Introduction to Organisation Structure and Design
Introduction to Organisation Structure and Design
•
• Introduction to Organisation, Theory and StructureIntroduction to Organisation, Theory and Structure
Definition of Organisation StructureDefinition of Organisation Structure
The System PerspectiveThe System Perspective
The Life-Cycle PerspectiveThe Life-Cycle Perspective
•
• Organisational Organisational EffectivenesEffectivenesss
Goal Attainment ApproachGoal Attainment Approach
The System ApproachThe System Approach
The The Strategic-ConsStrategic-Constituencies Approachtituencies Approach
The Competing-Values ApproachThe Competing-Values Approach
•
• Dimensions of Organisation StructureDimensions of Organisation Structure
ComplexityComplexity FormalizationFormalization CentralizationCentralization •
• Determinants - StrategyDeterminants - Strategy
MeaningMeaning
Types of StratégiesTypes of Stratégies
Classification Strategic Classification Strategic DimensionDimensionss
Chandler’s Strategy-Structure ThesisChandler’s Strategy-Structure Thesis
Miles and Snow’s Four Strategic TypesMiles and Snow’s Four Strategic Types
Porter’s Competitive StrategiesPorter’s Competitive Strategies
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• Determinants – TechnologyDeterminants – Technology
Woodward’s ResearchWoodward’s Research
Knowledge based technology – Perrow’s ContributionKnowledge based technology – Perrow’s Contribution
TechnologicTechnological Uncertainty al Uncertainty – Thompson’s Contribution– Thompson’s Contribution
RelationshiRelationship p between technology between technology and and complexity/Formacomplexity/Formalisation/Celisation/Centralisationntralisation
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• Organisational Design OptionsOrganisational Design Options
Common Elements in Common Elements in OrganisationOrganisationss
The Simple StructureThe Simple Structure
The BureaucracyThe Bureaucracy
The Divisional StructureThe Divisional Structure
The AdhocracyThe Adhocracy
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• BureaucracBureaucracy: A y: A Closer LookCloser Look
Features of BureaucracyFeatures of Bureaucracy
Criticism of BureaucracyCriticism of Bureaucracy
Is Bureaucracy a structural dinosaur?Is Bureaucracy a structural dinosaur?
You can’t ignore the You can’t ignore the obvious: Bureaucraciobvious: Bureaucracies are everywherees are everywhere •
• Adhocracy: A Closer Look Adhocracy: A Closer Look
MatrixMatrix
Theory Theory A, A, J, J, ZZ
The Collateral FormThe Collateral Form
Introduction to Organisation, Theory and Structure Introduction to Organisation, Theory and Structure Definition of Organisation Structure:
Definition of Organisation Structure:
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• It definesIt defines
-- hohow tw tasask ak are re to to be be alallolocacatetedd -- wwhho o rreeppoorrts ts tto o wwhhoomm
-- formaformal cool coordinrdinatinating mecg mechanihanisms asms and innd interacteraction tion pattepatterns trns that what will bill be fole followlowed.ed.
•
• Three components of Three components of Organisation StructureOrganisation Structure
-- CompComplexilexity: it ty: it is exis extent tent of diof differefferentiatntiation wion withiithin the n the orgaorganisanisationtion. It in. It includcludes thees the degree of specialisation or division of labour, the
degree of specialisation or division of labour, the number of levels in org.‘snumber of levels in org.‘s hierarchy, and extent to
hierarchy, and extent to which the org.’s units are which the org.’s units are dispersed geographdispersed geographically.ically. -- FormaFormalisalisationtion: It i: It is des degree gree to wto which hich an an orgaorganisanisation tion relirelies oes on run rules ales andnd
procedures to direct the behaviour of
procedures to direct the behaviour of employeeemployees.s.
The Systems Perspective The Systems Perspective
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• SystemSystem
-- A seA set of t of inteinterrelrrelated ated and and inteinterdeprdependendent pent parts arts arraarranged nged in a in a mannmanner ther thatat produces a unified whole.
produces a unified whole.
-- TheThey taky take ine inpuputs, tts, tranransfosform thrm them aem and pnd prodroduce uce somsome oue outputputt
•
• Differentiation and integrationDifferentiation and integration
-- SpeSpeciacialislised ed funfunctictions ons are are difdifferferententiatiated.ed.
-- In orIn order to der to mainmaintain utain unity nity amoamong thng the dife differenferentiatetiated pard parts ants and ford form a cm a complompleteete whole, every system has a
whole, every system has a reciprocal process of integration.reciprocal process of integration.
-- This This integintegratioration is n is typitypicallcally achiy achieved eved throuthrough dgh devicevices suces such as h as coorcoordinadinatedted levels of hierarchy,
levels of hierarchy, direct supervision, rules, procedures and direct supervision, rules, procedures and policiespolicies..
-- Every Every systesystem reqm requireuires diffs differenerentiatitiation to on to idenidentify itify its suts subparbparts and ts and integintegratioration ton to ensure that the
ensure that the system doesn’t break down into separate elements.system doesn’t break down into separate elements.
•
• Types of SystemsTypes of Systems
-- ClosClosed syed systemstem: Sys: System tem that that receireceives ves no eno energnergy froy from an m an outsoutside ide soursource ace andnd from which no energy is
from which no energy is released to its surrounding. Self contained system.released to its surrounding. Self contained system. Very less relevance to t
Very less relevance to the study of he study of organisatioorganisations.ns.
-- Open Open systesystem: It m: It recorecognizgnizes thes the dye dynaminamics ics interanteraction ction of thof the se system ystem with with itsits environment.
environment.
•
• Features of Open SystemFeatures of Open System
-- EnEnviviroronnmement nt aawwaarerenenessss -- FFeeeeddbbaacckk
-- CCyycclliiccaal cl chhaarraacctteer r -- NNeeggaattiivve ee ennttrrooppyy -- SStteeaaddy y ssttaattee
-- MoMovevemement tnt towowarards gds grorowtwth anh and exd expapansnsioionn -- BalBalancance of e of mamaintintenaenance nce anand ad adapdaptivtive ae actictivitvitiesies -- EEqquuiiffiinnaalliittyy
•
• Importance of the System Importance of the System PerspectivePerspective
-- It peIt permits rmits seeiseeing thng the oe organrganisatisation ion as a as a whowhole wle with ith inteinterdeprdependeendent pant parts.rts. -- It preIt preventvents lows lower leer level mvel managanagers to ers to idenidentify atify and und undernderstand stand the ethe envirnvironmeonmentnt
in which their system
in which their system operation.operation.
-- It helIt helps maps managenagers to srs to see oee organrganisatiisation as on as stablstable pae patterns tterns and aand actionctions wis withinthin boundarie
boundaries and s and to gain insights into why to gain insights into why organisaorganisations are resistant totions are resistant to change.
