All Presentation

Organizational Design
Sayed Mahmood Fazli

Sayed.mfazli@gmail.com
0706317442
What is organizational Design
The action or process of organizing, ordering,

or putting into systematic form
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What is an organization?
Organizations are social entities that are goal
directed are designed as deliberately
structured and coordinated activity system
and are linked to the external environment.
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System
The system of organizations is very similar to the
system of human beings.
Organization theory is similar to anatomy or

physiology
Systems, Systems Theory
A system is an organized collection of parts (or

subsystems) that are highly integrated to accomplish an
overall goal.
The system has various inputs, which go through certain

processes to produce certain outputs, which together,
accomplish the overall desired goal for the system.
A system is usually made up of many smaller systems, or

subsystems:
1. Open System ( interact with its environment) and

2. Closed Systems (does not interact with its environment)
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A system can be said to consist of four things
The first is objects – the parts, elements, or variables

Second, a system consists of attributes – the qualities
or properties of the system and its objects.
Third, a system has internal relationships among its
objects.
Fourth, systems exist in an environment.
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Execution is critical to success, yet the majority of

companies struggle to translate strategy into action.
Recent studies including a survey of more than 1,000

organizations globally, reveal that 60 per cent of
organizations fail to execute their strategy effectively.
One of the most widespread obstacles to execution is the

gap between the nature of work in turbulent markets and
the techniques managers use to get things done.
(Don Sull , 2010)
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Organization design sets out to answer the question:
What is the best way to organize a group with a shared purpose to get
things done and achieve its strategic intent?
 To find the optimal form for an organization to maximize its
performance. Form is much more than structure; organizations need to
be viewed holistically with many more dimensions considered and kept
in alignment.
 Organization design is the art, the science and the business of
building effective organizations.
 It is a deep expertise and competence, consisting of knowledge from
theory and experience
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Organizational
Design
Sayed Mahmood Fazli
0706317442
The term industrial relations is generally associated with

relations between the employer and the workmen in a unit or
industry.
The evolution of the concept is linked to industrialization and the
growing complexity of work organization.
As industrial enterprises grew in size and technological
processes initiated a socio-technical dependence, there emerged
certain peculiar characteristics that required an institutionalized
rather than an individualized employer–employee relationship.
1. Segmentation (Blue-collar and White-collar Roles): the
repetitive tasks be performed with greater efficiency and competence.
Work, therefore, got fragmented into smaller tasks. Those performing
these fragmented and repetitive tasks needed supervision
White-collar workers are known as suit-and-tie workers who work
in service industries and often avoid physical labor. The blue-
collar stereotype refers to any worker who engages in hard
manual labor, such as construction, mining, or maintenance. 2
2. Specialization (Horizontal Differentiation): Workers were
further classified on the basis of groups that specialized in a small
but distinct nature of task grouping (for example, fitters, riggers,
riveters and painters). The differentiation, from an organizational
point of view, was horizontal, and later led to what, in modern
terms, could be akin to departments or sections. This horizontal
differentiation also enabled workers to organize themselves on the
basis of specialization or special skill sets at an enterprise level or
even at the industry level. This kind of organization had its own
impact on work relationships not only amongst the members but
also with the employer and the industry.
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3. Hierarchical Levels (Vertical Differentiation): As the
differentiation on the horizontal dimension increased, there
was need for supervision and coordination, which resulted in
a vertical hierarchy or vertical differentiation. The different
levels thus created vertically were responsible and
accountable for different tasks in terms of output, targets,
costs, resource utilization, etc. With differentiations along both
vertical and horizontal dimensions, work relationships
became increasingly complex.
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4. A New Relationship Interface: The fragmentation of work
and the resulting differentiations—both vertical and horizontal—
resulted in increasing complexity in the relationship between
employees and employers, and amongst different groups.
The focus, then, shifted to technological transformation and

innovations. Newer methods of production through newer
technologies demanded different and new knowledge and skill sets.
This impacted the security of the existing job holders because of

knowledge and skill obsolescence and their redundancy.
A collective effort for protecting their interests, thus, became a

necessity.
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HUMAN RESOURCE PLANNING (HRP)
To understand the Human Resource Planning First, we will

see what is Planning? and why is it needed?
What is planning? Plans are methods for achieving a
desired result. Goals or objectives are specific results
you want to achieve. Planning is thus “the process of
establishing objectives and courses of action prior to
taking action.”
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Human resource planning (HRP):
Is the process of systematically reviewing human

resource requirements to ensure that the required
number of employees, with the required skills, is available
when they are needed.
After an organization’s strategic plans have been
formulated, human resource planning can be undertaken.
Human resource planning has two components:
requirements and availability. Forecasting human
resource requirements involves determining the number
and type of employees needed by skill level and location.
In order to forecast availability, the HRM DEP looks to both
internal sources (presently employed employees) and
external sources (the labor market).
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JOB ANALYSIS
Studying and under-standing jobs through the

process known as job analysis is a vital part of any
HRM program.
Job Analysis is the SYSTEMATIC process of
collecting and making judgments about all the
important information related to a job. Job analysis is
the procedure through which you determine the
duties and nature of the jobs and the kinds of people
who should be hired for them. it provides to write job
descriptions and job specifications that are utilized in
recruitment and selection, compensation,
performance appraisal, and training.
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Methods of Collecting Job Analysis Information
• The Interview
The three types of interviews managers use to
collect job analysis data are:
Individual (to get the employee’s perspective
on the job’s duties and responsibilities,
Group (when large numbers of employees
perform the same job),
Supervisor (to get his/her perspective on the
job’s duties and responsibilities).
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The Questionnaire
• Structured or unstructured questionnaires
may be used to obtain job analysis
information
• Questionnaires can be a quick, efficient way
of gathering information from a large number
of employees. But, developing and testing a
questionnaire can be expensive and time
consuming.
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The Observation
Direct observations are useful when jobs consist of mainly
observable physical activity as opposed to mental activity.
Reactivity can be a problem with direct observations, which
is where the worker changes what he/she normally does
because he/she is being watched.
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Participant Diary / Logs

