organization unit i

8/3/2019 Organization Unit I

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ORGANISATION

AN OVERVIEW


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ORGANISATION

A consciously coordinated social entity, with arelatively identifiable boundary that functions ona relatively continuous basis to achieve acommon goal or set of goals.

consciously coordinated - management social entity- group of people

relatively identifiable boundary- who is andwho is not part of organization

continuous- regularity common goal or set of goals- individual or

group goals


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Why Organizations Exist?

The use of an organization allows peoplejointly to:

Allocate tasks to employees

Instruct employees

Use technology and other resources

Collect and transmit information necessary forproblem solving and decision making

Exert power and control All these increase the value that an

organization can create


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Organization Structure

Defines how tasks are to be allocated, who

reports to whom and the formal coordinating

mechanisms and interaction patterns to be

followed. Three components- complexity- differentiation within the organization

Formalization- degree of reliance on rules and

procedures to direct the behavior of employees

Centralization- where the decision-making authoritylies


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Organization Design

Concerned with constructing and changing

an organization's structure to achieve the

organizations goals. Importance of Organization Design-

Dealing with contingencies

Gaining competitive advantage

Managing diversity

Efficiency and innovation


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Organization Theory

The discipline that studies the structure

and design of organizations.

Refers to both the descriptive andprescriptive aspects of the discipline.

Describes how organizations are

structured and offers suggestions on how

they can be constructed to improve their

effectiveness.


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Difference between Organization

Theory and Organization Behavior Organization Behavior- micro in nature-

emphasizes on individuals and small groups

Organization Theory- macro in nature- studies

the organization itself or its subunits. Focuses on

the behavior of organizations and organizational

effectiveness. Concerned with organizations

ability to adapt and achieve its goals


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Why Study Organization Theory?

Organizations exist in all aspects of life society

as a whole, the economy and even our personal

lives

To understand organizations structure

To develop systematic theories of organizations

To make choice about how organizations will be

designed For fulfilling requirements for a degree or

certificate


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The Systems Perspective

System- a set of interrelated and

interdependent parts arranged in a

manner that produces a unified whole.

Every system is characterized by two

diverse forces-

Differentiation- specialized functions are

differentiated

Integration- to maintain unity among the

differentiated parts


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Types of Systems

Closed system- that receives no energyfrom an outside source and from which noenergy is released to its surroundings

Open system- made up of interrelated andinterdependent parts that produce aunified whole that interacts with its

environment Organizations are described as opensystems


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Characteristics of an Open System

Environment awareness

Feedback

Cyclical character

Negative entropy- propensity of the system to run down

or disintegrate Steady state- constant energy exchange

Movement toward growth and expansion

Balance of maintenance and adaptive activities

Maintenance- various systems are in balance and thetotal system is in accordance with the environment

Adaptive- system can adjust over time variations ininternal and external demands

Equifinality- variety of solutions to a given problem ratherthan to seek a rigid optimal solution


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The Evolution of Organization

Theory


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Developing a Framework

The second dimension deals with the ends oforganization structure- two opposingperspectives-

The rational perspective argues that thestructure of an organization is conceived as avehicle to effectively achieve specifiedobjectives

The social perspective emphasizes thatstructure is primarily the result of theconflicting forces by the organizationsconstituents who seek power and control.


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Type 1

Time frame 1900-1930

Reflects that organizations are closed systems

Conceived organizations as mechanical devices

to achieve goals. Attention focused on internal

functions of the organizations

Rational ends perspective


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Type 3

Time frame 1960-1975

Rationality as the vehicle for achieving goals

Concentrated on size, technology and

environmental uncertainty as the majorcontingency variables that determined whatshould be the right structure for an organization.

Structure properly aligned to the contingency

variables will facilitate the achievement of goalsand wrong structure could threaten theorganizations survival.


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Type 4

Time frame 1975-?

Social perspective but with an open-

system framework. Structure is not the rational effort by

managers to create the most effective

structure but rather the outcome of the

political struggles among coalitions within

the organization for control.


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Type 1 Theorists- Classical School

Frederick Taylor and Scientific

Management

Henri Fayol and Principles of Organization Max Weber and Bureaucracy

Ralph Davis and Rational Planning


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Organizational Effectiveness


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The degree to which an organization realizes its

goals

Organizational Effectiveness is the degree to

which operative goals have been attained whilethe concept of efficiency represents the

cost/benefit rate incurred in the pursuit of these

goals.