The Life-Cycle Perspective The Life-Cycle Perspective
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• A life cycle:A life cycle:
-- It rIt refeefers trs to a o a papattettern rn of of prepredidictactablble che chanange.ge.
-- There There are dare distiistinct snct stages tages throuthrough wgh which hich orgaorganisanisationtions pros proceedceed, that , that thethe stages follow a consistent pattern, and that the transitions from one stage to stages follow a consistent pattern, and that the transitions from one stage to another are predictable rather
another are predictable rather than random occurrences.than random occurrences.
•
• Life Cycle stagesLife Cycle stages
-- EnEntrtrepeprereneneuuririal al ststagagee -- CCoolllleeccttiivivity ty sstataggee
-- FoFormrmalalisisatatioion n anand d cocontntrorol l ststagagee -- ElElababororatatioion of sn of strtrucuctuture sre statagege -- DDeecclliinne se sttaaggee
•
• Importance of Life Cycle perspectiveImportance of Life Cycle perspective
-- It makIt makes us es us awaaware thare that an ot an organrganisatisation hion hasn’asn’t alwt always bays been teen the whe way it ay it is or is or willwill it always be the same in t
it always be the same in the future.he future.
-- It helIt helps to ps to decidecide apde approppropriate riate actiaction to on to solvsolve ane any givy given pren probleoblems dems dependpendinging on stages.
Organisational
Organisational EffectivenesEffectivenesss Goal attainment approach Goal attainment approach
•
• It states that an It states that an org’s effectiveness must be appraised in terms of org’s effectiveness must be appraised in terms of
accomplishm
accomplishment of ent of ends rather than means.ends rather than means.
•
• AssumptionsAssumptions
-- OrgOrg. are d. are delieliberberateate, rat, rationional, gal, goaoal-sl-seekeeking eing entintitieties.s. -- OrOrg. g. mumust st hahave ve ulultitimamate te gogoadads.s.
-- TheThese gose goals mals musust be idt be idententifiified aned and ded definfined wed welell enol enougugh to beh to be understood.
understood.
-- TheThese gse goaloals mus must bst be fee few ew enounough gh to bto be me mananageageablable.e.
-- TheThere mure must be gst be geneneraeral conl consensensus osus or agr agreereemenment on tht on these gese goadoads.s. -- ProProgregress tss towowardards ths thesese ge goaoals mls musust be t be meameasursurabable.le.
•
• ProblemsProblems
-- WhosWhose goe goals als – i– it is t is posspossiblible thae that sot some ome of def decisicision maon makers kers with with reareall power and influence are not the
power and influence are not the member of senior managementmember of senior management -- What What an oan org. srg. states tates officofficialially as ly as its gits goals oals does does not not alwaalways reys reflect flect thethe
org.’s actual goals – official and actual goals may be different. org.’s actual goals – official and actual goals may be different.
-- Org. Org. shorshort-term t-term goalgoals are s are frequfrequentlently dify differenferent frot from itm its los long tng term erm goalgoals.s. -- Org. Org. have have multimultiple ple goalgoals as also lso creacreates tes diffidifficulticulties ses such uch as as they they cancan
compete with each other and
compete with each other and sometimes are even incompatible.sometimes are even incompatible. -- TheThere arre are mule multiptiple gole goalals and dis and diververse inse interterestests wits within thhin the orge org.,.,
consensus may not be possible unless goals are stated in such consensus may not be possible unless goals are stated in such
ambiguous and vague terms as to allow the varying interest groups to ambiguous and vague terms as to allow the varying interest groups to interpret them in a way favourable to their self interests.
interpret them in a way favourable to their self interests.
-- MulMultiptiple gole goalals muss must be ordt be ordereered accd accordording ting to impo importortanance. Hce. How toow to allocate relative importance to goals that may
allocate relative importance to goals that may be imcompatible.be imcompatible.
•
• Value to managers: The validity of Value to managers: The validity of those goals identified can probably bethose goals identified can probably be
increased significantly by increased significantly by
-- EnsuEnsuring ring that that inpuinput is t is receireceived ved from from all all thosthose hae having ving a maa major jor inflinfluencuencee on formulating the official goals, even if they are not part of
on formulating the official goals, even if they are not part of senior senior management.
management.
-- IncluIncluding ding actuaactual gol goals als obtaobtaininining by g by obseobservinrving the g the behbehavioaviour of ur of org.org. member.
member.
-- ReRecogcogninisinsing thag that orgt org. pur. pursue bsue both soth shorhort and lt and lonong terg term gom goalals.s. -- InsisInsisting ting on on tangitangible, ble, verifverifiabliable ae and mnd measueasurablrable goe goals als than than vaguvaguee
statement. statement.
The system approach The system approach
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• System models emphasize criteria that will increase the long-term survival of System models emphasize criteria that will increase the long-term survival of
the org. such
the org. such as the org’s ability as the org’s ability to acquire resources, maintain itself internallyto acquire resources, maintain itself internally as a
as a social organism, and interact successfully with it external environment. Itsocial organism, and interact successfully with it external environment. It focuses more on means needed for
focuses more on means needed for the achievement of those ends.the achievement of those ends.
•
• AssumptionsAssumptions
-- OrOrg. ag. are mre madade up oe up of inf inteterrrrelelatated sed sububpapartsrts..
-- EffectEffectiveniveness ess requrequires ires awarawareneeness ass and nd succesuccessful ssful inteinteractiraction on withwith environmen
environmental tal constituenciconstituencies.es.
-- SurSurvivvival real requiquires a sres a steateady redy replepleninishmshment of tent of thoshose rese resourourcesces consumed.
consumed.
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• Making System OperativeMaking System Operative
The system view looks at factors such as
The system view looks at factors such as relation with the environmenrelation with the environment tot to assure continued receipt of inputs and
assure continued receipt of inputs and favourable acceptanfavourable acceptance of ce of outputs,outputs, flexibility of response to environmental changes, the efficiency with which t flexibility of response to environmental changes, the efficiency with which t hehe org. transforms inputs to outputs, the clarity of internal communications, the org. transforms inputs to outputs, the clarity of internal communications, the level of conflict among groups and
level of conflict among groups and the degree of employees job satisfactionthe degree of employees job satisfaction
•
• ProblemProblem
-- MeMeasasururining spg spececifific eic end gnd goaoals ils is dis diffifficucultlt
-- It focIt focuseuses on ths on the meae means nens necescessarsary to acy to achiehieve efve effecfectivtiveneeness rass rathether r then on org.
then on org. effectiveness itself.effectiveness itself.
-- “It“It’s wh’s whethether yoer you wiu win or ln or lose tose thahat cout countsnts, not h, not how yoow you plu play thay the game game!”e!”
