BY: SWATI SINGH ANKITA PANDEY GUNJAN GUPTA KHUSBOO SINGH AMIT NEGI HEMANT YADAV VIJAY BAHRADWAJ
Understand the various ways in which „organization‟ is used.
Prescriptions of Classical Theory regarding Organization design. Various forms of organization structure. Common organization designs.
In general, „organization‟ is used in various ways, like:
A group of people united by a common purpose.
An entity engaged in utilizing resources to create a result. A structure of relationships between various positions in an enterprise.
A process by which employees, facilities & tasks are related to each other, with a view to achieve specific goals.
Dynamic interpretation (as a process).I NTERPRETATION OF O RGANIZATION
The word Organization has 3 interpretations:
Static interpretation (as a structure).
As a group.
It is much more than a network of formal. superiorsubordinate relationship.
. “Organization is a structural relationship by which an enterprise is bound together and the framework in which individual effort is coordinated.O RGANIZATION : AS A STRUCTURE
According to Koontz & O’Donnell.
Structure ensures the smooth achievement of goals.
members combine their efforts to achieve their goals. has the following features:
Two or more persons:
The human association consists of 2 or more persons.
Organization. as a structure.
Takes place in the form of issuing commands. Each superior will have limited numbers of people reporting to him. directives.
Rules and regulations:
Division of work:
It ensures speedy execution of work. orders.
Define the territorial jurisdiction of members.
„organization’ refers to one of the important functions of management.O RGANIZATION : AS A PROCESS
As a process. “ Organizing is the process of identifying and grouping the work to be performed. „organizing’. defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives”.e.
According to Allen . i.
avoiding unnecessary duplications.
To provide for a smooth flow of work. Establishment of formal relationships is necessary as it helps the individuals in performing better.
Process of organizing involves the following steps:
Identifying the work:
To identify the total work necessary to achieve the goals. overlapping and wastage of efforts. It enables managers to concentrate on important activities. all closely related and similar activities must be grouped together.
Grouping the work:
It provides a framework for assigning duties and responsibilities to individuals in a clear fashion. b.
c. remedial steps should be taken. In case of any deviation.
. b. Performance must be measured.
Providing for coordination and control:
Activities and efforts of individuals must be coordinated. evaluated and controlled at frequent intervals. the manager should clearly specify authority and responsibility limits.
While assigning duties. so that the subordinate is well-aware of what kind of work is expected of him.
I. “Organization is a system of consciously coordinated activities or forces of two or more persons.O RGANIZATION : AS A GROUP
In words of C. Barnard. “An organization is a collection of interacting and interdependent individuals who work towards a common goal whose relationships are determined according to a certain structure. J.” According to W. Duncan.”
Interactions are ordered to achieve joint objectives.
People interact with one another in some way.
5 essential features common to all organizations:
An organization always refer to people.
These interactions are specified by some sort of structure. An organization is developed for people.
Fayol & Weber. it prescribes that an organization must be built around the work to be done. which in turn co-ordinate & control the jobs in an organization.
CLASSICAL THOERY: Given by Taylor.
.O RGANIZATIONAL DESIGN & C LASSICAL T HEORY
ORGANIZATIONAL DESIGN: It refers to the managerial decisions that determine the structure and process.
Organizations must rely on some of the Universal Design Principles while structuring activities.
The pyramid is created by the “unity of command” concept.
It depicts how the components of an organization are created & held together. These are as follows:
Formal structures tend to take the
.Promises greater efficiency and productivity.Improves one‟s skill at performing a task through repetition. Avoids conflicting orders & frustrating demands. Division of labor. “the scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks”.
The scalar principle:
According to Fayol.
Unity of command:
Each subordinate is accountable to only one superior.
Specialization & division of labor:
Span of control:
According to this principle.
Parity of authority & responsibility:
Authority is defined as the right to give orders and the power to get obedience. Increases organizational efficiency but prevents innovation. there is a limit to the number of subordinates a manager can effectively supervise.
