Eskom Procurement Book 2015

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.

50 CHAPTER 3