•
• Value to Manager Value to Manager
-- ManManageagers are lrs are less less likeikely to maly to make deke deciscisionions thas that tradt trade of the oe of the org’rg’ss long-term health and survival for ones that
long-term health and survival for ones that will make them look will make them look goodgood in the near term.
in the near term.
The
The Strategic-ConsStrategic-Constituencies Approachtituencies Approach
•
• This approach seeks to appease only This approach seeks to appease only those in the environment who canthose in the environment who can
threaten the org’s survival. threaten the org’s survival.
•
• AssumptionsAssumptions
-- OrgOrg. are a. are assussumed tmed to be poo be polilitictical aral arenenas was wherhere vese vested ited intenteresreststs compete for control over resources.
compete for control over resources.
-- ManManageagers purs pursursue a nue a numbember of gor of goalals and ts and thahat the gt the goaloals sels selectecteded represent a response to that
represent a response to that interest group that controls the interest group that controls the resourcesresources necessary for the org to survive.
necessary for the org to survive.
•
• Making Strategic Constituencies OperativeMaking Strategic Constituencies Operative
-- IdeIdentintify the cfy the consonstittitueuencincies to be ces to be critriticaical to the ol to the org. srg. survurvivaival.l. -- EvaEvaluluate to date to deteetermirmine thne the rele relatiative pove powewer of eacr of each conh constistituetuencyncy..
-- IdentIdentify tify the ehe expecxpectatiotations thns that that these ese consconstituetituenciencies hols hold in d in for for the othe org.rg. -- This This apprapproach oach wilwill col conclunclude bde by coy comparmparing ing the the varivarious ous expeexpectatictations,ons,
determining common expectations and those that
determining common expectations and those that are incompatible,are incompatible, assigning relative weights to the various constituencies and
assigning relative weights to the various constituencies and formulating a preference ordering of these various goals for
formulating a preference ordering of these various goals for the org asthe org as a whole.
a whole.
•
• ProblemProblem
-- It is It is diffidifficult cult to sto separeparate tate the she stratetrategic cgic constionstituentuencies cies from from each each otheother.r. -- EnEnviviroronmnmenent cht chanangeges ras rapipidldly.y.
•
• Value to Manager Value to Manager
-- ManManageagers unrs underderstastand on wnd on whom thom the suhe survirvivaval of orgl of org. is de. is depenpendendent.t. -- It decIt decreareases a cses a chanhance of ice of ignognorinring or upsg or upsettettining a grog a group whup whose pose powower er
could significantly hinder the
could significantly hinder the org operations.org operations.
-- ManaManager ger can can modimodify itfy its prs prefereeference nce ordeordering ring of gof goals oals as as necenecessary ssary toto reflect the changing power relationship with its strategic
reflect the changing power relationship with its strategic constituencies.
The Competing-Values Approach The Competing-Values Approach
•
• The theme of this approach is that the The theme of this approach is that the criteria you value and use in assessingcriteria you value and use in assessing
an org. effectiveness –
an org. effectiveness – return on investment, market share, new return on investment, market share, new productproduct innovation, job security – depend on who you are and the interest you innovation, job security – depend on who you are and the interest you represent.
represent.
•
• AssumptionsAssumptions
-- TheThere is nre is no beso best crit criterterioion for evn for evalaluatuating aing an org en org effeffectictivenvenessess.. -- TheThere ire is neis neithether a sinr a singlgle goae goal thal that evet everyoryone cane can agn agree uree upopon nor an nor a
consensus on which goals take precedence over other. consensus on which goals take precedence over other. -- An evAn evalualuatoator chor chooseoses goas goals bals based osed on hin his pers personsonal val valualues,es,
preferences and interests. preferences and interests.
•
• Making Competing Values OMaking Competing Values Operativeperative
-- TheThere re are are thrthree ee basbasic ic setsets os of cof compempetinting vag valuelues.s. -- FlFlexexibibililitity vy verersusus s cocontntroroll
Flexibility values innovation, adaptation and change. Flexibility values innovation, adaptation and change. Control favours stability, order
Control favours stability, order and predictability.and predictability.
-- WeWellbllbeineing and dg and deveveloelopmepment of pnt of peopeople vele versursus wes wellbllbeineing andg and developme
development nt of of organisatioorganisationn
The concern for the feelings and needs of people within org. versus The concern for the feelings and needs of people within org. versus the concern for productivity and
the concern for productivity and task accomplishmentask accomplishmentt -- OrOrgg. . memeaanns s vveersrsus us eenndsds
The former stressing internal process and long t
The former stressing internal process and long term, latter erm, latter emphasizin
emphasizing final outcomes and g final outcomes and short termshort term
•
• Value to Manager Value to Manager
-- It gIt guideuides Mas Managenagers irs in idn identientifying fying the the apprappropriopriatenateness ess of dof differifferentent criteria to different constituencies and different life
Comparing four Organisation Effectiveness Approaches Comparing four Organisation Effectiveness Approaches
A
Apppprrooaacchh DDeeffiinniittiioonn WWhheen n uusseeffuull G
Gooaal l AAttttaaiinnmmeenntt AAn n oorrg g iis s eeffffeeccttiivve e tto o tthhee extent that it
extent that it accomplishaccomplisheses its stated goals.
its stated goals.
The approach is preferred The approach is preferred when the goals are clear, when the goals are clear, time bound and
time bound and measurable. measurable. S
Syysstteemm AAn n oorrg g iis s eeffffeeccttiivve e tto o tthhee extent that it acquires extent that it acquires needed resources. needed resources.
The approach is preferred The approach is preferred when a clear connection when a clear connection exists between inputs and exists between inputs and outputs.
outputs. St
Straratetegigic Cc Cononststititueuencncieiess An An ororg ig is es effffecectitive ve to to ththee extent that all strategic extent that all strategic constituencie
constituencies are s are at leastat least minimally satisfied.
minimally satisfied.
The approach is preferred The approach is preferred when constituencies have when constituencies have powerful influence on the powerful influence on the org. and org. must
org. and org. must respond to demands. respond to demands. C
Coommpplleettiinng g vvaalluueess An An oorrg g iis s eeffffeeccttiivve e tto o tthhee extent that the
extent that the emphasisemphasis of the org. in the four of the org. in the four major areas matches major areas matches constituent preferences. constituent preferences.
The approach is preferred The approach is preferred when unclear about its when unclear about its own emphases, or own emphases, or changes in criteria over changes in criteria over time are of interest. time are of interest.
