UNIT 1

Organisation

WHAT IS ORGANIZATION? It is a collective social unit deliberately

created by a group of people to accomplish specific goals and purposes within loosely delineated boundary on a continuing basis with enabling factors for sustained growth.

Nature of organization:1. Social unit2. Specific goal3. Boundary4. Continuing basis

TYPES OF ORGANIZATION It is based on 1. function: can be a manufacturing or

service2. Purpose: profit or not for profit3. Ownership: private or public4. Size: small, medium or large5. Area: global, national, regional & local

COMPONENTS & STRUCTURES Various components of organization are: Authority – right to make decisions Span of control – number of people a

superior is responsible for

Chain of Command – relationship between different levels of authority in the business

Hierarchy – shows the line management in the business and who has specific respn

Delegation – authority to carry out actions passed from superior to subordinate

Empowerment – giving responsibilities to people at all levels of the business to make decisions

COMPONENT- ORGANISATION CHARTS

Hierarchical Structure

Managing Director

Sales DirectorMarketingDirector

Finance Director

A B C D Market Research

Strategy PurchasingManager

Sales Manager

AccountsManager

AN ORGANIZATION CHART

ORGANIZATION CHART SHOWSOrganization charts convey five major points about an organization’s structure:1. Activities of the organization: chart indicates the range of activities in which the organization is involved.2. Subdivisions of the organization: each box represents a subdivision of the orgn responsible for a portion of work.3. Type of work performed: the label in each box indicates the department’s area of responsibility.4. Levels of management: chart shows management hierarchy; who report to the same individual are on the same level, or horizontal level on the chart.5. Lines of Authority: the lines that connect the boxes show the official lines of authority and channels of communication for the organization.

ORGANIZATION CHART DOESN’T SHOW

1. Degree of responsibility and authority of individuals2. Degree of decentralization 3. Staff and line functions4. Position status or importance5. Lines of actual communication6. Relationships among members

and7. The ‘informal’ organization.

STRUCTURAL COMPONENTS

OrganizationStructure

Departmentalization

Span of Control

Height of Hierarchy

Coordination

Internal Factors

Formalization

Centralization

Complexity

ORGANISATION THEORY Organisation theory includes conceptual

framework for gaining insight into the way orgnisations functions and the principles governing it.

Several theories of ogn have evolved through times which are not mutually exclusive.

Major theories have been evolved over a period of time to give clear meaning for the term orgnisation.

MAJOR THEORIES OF ORGANISATION

1. Classical theories: Scientific management Administrative management Theory of bureaucracy2. Behavioral science theory Human relations school Behavioral science contributors3. Management science theories4. Systems theories Open ended vs. Closed ended Contingency school

IMAGES OF ORGANISATION Organisations do not carry & convey

common meaning to everyone. This complexity allows people to

interpret the organisational reality in ways convenient to them.

People view the realities in which they live and work.

Hence organisations carry different images in the minds of people who work for the organisations.

DIFFERENT IMAGES Organisation as Machines Organisation as Living Systems Organisation as Brains Organisation as Political systems Organisation as Cultures Organisation as Psychic Prisons

ORGANISATION AS MACHINES Term organisation is derived from Greek

word, Organon, meaning TOOL or INSTRUMENT.

A good tool is one which has precision, efficiency, reliability & predictability.

These are the most obvious features of an org.

Orgn are built around systems, procedures and rules.

This image is the most popular & widely perceived.

It does suffer from being mechanistic organisation.

ORGANISATION AS LIVING SYSTEM

Organisations do not merely keep on repeating their activities in an identical manner overtime.

That could be possible if org were insulted from external environment.

But org cannot exist in vacuum, they have to change and adopt to the environment.

This feature of the org makes them be similar to living systems.

It makes the org to be an open system. Org are influenced by environment.

CHARACTERISTICS OF OPEN SYSTEM Takes inputs from the environment &

transfer them into usable outputs. The throughput processes are cyclical in

nature. They are differentiated. Provides feedback Tend to maintain the balance Dynamic in nature They tend to reach the same goal from

differing conditions.

ORGANISATION AS BRAINS

Org are proactive in their stance as they select their operating environment.

This indicates that the changes happening in the organisation is not automatic but depends on how org react to such changes.

but it ascribes a certain conscious and deliberate rationality to the organizations, while ignoring its irrational human content.

ORGANISATION AS POLITICAL SYSTEM

In a more realistic perspective, political view of org is not very surprising.

Politics refers to the flow of power & influence the process within a social system.

Hence org has built in political process with their hierarchy & authority relations.

Org members enjoy power from various sources.

In org, people differ widely in terms of their need for power & control.

A modern manager also need to have political skills.

ORGANIZATIONAL EFFECTIVENESS

FREDERICK TAYLOR

EFFECTIVENESS WAS DETERMINED BY FACTORS

SUCH AS PRODUCTION MAXIMIZATION,

COST MINIMALIZATION, TECHNOLOGICAL EXCELLENCE, Etc.

HENRI FAYOL

EFFECTIVENESS IS A FUNCTION OF CLEAR AUTHORITY AND DISCIPLINE WITHIN AN

ORGANIZATION

ELTON MAYO

EFFECTIVENESS IS A FUNCTION OF PRODUCTIVITY RESULTING FROM

EMPLOYEE SATISFACTION

ORGANIZATIONAL EFFECTIVENESS

meeting organizational objectives and

prevailing societal expectations in the

near future, adapting and developing in

the intermediate future, and surviving

in the distant future.

APPROACHES TO MEASURING ORGANIZATIONAL EFFECTIVENESS

Goal Approach: Effectiveness is the ability to excel at one or more output goals.

Internal Process Approach: Effectiveness is the ability to excel at internal efficiency, coordination, motivation, and employee satisfaction.

System Resource Approach: Effectiveness is the ability to acquire scarce and valued resources from the environment.

APPROACHES TO MEASURING ORG. EFFECTIVENESS, CONTINUED Constituency Approach: Effectiveness

is the ability to satisfy multiple strategic constituencies both within and outside the organization.

Domain Approach: Effectiveness is the ability to excel in one or more among several domains as selected by senior managers.

Flow Charts of Approaches to OE –Goal Approach

TRANSFORMATIONINPUTS OUTPUTS

GOAL APPROACH

Flow Charts of Approaches to OE –Internal Process Approach

TRANSFORMATIONINPUTS OUTPUTS

INTERNAL PROCESS APPROACH

FLOW CHARTS OF APPROACHES TO OE –SYSTEM RESOURCE APPROACH

TRANSFORMATIONINPUTS OUTPUTS

SYSTEM RESOURCE APPROACH

Flow Charts of Approaches to OE –Constituency Approach

TRANSFORMATIONINPUTS OUTPUTS

STRATEGIC CONSTITUENCIES APPROACH

COMPARISON OF THE FOUR OE APPROACHES

Approach Definition When Used

An organization is effective Preferred when: to the extent that:

Goal attainment it accomplishes its stated goals goals are clear, time bound and measurable

System Resource it acquires needed resources a clear connection exists between inputs & outputs

Constituencies all strategic constituencies constituencies have powerful are at least minimally influence on the organization, satisfied and the organization must respond to demands

Internal Processes combines internal efficiency costs, outputs & satisfaction and affective health are easily measurable

ORGANIZATIONAL EFFECTIVENESS