Module 1 Understanding and Managing Organizations

10/9/2008
MBA
Master of Business Administration
Crash Course
Course
“To reach our greatest potential, we

must set our sights clearly and
embrace the unknown confidently”
The National Organization of Certified Public Accountants An association of institutional, professionals, and OFWs
Riyadh Chapter, Kingdom of Saudi Arabia Riyadh, Kingdom of Saudi Arabia
THOUGHTS
WITH GOD’s BLESSINGS
I will…
Be too calm for worry,

Too noble for anger,
And too strong to defeat,
I will believe anything is possible,
I will walk through fear without hesitation,
I will stand for something
and,
today
I WILL MAKE A DIFFERENCE
“I am committed to treating everyone with courtesy and respect, cultivating relationships by

sowing seeds of goodwill and understanding. With attention and care, I will help create an
environment where everyone can flourish and grow."
SIX MAJOR DEPARTMENTS OF PERSON’S LIFE
FINANCE WORK
S
SELF
& HOME
KNOWLEDGE
&
FAMILY
ROMANCE
SPIRITUALITY &
FRIENDSHIP
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10/9/2008
SIX MAJOR DEPARTMENTS OF PERSON’S LIFE
CIRCLE OF
INFLUENCE
SIX MAJOR DEPARTMENT OF PERSON’S LIFE
CIRCLE OF
CONCERN
THE FOUR
DIMENSIONS
DIMENSIONS
OF A
PERSON’S NATURE
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10/9/2008
FOUR DIMENSIONS
SOCIAL
PHYSICAL Service, Empathy
Exercise, Nutrition Synergy
Stress Management Intrinsic Security
SPIRITUAL
MENTAL Value Clarification
Reading, Visualizing & Commitment
Planning, Writing Study & Meditation
THOUGHTS
WITH GOD’s BLESSINGS
I will…
Be too calm for worry,

Too noble for anger,
And too strong to defeat,
I will believe anything is possible,
I will walk through fear without hesitation,
I will stand for something
and,
today
I WILL MAKE A DIFFERENCE
“I am committed to treating everyone with courtesy and respect, cultivating relationships by

sowing seeds of goodwill and understanding. With attention and care, I will help create an
environment where everyone can flourish and grow."
MBA CRASH COURSE OUTLINE
DAY 1 – MODULE 1
UNDERSTANDING AND MANAGING ORGANIZATIONS
DAY 2 - MODULE 2
HUMAN CAPITAL MANAGEMENT
DAY 3 - MODULE 3
ENABLING TECHNOLOGIES
TECHNOLOGIES
DAY 4 - MODULE 4
MARKETING MANAGEMENT
DAY 5 - MODULE 5
MANAGEMENT CONTROL AND DECISION MAKING
DAY 6
MCDM PRESENTATION AND WRAP UP
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COURSE METHODOLOGY
LECTURE & THEORIES
CASE ANALYSIS
CASE PRESENTATION
KNOWLEDGE
MANAGEMENT
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KNOWLEDGE MANAGEMENT
ORGANI-
ZATIO-
NAL
TECHNO ECOLOGI-
CENTRIC CAL
KNOWLEDGE MANAGEMENT DRI VERS
Gaining competitive advantage

Increasing effectiveness
New knowledge creation.
Greater innovation
Better experiences
Consistency in good practices
What
is
MBA?
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STRATEGIC OBJECTIVES
PERSONAL DEVELOPMENT
CONFIDENCE
COMPETENCE
COMPETITIVENESS
PROFESSIONALISM
CAREER MANAGERIAL
KNOW-HOW
FUTURE
DEVELOPMENT
EXISTING RE-
COMPETITIVENESS
WORK PROFESSIONAL
GROWTH INTEG
ENTREPRENEURIAL
PREPARATION RATION
ADVANCEMENT
RE-INTEGRATION
COMPETITIVE EDGE
MBA PROGRAM
Designed to develop individual’s skills:
Quantitative
Leadership
Communication
Optimize
performance in the
business world.
MBA EXPERIENCE
Enhance decision making ability by
strengthening:
Technical while being able

to negotiate
issues
regarding
ethical business
Analytical
practices.
Strategic
aptitude
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COMMON SKILLS GAINED FROM MBA DEGREE
Academic Achievement
Ability to contribute solutions to