Dimensions of Organisation Structure Dimensions of Organisation Structure Complexity
Complexity
•
• It refers to tIt refers to the degree of differentiation that exists within the org.he degree of differentiation that exists within the org. •
• There are three kinds of There are three kinds of differentiationdifferentiation
-- HHoorriizzoonnttaall -- VVeerrttiiccaall -- SSppaattiiaall
•
• Horizontal differentiationHorizontal differentiation
- It refers t
- It refers to the degree of differentiation between units based ono the degree of differentiation between units based on
orientation of members,orientation of members,
the nature of tasks they performthe nature of tasks they perform
their education and their education and trainingtraining - The
- The most visible evidence of horizontal differentiation is specialisation andmost visible evidence of horizontal differentiation is specialisation and departmentation.
departmentation.
•
• SpecialisaSpecialisation refers to tion refers to the particular grouping of activities performed by thethe particular grouping of activities performed by the
individual. individual.
- Specialisation can be through functional specialisation or social - Specialisation can be through functional specialisation or social
specialisation. specialisation. -
- In Functional speciIn Functional specialisation, jobs are broken doalisation, jobs are broken down into simple and repetitiwn into simple and repetitiveve tasks. It is
tasks. It is also known as division of labour. It creates high substitutabilityalso known as division of labour. It creates high substitutability among employees and facilitates their
among employees and facilitates their easy replacement by management.easy replacement by management. - Social specialisation can be achieved by
- Social specialisation can be achieved by hiring professionahiring professionals who hold skillsls who hold skills than cannot be
than cannot be readily routinised.readily routinised.
•
• Departmentation is the way in Departmentation is the way in which org. typically coordinate activities thatwhich org. typically coordinate activities that
have been horizontally differentiated. Departmen
have been horizontally differentiated. Department can t can be created on the be created on the basisbasis of simple numbers, function, product or
of simple numbers, function, product or service, client, geography or process.service, client, geography or process.
•
• Vertical Vertical DifferentiatioDifferentiationn
-
- It refers to It refers to the depth the depth in structure.in structure. -
- DifferentiatioDifferentiation increases, and hn increases, and hence complexence complexity, as the number of ity, as the number of hierarchica
hierarchical levels in l levels in the org increases.the org increases.
•
• Span of Control defines the number of subordinates that a manager canSpan of Control defines the number of subordinates that a manager can
direct effectively. direct effectively. -
- Wide span – Wide span – more number of sumore number of subordinates and vibordinates and vice versace versa -
- It creates It creates tall or tall or flat structure.flat structure. -
- Tall structures providTall structures provide close supervision and boe close supervision and boss oriented control andss oriented control and coordination and communication
coordination and communication become complicated.become complicated. -
- Flat structures have sFlat structures have shorter and simplhorter and simpler communicaer communication chain, lesstion chain, less opportunity for supervision, but
opportunity for supervision, but reduced promotion opportunities.reduced promotion opportunities.
•
• Spatial DifferentiatioSpatial Differentiation refers to the n refers to the degree to which the location of an org’sdegree to which the location of an org’s
offices, plants and
offices, plants and personnel are dispersed geographicalpersonnel are dispersed geographically.ly.
•
• Why complexity is importantWhy complexity is important
- The higher the complexity, the greater amount of attention they must pay - The higher the complexity, the greater amount of attention they must pay toto dealing with problems of
- The
- The higher complexity demands on managemenhigher complexity demands on management to t to ensure thatensure that differentiated and dispersed activities are
differentiated and dispersed activities are working smoothly and together working smoothly and together toward achieving the org’s goals.
toward achieving the org’s goals. Formalisation
Formalisation
•
• It refers to tIt refers to the degree to which jobs within the org are standardised.he degree to which jobs within the org are standardised. •
• The formalisation is high, if there are explicit job descriptions, lots of org rulesThe formalisation is high, if there are explicit job descriptions, lots of org rules
and clearly defined procedures covering work processes in org. and clearly defined procedures covering work processes in org.
•
• The formalisation is low, if The formalisation is low, if employee’employee’s behaviour is relatively nons behaviour is relatively non
programmed. Such job offer employee a great
programmed. Such job offer employee a great freedom to exercise discretionfreedom to exercise discretion in work.
in work.
•
• Range of formalisationRange of formalisation
- High degree of
- High degree of formalisatioformalisation: Unskilled jobs, repetitive jobs, production jobsn: Unskilled jobs, repetitive jobs, production jobs - The
- The greater the degree of professionalisation, lesser formalisationgreater the degree of professionalisation, lesser formalisation - The
- The higher level in org, lesser formalisationhigher level in org, lesser formalisation
•
• Why is formalisation importantWhy is formalisation important
-
- StandardisStandardising behaviour reduces ing behaviour reduces variability.variability. - It
- It promotes coordinatiopromotes coordination.n.
- Standardisation leads to less discretion. More
- Standardisation leads to less discretion. More discretion can cost money.discretion can cost money. - Org
- Org with formalised jobs jet most with formalised jobs jet most effective performance from employees ateffective performance from employees at lower cost.
lower cost.
•
• Formalisation tFormalisation techniqueechniquess
- Selection: An effective
- Selection: An effective selection process will be designed to determine if selection process will be designed to determine if candidates is fit into
candidates is fit into the org. This the org. This technique control employee discretiontechnique control employee discretion. It. It tries to prevent the employment of misfits.
tries to prevent the employment of misfits. - Roles
- Roles requiremenrequirements:ts:
- Every job carries with its expectations on how the role incumbent is - Every job carries with its expectations on how the role incumbent is supposed to behave.
supposed to behave.
- Job analysis defines the jobs that need to be
- Job analysis defines the jobs that need to be done in the org anddone in the org and outlines what employee behaviours are necessary to perform the jobs. outlines what employee behaviours are necessary to perform the jobs. It results into
It results into Job Descriptions and Job specifications.Job Descriptions and Job specifications. - Rules:
- Rules:
- Rules are expl
- Rules are explicit statements that tell an icit statements that tell an employee whemployee what he ought at he ought or or ought not to do.
ought not to do.
- It tells employees what they can do,
- It tells employees what they can do, how they are to do it how they are to do it and whenand when they are to do it.
they are to do it.
- Rules leave no room for employee judgement or discretion. - Rules leave no room for employee judgement or discretion. - Procedures:
- Procedures:
- Policies are established to
- Policies are established to ensure standardisaensure standardisation of tion of workwork processes.
processes.
