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INTRODUCTION
In simple terms organization is made of group of people with some specific goals and objectives. It is defined as relations among components of a system. Organization structure denotes the components and relations that bind people working with the organization. Three pillars of organization are the people, the organization itself (considering it as a separate entity) and the technology. People issues encompass education, training and attitudes. Organization issues cover strategy, policy, culture and bureaucracy. Technology issues are hardware, software, telecommunications and information systems. Three different levels of organization structure are strategic, tactical and operational. Strategic level represents decision making level, i.e., the corporate or the top level of an organization. Tactical or business level is the middle management level, where strategic decisions are transformed into tactics to achieve the strategic intents. Operational level represents the actual implementation level, where first level employees and workers, execute the tactics, adopting the actions plans.
ORGANIZATION STRUCTURE
Organization structure helps us to determine the authority relationships among the members of organization, and hence it influences the behaviour of individuals, groups and divisions within the organizations. Among others, structure of an organization affects the division of tasks, communication systems, decision making patterns and finally the way how people relate to each other. Global competition now requires many organizations to re-define their structure and even to relocate, taking advantage of state of art technology and communication support.
What is an organization? Organization is essentially a formal structure of people, which is set up to achieve some defined goals. Commonly we use following terms to define any organization.
Organization is a group of people who are organized to achieve a common purpose. It is an entity, a unit or a establishment, which utilises resources to achieve some common purpose. It shows a structure of relationship in an enterprise It is a process, which facilitates to relate tasks and facilities of people working in an enterprise, to achieve intended goals.
According to Arthur Young to create an organization, we group the activities, establish authority and responsibility, and describe the working relationships
Organization, Organizing and Organization Structure The term organization is used to refer a social group, which is deliberately created and maintained to achieve some intended goals. More specifically it is defined as a formal social group. Also the term organization is referred as a process of determining activities that are required to achieve intended goals, creating various roles and ensuring effective operation of the total system. Organizing is a management process of identifying; classifying, grouping and assigning various activities with adequately defined authority relationships to achieve intended goals. Organization structure is the outcome of organizing process. It is a framework of decision-making authority, i.e., a system of relationships, which govern the activities of the people working in the organization to achieve some intended goals.
Systems view of Organization Organizations are viewed from systems perspectives, as systems is a collection of parts (or sub-systems), which is integrated to accomplish the goals and objectives of the organization. Systems have inputs, processes, outputs and outcomes, with ongoing feedback among these various parts. If one part of the system is removed, the nature of the system is changed. Organization is viewed as a system, as organization is a unitary whole. It consists of arrangement of activities to achieve its objectives. Systems theory also provides new perspective for managers to interpret patterns and events in their organizations.
Attributes of a System
The system is goal oriented. The whole is more than the sum of all parts in a system. A system is engaged in processing or transformation of inputs into output. Various components of a system are interrelated and interdependent. They interact with each other. A system acts upon its environment and is also acted upon by the environment.
Components of Organizational Structure According to Mintzberg (1981), organizational structure is the sum total of the ways in which it divides its labour into distinct tasks and then achieves coordination among them. As Mintzberg believed organization structure is a configuration systems and relationships, he suggested six components, as illustrated in the figure below:
people in the operating core part of the organization are involved in the production of goods and services. The strategic apex part of the organizations is involved with controlling. The middle line managers aligns strategic apex with the operating core. People at the techno-structure core, designs, plan, change or train the operating core. The support staff provides support to the organization, which is outside of the operating core. Finally ideology is the traditions and beliefs that make one organization distinctly different
Each structural form indicates different pattern of behaviour of the organization. Organizational structure that conforms to machine bureaucracy emphasizes on: Standardization of work Centralized decision-making Limitations of behaviour and procedures for members Polarization of status (maintaining hierarchies) Enforce internal and external control on stakeholders
Characteristically such organizations are secretive, narrow-minded, prevent internal and external cooperation, and rigorously practice insularity (preventing employees of one department to enter into another). Such organizations promote competition, and not collaboration among employees. Very large organizations like; GM and Ford, Tata Steel, Tata Motors, Hindustan Motors, etc. are examples of machine bureaucracies.
Organizations that subscribe to the professional bureaucracy discard formalizations. Professional people manage such organizations and hence employees enjoy functional control and less control. Such organizations believe in employees empowerment and total employee involvement (TEI) and even they build employees capability to cope with the external eventualities. Free and open culture promote learning environment, hence such organizations can also practice knowledge management, competency development, and truly transform people as good performers. Organizations with innovative or adhocracy structure emphasize on developing their distinctive cultural identity. They decentralize their decision making, process, and promote open communication, discussion, negotiation and interaction among people and divisions. They are more prone to alliance building behaviour. The entrepreneurial form or organization structure is simple, as a single person (usually the entrepreneur himself/herself) directs the activities of the firm. The fifth and final type organizational structure is the divisional form. Such form or organizational structure focuses on autonomous divisions, which, however, may not always imply decentralization of decision-making. Often this form of organization structure sparks intra-unit fighting.