organizational problems
Ability to evaluate and exploit

business opportunities
COMMON SKILLS GAINED FROM MBA DEGREE
Ability to make decisions with

imperfect information
Better leadership skills and

methods to encourage and
motivate a team
Clearly and effectively

communicate (speaking, writing,
using body language)
CAREERS AND SALARIES

MIT (Sloan Management)
Consulting/Strategic Planning $82,000 - 140,000
Finance (total) 70,000 - 150,000
Finance/ 95,000 - 110,000
Investment Banking
Finance/Investment 70,000 - 150,000
Management
Finance/ 95,000 - 120,000
Sales & Trading
Finance/Research 85,000 - 101,076
Finance/Other² 75,000 - 110,000
Operations/Project Management 42,000 - 125,000
Marketing/Sales 60,000 - 132,000
General Management/Leadership 65,000 - 150,000
Development Program
Product Management/Development 50,000 - 165,000
Business Development 80,000 - 140,000
Information Technology Insufficient data
Other 73,500 - 125,000
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Harvard
Business Development $ 96,250 108,500
Consulting 116,000 120,000
Finance – Corporate 95,000 100,000
Gen. Finance 92,750 97,500
General Management 95,000 110,000
Manufacturing Management 110,000 115,000
Project Management 107,500 110,000
Marketing 89,500 100,000
Brand/Product Management 90,000 100,000
General Marketing 85,000 100,000
Sales 88,500 92,000
Strategic Planning 90,000 100,000
Other 85,000 102,500

Maryland
Robert Smith School of Business
Compensation Packages:
Mean Median High
Base Salary (US Citizens) $84,239 $83,000 $110,000
Base Salary (Foreign Nationals) $81,313 $82,000 $115,000
Function Mean Median High
Consulting $93,850 $97,500 $115,000
Finance/Accounting $81,670 $84,500 $100,000
General Management $81,909 $84,000 $95,000
Marketing/Sales $79,286 $80,000 $105,000
MIS $78,666 $78,000 $83,000
Operations/Production $78,000 $77,500 $82,000

AS OF YEAR 2007
CAREER MANAGEMENT CENTER
U.S. Citizens
Particulars Mean ($) Median ($) High ($) Low ($)
Base Salary 85,000 88,000 107,000 40,000
Signing Bonus 15,305 12,500 45,000 5,000
Other Guaranteed Comp 15,694 8,000 180,000 889
TOTAL 115,999 108,500 332,000 45,889
Foreign Nationals
Particulars Mean ($) Median ($) High ($) Low ($)

Base Salary 87,030 86,400 97,500 75,000
Signing Bonus 15,450 13,750 45,000 5,000
Other Guaranteed Comp 7,250 7,750 10,000 3,000
TOTAL 109,730 107,900 152,500 83,000
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AS OF YEAR 2007
CAREER MANAGEMENT CENTER
By Function
% Accepting
Mean ($) Median ($) High ($) Low ($)
Particulars New Jobs
Consulting 6.90% 87,860 90,000 95,000 82,000
Finance/Accounting 12.50% 84,857 80,000
80,000 95,000
95,000 78,000
78,000
Gen. Management 9.70% 78,166 76,000 95,000 60,000
Marketing/Sales 20.80% 81,312 80,750 102,000 45,000
IS Management 5.60% 86,666 85,000 95,000 80,000
Operations/Supply Chain 38.90% 88,867 89,500 107,000 75,000
Others 5.60% n/a n/a n/a n/a
MBA
Tracks
Two major Units

Research Methods
Project and Dissertation
MBA STAGE
Managing Organizations
Approaches to Strategic Mgt
Change Management
Managing Change
3 Electives
POST GRADUATE DIPLOMA PGD Stage

Nature of Management Enabling Technologies
Systems Realization Management Accounting and
Financial Accounting Decision Making
Marketing Understanding Organizations
POST GRADUATE CERTIFICATE PGC Stage
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FIRST YEAR FIRST TRIMESTER