- The same input is processed in the same
- The same input is processed in the same way and output is theway and output is the same each day.
same each day. - Policies:
- Policies:
- Rather than
- Rather than specifying a particular and specific behaviour, policiesspecifying a particular and specific behaviour, policies allow employees to use
allow employees to use discretion but within limited discretion but within limited boundarieboundaries.s. - The
- The discretion is created by including judgemental terms (such asdiscretion is created by including judgemental terms (such as best, satisfied, competitive) which the employee is left
best, satisfied, competitive) which the employee is left to interpret.to interpret. - Training:
- This includes on
- This includes on the job variety where understudy assignments,the job variety where understudy assignments, coaching and apprenticeship methods are used
coaching and apprenticeship methods are used to teach to teach employeesemployees preferred job skills, knowledge and
preferred job skills, knowledge and attitudes.attitudes. - New employees are required to
- New employees are required to undergo a brief orientation programundergo a brief orientation program in which they are
in which they are familiarised with org objectives, history, philosophy,familiarised with org objectives, history, philosophy, rules.
rules. Centralisation
Centralisation
•
• It concerned with the dispersion of authority to make decisions within the org.It concerned with the dispersion of authority to make decisions within the org. •
• A high A high concentration implies high centralisation, whereas a low concentration implies high centralisation, whereas a low centralisatiocentralisationn
indicates
indicates decentralisadecentralisation.tion.
•
• CentralisatioCentralisation can be n can be described as the degree to described as the degree to which the formal authority towhich the formal authority to
make discretionary choices is concentrated in an individual, unit or make discretionary choices is concentrated in an individual, unit or levellevel (usually high in the org)
(usually high in the org) thus permitting employees (usually low in the org)thus permitting employees (usually low in the org) minimum input into their works.
minimum input into their works.
•
• Why decentralisation is importantWhy decentralisation is important
- Managers are limited in their ability to give attention to the
- Managers are limited in their ability to give attention to the date they receive.date they receive. - Org needs to respond rapidly to changing conditions at the point at which - Org needs to respond rapidly to changing conditions at the point at which the change is taking
the change is taking place.place.
- Decentralisation can provide more detailed input into the
- Decentralisation can provide more detailed input into the decision.decision. - It also
- It also provides motivaprovides motivation to employees by allowing them to participate intion to employees by allowing them to participate in decision making process.
decision making process. - It is
- It is the training opportunity that it creates for low level managers.the training opportunity that it creates for low level managers.
•
• When centralisation is preferredWhen centralisation is preferred
- A
- A comprehensicomprehensive perspective is needed in ve perspective is needed in decision.decision. - A lot of
Determinants - Strategy Determinants - Strategy Meaning
Meaning
•
• It can be defined as the It can be defined as the determinadetermination of the basic long-term goals andtion of the basic long-term goals and
objectives of an enterprise and the adoption of courses of action and the objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these
allocation of resources necessary for carrying out these goals.goals.
•
• Views on Strategy:Views on Strategy:
-- PPllaannnniinng mg mooddee -- EEvvoolluuttiioonnaarry y mmooddee
•
• Planning modePlanning mode
- Strategy is a plan or explicit set of guidelines developed in advance - Strategy is a plan or explicit set of guidelines developed in advance
- Managers identify where they want to go; then they develop systematic and - Managers identify where they want to go; then they develop systematic and structured plan to get there.
structured plan to get there.
•
• Evolutionary modeEvolutionary mode
- Strategy is
- Strategy is not necessarily a well-though-out and systematic plan.not necessarily a well-though-out and systematic plan. - It evolves over time as
- It evolves over time as a pattern in a stream of significant decisions.a pattern in a stream of significant decisions.
Types of Strategy Types of Strategy
•
• Corporate-levCorporate-level strategy: It el strategy: It determines the roles that each business in determines the roles that each business in thethe
organisation will play. organisation will play.
•
• Business-leveBusiness-level strategy: l strategy: For organisations in multiple For organisations in multiple businessesbusinesses, each, each
division will have its own strategy that defines the products or services that it division will have its own strategy that defines the products or services that it will offer, the customer it wants to
will offer, the customer it wants to each.each. Classifying strategic dimensions
Classifying strategic dimensions
•
• Innovation: It does not mean a strategy merely for simple or cosmeticInnovation: It does not mean a strategy merely for simple or cosmetic
changes from previous offerings but rather one
changes from previous offerings but rather one for meaningful and uniquefor meaningful and unique innovations.
innovations.
•
• Marketing DifferenMarketing Differentiation: tiation: It strives to create customeIt strives to create customer loyalty by unir loyalty by uniquelyquely
meeting a particular need. The org seeks to create a favourable image for its meeting a particular need. The org seeks to create a favourable image for its product through advertising, market segmentation and
product through advertising, market segmentation and prestige pricing.prestige pricing.
•
• Breadth: It refers to the Breadth: It refers to the scope of the market to which the business caters; thescope of the market to which the business caters; the
variety of customers, their geographic range and numbers of
variety of customers, their geographic range and numbers of products.products.
•
• Cost Control: It considers the extent to which the org Cost Control: It considers the extent to which the org tightly controls costs,tightly controls costs,
refrain from incurring unnecessary innovation or
refrain from incurring unnecessary innovation or marketing empences andmarketing empences and cuts prices in selling a basic product.
Chandle
Chandler’s r’s Strategy-Structure ThesisStrategy-Structure Thesis
•
• “A new strategy required a new or at least refashioned structure if the“A new strategy required a new or at least refashioned structure if the
enlarged enterprise was to be operated efficiently ….
enlarged enterprise was to be operated efficiently …. Unless structureUnless structure follows strategy, inefficiency results.”
follows strategy, inefficiency results.”
•
• “Unless new structures are developed to meet new administrative needs“Unless new structures are developed to meet new administrative needs
which result from an expansion of a firm’s activities into new areas, which result from an expansion of a firm’s activities into new areas, functions, or product
functions, or product lines, the technological, financial and lines, the technological, financial and personnelpersonnel economies of growth and size cannot be
economies of growth and size cannot be realised.”realised.”
•
• Argument:Argument:
- The efficient structure for an org with
- The efficient structure for an org with a single product strategy is onea single product strategy is one that is simple –
that is simple – high centralisationhigh centralisation, low , low formalisatiformalisation and low on and low complexitycomplexity - From
- From single-prodsingle-product line, uct line, companiecompanies ts typically expand activities withinypically expand activities within same industry. This vertical integration strategy makes for
same industry. This vertical integration strategy makes for increasedincreased interdepen
interdependence among org units and dence among org units and creates the need for creates the need for a morea more complex coordinative device. This desired complexity is
complex coordinative device. This desired complexity is achieved byachieved by redesigni
redesigning the ng the structure to form specialised units based on structure to form specialised units based on functionsfunctions performed.
performed. - If
- If growth proceeds further into product diversification, again structuregrowth proceeds further into product diversification, again structure must be adjusted if efficiency is to be
must be adjusted if efficiency is to be achieved. This can best be achievedachieved. This can best be achieved through the creation of a
through the creation of a multiple set of multiple set of independindependent divisions, eachent divisions, each responsibl
responsible for e for a specified product line.a specified product line.
•
• Research: The related and Research: The related and unrelated business strategies were associatedunrelated business strategies were associated
with multidivisional structures, while
with multidivisional structures, while single-busisingle-business strategies ness strategies werewere linked with functional structure.
linked with functional structure.
