Unit 1

Understanding an organization
What do you think an Organisation is?
 Unit 1
Understanding an organization
Introduction

Organization is born when more than one person coordinates to execute

a work, such as one person passing bundles to another person who
puts them in an order.

An organization or organisation is an entity comprising multiple

people, such as an institution or an association, that has a particular
purpose.
 Unit 1
Understanding an organization
Definitions

An organisation is a collection of people working together in a

coordinated and structured fashion to achieve one or more common
goals.

Organisation is a group of people, coming together to achieve common

goals.
 Unit 1
Understanding an organization
Characteristics of Organization

Organization is an effective and necessary instrument for the attainment

of predetermined goals. The following are main characteristics of
organization.
1. Organization is an instrument used by the management for the
attainment of pre-planned objectives.
2. Management guides and directs the organization.
3. A set of rules and instrument are communicated to all connected
with the organization.
4. It prefers to a group of personnel whose positions, rights,
responsibilities are well defined and classified according to the nature
of assignments.
 Unit 1
Understanding an organization
Nature of Organization

A set of five processes is commonly accepted as five functions of

organization which represents nature of organization, they are

1. Subdivision of main work into small groups

2. Based on principles of equality division of different activities.
3. Selection of suitable personnel and allocation of jobs according to
suitability
4. Allotments of rights and authority to those who have been assigned
the job so that may be able to accomplish their job satisfactorily
5. Determination of positions at different levels
 Unit 1
Understanding an organization
Importance of Organization

Any effective organization

1. Makes the management simple and efficient
2. Encourages specialization
3. Improves techniques
4. Encourages constructive thinking
5. Increase productivity and
6. Accelerates the progress
 Unit 1
Understanding an organization

Role of Organizations
 Unit 1
Understanding an organization
Organizations Role in Society
• Organizations exist to allow accomplishment of work that could not
be achieved by people alone.
• As long as the goals of an organization are appropriate, society will
allow them to exist and they can contribute to society.

Organizations and People

• Organizations are strongly influenced by the people that form part of
them.
• Organizations can take in part of the personality of the people within
them and their attitudes, perceptions and behaviours affect how an
organization will operate.

Organizations Require Management

• Organizations use management to accomplish the work that is
required to achieve the goals.
 Unit 1
Understanding an organization

Organization Environment
 Unit 1
Understanding an organization
What is Organisation Environment

• The organization works within the framework provided

by various elements of society. All such elements which
lie outside the organization are as environment.

• The organization needs to properly understand the

environment for effective management.
 Unit 1
Understanding an organization

Organization Environment
 Unit 1
Understanding an organization
The Internal Environment

• Board of Directors

• Employees

• Culture
 Unit 1
Understanding an organization
The Internal Environment – A Board of Directors

• A board of directors is only required of organizations that are

incorporated; however, many other firms have them.
• The board of directors is elected by the stockholders and is charged
with overseeing the general management of the firm to ensure that it
is being run in a way that best serves the stockholders' interests.
 Unit 1
Understanding an organization
The Internal Environment - Employees

• When the organization's employees hold the same values and goals as
its management, everyone wins.
• However, when managers and employees work toward different
goals everyone suffers.
• The composition of the organization's employees is changing, and
managers must learn how to deal effectively with these changes.
 Unit 1
Understanding an organization
The Internal Environment - Culture

• The culture of an organization is the set of values that helps its

members understand what the organization stands for, how it does
things, and what it considers important.
• A strong organizational culture can shape the firm's overall
effectiveness and long-term success and help employees to be more
productive.
 Unit 1
Understanding an organization
The External Environment

• The general environment is the nonspecific dimensions and forces in

its surroundings that might affect its activities.

• The task environment consists of specific organizations or groups that

are likely to influence an organization.
 Unit 1
Understanding an organization
The External Environment - Task Environment

• Competitors are other organizations that compete for resources.