BA 201Economic Analysis
BA 211Management Science
BA 220Managerial Accounting and Control I
BA 251Organizational Behavior
SECOND TRIMESTER
BA 221Managerial Accounting and Control II
BA 230Marketing Management
BA 240Operations Management
BA 280.1Fundamentals of Financial Management
THIRD TRIMESTER
BA 243Management of Innovation
BA 280.2Corporate Finance and Financial Markets
BA 286Management of Information Technology
BA 290General Management Elective # 1
SECOND YEAR FIRST TRIMESTER
BA 291.1Strategic Management I
Elective # 2 Elective # 3 Elective # 4
SECOND TRIMESTER
BA 291.2Strategic Management II
Elective # 5 Elective # 6 Elective # 7
COMPREHENSIVE EXAMINATION
A. PRE-MBA COURSES (10 units) C. INTEGRATING COURSES (6 units)

Economics for Managers
Applied Mathematic Strategic Management
Business Communication
Financial Accounting
D. ELECTIVES & EMPHASIS AREAS (6 units)
Managerial Statistics
Research for Managements
a. HUMAN RESOURCE
B. CORE COURSES (30 units)
b. FINANCE & BANKING
Business Ethics
Managerial Accounting & Control
c. OPERATIONS & MANUFACTURING
IT for Managers
Leadership Effectiveness
d. INFORMATION TECHNOLOGY
Principles & Dynamics of Management
Applied Management Science
e. MARKETING
Human Resource Management
Financial Management
f. INDUSTRY SECTORS
Operations Management
Marketing Management
YEAR 1
Management Control (MC)
Human Behavior in Organizations (HBO)
Management Communication (MC)
Economics
Marketing Management (MM)
Operations Management (OM)
General Management (GM)
Development of Enterprise (DE)
Quantitative Analysis (QA)
Information and Communication Technology (ICT)
Language of Business (LOB)
Management Accounting (MA) YEAR 2
Financial Management (FM)
General Management II (GM)

Development of Enterprise II (DE)
Development Management (DM)
Management Issues in Globalization (MIG)
Asian Business Systems (ABS)
Electives I
Electives II
Human Behavior in Organizations
Action Consultancy (AC)
Management Research Report (MRR)
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TERM 1
Finance 1
Financial reporting and Control
Leadership and Organizational Behavior
Marketing
Technology and Operational Management
TERM 2
Business Government and International Economy

Strategy
The Entrepreneurial Manager
Negotiation
Finance II
Leadership & Corporate Accountability
BUSI NESS
BASI CS
ESTABLISHING A BUSINES – MAJOR FRAMEWORKS
Defined Infrastructure
Organization Structure
Job Descriptions
Financial Operating Human & Other

Budget Assets
`
Financial Resources Skills Inventory
Financial Controls Facilities/Fixed Assets
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HIGH PERFORMANCE BUSINESS
Set Strategies
to satisfy key
stakeholders
STAKEHOLDERS
Improved
critical business
processes PROCESSES
Align
resources
and RESOURCES ORGANIZATION
organizations
BEST MANAGED COMPANIES
STRUCTURE
STRATEGY SYSTEMS
SHARED
VALUES
SKILLS STYLE
STAFF
7 ELEMENTS OF HI GH PERFORMANCE
Good Enough
is not Enough
Purpose, Values,
the Positive
Accentuate
and Goals
Aligned
PEOPLE
Creating
Emotional
Connections
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Module 1
UNDERSTANDING
AND
MANAGING
ORGANIZATION
LEARNING OUTCOMES
Organizational histories.
Different theories and schools of

thoughts
Organizational metaphors in
organizational analysis.
Structural types and

configurations of organizations.
Organizational Design
ORGANIZATION OVERVIEW
Greek Word – “Organon” – Tool/Instrument
Structure or Skeleton
Capture and direct system flows
Interrelationships among
Interrelationships among different
differentparts
parts
Shared values
Shared beliefs
Culture
STRUCTURES – POLICIES –CORPORATE CULTURE
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ORGANIZATION OVERVIEW
Organization
stable, formal social structure
Inputs Outputs
from to
Environment Environment
Production Process
HI STORY OF ORGANI ZATI ONAL THEORY
Taylorism (scientific mgt)
Human relations
Neo- human relations
System Theory
Contingency theory
Taylorism (scientific management)
Frederick the Great of Russia – 1740 to 1746
Frederick Taylor – American Engineer (1915)
“Enemy of working man”
Principles of Scientific Management
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Shift all the responsibility for the organization of