•
• ConclusionsConclusions
-- He lHe looookeked ond only aly at lat largrge, pe, prorofifit-t-mamakiking ong orgrg..
-- He foHe focuscussed osed on gron growth awth as meas measursure of ee of effecffectivtiveneness ress rathather ther thanan profitability.
profitability.
Miles and Snow’s four strategic types Miles and Snow’s four strategic types
•
• They have classified org based on the rate at which they change their They have classified org based on the rate at which they change their
products or market into one of four strategic types: defenders, products or market into one of four strategic types: defenders, prospectors, analyzers and reactors.
prospectors, analyzers and reactors.
•
• DefendersDefenders
- They seek stability by producing only a limited set of products - They seek stability by producing only a limited set of products directed at a narrow segment of the total potential market. directed at a narrow segment of the total potential market. - Within this limited niche,
- Within this limited niche, defenders strive aggressiveldefenders strive aggressively to y to preventprevent competitors from entering their ‘turf’ through standard economic competitors from entering their ‘turf’ through standard economic actions such as competitive pricing or
actions such as competitive pricing or production of high-qualityproduction of high-quality products.
products.
- They ignore development, environment to find
- They ignore development, environment to find out new areas of out new areas of opportunity but there is intensive planning oriented towards cost and opportunity but there is intensive planning oriented towards cost and other efficiency issues.
other efficiency issues. - Their structure is
- Their structure is made up of made up of high horizontal differentiationhigh horizontal differentiation,, centralised control and an elaborate formal hierarchy of centralised control and an elaborate formal hierarchy of communication.
communication.
•
• ProspectorsProspectors
- Their strength is
- Their strength is finding and exploiting new product and marketfinding and exploiting new product and market opportunities.
opportunities.
- Innovations are more
- Innovations are more important than high profitability.important than high profitability. - They are
- They are built its reputation and long built its reputation and long term profitability on developingterm profitability on developing innovative products, getting quickly to the
innovative products, getting quickly to the market with those products,market with those products, exploiting opportuni
exploiting opportunities while they are ties while they are still innovative and then gettingstill innovative and then getting out.
out.
- Their success depends on
- Their success depends on developing and maintainideveloping and maintaining the capacityng the capacity to survey a
to survey a wide range of environmental conditions, trends andwide range of environmental conditions, trends and events.
events. - So
- So it has a it has a low degree of routinisation, mechanisation, flexiblelow degree of routinisation, mechanisation, flexible structure.
structure.
•
• AnalysersAnalysers
- They try to
- They try to capitalise on the best of both the preceding types.capitalise on the best of both the preceding types. - Their strategy is to
- Their strategy is to move into new products or new markets only after move into new products or new markets only after viability has been proved by prospectors.
viability has been proved by prospectors. - They essentially follow their smaller and
- They essentially follow their smaller and more innovative competitorsmore innovative competitors With superior products, but only after
With superior products, but only after their competitors havetheir competitors have demonstrated that the market is
demonstrated that the market is there.there. - They seek
- They seek both flexibility and stability.both flexibility and stability. - They have a dual structure –
- They have a dual structure – part of these organisations have highpart of these organisations have high levels of standardisation, routinisation and mechanism for
levels of standardisation, routinisation and mechanism for efficienty.efficienty. Other part are
Other part are adaptive, to enhance flexibility.adaptive, to enhance flexibility.
•
• ReactorsReactors
- This label is meant to describe the inconsistent and unstable - This label is meant to describe the inconsistent and unstable
patterns that arise when one of the other three strategies are pursued patterns that arise when one of the other three strategies are pursued improperly.
improperly. - In
- In general, reactors respond inapproprigeneral, reactors respond inappropriately, perform poorly and as ately, perform poorly and as aa as a result are reluctant to commit t
as a result are reluctant to commit themselvehemselves aggressively to as aggressively to a specific strategy for the future.
Porter’s Competitive Strategies Porter’s Competitive Strategies
•
• He proposes that management must select a strategy that will give itsHe proposes that management must select a strategy that will give its
org competitive advantage. org competitive advantage.
•
• It can It can choose from among three strategies – Cost choose from among three strategies – Cost leadershipleadership,,
differentiation and focus. Which
differentiation and focus. Which one management chooses dependsone management chooses depends on the org’s
on the org’s strengths and competitor’s weaknessestrengths and competitor’s weaknesses.s.
•
• Cost-leadershCost-leadership ip strategystrategy
- These org sets out t
- These org sets out to be the low-cost producer in the industry.o be the low-cost producer in the industry. - Success requires that the org be the cost
- Success requires that the org be the cost leader.leader. - Typical means to
- Typical means to become cost leaders are efficiency of become cost leaders are efficiency of operations,operations, economy of scale, low-cost labour or
economy of scale, low-cost labour or preferential access to rawpreferential access to raw material.
material.
- Best structure
- Best structure is high in complexity, formalisation, centralised.is high in complexity, formalisation, centralised.
•
• Differential strategyDifferential strategy
- These org seeks to be
- These org seeks to be unique in its industry in ways that are widelyunique in its industry in ways that are widely valued by buyer.
valued by buyer. - It
- It might emphasise high quality, extraordinary service, innovativemight emphasise high quality, extraordinary service, innovative design, technological capability or an
design, technological capability or an unusual, positive brand image.unusual, positive brand image. - The key is t
- The key is that the attribute chosen must be different from thosehat the attribute chosen must be different from those offered by rivals and significant enough to
offered by rivals and significant enough to justify a price premium thatjustify a price premium that exceeds the cost of
exceeds the cost of differentiatiodifferentiation.n. - It demands a high degree of f
- It demands a high degree of flexibility, low complelexibility, low complexity, lowxity, low formalisation and decentralised decision making.
formalisation and decentralised decision making.
•
• Focus StrategyFocus Strategy
- It aims at
- It aims at a cost advantage or differentiation advantage in a narrowa cost advantage or differentiation advantage in a narrow segment.
segment.
- Org will select a segment or group of
- Org will select a segment or group of segment in an industry (suchsegment in an industry (such as product variety, type of end buyer, distribution channel, or
as product variety, type of end buyer, distribution channel, or geographi
geographical location of buyer) and tailor the strategy to cal location of buyer) and tailor the strategy to serve them toserve them to the exclusion of other.
the exclusion of other.
•
• Stuck in the middleStuck in the middle
- It describes org that are
- It describes org that are unable to gain a competitive advantage byunable to gain a competitive advantage by on of the previous strategy.
Determinants – Technology Determinants – Technology Woodward’s research
Woodward’s research
•
• Her research, which focused on production technology, was the Her research, which focused on production technology, was the first major first major
attempt to view
attempt to view org structure from a org structure from a technologitechnological perspective.cal perspective.