Organizational Effectiveness
Effectiveness is the extent of an activity that helps in achieving the long-term goals. Since we measure effectiveness for specific activity, we can define activity specific effectiveness is the outcome that support the broader goals of an organization. To measure the effectiveness, we can use both the qualitative and quantitative tools. Behavioural parameters like; values, attitudes, skills and behaviour are measured using qualitative tools. Value and volume of output changes, customer satisfaction, changes in the profitability, etc. are measured using quantitative tools. Organizational effectiveness is the extent to which the organization, as a whole, achieves its goals optimizing its resources. It depends on the degree of interpersonal skills, positive attitudes, technical competencies, small group activities, etc., which together contributes to the achievement of organizational goals and objectives. Organizational effectiveness refers to the corporate management systems that produce development results of an organization. Among others, an effective organizational structure helps in achieving organizational effectiveness.
Systems engineering approach encompasses technological, organizational and societal systems. It follows four different stages like; systems analysis, systems design, implementation and operation. At systems analysis stage, organization defines the systems, identify different sub-systems and establish their inter-relationships. At systems design stage, organization builds the systems model, optimizing the resources. At the implementation stage, final design is built, keeping in view various eventualities, which could cope with uncertainties. Finally at the operation stage supports are provided to continue with the designed systems documenting the activities involved, user manuals, training etc. Thus both Systems Analysis and Systems Engineering provide a general way of thinking about practical situations requiring the creation of a system that achieves some pre-defined purpose.
Operations of the Law of Requisite Variety, according to Beer exhibit following properties, Maintenance of identity (every organization must have a purpose and accordingly should organise its means to achieve the same). Ability to self repair (organisation should be capable enough to selfrepair to sustain existence). Self awareness (organization must aware of themselves on what they comprise). Self organising (organizational structure should be environment and context specific). Self balancing (homeostasis). Open systems (adaptive to extract information from their environment)
The model comprises two operating systems that primarily interact with the external environment and the five attendant systems, demonstrating specific interrelationships and producing the properties of variability.
Total Environm ent 5 Identity
M eta System
T he Future?
4 Intelligence
3 C ontrol
A udit 3* E nv A C oordination 2 1 O A p
O perating System
E nv B
1 O B p
Viable System
Viable systemcontd. As per the model, System 5 represents the identity, i.e., the total system purpose and the measures of success. System 5 passes down to System 3, i.e., the policies and authority, which govern the overall system outcomes. System 5 balances the present and the future, external and internal perspectives, moderating its relationship between systems 3 and system 4. Change in System 3, influence System 1 (operational systems, i.e., A and management function, i.e., B). System 3 and each of System 1 (A and B) through interactions establish agreements, i.e., managed by System 2. System 4 examines the external environment and gains the intelligence about the totality and the future. Therefore, in VSM, any of the six systems operate with a cybernetic intervention at any point in time, and in the process ensure that the organisation become a self-controlling system.
Orchestra Organization
The term orchestra organization is used in open system perspective, as like an open system organization, an orchestra organization is a complex set of interdependent subsystems. An open system organization takes input from the environment, processes those, and produces output. Efficient interactions with the environment and various subsystems, in an open system, determine the success of an organization. When the organization is efficient, it not only considers relationships and reciprocal influences between the organization and its environment, it even considers extending its sphere beyond the formal boundary, through an efficient boundary spanning sub systems. Boundary spanning subsystems play the buffering role to account for external organizational uncertainty. Processes or throughput, in a typical orchestra organization are specialized functions, which are distinct and interdependent. Even the coordinating function is considered as throughput, as it helps in the goal of achieving the output. The job of coordinating in orchestra organization could be both formal and informal. Depending on its structure and the use of physical space, an orchestra organization may emphasize more on informal coordination. It, however, depends how they organize their human resources.
Chaos Theory
Chaos theory studies the complexity of world to identify principles to understand the organizations. The theory of chaos deals with the structure of turbulence, i.e., study of unpredictable complex systems. Edward Lorenz of MIT (quoted in Hilborn, 2004), a meteorologist, simulating the weather pattern given a visual presentation to explain the theory of chaos as under:
The picture resemble to a butterfly, hence it is also known as the `Butterfly effect. "The Butterfly Effect" refers to the discovery that in a chaotic system, it is theoretically possible that slight change would make no difference whatsoever, but when the system is unpredictable at a certain stage, the future may unfold quite differently, depending upon what little difference occurred. The application of chaos theory to management depicts organizations as complex and unpredictable because of the relations among constituents of a system.
Chaos is fractal: Literally fractal means a curve or surface that is independent of scale. Any segment, if magnified in scale, appears identical to the whole curve. In the management analogy, it is assumed that different levels of organization resemble others, like a fractal in the managerial hierarchy. A form of social structures can be examined in relation to characteristics of the whole system at the macro and micro levels. Theory of bifurcation: Bifurcation is the sudden appearance of qualitatively different solutions to the equations for a nonlinear system as a parameter is varied. In an organization, two different patterns (groups) can emerge to address an issue differently, as complexity increases. This is often recommended as a source of creativity. Organizations are complex and adaptive systems that have behaviours similar to those found in nature--different stages of stability and chaos. Rather than control in organization, a manager is prompted to take advantage of its complexity. Theorists in management and social organization now believe that organizations are also non-linear dynamic systems, having the same characteristics as natural phenomena. The organization is often seen as complex adaptive system comprised of the formal and shadow systems, and in this way the analogy is made between chaos in natural systems and the social organization.