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CHAPTER 3
THE PLANNING, ORGANISING, LEADING AND CONTROL OF PROCUREMENT
whether the holder has line authority, staff authority, line and staff authority,
functional authority or project authority. Line authority refers to direct authority
that a procurement manager has over the subordinates under his or her line
of command. Staff authority refers to the authority limited to giving advice.
Functional authority refers to the power to issue orders to line subordinates in
an established area of responsibility that is wielded by staff specialists. Project
authority refers to the horizontal authority of a project manager, which can be
extended to different departments in a company.
3.3.2.3 The Responsibility Principle
When an employee accepts a job offer in the procurement department, he or
she agrees to perform the duties assigned to the offered job. In other words,
the employee accepts responsibility to perform the duties of the assigned job.
3.3.2.4 The Accountability Principle
Besides being responsible, employees are also expected to be accountable
for their actions in the procurement departments. Accountability means that
employees in the procurement department must perform the tasks of a job
correctly. Failure to do so means they will be held to account by their superiors.
3.3.2.5 The Delegation Principle
When a procurement manager allocates to a subordinate the responsibility and
authority to make decisions, it is termed delegation.
3.3.2.6 The Specialisation Principle
The specialisation principle calls for employees with special skills to be appointed
to work in divisions of the procurement department where they apply their special
skills and knowledge.
3.4 ORGANISATIONAL STRUCTURE
The organisational structure of a business helps the business to achieve its goals
by providing a framework (system or plan) for procurement managers to divide
responsibilities, allocate authority, co-ordinate activities, control performance,
and hold procurement officers accountable for their work. It is therefore imperative
for a procurement department to adopt an appropriate organisational structure
that facilitates the achievement of departmental objectives and company goals.
3.4.1 LINE ORGANISATIONAL STRUCTURE
This is a simple hierarchy where lines of authority run vertically from the top
levels of management to the lower ranks.