The employee records every activity he/she engages in,
in a diary or log along with the amount of time to perform
each activity to produce a complete picture of the job.
Employees may try to exaggerate some activities and
underplay others.
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Organizational
Design
Sayed Mahmood Fazli
0706317442
Business The relationship between Performance Leadership

foundation "management strategy" Wheels
and "organizational goals"
and "human capital
initiatives"
Organization’s Process and
SWOT Procedure
Mission
Vison technology, globalization, and Organizational
other competitive factors structure
Values Organizational
development
organization’s mission, vision, values, and culture
Culture Communication
Business Foundation - Mission
First, it’s always better to have a baseline of
where you are (mission)
Before considering
where you’d like to go (vision).
Hence, the mission comes before the vision, which
logically comes before the business strategy.
This allows for determination of the gap between the

mission and vision, prior to definition of the business
strategy and organizational goals.
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Business Foundation
Once the mission, vision, values, and culture have been

created and implemented,
Examine them sequentially and as an integrated system to

check for alignment.
This is beneficial because it provides a logical and credible

story the workforce can understand and accept as the
basis by which they will operate
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Business Foundation
Mission statement is : a written declaration of an
organization’s purpose and focus that normally remains
unchanged over time.
Mission statements:
 serve as filters to separate what is important from what
is not,
 clearly state which markets will be served and how, and
 communicate a sense of intended direction to the entire
organization.”
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Business Foundation - Vision
Vision statement is “an aspirational description of what an

organization would like to achieve or accomplish in the
mid-term or long-term future.
It is intended to serve as a clear guide for choosing current

and future courses of action.
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Business Foundation
The simplest way to understand the difference
between them is:
The mission statement is what’s to be

accomplished today or in the present state,
vision statement is what’s to be accomplished

in the future.
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Business Foundation Core Value
how we interact with each other, and which
strategies we employ to fulfill our mission.
The core values are the basic elements of
how we go about our work. They are the
practices we use (or should be using) every
day in everything we do.
Values represent the beliefs that an
organization has, and should guide the
internal conduct of the employees in the
company.
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Business Foundation core Value
Respect for People
was lost in translation.
Either way, the end result was a dissatisfied and

demotivated employee who became confused in
understanding what the company said versus what the
company (represented by the manager) did.
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Business Foundation Culture
The sum total of an organization’s past and current

assumptions, experiences, philosophy, and values that
hold it together, and is expressed in its self-image, inner
workings, interactions with the outside world, and future
expectations.
It is based on shared attitudes, beliefs, customs, express

or implied contracts and written and unwritten rules that the
organization develops over time and that worked well
enough to be considered valid.
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Business Foundation Culture
Key attributes of company culture:
1. formal hierarchy
2. The relative importance of cost, time, and quality
3. The power structure (Who makes the decisions, autonomy”
and “delegation), what functions have organizational influence
4. The way people communicate (What is the urgency and
speed, percentage , people oriented (feeling), Task ori
5. The degree of formalization (heavy on rules and written
communications)
• written or unwritten customs and traditions (work
remotely, people rewarded)
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Business foundation
Organization
Culture
Value
Vison
Mission
The relationship between "management strategy" and "organizational goals"
and "human capital
 SWOT Analysis
 Technology , Globalization and other
competitive Factors
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Performance Wheels
• Process and Procedure
• Organizational structure
• Organizational development
• Communication
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Leadership
 Exploitative
 Benevolent
 Consultative
 Participative
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Organizational Development
World has turned upside down . To day companies are

pouring money , technology , management expertise into
the regions that were once off limit, acquiring new
enterprises, forming joint ventures , creating new global
businesses.
Companies are going through changes , outsourcing ,

downsizing, reengineering , fattening organization , and
doing job with automation . Some experts contend that if
you can describe a job precisely or write roles for doing it
that job will probably not survive.
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Organizational Development
The key to survival and success lines not in the rational

, quantities approaches , but rather in a commitment to
irrational , difficult –to- measure things like people ,
quality , customer services, and more importantly
developing the flexibility to meet changing conditions.
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An organization is the planned coordination of the
activities of a number of people for the achievement of
some common explicit purpose or goal, through division
of labour and functions , and through a hierarchy of
authority and responsibilities.
Development; for an organization to develop change
must occur “development” does not mean growth.
Because growth can take place with or with out
development. Development is something more then
growth. Enhancing the capacity , enhancing the
organizational internal potential , it is betterment of
organization an people
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Development is an increase in capacity and potential , not
an increase in attainment . It has less to do with how much
one has than with how much one can do with whatever one
has.
Combining these words suggests that OD is anything Done
to better an organization,.
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-Several definitions of organization development to understand the OD,
-Classical Definition of OD
- This definition develop in 1969 at a time when an organization was considered to be much like a stable
machine comprised of interlocking parts.
-“Organization Development is an effort (1) planned,

