To define the structure, organization, design and related theories

By BEHSHAD MEHRABI

1. GENERAL2. Dimensions of Organizational Structure3. Strategy4. The size of Organization5. Technology6. Enviroment7. Types of organizational structures

Abstract

Objective :To define the structure, organization, design and related theories

Some basic definitions

The organization is a social phenomenon that consciously coordinated with certain boundary for the purpose or objectives, based on a series of works on permanent basis.

سازمان پدیده ای اجتماعی به شمار می آید كه به طور آگاهانه هماهنگ شده و دارایحدود و ثغور نسبتا مشخصی بوده و برای تحقیق هدف یا اهدافی، بر اساس یك

سلسله مبانی دائمی فعالیت می كند.

• The Conscious :

Implies that Management

• Social phenomenon

Individuals or groups that are interacting with each other

• Boundary

Members from non-members distinctive

What is structure? we define the structure as components of the organization which is formed with:

I. Complexity

II.Formalization

III.Centralization

What is organization theory?

Is a major that studies the structure and organization design. Organization theory to both describe and prescribe the course deals.

organizational behavior

Organizational behavior, attitude and lacking

respect to matters on individuals and small groups are emphasized. Behavior within organizations, performance, and employee attitudinal variables such as employee productivity, absenteeism at work, shift work and job satisfaction focused.

Biological metaphors

The organization phenomena such as trees, animals or human beings (which we'll assume that you're reasonably offered by them) that they are living and has life.

The definition of a system:

System consists of interconnected

components are configured and linked together to form a single whole, separate from the elements. Societies are a system. Cars, plants and the human body are also examples of the types of systems. In these systems, the data are obtained then modified and converted to produce those outcomes.

Types of systems:Usually systems have been classified into open and closed systems.

Completely closed system

System, which receives no external source of energy, does not emit out any energy .

Open systems

this system has dynamic interaction with environment.

Features of open system:

All the system include three elements of inputs, processes and outputs. Systems receive materials, energy, information, human resources and so on, and convert to the goods, services, resources, waste, etc

ORGANIZATION THEORY, STRUCTURE AND DESIGN- ( OTSD )

How an Organization Creates Value

Organization’s Inputs

Raw materials

Money and capital

Human resources

Information and knowledge

Customers of service organization’s

Organization’s Environment

Shareholders

Suppliers

Distributors

Government

Competitors

Organization’s Conversion Process

Machinery

Computers

Human skills and abilities

Organization’s Outputs Finished goodsServicesDividendsSalariesValue for stakeholders

Lifecycle perspective

. Organizations are born and grow and eventuallyDie. Every day, new organizations arise, at the same time hundreds are dismissed and do not operate .

Lifecycle steps:

1. Entrepreneurs

2. the initial formation

3. formalization and control

4. Complex structure

5. Decline

Objective :Understanding the dimensions of organizational structure

Complexity : which consists of three aspects:

1. Vertical - how deep

2. Horizontal - how wide

3. Geographic - how spread

• Formalization :degree to which rules and procedures are

spelt out in the organization. : So that staff roles are defined by means of official documents

• Centralization : which implies where decisions are made

in the organization

FACTORS WHICH AFFECT STRUCTURE

1. STRATEGY

2. ORGANISATION SIZE

3. TECHNOLOGY

4. ENVIRONMENT

Strategy can be defined as the determination of the basic long-term goals and objectives of the enterprise, and the adoption of courses of action and allocation of resources necessary for carrying out the goals.

There are three strategy dimensionsA. Innovation StrategyB. Cost Minimization StrategyC. Imitation Strategy Innovation Strategy emphasizes to introduction of New products and services.Cost Minimization Strategy emphasizes tight cost controls,Avoidance of unnecessary innovation or marketing expenses, And price cutting.Imitation Strategy seeks to move into new products or new Markets only after their viability has already been proven.

Strategy

IMPACT OF STRATEGY ON STRUCTUREFrom the above definition the question which arises is whether strategy is premeditated or it just emerges. There are two views viz.Planning Mode : describes strategy as a plan or explicit set of guidelines developed in advance. Managers identify where they want to go ; and then they develop a systematic and structured plan to get there. This was the dominant thinking until recently.

Evolutionary Mode :which is a recent perspective says that Strategy is not necessarily a well-thought-out and systematic plan .The advantage of the evolutionary mode is that of being able to cope with both static and dynamic strategies.

EnvironmentalFactors

&Organizational

Factors

Strategy Structure

IMPACT OF STRATEGY ON STRUCTURE

Chandler’s Strategy –structure thesisAlfred Chandler –a Harvard historian has published his work in the early 60s with extensive research of large American companies during The period 1909 and 1959. He said, “ A new strategy required a new orat least refashioned structure if the enlarged enterprise was to be operated

efficiently…. Unless structure follows strategy, inefficiency results.”(a) Backward integration(b) Creating product groups if the variety of products was large(c) Realizing financial, technological and personnel economies of growth and size cannot be realized

Time 1 1+1 1+2

Product Diversification Low HighStrategy

Structure Simple Functional Divisional

IMPACT OF SIZE ON ORGANIZATIONAL STRUCTURE

As an organization grows there is bound to be an impact on its structure.Generally, large organizations- those employing 2000 or more employeestend to be :(a) More Specialized(b) More Departmentalized(c) Have more vertical levels(d) More rules and regulations when compared to smaller organizations.Furthermore, size affects structure at a decreasing rate for e.g. anorganization of 2000 employees is as it is fairly mechanistic and anaddition of another 500 employees will not have any impact. But an organization of 300 employees if it adds another 500 employees will have a substantial impact in terms of developing a more mechanisticstructure

IMPACT OF SIZE ON ORGANIZATIONAL STRUCTURE

Increased Size

GreaterDifferentiationBetween Units

Greater Div.Of Labour(Job Spln.