Refers to how standardized an organization‟s jobs are and the extent to which employee behavior is guided by standard rules & procedures. Responsibility is the obligation of a subordinate to perform the duty as required by the superior.
There are various popular bases for departmentation:
Advantages: Efficiencies In-depth
from putting together similar specialties and people with common skills. and orientations. knowledge. flexible and administrative units. specialization
A way of dividing the large and complex organizations into smaller.
etc. book publishing. etc.
Helps to satisfy the customer‟s requirements conveniently.Disadvantages Poor
communication across functional areas
Example: britannia india.
. food industry. maruti udyog.
. needs of unique geographic markets better. transfer costs & helps building community goodwill.
effective and efficient handling of specific regional issues that arise.
feel isolated from other organizational areas.
larsen & toubro. Example: ITC.
Prevents products from being neglected.
Allows specialization in particular products and services.
C ONTINGENCY T HEORY & O RGANIZATION S TRUCTURE
This theory supports the idea that there is no one pattern of organization style that is universally appropriate.
The factors which establish the parameters within which management choices are made are:
Strategy & structure Size & structure
Environment & structure
Technology & structure People & structure
The design is conditional and is contingent upon many factors. internal as well as external.
Environment & structure:
Mechanistic organizational structures tend to be most effective in stable and simple environments. The flexibility of organic organizational structures is better suited for dynamic and complex environments.
Size & structure:
Size provides a greater opportunity to utilize the economies of specialization.
Strategy & structure:
Achievement of strategic goals is facilitated by changes in organizational structure that accommodate and support change.
Mass production of large batches of assembly line. structure & human behavior. Woodward‟s classification of firms based on the complexity of the technology employed in manufacturing process:
Unit production to meet specific needs of people.
Perrow proposed knowledge based technology rather than production technology.
Technology & structure:
Organizations is designed with a proper mix of technology.
Process production in continuous process of outputs. not highly mechanized. The classification of organization according to Perrow are:
aspirations. Engineering: involves complex tasks.
People & structure:
The attitudes. experiences and roles of organization members are also related to the structure of the organization. Non-routine: includes difficult to analyze problems. Craft: deals with relatively difficult problems. task standardized.
Routine: easy to analyze problems.
. handled by standard formulas and systematic procedures.
impersonal relations.responsibility relationships. procedures.
The Project Structure:
It is designed to achieve specific results by using teams of specialists from different functional areas in the organization.C OMMON O RGANIZATIONAL D ESIGNS
It implies an organization characterized by rules. and elaborate and fairly rigid hierarchy of authority.
Project authority: cuts across the normal organization structure. Promotes and maintains organizational flexibility.
Team members: report directly to the project manager.
Reduces environmental complexity.
Allows maximum use of specialized knowledge & concentrated attention of experts on a complex project.
The nature of Project Management:
Project manager: makes sure that the project doesn‟t get lost in the shuffle of organizational activities.
Creates an authority gap. Most commonly used in Aerospace.
Violates the principle of “unity of command”.
Manager has to perform a tightrope walk.
The Matrix Structure:
A permanent organization designed to achieve specific results by using teams of specialists from different functional areas in the organization.
Creates feeling of insecurity and uncertainty among members.
. Banking. Electronics. Insurance. Chemicals. etc.
Balance: balances customer‟s need for project completion and cost control for organization.
Efficiency: permits efficient utilization of resources. Motivation: opportunity to participate in important decisions foster higher level of motivation and commitment.
Development: helps employees to develop and grow. especially manpower.
. Flexibility: direct and frequent contact between different specialities make for better communication and more fexibility.
Stress: stress due to “role conflict”.
The Boundaryless Organization:
Composed of people linked by computers.
Power struggle: fosters power struggle between product and functional managers due to the same set of resources. faxes. “role ambiguity” & “role overload”. video teleconferencing and who rarely see each other face-toface.
Balance: difficult to strike a balance between project and functional authority.