(2) organization-wide, and (3) managed from the
top, to (4) increase organization effectiveness and
health through (5) planned interventions in the
organization's 'processes,' (6) using behavioral-
science knowledge.”
Beck hard, “Organization development: Strategies
and Models”
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• There is a formula, attributed to David
Glacier, which we can use to decide if an
organization is ready for change:
Resistance to Change
Willingness to Change
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Organizational
Design
Sayed Mahmood Fazli
0706317442
Classical Management Theory
Historical Context
Late 1700s to late 1800s
 Industry = work
 Revolution =Rapid Change
 From farms to factories
 From small shops to large companies
Primary Sparks
 Power ( Steam to hydro)
 Machinery innovations
 Transportation
 3
Emerging Issues
• Large Groups working together
• People working alongside machinery
• Increasing pace of industry
• Companies were looking for answers
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• How are we going to organize all of this
• How are we going to maximize productivity
• How are we going to manage all of these
people
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Bureaucracy
• Organizations should look like the

Government and the legal system
• A legal –rational approach
• Not traditional , family –Based leadership
• Not charisma –based leadership
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Bureaucracy
• One’s authority should be tired to the official

position he or she occupied
• Clear rules should govern performance
• Standardized guidelines should determine
hiring and firing
• Was against favoritism or particularism
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Scientific Management
• Applying science to work
• Saw customized , self-styled work as a
serious productivity problem
• Popularized time and motion studies
• Wanted to find the ‘one right way ‘ to do
every single work
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Scientific Management
• Reduce the amount of time

• Reduce the number of motions
– Break each task into small steps
– Standardize each step
– Do all tasks the new ‘ one right way’
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Bureaucracy
Big Picture
Managerial
Micro
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Business foundation
Administrative Science or Classical management
• Wanted more systematic principles to train

managers
• Saw a noticeable lack of available management
theory in his day
It is a case of setting it going , starting general
discussion that is what I am trying to do by publishing
this survey , and I hope a (management ) theory will
emanate from it (fayol , 1949,p.16)
Business foundation
Administrative Science or Classical management
1. Planning : look ahead , chart a course

2. Organization : select and arrange people
3. Command: oversee , lead , drive
4. Coordinate: harmonize and facilitate
5. Control: Ensure compliance
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Commonalities and overlap
• Hierarchy
• Standardized
• Centralization
• Separation of personal and work life
• Wanted to select the best employees
• Division of labor
• Wanted people paid fairly , in theory
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Organizational
Design
Sayed Mahmood Fazli
0706317442
Introduction
 Gives primacy to human factors over institutional

factors
 Views organization as social system with humans
as the basic unit
 It is based on the principle –happy workers are
efficient workers
Fundamental principles of Human Relations theory
 Social men, not economic men

 Organization is a social system
 Worker are human being with emotions
 Informal elements of organization play important role in
output and profit ( Grapevine communication).
 Organization must value social ethics
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The human relations theory was established by Elton Mayo,

an Australian psychologist.
He conducted a series of experiments at the Hawthorne
plants in the 1920s (now aptly named the Hawthorne
Experiment or the Hawthorne Studies).
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Mayo's team carried out a number of "experiments" to look at

ways of improving productivity.
The research involved manipulating length of rest and lunch
periods and piecework payment plans. Mayo concluded that
productivity partly depended on the informal social patterns
of interaction in the work group.
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Hawthorne experiments in late 1920s and early 1930s
 The great illumination experiment
 Human attitudes and sentiment experiment
 Bank wire experiment
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Illumination experiments
The initial illumination studies were meant to find out the effect
of lighting conditions on the productivity of workers.
In this experiment, the workers were divided into two groups
Worker Group
Controlled Experiment
Group Group
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It was found that when lighting was improved, the

productivity also improved.
But when lighting was brought down to moonlight intensity
where the worker could barely see each other, even then
productivity improved.
It led the Elton Mayo and his associates to believe that there
were some other variables besides illumination which were
influencing productivity.
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Illumination experiment –Conclusion
The study revealed that there is no significant correlation

between productivity and light level.
It was later concluded that productivity is not dependent

upon physical conditions alone but human’s psychological
conditions also.
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Relay assembly test room experiments
After illumination experiments, another experiment was

conducted in the relay room where female operators
assembled switches.
The experiment was undertaken to find the effect of working
conditions ( rest pauses) on productivity.
Under this test , two group of 6 females relay assemblers
were selected. Each group was kept in separate rooms and
from time to time changes were made in working hours.
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Rest pauses
 Group inventive (financial) were applied instead of

individual financial incentive. This results increase in
productivity of group.
 5 min. rest pauses introduced in morning and afternoon –
productivity increased. Rest paused lengthened to 10 min-
productivity remains the same
 Six min. pauses were introduced and the girls complained
that their work rhythm was broken by the frequent pauses-
productivity fell down.
 Two rest pauses were reintroduced, the first with coffee
and the second one with evening snack- productivity goes
up.
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Mass interviewing programme
The researchers interviewed a large number of workers for

more than a year to find out their attitudes and sentiments
towards work, working conditions, supervises, company and
intra-group relationships etc.
In the early part of interviews, the researchers adopted

direct technique and asked relevant questions from the
workers. Later on, the indirect technique of interviewing was
adopted and this time the researcher simply noted that the
workers wished to share with them.
On the basis of such responses, it was concluded that the

