Introduction to Organizations

WHO IS THE GOAT?

Messi: https://www.youtube.com/watch?v=cAehMNYw0ig
Ronaldo: https://www.youtube.com/watch?v=Nt8198a0acA&t=63s
What is an Organization?

• Is it the building that carries the name?

• Does an organization have any boundaries?
• Are we referring to the owners, senior managers, or
employees or customers?

• Are you part of IIMB? Why or why not?

An Organization is:

• Social entity
• Goal directed
• Structured and coordinated activity system
• Linked to external environment – open systems
view
STRUCTURAL DIMENSIONS: THE
INTERNAL CHARACTERISTICS

• Formalization: Written documentation

• Specialization: Division of labor
• Hierarchy of authority (span of control): Number
of employees reporting to a supervisor.
• Centralization: Decisions made at top level,
organization is centralized.
QUESTION: TRUE OR FALSE

When spans of control are narrow, the

hierarchy tends to be tall?
CONTINGENCY FACTORS: LARGER ELEMENTS
THAT INFLUENCE STRUCTURAL DIMENSIONS

• Size
• Organizational Technology
• Environment (outside he boundary of the
organization)
• Goals and strategies
• Organization culture
ARE THESE FACTORS INTERDEPENDENT?
 Goals and
Strategy
Environment Size

Culture Technology
Structure

1. Formalization
2. Specialization
3. Hierarchy of Authority
4. Centralization
Two Design Approaches

Mechanistic Design Organic Design

Decentralized
Centralized Structure
structure

Collaborative Empowered
Strict hierarchy Specialized tasks teamwork roles

Horizontal Few rules;

Vertical communication Many rules; formalized communication informal

Stable Environment Turbulent Environment

Efficient Performance Learning Organization
TRUE OR FALSE

An organization can be understood by understanding the

people who make it up
Four Basic Parts

• Operating/technical core
– The basic work of producing the organization’s products and services
gets done here

• Strategic apex/management
– The home of top management
Four Basic Parts contd.

• Technical support
– Help organization adapt by scanning the environment for problems,
opportunities, technology developments
• IT, researchers, engineers

• Administrative support
– Help organizational functioning through physical and human elements
• Cleaning of buildings, HR, service and repair of machines
 Why do we need to understand structural
dimensions and contingency factors?

• To achieve high performance and effectiveness

• Efficiency: amount of resources used to achieve
organizational goals
• Raw materials; money; employees
• E.g. Skype Interview
• Time factor

• Effectiveness: degree to which an organization achieves

its goals
• Which goals? Which internal/external stakeholders?

• Effectiveness is often considered more important than efficiency

Class Work:

Identify a problem with the organization design of one

of the hospitals and how will you fix it?

Analyze the contingency factors of either of the two

hospitals.
Additional videos

https://www.youtube.com/watch?v=D5xKm8tf9Ks