•
• BackgroundBackground
- She chose approx one hundred manufacturing firm in the south of England. - She chose approx one hundred manufacturing firm in the south of England. -
- She categorisShe categorised the firms into one oed the firms into one of three types of technof three types of technology – unit, masslogy – unit, mass or process production.
or process production. - She treated
- She treated these categories as a scale these categories as a scale with increasing degrees of with increasing degrees of technologic
technological complexity, with unit al complexity, with unit being the least complex and process tbeing the least complex and process thehe most complex.
most complex.
- Unit producers would manufacture custom-made products such as
- Unit producers would manufacture custom-made products such as tailor tailor made suits, turbines. Mass producers would make large-batch or
made suits, turbines. Mass producers would make large-batch or massmass produced products such as refrigerators or ford
produced products such as refrigerators or ford automobilesautomobiles. Process. Process production included heavil
production included heavily automated continuous process such as y automated continuous process such as oil andoil and chemical refiners.
chemical refiners.
•
• ConclusionConclusion
- There
- There were distinct relationships between these were distinct relationships between these technologtechnology classificationsy classifications and the subsequent structure of firm.
and the subsequent structure of firm.
- The effectiveness of org were related to the
- The effectiveness of org were related to the fit between technology andfit between technology and structure.
structure.
•
• Summary of Woodward’s finding on Summary of Woodward’s finding on the relationship between technologicalthe relationship between technological
complexity and structure complexity and structure
Structural Structural Characteristic Characteristic
Low
Low ---H---Highigh Technology
Technology U
Unniit t PPrroodduuccttiioonn MMaasss s PPrroodduuccttiioonn PPrroocceesss s PPrroodduuccttiioonn Number of vertical Number of vertical levels levels 3 3 44 66 Supervisor’
Supervisor’s s spanspan of control of control 2 244 4488 1144 Manager/total Manager/total employee ratio employee ratio 1 1::2233 11::1166 11::88 Proportion of Proportion of Skilled workers Skilled workers H Hiigghh LLooww HHiigghh O
Ovveerraalll l CCoommpplleexxiittyy LLooww HHiigghh LLooww F
Foorrmmaalliissaattiioonn LLooww HHiigghh LLooww C
Knowledge based Technology – Perrow’s Contribution Knowledge based Technology – Perrow’s Contribution
•
• It considers only manufacturing base as it represents more than 50% of allIt considers only manufacturing base as it represents more than 50% of all
the org. the org.
•
• BackgroundBackground
- It
- It looked at knowledge technology rather than at production technology.looked at knowledge technology rather than at production technology. - According to
- According to Perrow, technology means ‘ the action that Perrow, technology means ‘ the action that an individualan individual performs upon an object, with or without the aid of
performs upon an object, with or without the aid of tools or mechanicaltools or mechanical devices in order to make some change in that object.’
devices in order to make some change in that object.’ - There are
- There are two underlying dimension of knowledge technologtwo underlying dimension of knowledge technology – y – TaskTask variability and Problem
variability and Problem analyzabianalyzability.lity. - Task variability:
- Task variability: - It is
- It is the number of exceptions encountered in one’s work.the number of exceptions encountered in one’s work.
- These exceptions will be few in numbers if the job is high in routineness - These exceptions will be few in numbers if the job is high in routineness and vice versa.
and vice versa. -
- Problem analyzability:Problem analyzability: - It assesses the type
- It assesses the type of search procedures followeof search procedures followed to find successfuld to find successful methods for responding adequately to task exceptions.
methods for responding adequately to task exceptions. - It can be
- It can be well defined or ill defined.well defined or ill defined.
•
• Using this two dimensions, he has constructed a two by two matrixUsing this two dimensions, he has constructed a two by two matrix
representing four cells
representing four cells – Routine – Routine technologtechnologies, Engineering technologies,ies, Engineering technologies, Craft technologies and
Craft technologies and Nonroutine technologiNonroutine technologies.es. - Routine technologies:
- Routine technologies:
- Few exceptions and easy
- Few exceptions and easy to analyse problems.to analyse problems. - e.g. mass
- e.g. mass production processes such as steel, automobiles, bank teller production processes such as steel, automobiles, bank teller - Engineering technologies:
- Engineering technologies:
- A large number of exceptions but can be handled in a rational and - A large number of exceptions but can be handled in a rational and systematic manner.
systematic manner.
- e.g. construction of office building, activities of tax consultants - e.g. construction of office building, activities of tax consultants - Craft
- Craft technologtechnologies:ies:
- Relatively difficult problems with a
- Relatively difficult problems with a limited set of exceptionslimited set of exceptions - e.g. shoemaking, furniture restoring or performing artist. - e.g. shoemaking, furniture restoring or performing artist. - Nonroutine technologies:
- Nonroutine technologies:
- Many exceptions and difficult to
- Many exceptions and difficult to analyse problemsanalyse problems - e.g. strategic
- e.g. strategic planninplanning, basic research activitiesg, basic research activities
•
• ConclusionConclusion
C
Ceellll TTeecchhnnoollooggyy SttrruS uccttuurraal l CChhaarraacctteerriissttiicc Fo
Forrmamalliisasatitioonn CCeenntrtraalliisasatitioonn SSpapan n oof f control control Coordination Coordination and control and control 1
1 RRoouuttiinnee HHiigghh HHiigghh WWiiddee PPllaannnniinngg and rigid and rigid rules rules 2
2 EEnnggiinneeeerriinngg LLooww HHiigghh MMooddeerraattee ReReppoorrtts s aanndd meetings meetings 3
3 CCrraafftt MMooddeerraattee LLooww MMooddeerraatte e--wide wide Training and Training and meetings meetings 4
4 NNoonnrroouuttiinnee LLooww LLooww MMooddeerraatte e--low low Group Group norms and norms and group group meetings meetings
Technologi
Technological cal uncertainty: Thompson’s uncertainty: Thompson’s contributioncontribution
•
• Thomson’s contribution lies in Thomson’s contribution lies in demonstratindemonstrating that g that technologtechnology determines ty determines thehe
selection of a strategy
selection of a strategy for reducing uncertainty and that specific structuralfor reducing uncertainty and that specific structural arrangement can facilitate
arrangement can facilitate uncertainty reduction.uncertainty reduction.