social factors played important role in influencing
productivity at the work places 12
Bank wiring observation room experiments
In the above mentioned two experiments, the workers were

separated and the studies were conducted in test –room
conditions.
But this time, the experiments were conducted in almost

normal working conditions to avoid the impact or rest room
conditions on the workers.
The researchers identified a group of 14 experienced workers

with varying efficiency levels and recorded their output for 18
month prior to the study without the knowledge of the workers.
When these workers were brought in a room to do their routine
work, productivity did not improve and output was almost
same before and after the experiments
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Bank wiring observation room experiments
In the above mentioned two experiments, the workers were

separated and the studies were conducted in test –room
conditions.
But this time, the experiments were conducted in almost

normal working conditions to avoid the impact or rest room
conditions on the workers.
The researchers identified a group of 14 experienced workers

with varying efficiency levels and recorded their output for 18
month prior to the study without the knowledge of the workers.
When these workers were brought in a room to do their routine
work, productivity did not improve and output was almost
same before and after the experiments
14
Organizational
Design
Sayed Mahmood Fazli
0706317442
Contingency Theory
The basic premise of Contingency Theory is that

there is no one best way to lead an organization.
There are too many external and internal constraints

that will alter what really is the best way to lead is in
a given situation.
In other words, it all depends upon the situation at

hand as to what will be the best course of action.
Fred Fiedler is a theorist whose Contingency Trait
Theory was the precursor to his Contingency
Management Theory.
Fiedler believed there was a direct correlation to the
traits of a leader and the effectiveness of a leader.
According to Fiedler, certain leadership traits helped
in a certain crisis and so the leadership would need
to change given the new set of circumstances.
Fiedler's Contingency Theory proposes the following
concepts:
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Emerging Issues
• Fiedler's Contingency Theory says there is no one best way
to manage an organization.
• Fiedler's Contingency Theory of leadership says that a leader

must be able to identify which management style will help.
achieve the organization's goals in a particular situation
• The main component of Fiedler's Contingency Theory is the

least preferred co-worker (LPC) scale which measures a
manager's leadership orientation.
Understand the internal and external factors
contained in Fiedler's Contingency Theory
size , technology , leadership style,
Evaluate your managers with Fiedler's

Contingency Theory measurement tool
• managers are task-oriented or relationship- oriented.
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Organizational
Design
Sayed Mahmood Fazli
0706317442
The core disciplines of the behavioral sciences are

psychology, sociology and anthropology.
Although each of these disciplines is concerned with human
behavior and nature, there are little commonly accepted
theories among them.
In fact, there is widespread disagreement about the
problems that need to be analyzed within the organizations
and society.
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Psychology
Psychology deals with studying human behavior that seeks

to measure, explain and sometimes change the behavior
of humans and other animals.
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Some of the numerous areas of interest within the
disciplines of psychology are:
• General Psychology
• Experimental Psychology
• Clinical Psychology
• Consumer Psychology
• Personality and Social Psychology
• Industrial Psychology
• Counseling Psychology
• Educational Psychology
• Consulting Psychology
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Personality Psychology
Personality psychology is a branch of psychology that
studies personality and its variation among individuals. It
is a scientific study which aims to show how people are
individually different due to psychological forces. Its
areas of focus include: ... investigation of individual
psychological differences.
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Sociology
The major focus of sociologists is on studying the social

systems in which individuals fill their roles. The focus of
attention is centered on group dynamics.
Psychologists are primarily interested to focus their

attention on the individual behavior.
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Anthropology
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Managing Workforce Diversity
Employing different categories in terms of

gender, race, ethnicity, relation, community,
physically disadvantaged, elderly people etc.
Reason to employ heterogeneous category of
employees talents and potentialities, harnessing
the innovativeness, obtaining synergetic effect
among the divorce workforce.
In general, employees wanted to retain their
individual and cultural identity, values and life
styles even though they are working in the same
organization with common rules and regulations.
The major challenge for organizations is to
become more accommodating to diverse groups
of people by addressing their different life styles,
family needs, and work styles.
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Stimulating Innovation and Change
Today’s successful organizations must foster innovation and be

proficient in the art of change; otherwise, they will become candidates
for extinction in due course of time and vanished from their field of
business.
Victory will go to those organizations that maintain flexibility, continually

improve their quality, and beat the competition to the market place with
a constant stream of innovative products and services.
Example:
Compaq succeeded by creating more powerful personal computers for
the same or less money than EBNM or Apple, and by putting their
products to market quicker than the bigger competitors.
Amazon.com is putting a lot of independent bookstores out of business
as it proves you can successfully sell books from an Internet website.
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Emergence of E-Organisation & E-Commerce
It refers to the business operations involving the electronic mode

of transactions. It encompasses presenting products on websites
and filling the order.
The vast majority of articles and media attention given to using the
Internet in business are directed at online shopping.
In this process, the marketing and selling of goods and services
are being carried out over the Internet.
It is a dramatic change in the way a company relates to its

customers. At present e-commerce is exploding. Globally, e-
commerce spending was increasing at a tremendous rate.
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WHAT COULD YOU SEE HERE !
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Points about Perception
Perception is the process by which you give meaning to your
environment by organizing and interpreting stimuli into a
psychological experience.
Because perception varies across individuals , people see the same

thing in different ways.
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In the eye of the beholder
Process of response to environmental stimuli

