ch 3 Behavior in Organizations

8/7/2019 ch 3 Behavior in Organizations

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Behavior in Organizations





INFORMAL FACTORS THAT INFLUENCE

THE GOAL CONGRUENCEy External factors:

Work ethics ² set of attitude

Locality

Industry-specific norms and attitudes

y Internal factors:

Culture

Management style: MBWA v/s Written reports

Informal organization

Perception & communication:

Information transmission through formal and informal channels

Messages from different sources may conflict with one another

or may subject to different interpretations



FORMAL CONTROL SYSTEM y Rules ² Formal Instruction & controls

Some rules are guides

Some rules are positive requirement that certain action betaken

Types of rules :

1.Physical control ² pass word, locker, security guard

2. Manuals ² written rules

3. System safeguard ² crossC

hecking, signature, countingcash, separating duties

4. Task control system ² Ensuring specified task are carried outefficiently & effectively



Was

performance

satisfactory

Report

Actual Vs Plan

Responsibility

center

performance

BudgetingStrategic

planning

Other

informationRulesGoals &

Strategies

No

yes

Measurement

Feedback

Communication

Corrective

actionReviseRevise

Reward (feedback)

Formal Control Process



TYPES OF ORGANIZATION

y Function structure

y Business unit structure

y Matrix structure



Functional structure

Advantages :

Disadvantage :

Clarity about career path

Economies of scale within

function

Specialization

Coordination

In-depth skill development

Maintain power & prestigeof major function

Boredom & monotony

Poor decision making

Sub unit conflicts

Reduce coordination between the fun.

Responsibility for profit is at top level

Slow adaptation to changes in the

environment

No unambiguous way of determining

the effectiveness of the separatefunctional managers

Inadequate Structure for a firm with

diversified products & markets

Skilled higher level managers



y Use of the functional structure:

It can be adopted by organization that are small or medium sized

but require a formal structure to coordinate their activity

It can not used by organization that are too large & where

coordination is difficult

E.x. Domino·s pizza



Business unit structure

y Also called as division- responsible for all the functions

involved in producing & marketing a specified product line

Managers handle units as separate companies

Performance of managers is measured by profitability of the

unit

Headquarters reserve certain key prerogatives e.g. obtaining

and allocating funds

Headquarters establish company-wide policies



y Advantages :

It provide training ground in General Management

Better decision related to New Product & Marketing

y Disadvantages:

Duplication of work

Dispute between functional specialist may be replaced by

disputes between business unit in a business unit organization



Matrix structure

y ´Matrix organization means the combination of functioning & productpattern of departmentation in the same organizationµ

y Guideline for making matrix management effective:

Define the objective of the task or objective

Clarify the roles, Authority & Responsibility of Manager & Team Members

Ensure that influence is based upon the knowledge & information

Select experience manager for the project who can provide leadership

Install appropriate cost, time & quality control that report deviation fromstandard in a timely manner

Reward project & team manager fairly`





Advantages:

y Oriented towards end result

y Professional identification is

maintainedy Pinpoint product profit

responsibility

y Oriented towards Decentralization

of decision

y Cost can be cut down by support

system like computer, software

Disadvantages:

y Conflicts in Organization Authority

exists

y

Possibility of Disunity of commandexists

y Higher cost because of additional

hierarchy of project manager &

their staff

y It encourage Group Decisionmaking



y Use of matrix structure:

By the construction co. (Bridge), in Aerospace , in installation

of an electronic data processing system or in managementconsultancy firm where management expert work together tocomplete project

Matrix structure can be adopted when 3 condition exists:

1. There is high pressure from the environment that makes itessential to have a strong focus on both functional & divisionalaspect

2. The external environment of the organization is changing &

uncertain3. There is need for company to share resources



� Implications for System Design:

Along with ease of control, business units have other criteria

also to run their businesses

Once management has decided that a given structure is best,

all things considered, system designer must take thatstructure as given

Business units require broader type of manager and

functional organizations provide benefit of economies of scale

System designer should exist to serve the system



FUNCTIONS OF CONTROLLER

y Designing & operating information & control system

y Preparing financial statements

y Preparing & analyzing performance report, interpreting the

report

y Supervising internal audit & accounting control procedures

to ensure the validity of information, establishing adequate

safeguard against theft & fraud

y Developing personnel in the controller organization &

participating in the education of the management personnel

in matters relating to the controller function

³Controller means the Person who is responsible for designing & operating the

Management Control System´



Relation to line organization

y Controllership function Is staff function

y Controller is responsible for design & operation of the

system which collect & report information, the use of this

information is responsibility of line managementy Implementation of policies is the duty of the line managers

y Controller play an important role in the preparation of

strategic plans & budgets



Business unit controller

Dotted line Solid line

Corporate

controller

Business unit

managers

Business unitcontroller

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Corporate

controller

Business unit

managers

Business unit

controller

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Limitation : Business unit controller will

not provide complete information to the

business unit managers

Limitation :Business unit managers will

not considered business controller as a

trusted adviser

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ch 3 Behavior in Organizations