work from the worker to the manager.
Use scientific methods to determine the

most efficient way of doing work.
Select the best person to perform the job

designed.
Train the worker to do

the work efficiently.
Monitor work performance - appropriate

work procedures are followed -
appropriate results are achieved.
CLEAR DELINEATION OF AUTHORITY
RESPONSIBILITY
SEPARATION OF PLANNING FROM OPERATIONS
INCENTIVE SCHEME FOR WORKERS
TASK SPECIALIZATION
Human Relations/Neo- Human Relations
Hawthorne Studies - 1920

Hawthorne Plant of Western Electric Company, Chicago
Elton Mayo
RELATIONS BETWEEN CONDITIONS OF WORK, AND

BOREDOM AMONG EMPLOYEES
THEORY OF MOTIVATION
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Systems Theory
Developed in 1950s and 60s in the Atlantic
Ludwig Von Bertalanffy

Theoritical Biologist
Human Relations/Neo- Human Relations
Employees are people with complex needs -

must be satisfied perform effectively in the
workplace,
Employees work best when motivated by the

tasks - motivation hinges on allowing people
to achieve rewards that satisfy their personal
needs.
Human being - psychological organism

struggling to satisfy its needs in a quest for
full growth and development.

Systems Theory
Virtually anything can be defined as a

system by drawing a boundary.
Complex organisms exist in

continuous exchange with their
environment sustaining life and form.
Homeostasis – self regulation and

ability to maintain a steady state.
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Systems Theory
SYSTEMS VIEW OF ORGANIZATION
ENVIRONMENT
INPUT OUTPUT
Organization System
Raw
Materials Information Employee
Resources Resources Satisfaction
TRANSFORMATION PROCESS
Products
Management/Production
Services
Technology
Human Financial
Resources Profit/
Resources
Losses
FEEDBACK
ENVIRONMENT

Contingency Theory
Organization – Adapt to the environment
British Researchers
Tom Burns – G.M. Stalker

Contingency Theory
There is no one best way of organizing. The

appropriate form depends on the kind of task
or environment with which one is dealing.
Management must be
concerned, above all else, with
achieving alignments and
“good fits”
Different approaches to
management maybe necessary to
perform different tasks within the
same organization.
Different types or species of

organizations are needed in
different types of environments.
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KEY ORGANI ZATI ONAL METAPHORS
MACHINE METAPHOR
ORGANISM METAPHOR
BRAIN METAPHOR
POLITICAL METAPHOR
CULTURAL METAPHOR
FLUX AND TRANSFORMATION

METAPHOR
IMPLICIT IMAGE
WAY OF THINKING
METAPHOR
WAY OF SEEING
GENERAL
UNDERSTANDING

METAPHOR INVITES US TO SEE SIMILARITIES
STRETCHES IMAGINATION – CREATE POWERFUL INSIGHTS
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ORGANIZATION AS MACHINE
ORGANIZATION AS MACHINES - TAYLORISM
Organization - instruments to achieve other ends/goals.
Now called “BUREAUCRACIES”
Bureaucratic form of organization routinizes the process of

administration as machine routinizes production.
Franchising – form of
mechanistic organization
STRENGTHS
Works well under conditions where machines work well.
Straightforward task to perform
Stable environment
Production of the same product time and time again.
Precision is at premium
Human- machine parts are

compliant.
LIMITATIONS
Adapting to changing circumstances
Results in mindless and questioning bureaucracy.
Undesirable and unanticipated consequences.
De- humanizing effects.
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ORGANIZATION AS ORGANISMS
ORGANIZATION AS ORGANISM – HUMAN RELATIONS
Individuals and groups , like

biological organisms, operate
most effectively only when their
needs are satisfied.
Abraham Maslow’s Hierarchy of

needs.
Like organism – conceived as set

of interacting subsystems
ORGANIZATION AS ORGANISM – HUMAN RELATIONS
Encouragement/employee
Self commitment
Actualization Job – expressive dimension of
employee’s life
Achievement, autonomy, responsibility