• Customers are whoever pays money to acquire an organization's
product or service.
• Suppliers are organizations that provide resources for other
organizations.
• Regulators are units in the task environment that have the potential to
control, regulate, or influence an organization's policies and practices.
E.g. Environmental Protection Agency and the Department of Occupational Safety,
Health and Welfare.
• Labor includes all workers who provide the service or produce the
products. Labor is especially a concern when it is unionized.
• Owners are individuals, groups, or organizations who have a major
stake in the organization.
• Strategic allies are two or more companies that work together in joint
ventures.
 Unit 1
Understanding an organization
The External Environment - General Environment

• The economic dimension inflation, interest rates, unemployment, and

demand.
• The technological dimension refers to the methods available for
converting resources into products or services.
• The socio-cultural dimension, customs, mores, values, and
demographic characteristics of the society in which the organization
functions.
• The political-legal dimension refers to government regulation of
business and the relationship between business and government.
• The international dimension refers to the extent to which an
organization is involved in or affected by business in other countries.
 Unit 1
Understanding an organization

The Organizational Process

 Unit 1
Understanding an organization
The Organizational Process

Organizing, like planning, must be carefully worked out and applied

process.
This process involves determining what work is needed to accomplish
the goal, assigning those tasks to individuals, and arranging those
individuals in a decision‐making framework (organizational
structure).

The end result of the organizing process is an organization — a whole

consisting of unified parts acting in harmony to execute tasks to
achieve goals, both effectively and efficiently.
 Unit 1
Understanding an organization
The Organizational Process – Definition

It includes activities that establish the business goals of the

organization and develop process, product and resource assets
which, when used will help to achieve business goals.

A properly implemented organizing process should result in a work

environment where all team members are aware of their
responsibilities.

If the organizing process is not conducted well, the results may yield
confusion, frustration, loss of efficiency, and limited effectiveness.
 Unit 1
Understanding an organization
The Organizational Process - Steps

Functional departmentation

Divisional departmentation
 Unit 1
Understanding an organization
The Organizational Process – Definition

1. Identification and Division of work:

The organising function begins with the division of total work into
smaller units. Each unit of total work is called a job

And an individual in the organisation is assigned one job only. The

division of work into smaller jobs leads to specialization because jobs
are assigned to individuals according to their qualifications and
capabilities.

The division of work leads to systematic working.

For example, in a bank every individual is assigned a job. One cashier
accepts cash, one cashier makes payments, one person issues cheque
books, one person receives cheques, etc. With division of work into
jobs the banks work very smoothly and systematically.
 Unit 1
Understanding an organization
The Organizational Process – Definition

2. Grouping the Jobs and Departmentalisation:

After dividing the work in smaller jobs, related and similar jobs are
grouped together and put under one department. The departmentation
or grouping of jobs can be done by the organisation in different ways.
But the most common two ways are:

(a) Functional departmentation:

Under this method jobs related to common function are grouped under one department.
For example, all the jobs related to production are grouped under production
department; jobs related to sales are grouped under sales department and so on.

(b) Divisional departmentation:

When an organisation is producing more than one type of products then they prefer
divisional departmentation. Under this jobs related to one product are grouped
under one department. For example, if an organisation is producing cosmetics, textile
and medicines then jobs related to production, sale and marketing of cosmetics are
grouped under one department, jobs related to textile under one and so on.
 Unit 1
Understanding an organization
The Organizational Process – Definition

3. Delegation of Duties:
After dividing the organisation into specialised departments each
individual working in different departments is assigned a duty
matching to his skill and qualifications. The work is assigned
according to the ability of individuals. Employees are assigned duties
by giving them a document called job description. This document
clearly defines the contents and responsibilities related to the job.
 Unit 1
Understanding an organization
The Organizational Process – Definition

4. Assign activities and delegate authority: Span of Control

After grouping the activities in different departments the employees
have to perform the job and to perform the job every individual needs
some authority. So, in the fourth step of organising process all the
individuals are assigned some authority matching to the job they have
to perform.
Managers assign the defined work activities to specific individuals. Also,
they give each individual the authority (right) to carry out the
assigned tasks.
 Unit 1
Understanding an organization
The Organizational Process – Definition