•
• BackgroundBackground
- He proposed three types of technology that are differentiated by the tasks - He proposed three types of technology that are differentiated by the tasks that an organisational unit performs –
that an organisational unit performs – Long-likeLong-liked, Mediating, Intensived, Mediating, Intensive technology
technology
- Long-linked technology - Long-linked technology
- Tasks
- Tasks or operations are sequentially interdependent.or operations are sequentially interdependent. - Mass production assembly lines
- Mass production assembly lines - It
- It requires efficiency and coordination among activities, owing to sequentialrequires efficiency and coordination among activities, owing to sequential interdepend
interdependencies, the encies, the major uncertainty facing management lies on major uncertainty facing management lies on the inputthe input and output sides of
and output sides of management.management. - Mediating technology
- Mediating technology - It is
- It is one that links clients on both the input and output sides of one that links clients on both the input and output sides of thethe organisation.
organisation. - e.g. Banks,
- e.g. Banks, telephontelephone, retail stores, e, retail stores, employmenemployment agencies, post officest agencies, post offices - Mediators perform an interchange function liking units that
- Mediators perform an interchange function liking units that are otherwiseare otherwise independe
independent. The nt. The linking unit responds with standardising the orglinking unit responds with standardising the org transactions and establishing conformity in
transactions and establishing conformity in clients’ behaviour.clients’ behaviour. - Intensive t
- Intensive technologechnologyy
- It represents a customised response to a diverse set of
- It represents a customised response to a diverse set of contingenciecontingencies.s. - The exact response depends on the nature of problems and variety of - The exact response depends on the nature of problems and variety of problems.
problems.
- Hospitals, research labs,
- Hospitals, research labs, managemenmanagement consulting firms, t consulting firms, military combatmilitary combat teams
teams
- A number of multiple resources are available to the org, but only a
- A number of multiple resources are available to the org, but only a limitedlimited combination is used at a
combination is used at a given time depending on the situation.given time depending on the situation.
•
• ConclusionConclusion
- Long linked technology is accompanied by sequential interdependence – the - Long linked technology is accompanied by sequential interdependence – the procedures are highly standardised and must be performed in a
procedures are highly standardised and must be performed in a specifiedspecified serial order – low complexity and
serial order – low complexity and high formalisationhigh formalisation - Mediating technology has pooled interdependenc
- Mediating technology has pooled interdependence – e – two or more two or more units eachunits each contribute separately to a larger unit
contribute separately to a larger unit – moderate complexity and formalisation– moderate complexity and formalisation - Intensive technology creates reciprocal interdependen
- Intensive technology creates reciprocal interdependence – ce – the outputs of the outputs of units influence each other in
units influence each other in a reciprocal fashion – high complexity and lowa reciprocal fashion – high complexity and low formalisation
Relationshi
Relationship p between technology between technology and and Complexity/FoComplexity/Formalisation/Cermalisation/Centralisationntralisation
•
• Technology and ComplexityTechnology and Complexity
- Routine technology is positively associated with low complexity. - Routine technology is positively associated with low complexity. - The
- The greater the routineness, the fewer the greater the routineness, the fewer the number of occupational groupsnumber of occupational groups and the less
and the less training possessed by professionaltraining possessed by professional..
- The nonroutine technology is likely lead to high complexity. - The nonroutine technology is likely lead to high complexity. - As the work
- As the work becomes more sophistibecomes more sophisticated and customised, the span of cated and customised, the span of control narrows and vertical
control narrows and vertical differentiatiodifferentiation increases.n increases.
•
• Technology and FormalisationTechnology and Formalisation
- Routine t
- Routine technologechnology is y is positively related with formalisation.positively related with formalisation.
•
• Technology and Technology and CentralisaCentralisationtion
- The
- The routine technologroutine technologies would be ies would be associated with a centralised structureassociated with a centralised structure whereas the nonroutine technology, which would rely more heavily on the whereas the nonroutine technology, which would rely more heavily on the knowledge of specialist, would be
Organisational Design Options Organisational Design Options Common elements in
Common elements in OrganisationOrganisationss
•
• The operating core: Employees who perform the The operating core: Employees who perform the basis work related to thebasis work related to the
production of products and services. production of products and services.
•
• The strategic apex: Top-level managers who are charged with The strategic apex: Top-level managers who are charged with the overallthe overall
responsibil
responsibility for ity for the org.the org.
•
• The middle line: Manager, who connect the The middle line: Manager, who connect the operating core to the strategicoperating core to the strategic
apex. apex.
•
• The technostructure: Analyst who have the The technostructure: Analyst who have the responsibiresponsibility for efflity for effecting certainecting certain
forms of standardisation in org. forms of standardisation in org.
•
• The support staff: People who fill the staff The support staff: People who fill the staff units, who provide indirect supportunits, who provide indirect support
services for the org. services for the org. The Simple Structure
The Simple Structure
•
• The simple structure is depicted best as a flat organisation, with an organicThe simple structure is depicted best as a flat organisation, with an organic
operating core and almost everyone reporting to one
operating core and almost everyone reporting to one person where theperson where the decision-making power is centralised.
decision-making power is centralised.
•
• StrengthStrength
- Simplicity - Simplicity
- Fast and flexible - Fast and flexible
- Clear accountability, minimum amount of goal ambiguity - Clear accountability, minimum amount of goal ambiguity
•
• WeaknessWeakness
- Limited applicability - Limited applicability - With increased size, this
- With increased size, this structure proves inadequate.structure proves inadequate. - Concentrate power in one person
- Concentrate power in one person - Concentration of power can
- Concentration of power can work against the org’s effectiveness andwork against the org’s effectiveness and survival.
survival.
•
• When should be usedWhen should be used
- Small or in formative stage of
- Small or in formative stage of developmedevelopmentnt - Environment is simple and dynamic
- Environment is simple and dynamic - Org faces high hostility or crisis or
- Org faces high hostility or crisis or senior managemensenior management is owner t is owner - Number of employees are few
- Number of employees are few The Machine
The Machine BureaucracyBureaucracy
•
• FeaturesFeatures
- Highly routine operating tasks - Highly routine operating tasks - Tasks are
- Tasks are grouped into functional departmentgrouped into functional department - Centralised authority
- Centralised authority
- Decision making that follows t
- Decision making that follows the chain of commandhe chain of command - An
- An elaborate adminiselaborate administrative structure with a trative structure with a sharp distinction between linesharp distinction between line and staff activities
and staff activities
•
• StrengthStrength
- Ability to
- Ability to perform standardised activities in a highly efficient manager perform standardised activities in a highly efficient manager - It
- It requires less talented hence less costly middle and lower requires less talented hence less costly middle and lower level managerslevel managers - The
- The pervasivenpervasiveness of ess of rules and regulations substitute for managerialrules and regulations substitute for managerial discretion.
discretion.
- Standardised operations coupled with
- Standardised operations coupled with high formalisation, allow decisionhigh formalisation, allow decision making to be centralised.
making to be centralised.
•
• WeaknessWeakness
- Specialisation creates subunit conflicts. - Specialisation creates subunit conflicts.
- Functional unit goals can override the overall goals of org. - Functional unit goals can override the overall goals of org. - Not effective for solving new problems
- Not effective for solving new problems
•