Selection
Organization
No two people will necessarily perceive situation the same

Individuals base behaviour on perceived verity.
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ATTITUDES
It is defined as individuals’ feelings likes and dislikes, pros and

cons, favorable or unfavorable, positive or negative towards
various other people, objects, events or activities. These are the
evaluative statements – either favorable or unfavorable towards
object or people. I like coke. I do not like rock music.
Attitudes can be defined as an individual’s feelings about or

inclinations towards other persons, objects, events, or activities.
Attitudes encompass such affective feelings as likes and dislikes,
and satisfactions and dissatisfactions.
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Components of Attitudes
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Heredity
The genetic components inherited from our parents at the time of
conception determine strongly the personality characteristics of an
individual. The color, height, physical statutory, facial attractiveness,
gender, temperament, muscle composition, inheritable diseases etc
are considered to be inherited from our parents.
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TYPES OF PERSONAILITY
Extroversion and Introversion: This deals with whether the focus
of attention is directed towards outwardly or inwardly. Where do
you prefer to focus your attention?
Extroversion: Extroverted attention flows outward to the world of
objects and people or external ideas. They are interacting more
with people.
Agreeable: Trusting, good natured, cooperative, soft hearted.
Conscientiousness: Dependable, responsible, achievement
oriented,
1 persistent
Emotional stability: Related, secure, and unworried
Openness to experience: intellectual, imaginative, curious, broad

minded.
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Organizational
Design
Sayed Mahmood Fazli
0706317442
Competitive Advantage
What is competitive Advantage
Competitive advantage is a sustainable advantage
that a business has over competitor that enables it
to succeed in market. Can not replicate or copy.
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Two key sources of competitive advantage
Differentiation
Cost advantage
advantage
Where a business is able Where a business is able to

to produce its product at differentiate its product
lower cost than the from the competition such
competition that customers perceive
superior value
4
Organizational
Design
Sayed Mahmood Fazli
0706317442
Porter’s competitive Strategies
In porter's original theory, company would have

choose strategy based on two basic types of
competitive advantage;
1. cost leadership,
2. differentiation.
In cost leadership, you would select a strategy that focuses on cost-aware
consumers and reducing the production costs of a product.
In differentiation strategy, you would pick up a niché in selected vertical
and differentiate your product based on the attributes of competitive
products so that the product satisfies a (unidentified) market need.
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Cost Leadership
Differentiation
Focus
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Organizational
Design
Sayed Mahmood Fazli
0706317442
Miles and Snow Typology
Key thought Leaders: Raymond Miles and Charles

Snow , 1978
Another extremely well-known product market view
of business strategy was developed by Miles and
Snow6 and identified four major strategic types of
organization:
1. Defenders
2. Prospectors
3. Analyzers ,
4. and reactors
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Organizational
Design
Sayed Mahmood Fazli
0706317442
2
Unitary Approach
 The unitary approach believe in unitary and brining

together efforts of the individuals for team work and
common objective.
• The theory believes that the conflicts are non

permanent malformations , which are a result of
Improper management organization.
• It also considered the organizational conflicts

resulting in strikes to be useless and destructive.
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• To create a productive , effective and harmonious
work environment
• To develops a trustworthy , open , fair and

transparent work culture
• To restrict the roles of the tribunals and other

government associates like the trade unions and
initiate direct negotiation between management
and the employees
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Pluralist Approach
The pluralistic approach assumes that the organization

is composed of individuals who form distinct groups
with their own set of aims , objectives, leaderships
styles, and value propositions.
In contract to the unitary approach, the pluralistic

approach considers conflict between management and
employees as rational and inevitable.
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 Trade unions as legitimate representatives of
employee interest and they must recognized.
 Stability in industrial relations is the product of
compromises between management and unions.
 Collective bargaining is the best method for resolving
all kind of disputes.
 Management authority is not easily accepted and
employees join trade unions to protect themselves
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Marxist approach ideology
Marxists , like the pluralists , regard conflict between
employers and employees as inevitable.
However , pluralists believe that the conflict is
inevitable in all organization . Marxists see it as a
product of the capitalist society.
The Marxist approach , thus focuses on the type of
society in which an organization functions .
Trade union can see as labour reaction to the
exploitation by management.
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 Trade union act as mean of social change. They
work to improve the working condition of the
workers.
 In this approach, all strikes are political
 Marxists regard state intervention via legislation
and creation of industrial tribunals as supporting
management’s interest rather than ensuring a
balance between the competing groups
8
Organizational
Design
Sayed Mahmood Fazli
0706317442
Organizational Theory
Organization theory helps us explain what happened in the

past, as well as what may happen in the future, so that we can
manage organizations more effectively:
 How can the organization adapt to or control such

external elements as competitors, customers,
government, and creditors in a fast-paced environment?
 What strategic and structural changes are needed to help

the organization attain effectiveness?
 How can the organization avoid management ethical

lapses that could threaten its viability?
2
Organizational Theory
 How can managers cope with the problems of large size

and bureaucracy?
 What is the appropriate use of power and politics among

managers?
 How should internal conflict be managed?
 What kind of corporate culture is needed to enhance

rather than stifle innovation and change,
 and how can that culture be shaped by managers?

