BUSINESS ORGANIZATIONDR DOUGLAS NISBET

PGDBA101 Strategic Leadership and Management Skills

Learning Themes

There are 3 themes in this Topic:

1. Organisational Structure2. Information Systems and e-Business3. Managing Change and Innovation

Learning Objectives – Theme 1

After studying this topic you should understand the following:

• Structure and performance of organizationss• Elements in structure: the design options• Dividing work into functions and divisions• Coordinating work: alternative ways• Mechanistic and organic structures• Learning organizations

Structure and performance

Figure 10.1 Alternative structures and performance

Structure of a unit in a large business

Figure 10.2 The structure within a BAE aircraft factory (www.baesystems.com)

Developing structure in a small business

Figure 10.3 The organisation structure at Multi-show Events

Grouping work into functions and divisions

Figure 10.5 Five types of structure

Coordinating workIf divide work, then need to coordinate it by:• Direct supervision• Hierarchy• Standard inputs or outputs• Rules and procedures• Information systems (see Siemens)• Direct personal contactWhat method of coordination works best?

Mechanistic and organic structures

Table 10.4 Characteristics of mechanistic and organic systemsSource: Based on Burns and Stalker (1961)

Strategies and structures

Figure 10.8 Relationship between strategies and structural types

Contingencies – technologyWhat structure best supports technologies used to transform inputs, in manufacturing or services? • For example, production line or custom-made?• For example, information systems enable different ways of delivering services, and prompt a search for new structures to support relevant behaviour?• Chapter 18 (Managing Operations and Quality) shows other ways of designing transformation processes using different technologies

organisation structure 2

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Contingencies – size and life cycle

What structure best supports an organisation as it grows (number of staff)?

• Birth – informal, little division of labour, organic• Youth – decisions shared more widely, specialists

employed• Mid-life – extensive division of responsibility, with

rules for coordination• Maturity – mechanistic, perhaps divisions,

selling some units that no longer fitProblem of managing the transitions

Learning organizations

Figure 10.10 Clusters of learning organisation featuresSource: Pedler et at. (1997)

Learning Objectives – Theme 2

After study of this theme you should understand:• The importance of Information Systems (IS) and e-business • How convergence transforms how people add value• How value depends on technology and organisation• About operating and management systems and applications –

enterprise resource planning, customer relations, knowledge and e-business

Management depends on information

Figure 12.1 The role of Information systems in organizations Source: Boddy et al. (2005)

Stages in using the Internet

Figure 12.3 Stages in using the Internet

Co-creation (or Wikinomics)

Figure 12.2 Traditional delivery and customer participation

Computer-based IS

Figure 12.4 The elements of a computer-based ISSource: Boddy et al. (2009a)

Operating and management systems

Figure 12.5 Types of information system

How the Internet changes the links

Figure 12.6 Reinventing the supply chain

Customer Relationship Management (CRM)

Figure 12.7 Communications methods and message

Enterprise Resource Planning (ERP) systems

Figure 12.8 Anatomy of an enterprise system

Knowledge Management (KM) systems

• Potential benefits– Improve way an organisation creates, captures and uses

knowledge– Relates to inputs, transformation and outputs– Examples of BP and Buckman Labs

• Difficulties include– Most valuable knowledge is tacit (shared understanding,

often unwritten): IS best suitedto explicit, codified knowledge

– Do rewards structures encourage people to share knowledge?

IS, strategy and organisation

Figure 12.9 How information systems can change competitive forces: Porter’s modelSource: Adapted and reprinted by permission of Harvard Business Review. Exhibit adapted from Strategy and the Internet, Harvard Business Review, vol. 79, no. 3, pp. 63–78 by M. E. Porter, Copyright © 2001 by Harvard Business School Publishing Corporation; all rights reserved

Conclusion to Theme 2

• Developing technologies have moved IS from the background to the foreground of managing

• Focusing on the technical aspects of computer-based systems will usually add less value than attending to the strategic, human and organisational aspects

• Models presented enable you to question whether the assumptions behind a proposal are right for the context, to explore alternatives and to recognise limitations

Learning Objectives - Theme 3

Managing Change and Innovation is an important part of Organising Business and after studying this theme you should understand about:

• Initiating change – interaction with context• Four models of change• Driving and restraining forces• Forms and sources of resistance• Innovation

An overview of the themes

Figure 13.1 A model of the change process

The life cycle illustrated

Figure 13.4 A project life cycleSource: Lock (2007) p. 8

Models of change – emergent

• Change takes place in an uncertain context,and unrealistic to expect outcomes to be closeto plan

• Success depends on– Learning during the project– Adapting to changing conditions– Managing interest groups

• Plan, but be ready to change

Models of change – participative

• Change relies on those affected being willingto cooperate with the change

• Success depends on– Developing ownership and commitment– Consulting widely for ideas– Seeking consensus

• A democratic process– Suited to which conditions?

Models of change – political

• Change often threatens established interests, who will oppose it

• Success depends on – Building power sources– Creating alliances and coalitions– Manipulating information to support position

• A political process– Suited to which conditions?

Kurt Lewin – driving and restraining forces

Figure 13.5 Driving and restraining forces

Innovation

Figure 13.7 Sources of innovation

The Process of innovation

Figure 13.8 A model of the innovation processSource: Based on Tidd and Bessant (2009)

Organisational support factors

• Strategy – innovation is explicitly called for in the corporate strategy

• Structure – roles and jobs are defined to aid in innovative behaviour

• Style – management empowers the workforce to behave innovatively

• Support – IT systems are available to support innovative behaviour

Conclusion on Theme 3

• External and internal forces driving change• Managing it depends on having a model of the

process – such as the interaction model• Four perspectives offer complementary models

– which is best for the situation• Innovation can be used as a tool to enhance what

the company offers to the market