FUNDAMENTALS OF ENTREPRENEURSHIP

(ETR300/ENT300)

MODULE 10 :
ORGANIZATIONAL PLAN

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 1

 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 2

 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 3

 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 4

 Organizing

• Organizing involves determining the task to be

done, who will do them and how those task will
be managed and coordinated

• The manager’s 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 5

 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 6

 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 7

 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 8

 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 9
 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) ETR/ENT300 MODULE 10 : Organizational Plan 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) ETR/ENT300 MODULE 10 : Organizational Plan 11

 SMART Concept
S= Specific
M= Measurable
A= Achievable
R= Realistic
T= Time frame
Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 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) ETR/ENT300 MODULE 10 : Organizational Plan 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 14

 ORGANIZATIONAL CHART

Organizational chart shows

• Job position
• Hierarchy
• Span of control

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 15

 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

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 18

ORGANIZATIONAL STRUCTURE-CLIENT
 ORGANIZATIONAL STRUCTURE-NUMBER OF
WORKERS

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 20

 ORGANIZATIONAL STRUCTURE-
REGION

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 21

ORGANIZATIONAL STRUCTURE-SHIFTS
 PREPARING AN ORGANISATIONAL PLAN
The steps in preparing an organisational plan
for a business:

1. The introduction to the organisation

2. To develop an organisation chart
3. To prepare a list of administration personnel
4. To develop a schedule of tasks and responsibilities
5. To develop a schedule of remuneration
6. To determine the office equipment and supplies
7. To prepare an administration budget

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 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) ETR/ENT300 MODULE 10 : Organizational Plan 24

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 NO. OF PERSONNELS

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 26

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 TASKS AND RESPONSIBILITIES

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 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 personnel’s
Monthly salary not exceeding RM2000.

It would be made clearer, if a schedule of remuneration is developed

as below:

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 28

 TABLE 3: SCHEDULE OF REMUNERATION

POSITION NO. MONTHLY SALARY EPF SOCSO TOTAL

(RM) (RM) (RM) AMOUNT(RM)
(A) (B) (C) (A)+(B)+( C)

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 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 PRICE /UNIT QUANTITY TOTAL AMOUNT

(RM) (RM)

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 30

 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) ETR/ENT300 MODULE 10 : Organizational Plan 31

 ADMINISTRATION BUDGET
ITEMS FIXED MONTHLY OTHER
ASSET EXPENSES EXPENSES
Land & Building xx
Furniture & Fittings xx
Vehicle(office use) xx
Renovation xx
Salary (EPF & SOCSO) xx
Rent xx
Utilities xx
Office Supplies xx
Business Registration xx
Business Licence/Permit
Deposit xx
Professional Fees xx
Road Tax/Insurance xx
Courses Attended xx
xx
TOTAL

Entrepreneurship Dept, FBM (2009) ETR/ENT300 MODULE 10 : Organizational Plan 32

END OF MODULE 10