3
Current Challenges
Globalization:
 World is getting smaller
 Rapid advancement in technology and communications,
 Markets, technologies, and organizations are becoming

increasingly interconnected.
 cross-border acquisitions as crucial to their future

competitiveness.
 biotechnology, computer manufacturing, and

semiconductors
4
Intense Competition:
This growing global interdependence creates new
advantages, but it also means that the environment for
companies is becoming extremely competitive.
Customers want low prices for goods and services.
Outsourcing firms in low-wage countries can often do work

for 50 to 60 percent less than companies based in the
United States, for instance, so U.S. firms that provide
similar services have to search for new ways to compete or
go into new lines of business.
5
Ethics and Social Responsibility:
Today’s managers face tremendous pressure from the
government and the public to hold their organizations and
employees to high ethical and professional standards.
Speed and Responsiveness: A third significant

challenge for organizations is to respond quickly and
decisively to environmental changes, organizational crises,
or shifting customer expectations. so managers could focus
on designing structures and systems that kept the
organization running smoothly and efficiently.
6
The Digital Workplace:
Many traditional managers feel particularly awkward in today’s
technology-driven workplace. Organizations have been
engulfed by information technology that affects how they are
designed and managed. The use of end-to-end digital supply-
chain networks to keep in touch with customers, take orders,
buy components from suppliers, coordinate with
manufacturing partners, and ship customized products directly
to consumers has spread to all industries.
7
Diversity:
As organizations increasingly operate on a global playing
field, the workforce—as well as the customer base—grows
increasingly diverse. Many of today’s leading organizations
have an international face.
8
9
DIMENSIONS OF ORGANIZATION DESIGN
Organizations shape our lives, and well-informed managers

can shape organizations.
These dimensions describe organizations in much the same

way that personality and physical traits describe people.
Organizational dimensions fall into two types:
1. Structural dimensions provide labels to describe the internal

characteristics of an organization. They create a basis for measuring
and comparing organizations.
2. Contextual dimensions characterize the whole organization,

including its size, technology, environment, and goals.
10
Structural Dimensions
1. Formalization:
Pertains to the amount of written documentation in the
organization which includes that describe behavior and
activities :
 Procedures,
 Job descriptions,
 Regulations,
 and policy manuals.
Formalization is often measured by simply counting the

number of pages of documentation within the organization.
11
2. Specialization
is the degree to which organizational tasks are subdivided
into separate jobs. If specialization is extensive, each
employee performs only a narrow range of tasks. If
specialization is low, employees perform a wide range of
tasks in their jobs. Specialization is sometimes referred to
as the division of labor.
12
3. Hierarchy of authority
describes who reports to whom and the span of control for
each manager. The hierarchy is depicted by the vertical lines
on an organization chart.
The hierarchy is related to span of control (the number of

employees reporting to a supervisor).
When spans of control are narrow, the hierarchy tends to be

tall. When spans of control are wide, the hierarchy of
authority will be shorter.
13
4. Centralization
refers to the hierarchical level that has authority to make a
decision.
When decision making is kept at the top level, the
organization is centralized.
When decisions are delegated to lower organizational levels,

it is decentralized.
14
5. Professionalism:
Is the level of formal education and training of employees.
Professionalism is considered high when employees require
long periods of training to hold jobs in the organization.
Professionalism is generally measured as the average
number of years of education of employees, which could be
as high as twenty in a medical practice and less than ten in a
construction company.
15
6. Personnel ratios
Refer to the deployment of people to various functions and
departments.
Personnel ratios include the administrative ratio, the
clerical ratio, the professional staff ratio, and the ratio of
indirect to direct labor employees.
A personnel ratio is measured by dividing the number of
employees in a classification by the total number of
organizational employees.
16
Contextual Dimensions
1. Size :
Can be measured for the organization as a whole or for
specific components, such as a plant or division.
Because organizations are social systems, size is typically
measured by the number of employees.
Other measures such as total sales or total assets also
reflect magnitude, but they do not indicate the size of the
human part of the system.
17
2. Organizational technology refers to the tools,
techniques, and actions used to transform inputs into outputs.
It concerns how the organization actually produces the
products and services it provides for customers and includes
such things as flexible manufacturing, advanced information
systems, and the Internet. An automobile assembly line, a
college classroom, and an overnight package delivery system
are technologies, although they differ from one another.
18
3. The environment includes all elements outside the
boundary of the organization. Key elements include the
industry, government, customers, suppliers, and the
financial community.
The environmental elements that affect an organization the

most are often other organizations.
19
4. The organization’s goals and strategy define the
purpose and competitive techniques that set it apart from
other organizations.
Goals are often written down as an enduring statement of
company intent. A strategy is the plan of action that
describes resource allocation and activities for dealing with
the environment and for reaching the organization’s goals.
Goals and strategies define the scope of operations and the
relationship with employees, customers, and competitors.
20
5. An organization’s culture is the underlying set of key
values, beliefs, understandings, and norms shared by
employees. These underlying values and norms may pertain
to ethical behavior, commitment to employees, efficiency, or
customer service, and they provide the glue to hold
organization members together. An organization’s culture is
unwritten but can be observed in its stories, slogans,
ceremonies, dress, and office layout.
21
Organizational
Design
Sayed Mahmood Fazli
0706317442
Behavioral Sciences
When human capital owners [employees] have the upper hand in the
market, they do not behave at all like assets. They behave like owners of a
valuable commodity....They are investors in a business, paying in human
capital and expecting a return on their investment. [Davenport 99]
The assets of an enterprise can perhaps be divided into two parts: its
people, and everything else. it may also be said quite simply that a
company consists of the human beings who use technology to improve the
lives of their fellow citizens.
2
Organizational design : A plan for arranging and coordinating the

functions and activities of an organization for the purpose of fulfilling
its mission and achieving its goals.
Organizational design – FOUR COMPONENTS

