DR.

Haider Shah

Assistant Professor People & Organization

MS Department

 .
True?
 Why people are important?
 It's the people that make an organization.
 The world of work is changing.
 If organizations do transform themselves
 ensure they can attract, inspire, motivate, manage,
develop and reward their people appropriately, they
will engage their most valuable assets.
 Solid strategies, processes and technology alone
do not deliver results. It takes people to accept,
adopt, drive and sustain the change to realize
tangible impact.
People & Organization
What is an Organization?
 According to Business Dictionary it is defined as
“A social unit of people that is structured and
managed to meet a need or to pursue collective
goals”.

 OR

 An organized group of people working together for

a common purpose.
Types of Orgnizations
 Formal
 Informal

 Private
 Public Sector
Classification by Major Purpose
 Business firms
 (Economic organization)
 Armies and Police force
 (Protective organization)
 Clubs and societies
 (Associative organization)
 Local authorities and Hospitals
 (Public Service organization)
 What is business model?
 It describes how a company creates and captures value
 Features:
 Define the customer value
 Pricing mechanism

 Indicating how the company will organize itself

 Indicate how the company will organize itself

 Specify how it will structure its supply chain

 A business model is a system in which various features

interact in a complex ways to attain the organizational
success and growth.
“Old” Model of the Organization
 Classic model of formal organization according to Max
Weber, the key features are:
 Specialized individual positions and jobs
 A proper formal hierarchy with a clear line of authority (“chain
of command”)
 Formal rules and standard operating procedures
 Set boundaries for each department and subunit, and clear
boundaries between the organization itself and its
environment
 Standardized training and training need requirements, clear
career development, and compensation reward systems,
based on the development of expertise
“Old” Model of the Organization
(cont’d)
 Strengths of the classic model:
 Predictability and reliability
 Impartiality

 Expertise

 Clear lines of control

“New” Model of the Organization
 Key features of the “new” model:
 Networked
 Flat

 Flexible

 Diverse

 Global
Key Features of the “New” Model
 Importance of networks results from:
 Availability of new telecommunications and information
technologies to connect people and organization units
 Competitive need for rapid response to customer needs,

changing environments, demands for innovation

 Need for increasingly complex and diverse resources to

develop and deliver value to customers

 New approach of dealing with volatility by linking source

of volatility with part of organization most affected by it

Key Features of the “New” Model
(cont’d)
 Flat hierarchy is necessary because:
 Organizations must respond more rapidly and
flexibly to changes in markets and technology
 Changes in information technology remove the need

for layers of middle managers whose main tasks

were organizing and transmitting information
 Organizations face intense pressure to cut costs
Key Features of the “New” Model
(cont’d)
 Need for flexibility driven by:
 Intensifying competition
 Increasingly diverse labor force

 Increasingly complex and unpredictable external

environment
Key Features of the “New” Model
(cont’d)
 Diversity is necessary because of:
 Growing diversity of the workforce in demographic
terms
 A greater need for innovation and creative

approaches to solving problems

 Growing volatility in the business environment

 “Requisite variety”—the diversity that matches the

diversity of key elements of the environment

Requisite variety!
 Emerging from systems theory, defines
organizations as systems which have to deal with
specific contingencies that shape their structure,
technology, and environment
Key Features of the “New” Model
(cont’d)
 Key factors driving globalization:
 Greatly reduced costs of international transportation
and communications
 Growing equalization across markets of “advanced

factor endowments”
 Globalization of markets
Key Features of the “New” Model
(cont’d)
 Key factors driving globalization (cont’d):
 Continuing differences in cost structures across
countries
 Cross-border learning that expands capabilities of

firms
 Pressures from international nongovernmental

organizations (NGOs)
Summary of Features of Old and New
Models of Organization
Old Model New Model

Individual position/job as basic unit of Team as a basic unit

organization

Relations with environment handled by Densely networked with environment

specialist boundary-spanners

Vertical flows of information Horizontal and vertical flows of information

Decisions come down, information flows up Decisions made where information resides

Tall (many layers of management) Flat (few layers of management)

Emphasis on structures Emphasis on processes

Emphasis on rules and standard Emphasis on results and outcomes

procedures

Fixed hours Flexible workday, part-time workers

References
 Managing for the future (Organizational Behavior
and Processes) By Ancona
 Managing People and Organizations (2010) by
Guido Stein
 Rouse, W. B. (2007. People and
Organizations: Explorations of Human-Centered
Design.
 Reading material from Massachusetts Institute of
Technology USA.