5. Design a hierarchy of relationships. Chain of Control

With the establishment of authority, managerial hierarchy gets created
(chain of command) and principle of scalar chain follows this
hierarchy. The establishment of authority also helps in creation of
managerial level.
A manager should determine the vertical (decision‐making) and
horizontal (coordinating) relationships of the organization as a whole.
Next, using the organizational chart, a manager should diagram the
relationships.
 Unit 1
Understanding an organization

Mission, Vision, Strategy, Goals & Objectives

 Unit 1
Understanding an organization

Mission, Vision, Strategy, Goals & Objectives

What is First ?
 Unit 1
Understanding an organization

What is First ?

Your business needs to have

its purpose (mission) defined
before you can choose its
destination (vision).
 Unit 1
Understanding an organization

What is First ?
 Unit 1
Understanding an organization
Mission, Vision, Strategy, Goals & Objectives
 Unit 1
Understanding an organization
Mission, Vision, Strategy, Goals & Objectives
 Unit 1
Understanding an organization

Your Mission creates FOCUS.

Your Vision provides DIRECTION.
Your Values define BEHAVIOUR.
 Unit 1
Understanding an organization
Mission Statements:

• Define the organization’s purpose.

• Are short, clear and simple (only need to be one or two sentences).

• Capture how you serve people, animals, the environment (what ever
it may be).

• Needs to tell people how you intend to achieve your vision.

 Unit 1
Understanding an organization

Vision Statements

• A good vision is… • Your vision checklist:

 Inspiring  Does it excite you?

 Does it tell the world
 Focuses on serving the world about the good you
want to do?
 Is very ambitious  Is it bigger than you?
 Is it simple?
 Describes the ideal result you  Is it clear?
want to achieve  Is it about what you
can give and not about
what you’ll get?
 Unit 1
Understanding an organization
A Mission statement provides focus. It should answer:
 What do you do?
 For whom?
 Why?

A Vision statement describes the future, as you see it. It should:

 Inspire
 Create excitement
 Motivate

Values describe your organizational culture. They should:

 Guide how you do business internally and externally.
 Resonate with your employees and stakeholders (clients, suppliers,
etc.).
 Define your culture and beliefs.
 Unit 1
Understanding an organization

What is a vision?

“description of something in the future”

A vision is a clear, comprehensive “photograph” of

an organization at some point in the future.

It provides direction because it describes what the

organization needs to be like, to be successful within
the future.
 Unit 1
Understanding an organization
Vision Statement

A vision statement answers the question,

“ What will success look like?”

The pursuit of this image of success is what motivates people to work

together.
 Unit 1
Understanding an organization
Vision Statement

Strategic vision addresses the “where are we going” questions and

explains the course and direction chartered by management.

A strategic vision should provide a clear understanding of what the

business should look like and provide help to take strategic decisions.

Strategic intent should lead to an end.

– That end is the vision of an organization or an individual.
– It is what the firm or a person would ultimately like to become.
– Should be short and specific.
– It should be based on overall purpose of organization
 Unit 1
Understanding an organization
Vision Statement : Characteristics

1. It’s a blue print of the kind of business organization the management

is trying to create and the market position it would occupy.
2. It should be forward looking a provide strategic course the
management will adopt to help the company prepare the future
3. Specific and provide guidelines to managers for making decisions and
allocating resources
4. Flexible to changing environment
5. Within realm of companies hope to achieve
6. Appeal to emotions and motivate employees
7. Narrow vision, can focus effort and excite people
8. May not fit to present circumstance, but contributes to future. Shows picture
of future.
9. Should be easy to explain to all stake holders and preferably short
 Unit 1
Understanding an organization
Vision statement : Examples

1. BSNL Vision Statement :

“To become the largest telecom service provider in Asia.”