Within units)

More Levelsin the

Hierarchy

Less needfor IntraunitCoordination

More need forInterunit

Coordination

Larger Unit Size

MoreFormalisationof Behaviour

More use ofPlanning Control

Systems

Structure moreBureaucratic

(Unskilled variety)

Objective :To define the technology and earlier research, theories and technologies relation with structure

Technology

Information, equipment, techniques and processes needed to transform inputs to outputs is defined as Technology.

Woodward Technology Classification:

1- Small-batch: Production is based on the order (eg order to tailor clothes)

2- Mass Production: products produced in large batches (eg, refrigerator manufacturing companies)

3- Continuous-proc : Continuously automated manufacturing process with maximum complexity (such as oil refineries and chemical)

IMPACT OF Technology ON ORGANIZATIONAL STRUCTURE(base on Woodward Classification):

StructuralCharacteristics

Small-batch Mass Production Continuous-proc

Proportion of skilled workers

High Low High

Complexity Low High Low

Formalization Low High Low

Centralization Low High Low

Knowledge-based technologies: Woodward Classification is base on producing companies but Less than half of the organizations are producer so another

Classification was introduced by Charles Peru .

Two basic dimensions of knowledge-based technology

1) Variability of Duty : Exceptions are related to diversifications

2) Analyzability : capability of analyzing the problems and finding solution

Art and Industrial(3) Non-repetitive(4)

Repetitive(1) Engineering(2)

DiversificationLow High

Low

High

Analyzability

Repetitive

Non-repetitive

Classification Technology of Peru

Classification Technology of Peru

1) Repetitive :With very few Exceptions and easy to analyzing like Bank cashier

2)EngineeringWith several Exceptions and easy to analyzing like tax Accounting

3)Art and IndustrialWith very few Exceptions and complex to analyzing like Serviceman

1)Non-repetitiveWith Several Exceptions and complex to analyzing like researchers

• Environment : composition of the agencies or the forces that

affect the function of organizations and organization have little control or no control at all. (Factors outside the organization)

• General environmentAll factors that affect the organization,

However, the dependence of the organization is not clear Such as economic factors. Political. Social. Culture. Ecological status.

• Private environment: Part of the environment that are directly related to the organization include customers. Competitors. Institutions .... in achieving its goals .its Unique and with specific environmental conditions will be change d.

• Organization Domain : Range of products , services and markets which will be influenced by organization.

Environmental Unreliability

All Environments based on "environmental Unreliability " are different. some are statics and others are dynamic and it’s a threat to the effectiveness of the organization so managers are seeking to way to minimize it

Statics Environment : Private environment with Few change in forces

Without new competitor and low competition.

without New technological barriers .

Pressure groups have little activity.

Dynamic Environment : Government regulations which affecting working conditions are

changing rapidly.

New competitors are emerging regularly

Absorbing raw material is difficult and Consumers' tastes are changing

Environmental Uncertainty

Mechanistic Structure Organic Structure

Simple structure Complex Structure

Low differentiation High Differentiation

Low Integration High Integration

Centralized Decision- Making Decentralized Decision-Making

Standardization Mutual Adjustment

LOW HIGH

Two types of structures were introduced by Burns and Stalkerz

THREE DIMENSIONAL MODEL OF THE ENVIRONMENT

Stable

Dynamic

Scarce

Complex

Abundant

Simple

Objective :Understanding the common elements of the organizations and types of deferent structures

MiddleLine

SupportStaffTechno-

structure

The Five parts of the Organization

Operative Core

Strategic Apex

Structure in Fives- Manufacturing Firm

VPsOper & Mktg.

Plant Mgrs RSMsForemen RSMs

Purchasing Assemblers Machine Salespersons Shippers Agents Operators

(OC)

(SS)

Strategic Planning.ControllerPersonnel TrainingOperations ResearchProduction SchedulingWorks StudyTechnocratic clerical staff

Legal CounselPublic RelationsIndustrial RelationsResearch & Devlpt.PricingPayrollReceptionMailroomCafeteria

Board of Directors President (SA)Executive CommitteePresident’s staff

(TNS)

(ML)

DIAGRAM OF AN ORGANIZATION

1. OPERATING CORE- operators who perform the basic work of producing the products and rendering the services

2. STRATEGIC APEX- High level managers

3. Middle Line is created between the Strategic Apex and the Operators. 4. ANALYSTS- they are required for facilitating coordinating of work through the process of standardization.

5. SUPPORT STAFF- role is not standardized but is to provide indirect services. More in the nature of administrative support.

Deferent structures

The synthesis achieved through the following:

1. Simple Structure: based on Direct Supervision in which the Strategic Apex is the key part2. Machine Bureaucracy: based on standardization of work processes in which Technostructure is the key part.3. Professional Bureaucracy : has the standardization of skills in which the Operating Core is the key point.4. Divisionalized Form : based on standardized output, in which the Middle Line is the key part.5 Adhocracy : based on Mutual Adjustment in which Support Staff (sometimes with the Operating Core) is the key part.