 Organizational strategy (visions, mission, goals, strategy)
 Organizational structure (core functions, processes and systems)
 Integrating mechanisms (co-ordination , delegating and reporting)
 Central decision-making points (responsibility and accountability )
3
Two approaches of organizational Design
1. Re-organization of an “ existing” design and structure:

Where an existing design and structure is simply re-arranged to reflect
any changes to functions and/ or activities (simply re-arranging the
boxes on an organizational chart or adding or deleting as required).
2. New or “clean-sheet “ approach
Where a completely new design a structure is completed which does not
rely on any existing/ current design, but uses a process of reviewing:
Organizational strategy/ business plan compounds:

• Identifying key ‘core functions to be performed:
• Comparing with similar organizations (both local and international)
• Compiling a draft organization design and structure, for discussion with
senior executives to obtain agreement.
4
Organizational structuring
The primary coordinating and reporting relationships that

exist within an organization.
The chain of command and spans of control – existing in a

hierarchy of responsibility, authority and accountability
established throughout an organization.
5
Organizational chart
 The formal structure of an organization, and is depicted as

 A diagram that outlines the relationships among people and or
departments or directorates as well as
 Representing lines of authority, responsibilities, and relative
rank grading of various positions /jobs detailed within.
 Combined horizontal and vertical tree that contains geometric
shapes to represent various functional groups of staff or
department/ directorates
 Connect the shapes to indicate relationships between positons.
6
Guiding Principles of organizational deign and Structuring
• Structure follows Strategy : any organization ( Ministry/ Agency)

structure should be designed in such a ways so as the functions
support the strategic direction of the organization)
• Clarity and understanding: should be such that there is no confusion
about what purpose, objectives, functions and work activities are and
what people’s individual roles, tasks, lines of operating, reporting and
communicating are.
• Work specialization/division of labor : division of labor is the degree
to which organizational functions and activities are divided into
separate areas or jobs and that employees within each work area –
department unit perform only the job tasks related to their department
or units specialized nature of work.
7
• Order and discipline: provide an orderly place for each individual

staff member – who in turn need to see how their individual role fits into
the overall organization
• Unity of command and direction : structure should provide all people
working within a clear picture of what the line of command , control and
direction is , and that no one person will have more than one superior
to report.
• Authority , delegation and accountability : an employee should never be
given authority without responsibility , and also should never be given
responsibility without the associated authority to get the work done.
8
Authority: is the formal and legitimate right of director/ manager to

make decisions, issue orders and allocate resources to achieve
desired outcomes.
Delegation: is a concept related to authority .it is the downward
transfer of authority from a director/ manager to a subordinate staff
member.
Accountability: means that all employees are answerable for their
individual projects or work tasks, and should be prepared to
answer and or justify their individual actions and accept the
consequences –either positive or negative.
9
Centralization versus Decentralization:
A centralized organization systematically works to concentrate

authority at the upper-levels, where as in a decentralized
organization management consciously tries to spread authority to
the lower –levels.
10
Chain of Command
A unbroken line of authority and responsibilities that extends from

top to the organization all the way down to the bottom.
11
Chain of Command
Chain of command can explain to every

employee :
 What exactly do you do ?
 Who report to whom?
 Whom should you consult in case of issue
or problems
Alternative explanation:
 Delegation and use of authority and
responsibility
 At every levels : from top to bottom
 Within : organization
12
Span of control:
The number of subordinates which a manger can manage

effectively.
 It helps in determining the complexity of job

 It influences the shapes of an organization
13
Determining span of management
Earlier theories said 3 to 8 subordinates or enough for an manager

to manage.
Garaincunas theory of span of management developed a
mathematical theory.
There are three types of relationship:
 Direct relationship
 Direct group relationship
 Cross Relationship
14
Factors affecting span of management
• Capacity of superior
• Capacity of Subordinates
• Nature of work
• Degree of planning
• Degree of decentralization
15
Narrow Span of Management
• Tell Structure
• Easy to communicate
• Large number of levels
• Decision making is very slow
• High cost
• To much control –centralized
16
Wide Span of Management
• Flat Structure
• Difficult to communicate due to large number of employess
• Small number of levels
• Fast Decision making
• Lesser cost involved
• Decentralized
17
Organizational layers
Refers to the maximum number of people any one individual

person within an organization would have to report through to
reach the organization’s most senior executive eg director-
general.
A typical international standards has set layer of management

based on the number of employee in the organization structure;
 A Maximum of 7 layers for an organization of less than 500

employees.
employees.
employees
18
Co-ordination of work tasks and activities:
Refers to integrating the individual work tasks and activities of

various different work areas, to achieve the broad
objective/functions of the organization.
It should include activates to enable more work focus on efficiency

and effectiveness of services delivery –where efficient is the direct
relationship between inputs and outputs. Put simplistically,
efficiency can often mean doing the job right but effectiveness
should always mean doing the right job.
19
Stability and Adaptability:
An organization structure should always be adaptable and flexible
to meet changing work environmental conditions/changes – it
should at the same time remain steady during unfavorable times .
20
Equity and fairness :
Equity and fairness : and a sense justice should spread the

organization – in both principle and practice.
21
Work harmony :
When a organization has work harmony , there is open and hones