2. Walt Disney vision Statement :

“Make people happy”
 Unit 1
Understanding an organization
Vision statement : Examples

We aim to be a globally respected and sustainable company

To be amongst the 5 most admired Information Technology Solution

Providers globally with leadership focus in delivery of products,
solutions and services which are globally competitive.
 Unit 1
Understanding an organization
Vision statement : Examples

Create world class digital experiences to connect and inspire every

Indian to build a better tomorrow

Our vision is to enrich the lives of our customers. Our obsession is to win
customers for life through an exceptional experience.
 Unit 1
Understanding an organization
Mission : Introduction

 Organizations relate their existence to satisfying a particular need of

the society. They do it in terms of their mission.

 Mission is a statement which defines the role that an organization

plays in a society.

 It refers to the particular need of that society for instance, its

information needs.
 Unit 1
Understanding an organization
Mission : Definition

“Essential purpose of the organization, concerning particularly why it is

in existence, the nature of the business it is in, and the customers it
seeks to serve and satisfy.”

“Purpose or reason for the organization's existence.”

“Mission is an enduring statement of purpose that distinguishes one firm

from other similar firm.”

Different from vision by it is more focused on “what is our business “as

compared to the “where are we headed” or “what we want to
become” nature of vision.
 Unit 1
Understanding an organization
Mission Statement

“A mission statement is an enduring statement of purpose that

distinguishes one business from other similar firms. A mission
statement identifies the scope of a firm’s operations in product and
market terms.”

The mission statement of an organization is normally short, to the point,

and contains the following elements:

 Provides a concise statement of why the organization exists, and

what it is to achieve;
 States the purpose and identity of the organization;
 Defines the institution's values and philosophy; and
 Describes how the organization will serve those
 Unit 1
Understanding an organization
Mission Statement

BSNL Mission Statement

“To provide world class state of art technology telecom services to its
customers on demand at competitive prices.

“ To provide world class telecom infrastructure in its area of operation

and to contribute to the growth of country's economy.”
 Unit 1
Understanding an organization
Points to be considered while Formulating mission

1. What is the basic purpose of your organization?

2. What is unique about your organization?
3. What is in your company that will make it stand out in a crowd?
4. Who are, and who should be, your principal customers?
5. What are the basic beliefs, values and philosophical priorities of your
firm?
 Unit 1
Understanding an organization
Components of mission statement

1. Product or service
2. Customers
3. Technology
4. Survival, growth & profitability
5. Company philosophy
6. Public image
7. Employees
 Unit 1
Understanding an organization
Components of mission statement

1) Product or service
Invariably includes mention of the product or service the company offers
to customers.

2) customers
Information in the mission statement describes the profiles of customers
and the organization it services.

3) Technology
Components of the mission statement generally refers to means of
production, operations and organizational functions.
It include elements such as equipment's, materials, techniques, processes
 Unit 1
Understanding an organization
Components of mission statement

4) Survival, Growth and Profitability

Make a general reference to the company’s survival and healthy
functioning, which include growth and profitability.

5) Company philosophy :
It reflects the basic believes, values, aspirations and ethical priorities of
company that guide the employee in conditioning organizational
function.
 Unit 1
Understanding an organization
Components of mission statement

6) Public image :
Elements of the company deals with how the company wishes to be
viewed by external constituencies.
To create a positive public image, the mission statement could explicitly
refers to the responsiveness of the company to concerns about the
company and the society

7) Employees:
To develop a public image a company could include concerns for
recognition of the value of employees in the statement
 Unit 1
Understanding an organization
Need for an explicit mission

 To ensure unanimity of purpose within the organization.

