Foundations of organization design Coordination, organizational parts and configurations orgNET, Research in Sociology, 2011

Foundations of organization design

Coordination, organizational parts and configurations

orgNET, Research in Sociology, 2011

Feeding Mintzberg’s Structure in Five with background info

Perhaps, 2 of the most influential approaches in the Sociology of Organizations (citation criteria)

Henry Mintzberg (1993) Structure in Five. Designing Effective Organizations

Richard W. Scott (1998) Organizations. Rational, Natural and Open Systems


Brings forth a pattern of internally analyzing organizations

Orders the main directions of accumulating knowledge in the area of sociology of organizations

Scott’s way of understanding the evolution of theories

2 criteria of classifying organizations The relation between organizations and their external

environment Organizations functioning as systems

Applying the 2 criteria generates the following classification of organizations:


Closed systems Open systems

Rational systems

Theories assuming organizations operating as …

I


III

Natural Systems


II


IV

Assuming that organizations operate as machines


Theories assuming organizations as rational and closed systems (1900 -1930) the machine metaphor (see Modern Times, C. Chaplin)

a. Taylor seeking the perfect standardization of work processes and workers’ skills

b. Fayol describing the principles of direct supervision (e.g. unity of command, scalar chain, span of control)

c. Weber highlighting the importance of formal structure (produced by formal rules and procedures)

Assuming that organizations operate as social collectivities

Theories assuming organizations as natural and closed systems (1930-1960)

Hawthorne experiment (George Elton Mayo and Fritz Roethlisberger): social relations do matter and people are not motivated only by economic incentives

McGregor’s X and Y theories: management is grounded in 2 different philosophies

Bernard’s theory of cooperation within organizations: organizations are cooperative systems


Discovering the external environment

Theories assuming organizations as rational and open systems (1960 – 1970)

Contingency theories – a class of behavioral theories that claims that there is no best way to design an organization, lead a company, take decisions

Organizational adapting is determined by 2 factors: its internal characteristics and the conditions of its external environment


Assuming that organizations operate as living organisms

Theories assuming organizations as natural and open systems the living organism metaphor (akin to Aristotel’s organicist theory)

Pfeffer and Salancick – the resource dependence theory [organizations can adapt to survive]

Hannan and Freeman – populations of organizations, competing for resources [the environment selects the organizations that must survive, based on how their internal structure fits the external conditions]


Shifting to Mintzberg’s approach

There are 5 basic means of achieving (mechanisms of) coordinationMutual adjustment (informal communication/adaptation among

workers)Direct supervision (one brain coordinates several hands: one takes

responsibility for the work of others)Standardization (of work processes, of outputs, and of skills): on

the drawing board before work actually starts


Which is the proper mechanism of coordination?

Factors determining the proper mechanism

The problem of brains: the number of group members [n(G)]Mutual adjustment or direct supervision

The problem of work: the complexity of work [c(W)]Standardization of work processes, or standardization of

outputs/skills, or mutual adjustments


The structure of organization

The division of labor in several work tasks & the mechanisms of coordination generate the structure of organization (i.e. this defines the interrelation among different parts: formal & informal)

Is there one best way to design the structure?Yes: the approach assuming organizations as rational and closed systemsNo: the approach assuming organizations as rational and open systems

How should the structure be designed?Formal rules & rigid flow of authority (Weber or Fayol)Depends on the internal and external conditions of the organization

(Mintzberg)


Forms of division of labor 1st form: The division of labor in work tasks performed by the operating core2nd form: The division of labor in administrative work & basic work – the

administration of work is performed by managers 3rd form: The division of labor into those who supervise the basic work (i.e.

managers) & those who standardize the basic work (the analysts of the technostructure)

4th form: The division of labor into those standardize the basic work and those who support the different levels of the organization (the support staff)


The technostructure and the suport staff are off the flow of authority

The operating core, the strategic apex and the middle line managers are placed in the flow of authority

The 5 parts of an organizational structure

The operating core: comprises people who perform the basic work/produce the basic products and services

Functions: Secure the inputs for production Transform the inputs into outputs Distribute the outputs Provide direct support (e.g. maintenance, inventorying etc.)



The strategic apex: the managers placed at the top of the flow of formal authority (i.e. managers of manager or manager who directly supervises)

Major duties: Direct supervision (e.g. allocate resources, issue work orders,

authorize decisions, resolve conflicts etc.) The management of the organization’s boundary conditions (e.g.

development of high level contacts and tapping these for information or resource access)

The development of the organization’s strategy (streams of decisions for responding to the pressures of the external environment & for tailoring the strength points)



The middle line managers: the chain of middle line managers joints the strategic apex to the operating core

Tasks performed: Collects feedback info of the performance of his/her unit & and passes

some of it to the managers above; Intervenes in the flow of decision (makes suggestions for change) Allocate resources to and designs the strategy for his/her unit Elaborate rules and plans Direct supervision Manage boundary condition at his/her level



The techostructure: encompasses the analysts that design, plan and change the operating work flow; make the work of others more efficient (via working on standardization schemes)

The support staff: encompasses all the units that support the organization, being placed outside the flow of formal authority


Organizational configurations

It follA mixture of situational factors (objective realities – size, age, type of environment etc.) and subjective choices made by the strategic apex

It follows that, analyzing the division of labor, the mechanisms of coordination and the organizational parts, we can bring about:

Simple structure (based on direct supervision & with the strategic apex as a key part)

Machine Bureaucracy (based on standardization of work processes & with the technostructure as a key part)

Professional Bureaucracy (based on standardization of skills & with the operating core as a key part)

Divisionalized Form (based on standardization of outputs & with the middle line as a key part)

Adhocracy (based on mutual adjustments & with the support staff /operating core as a key part)


Final remarks

When studying internal organizational networks, we assume organizations operating as natural systems

When studying external organizational networks, we assume

organizations operating as open systems Based on Mintzberg’s key findings, we must have in mind, when

studying internal /external organizational networks: Formal and informal relations (see the means of achieving coordination) Each organizational part builds external relations with the environment

in the process of managing the organization’s boundaries

The capacity of building organizational networks is determined by: (1) the conditions of the environment & (2) the organizational configuration


Glossary Middle management – include all members that are

not in the strategic apex or operating core (i.e. middle line managers: managers in the flow of formal authority)

Staff vs. line – staff positions advise line positions in taking decisions (i.e. the technostructure), whereas line positions have the formal authority to take decisions


Documents

Foundations of organization design Coordination, organizational parts and configurations orgNET, Research in Sociology, 2011