporate culture
To help entrepreneurs assess business performance

Entrepreneurship Dept, FBM

(2009)

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11

SMART Concept

S= Specific
M= Measurable
A= Achievable
R= Realistic
T= Time frame
Entrepreneurship Dept, FBM
(2009)

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12

TYPES OF GOALS
Long term goals relate to extended period of time,
typically five years or more.
Intermediate goal are set for a period of one to five
years.
Short term goal are set for perhaps one year and
are develop for several different areas.

Entrepreneurship Dept, FBM

(2009)

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13

ORGANIZATIONAL STRUCTURE
Organizational structure depends on the needs of the
organization. Steps are:
1. List all the work needed to be done in the organization
2. Group the work or job into section, unit or department
3. Construct diagrammatically through organizational
chart

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

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ORGANIZATIONAL CHART
Organizational chart shows
Job position
Hierarchy
Span of control

Entrepreneurship Dept, FBM

(2009)

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TYPES OF ORGANIZATIONAL
STRUCTURE
Function
Product
Client
Number of workers
Region
Shifts

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

16

ORGANIZATIONAL STRUCTURE-FUNCTION

Entrepreneurship Dept, FBM

(2009)

ETR/ENT300 MODULE 10 : Organizational Plan

17

ORGANIZATIONAL STRUCTURE-PRODUCT
Manager
Product X

Entrepreneurship Dept, FBM

(2009)

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ORGANIZATIONAL STRUCTURE-CLIENT

ORGANIZATIONAL STRUCTURE-NUMBER OF
WORKERS
Manager(Entrepreneur)
Supervisor 1

Entrepreneurship Dept, FBM

(2009)

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ORGANIZATIONAL STRUCTURE-REGION
Manager
Northern Region

Entrepreneurship Dept, FBM

(2009)

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ORGANIZATIONAL STRUCTURE-SHIFTS
Manager
Morning Shift

PREPARING AN ORGANISATIONAL PLAN

The steps in preparing an organisational plan
for a business:
1.
2.
3.
4.
5.
6.
7.

The introduction to the organisation

To develop an organisation chart
To prepare a list of administration personnel
To develop a schedule of tasks and responsibilities
To develop a schedule of remuneration
To determine the office equipment and supplies
To prepare an administration budget

Entrepreneurship Dept, FBM

(2009)

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23

1. Introduction to the organisation

For the introduction, state the vision, mission and
objectives of the business organisation.
Business vision helps to prepare a small business to plan
for the future and to achieve what it aspires to be.
Business mission is a statement that shows the purpose or
reasons for its existence.
Business objectives are short term planning characterised
by a more specific statements and with definite time
frame. Use SMART concept.
Also include the following: business address, location plan,
type of building and infrastructure.

Entrepreneurship Dept, FBM

(2009)

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2. Develop an organisation chart

Based on the structure of business, develop an
organisational chart that best suits the organisation. The
chart portrays the hierarchy and chain of command of
personnel in an organisation at a particular point of time.
The most commonly used organisational structure by a
small business is the line structure which is based on :
Shifts
Number of workers
Functions
Products
Regions
Clients

3.The preparation of Administration personnel

At this stage, lists all the personnel involved in the administration section
of the business and those personnels who are not directly involved in
operation (i.e. indirect workers).
Using a two column table, indicate the personnel position in one column
and the number of personnels in the second column. The table is as
illustrated below :
TABLE 1: LIST OF ADMINSTRATION PERSONNEL

POSITION

Entrepreneurship Dept, FBM

(2009)

NO. OF PERSONNELS

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4. Develop a schedule of Tasks and Responsibilities

The next step is to prepare a schedule of tasks and responsibilities. For
each personnel position explain its main tasks and responsibilities.
This may be illustrated by drawing a two column table as in TABLE 2.
Then depict all the positions that have been described in TABLE 1 into
Column one of TABLE 2. In column two, explain the tasks and
responsibilities of each position.
TABLE 2: SCHEDULE OF TASKS AND RESPONSIBILITIES

POSITION

Entrepreneurship Dept, FBM

(2009)

TASKS AND RESPONSIBILITIES

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27

5.Develop a Schedule of Remuneration

The remuneration of each personnel of all indirect workers has to be
taken into consideration beforehand. The remuneration includes
monthly salary or contractual wages, (daily, weekly or on project basis)
and all provident fund contribution as well as work related insurance.
Take note that provident fund contribution to EPF by employers is 12%
(subject to regulatory changes) of base pay. Meanwhile, SOCSO
contribution will be based on an average of 2.5% of personnels
Monthly salary not exceeding RM2000.
It would be made clearer, if a schedule of remuneration is developed
as below:

Entrepreneurship Dept, FBM

(2009)

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TABLE 3: SCHEDULE OF REMUNERATION

POSITION

NO.

Entrepreneurship Dept, FBM

(2009)

MONTHLY
SALARY (RM)
(A)

EPF
(RM)
(B)

SOCSO
(RM)
(C)

ETR/ENT300 MODULE 10 : Organizational Plan

TOTAL
AMOUNT(R
M)
(A)+(B)+( C)

29

6.Determine the Office Furniture and Fittings

The business owner is to list all the office furniture and equipment that
are necessary for the administration section. It is also necessary to
include all office supplies. In addition, the owner should also survey and
check on the prices of the office equipment and supplies in order to
spend within the administration needs.
Develop a list of office furniture and fittings as shown below.
(Note: Also a prepare a separate list of office supplies. Example:
Office stationeries)
TABLE 4: LIST OF OFFICE FURNITURE AND FITTINGS

TYPE

Entrepreneurship Dept, FBM

(2009)

PRICE /UNIT
(RM)

QUANTITY

TOTAL AMOUNT
(RM)

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7.The Preparation of The Administration

Budget
Upon the determination of the administration
expenses classify the items into the following
categories:

Capital Expenditures/ Fixed Asset Cost

Working Capital/Monthly Expenses
Other Expenses

Entrepreneurship Dept, FBM

(2009)

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31

ADMINISTRATION BUDGET
ITEMS

FIXED
ASSET

Land & Building

Furniture & Fittings
Vehicle(office use)
Renovation
Salary (EPF & SOCSO)
Rent
Utilities
Office Supplies
Business Registration
Business Licence/Permit
Deposit
Professional Fees
Road Tax/Insurance
Courses Attended

MONTHLY
EXPENSES

OTHER
EXPENSES

xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx

TOTAL

Entrepreneurship Dept, FBM

(2009)

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END OF MODULE 5