 To provide a basis for motivating the use of the organizations
resources.
 To develop a basis, or standard, for allocating organizational
resources.
 To establish a general tone or organization climate.
 To serve as a focal point for those who can identify with the
organization's purpose and direction.
 Unit 1
Understanding an organization
Idea Mission Statement
Customers
Be the most loved brand by continuously raising the bar in
delivering simple, delightful experience and meaningful
innovations, through new age technologies

Team
Be an inspirational, agile and exciting organization that
challenges status quo, and champions a diverse team that
has a winning attitude and thrives on delivering customer
excellence
Share Holders

Be the most valued company through smart leadership

committed to delivering sustainable growth, while adhering
to the highest standards of government and compliance
Community
Be the most respected company by leveraging technology and
purposeful innovation to catalyze social prosperity, digital
literacy and inclusivity
 Unit 1
Understanding an organization

Strategy
 Unit 1
Understanding an organization
Strategy : Introduction

Strategy arrived from Greek word stratēgia, or strategos means "art of

troop leader; office of general, command, generalship“.

Strategy is a high level plan to achieve one or more goals under

conditions of uncertainty.

Strategy is important because the resources available to achieve these

goals are usually limited. Strategy generally involves setting goals,
determining actions to achieve the goals, and mobilizing resources to
execute the actions.

A strategy describes how the ends (goals) will be achieved by the means
(resources).
 Unit 1
Understanding an organization
Strategy : Definition

A plan of action designed to achieve a long-term or overall aim

“A general direction set for the company and its various components to
achieve a desired state in the future. Strategy results from the detailed
strategic planning process”.

Strategy is a well defined roadmap of an organization. It defines the

overall mission, vision and direction of an organization. The objective
of a strategy is to maximize an organization’s strengths and to
minimize the strengths of the competitors.
 Unit 1
Understanding an organization
Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future.

Without a perfect foresight, the firms must be ready to deal with the
uncertain events which constitute the business environment.
2. Strategy deals with long term developments rather than routine
operations, i.e. it deals with probability of innovations or new
products, new methods of productions, or new markets to be
developed in future.
3. Strategy is created to take into account the probable behavior of
customers and competitors. Strategies dealing with employees will
predict the employee behavior.
 Unit 1
Understanding an organization
Types of Strategy

1. Corporate level strategy: This level answers the foundational

question of what you want to achieve. Is it growth, stability, or
retrenchment?

2. Business unit level strategy: This level focuses on how you’re going
to compete. Will it be through customer intimacy, product or service
leadership, or lowest total cost? What’s the differentiation based on?

3. Market level strategy: This strategy level focuses on how you’re

going to grow. Will it be through market penetration, market
development, product or service development, or diversification?
 Unit 1
Understanding an organization

Goals and Objectives

 Unit 1
Understanding an organization
Goals

A goal is a desired future state that an organization tries to achieve.

Goals specify in particular what must be done if an organization is to

attain mission or vision.

Goals make mission more prominent and concrete.

Goals co-ordinate and integrate various functional and departmental

areas in an organization.
 Unit 1
Understanding an organization
Features of Goals

1. These are precise and measurable.

2. These look after critical and significant issues.
3. These are realistic and challenging.
4. These must be achieved within a specific time frame.
5. These include both financial as well as non-financial components.
 Unit 1
Understanding an organization
 Unit 1
Understanding an organization
Objectives

Objectives are defined as goals that organization wants to achieve over a

period of time.

These are the foundation of planning.

Policies are developed in an organization so as to achieve these

objectives.

Formulation of objectives is the task of top level management.

 Unit 1
Understanding an organization
Features of Objectives

1. These are not single for an organization, but multiple.

2. Objectives should be both short-term as well as long-term.
3. Objectives must respond and react to changes in environment, i.e.,
they must be flexible.
4. These must be feasible, realistic and operational.
 Unit 1
Understanding an organization
 Unit 1
Understanding an organization

Jobs and Task

 Unit 1
Understanding an organization
Job and Task

A “Job” often means a set of processes.

A “task” may mean a process, a thread, a process or thread, or,

distinctly, a unit of work done by a process or thread.

Job usually refers to the entire group of responsibilities entailed by a

position in an organization.

The word task usually refers to one of those assigned responsibilities

The job is formed of tasks and a task is part of a job.

Thank you