The proper organization structure makes an

organization effective- the way people and jobs

are put together and their roles and

relationships are defined


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There is no proper definition ofOrganizational Effectiveness. There aremultiple criteria from general to specific

factors which means different things todifferent people.

OE must consider both means (process)and ends (outcomes)

Different approaches deal with thedefinition of OE


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THE GOAL-ATTAINMENT

APPROACH

States that an organizations effectiveness must

be appraised in terms of the accomplishment of

ends rather than the means

Assumptions- organizations are deliberate,rational, goal-seeking entities-

Organizations must have ultimate goals

Goals must be identified and defined

Few enough to be managed

General agreement on these goals

Progress must be measurable


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THE GOAL-ATTAINMENT

APPROACH Value to managers- The real problems lie in the proper

identification and measurement of goals. The validity ofthe goals identified can be increased by-

Ensuring that input is received from all those having

influence on formulation of goals even if they are notpart of senior management

Including actual goals obtained by observing thebehavior of organization members

Recognizing that organizations pursue both short andlong term goals

Insisting on tangible, verifiable and measurable goals

Viewing goals as dynamic that change over time


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THE SYSTEMS APPROACH

Emphasizes on long term survival of the organization-

ability to acquire resources, maintain itself internally as a

social organism and interact successfully with its

external environment

Focuses not on specific ends but on means needed for

the achievement of those ends

Assumptions-

Organizations are made-up of interrelated subparts

Successful interaction with external environment

Steady replenishment of resources consumed


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Making systems operative-

critical systems interrelationships can be converted to

OE ratios-

input/output transformations/input

Changes in input/input

Transformations/output

Management audit- analyses the key past, presentand future business activities to ensure that the

organization is getting the maximum effort out of its

resources


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Problems-

development of valid and reliable measures fortapping quantity and intensity may not be possible

It focuses on the means necessary to achieve

effectiveness rather than on organizationaleffectiveness itself

Value to managers-

Less prone to immediate results

Increases managers awareness of the interdependcy

of organizational activities Applicability where end goals are either vague or

cannot be measured


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THE STRATEGIC-

CONSTITUENTS APPROACH

An effective organization is one that

satisfies the demands of those

constituencies in its environment from

whom it requires support for its continued

existence. It is similar to the systems

approach as regards interdependency but

differs as it considers only those aspectsof the environment who can threaten the

organizations survival


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THE STRATEGIC-

CONSTITUENTS APPROACH

Assumptions-

Organizations are political arenas where vested

interests compete for control over resources

The organization has a number of constituencies withdifferent degrees of power, each trying to satisfy its

demands

Managers pursue a number of goals and goals

selected represent a response to those interest

groups that control the resources necessary for the

organization to survive


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THE STRATEGIC-

CONSTITUENTS APPROACH Making Strategic-Constituencies operative-

Identify the constituencies that are critical for theorganizations survival

How dependent the organization is on eachconstituency

Identifying the expectations that these constituencieshold for the organization

Comparing the relative power of various strategic-

constituencies


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THE STRATEGIC-

CONSTITUENTS APPROACH Problems-

Task of separating the strategic constituencies fromthe larger environment is difficult

Constituencies in the changing environment may notbe easily identified

Each member may strongly affect what he or sheperceives as strategic

Identifying the expectations that the strategicconstituencies hold for the organization

Value to managers-

On which constituencies, does the survival of theorganization depends

Decrease the chance of upsetting the group whosepower could hinder the organizations operations

modify preference ordering of goals to reflect

changing power relationships


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THE COMPETING-VALUES

APPROACH Each evaluator may look at the same organization but

may evaluate it differently

Assumptions-

There is no best criterion for evaluating anorganizations effectiveness

There is no single goal that everyone can agree uponand consensus on precedence of goals

Diverse preferences can be consolidated and

organized There are common elements of any list of OE criteria

and these elements can be combined to create basicsets of competing values


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APPROACH

Making Competing Values Operative- Three

basic sets of competing values-

flexibility versus control- flexibility values innovation,

adaptation and change and control favors stability,order and predictability

People versus organization- well being and

development of people or organization

Organizational means versus ends- means stressingon internal processes and long term and ends

emphasizing on final outcomes and short term


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APPROACH Organizations stage in its life-cycle is an important

determinant of which OE model should be emphasizedby the management-


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APPROACH

Problems- more research is needed to

determine if effectiveness models actually

change in predictable ways as organizations

develop through their life-cycle Value to managers- by reducing a large number

of effectiveness criteria into four models, this

approach can guide the manager in identifying

different criteria to different constituencies andin different life-cycle stages

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