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What are Organizations?

DEFINED: 1) social entities 2) goal-directed 3) deliberately structured and coordinated activity systems 4) linked to external environment
CEO

VP Sales

VP Production

VP Finance

Types of Organizations
Small / Large Manufacturing / Service Domestic / Multinational For-profit / Not-for-profit

Dimensions of Organization Design


1) Structural Dimensions describe the internal characteristics of an organization 2) Contextual Dimensions everything that shapes the structure of the organization

Structural Dimensions
1) Formalization 2) Specialization 3) Hierarchy of Authority 4) Centralization 5) Professionalism 6) Personnel Ratios

Structural Dimensions
1) Formalization: - the amount of written documentation in the organization - Include procedures, job descriptions, regulations, and policy manuals

Structural Dimensions
2) Specialization: - the degree to which organizational tasks are subdivided into separate jobs - Skilled trades often exhibit a high degree of specialization

Structural Dimensions
3) Hierarchy of Authority: - describes who reports to whom and the span of control of each manager - The number of layers of management: tall vs. flat organizations

Structural Dimensions
4) Centralization: - refers to the hierarchical level that has authority to make a decision - Centralized decision making (at top) gives little discretion to lower level employees

Structural Dimensions
5) Professionalism: - is the level of formal education and training of employees - accounting firms have a high level of professionalism

Structural Dimensions
6) Personnel Ratios: - refer to the deployment of people to various functions and departments - Measures include various ratios such as administrative ratio

Contextual Dimensions
1) Size 2) Organizational Technology 3) Environment 4) Goals & Strategy 5) Culture

Contextual Dimensions
1) Size: - is the organizations magnitude as reflected in the number of people in the organization - organization as a social system

Contextual Dimensions
2) Organizational Technology - is the nature of the production subsystem that changes inputs to outputs - Includes assembly lines, classrooms, oil refineries, etc.

Contextual Dimensions
3) Environment: - includes all elements outside the boundaries of the organization - Includes customers, suppliers, competitors, government, etc.

Contextual Dimensions
4) Goals & Strategy: - define the purpose and competitive techniques that set one organization apart from others - Includes mission statements and plans of action

Contextual Dimensions
5) Culture: - is the underlying set of key values, beliefs, understandings, and norms shared by employees - May be observed in stories, symbols, ceremonies, etc.

As environments become more turbulent organizations move


From vertical to horizontal structures From routine tasks to empowered tasks From formal control to shared information From competitive to collaborative strategy From rigid to adaptive control