communications a strong work ethic combined with strong
teamwork spirit , respect for each other , healthy and productive
debates , and people all working towards the same strategic goals
22
Functional organizational Design
Is the most common type organizational structure – it groups people/

resources into work units based on similar type activities ,skills ,expertise
and resources . It has well-defined channel of authority and
communications and reporting relationships
23
Stimulating Innovation and Change
Strengths Weakness
 Ideal design when specializations of functions and or  Difficult to manage when numerous services are
resources are required . offered
 Can efficient –given economies of scale and cost  Quick decision may be difficult.
controls.  More difficult to manage performance
 Collaboration and quality within each individual  Loyalty to functional unit may cause lack of
function coordination across groups.
 Easier to supervise  Achieving cost reduction and organizational
 Easier to mobilize specialized skills when needed efficiencies may be a challenge.
24
Divisional Organization
• This type of organization often resembles a Functional Organization. The
team members work in different departments. This setup splits the
employees into segments based on products, markets, or services.
25
WHAT COULD YOU SEE HERE !
Advantages Disadvantage
•People work in different •This structure affects the integration

geographical locations and of the organization as a whole.
•Share ideas and enhance skills, •The autonomous nature often
thereby creating a collaborative work results in duplication of functions and
culture. Thus enhancing overall resources.
productivity.
•Segmentation creates boundaries
among divisions and may lead to
poor inter-unit coordination
26
27
Matrix Organization
Sometime an organization needs to run according to various projects

that they have complete. In this situation a matrix organization is used .
This one is the combination of a projectized and functional organization.
This hybrid organization overcomes the limitations of each organization.
Here, both the functional and project managers share their respective
authorities.
28
Advantage Disadvantage
It helps in sharing resources efficiently The dual reporting structure add
confusion and results in conflicts
Decision making is balanced and flexible Create issues when there is no
coordination between functional and
project managers
Staff members can communicate with Resources may be under-utilized if you
each other across boundaries don't assign them with skill-related tasks
Pleasant environment Costly to maintain as it has many
managers
It has a clear career graph and job You need to maintain resources
security; hence, members would be more throughout the project, no matter how
loyal to the organization long it takes
29
Virtual Organization/ Network
A virtual organization is a recent development that involves different

locations. When your team executes a project in one area, you can
manage it from any other place. So you can distribute resources to your
project team regardless of location.
30
Faster and cost-effective as there are no No physical contact or communication, thus,
boundaries to work and communication. lacks team integrity
Lower operating costs as no permanent set Difficult to restrict information sharing as

up required (no need for office premises) your locations are different
Have several options like flexitime, part-time You have to spread resources across
work, job-sharing, and home-based working, various locations and time zones
hence increased
Employee satisfaction and efficiency Resources require training for virtual

interaction
Can have a larger talent pool Different time zones cause delayed
responses
31
Amalgamated (Hybrid)
People in different parts of the organization fulfill different

requirements
Is mixture of all previous design types operating within the same

organization.
32
Can fulfil both public and commercial May be hard to manage effectively due
activities at the same time to reliance ton contracted out services
devlivers
33

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Organizational Design

Sayed Mahmood Fazli

The action or process of organizing, ordering,

Organization theory is similar to anatomy or

A system is an organized collection of parts (or

The system has various inputs, which go through certain

A system is usually made up of many smaller systems, or

1. Open System ( interact with its environment) and

The first is objects – the parts, elements, or variables

Execution is critical to success, yet the majority of

Recent studies including a survey of more than 1,000

One of the most widespread obstacles to execution is the

The term industrial relations is generally associated with

The focus, then, shifted to technological transformation and

This impacted the security of the existing job holders because of

A collective effort for protecting their interests, thus, became a

To understand the Human Resource Planning First, we will

Is the process of systematically reviewing human

Studying and under-standing jobs through the

Participant Diary / Logs

Business The relationship between Performance Leadership

This allows for determination of the gap between the

Once the mission, vision, values, and culture have been

Examine them sequentially and as an integrated system to

This is beneficial because it provides a logical and credible

Vision statement is “an aspirational description of what an

It is intended to serve as a clear guide for choosing current

The mission statement is what’s to be

vision statement is what’s to be accomplished

Respect for People

was lost in translation.

Either way, the end result was a dissatisfied and

The sum total of an organization’s past and current

It is based on shared attitudes, beliefs, customs, express

• Process and Procedure

World has turned upside down . To day companies are

Companies are going through changes , outsourcing ,

The key to survival and success lines not in the rational

-“Organization Development is an effort (1) planned,

 Power ( Steam to hydro)

• Large Groups working together

• People working alongside machinery

• Increasing pace of industry

• Companies were looking for answers

• How are we going to maximize productivity

• How are we going to manage all of these

• Organizations should look like the

• One’s authority should be tired to the official

• Reduce the amount of time

Administrative Science or Classical management

• Wanted more systematic principles to train

Administrative Science or Classical management

1. Planning : look ahead , chart a course

 Gives primacy to human factors over institutional

 Social men, not economic men

The human relations theory was established by Elton Mayo,

Mayo's team carried out a number of "experiments" to look at

Hawthorne experiments in late 1920s and early 1930s

 The great illumination experiment

 Human attitudes and sentiment experiment

 Bank wire experiment

It was found that when lighting was improved, the

The study revealed that there is no significant correlation

It was later concluded that productivity is not dependent