Ego Enhancing personal identity
Recognition, awards
Work organization-interaction with co-workers

Social Social and sports facilities
Company outings/parties
Pension/healthcare plans
Security Job Tenure
Emphasis on career paths within the organization
Physio- Salaries and wages

logical Safe and pleasant working conditions
ORGANIZATIONAL SUBSYSTEMS
Environment
Strategic Technological
Subsystem Subsystem
ORGANI-
ORGANI- Managerial ZATIONAL
ZATIONAL Subsystem OUTPUT
INPUT
Human- Structural
Cultural Subsystem
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STRENGTHS
Understanding of relations between
organizations and their environment.
Systematic attention to the needs in

order to survive.
With different species – alert that

organizations have several options.
Impact to inter- organizational processes.
LIMITATIONS
Difficulty of collaborating/cooperating due
to several subsystems.
Organization is not functionally unified as

organisms.
Takes a number of forms – not ideal.
ORGANIZATION AS BRAIN
Organizations are information systems.
Organizations are communication

systems.
systems.
Organizations are decision- making

systems
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Brain organizations innovate and evolve and skilled at:
Systematic problem solving
Experimentation with new approaches.
Learn from experiences and practices of

others
Learn from own experiences and past

history.
Transfer knowledge effectively and quickly

throughout the organization.
Organization as Holographic Brain
Principle 1:
Principle 5: Build the “whole”
Learn to learn into the “parts”
Visions, values, and culture as
Scan and anticipate
corporate DNA
environmental changes
Networked Intelligence
Double loop learning
Structures that reproduces
Emergent design
themselves
Holistic teams; diversified roles
HOLOGRAPHIC
Principle 4: ORGANIZATION Principle 2:
Minimum Specs Importance of
redundancy
Define no more than is
absolutely necessary
In information processing
In skills and the design of work
Principle 3: Requisite Variety

Internal complexity – matches the environment
STRENGTHS
Ability to create Learning Organizations
Identify organizational requirements,

bring them together and move forward.
Powerful way of thinking about

technology.
Re- thinking of key management principles

and lays new theory of management.
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LIMITATIONS
Problem of self reference – looking of other

metaphors to make sense of what we see.
Overlooking important conflicts arising

between learning and self organization.
ORGANIZATION AS POLITICAL SYSTEM
Political Issues : Power, authority, superior-

subordinate relations .
Creation of order and attention .
Organization – like government employs system of

rule.
Autocracy
Bureaucracy
Technocracy
Codetermination
Representative Democracy
Direct Democracy
STRENGTHS
Contributes to the creation of social order.
Explode myth of organizational rationality – importance

of rational, efficient and effective management.
Overcome limitations of organizations as functionally
system.
integrated system.
Understanding of human behavior in an organization – the

political way.
Recognition of socio- political

implications of different kinds
of organization and roles in the
society.
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LIMITATION
We tend to behave politically in relation to what
we see.
Cynicism and mistrust.
Analysis of conflicts, interest and power –

interpretationthat
interpretation thateveryone
everyone tries
tries
to to
maneuver
maneuver
andand
outwit the other.
Assumption of pluralism – the

need for groupings, coalition
for power.
ORGANIZATION AS FLUX & TRANSFORMATION
Greater flexibility and general skills required for

organizations in turbulent environment.
Change must become a norm for managers
Managers are change agents for the

future.
ORGANIZATION AS FLUX & TRANSFORMATION
APPROACHES TO CHANGE
DESCRIPTIVE APPROACH – Mechanistic for stable
environment and organic for unstable environment.
PRESCRIPTIVE APPROACH – a planned process:
Diagnosis of the Problem

Planning for Change
Launching Change
Follow- up
CULTURAL APPROACH – culture

is the key to managerial control,
worker commitment and
organizational effectiveness.
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ORGANIZATION AS CULTURES
WHAT
IS
CULTURE?
Organizational culture,
or
corporate culture,
comprises the attitude,
experiences, beliefs and
values of an
organization.
Pattern of development reflected in a

society’s system of knowledge, ideology,
values, laws, and day- to- day ritual .
Set of assumptions invented and learned by

a group, proven successful – taught to new
members to adopt .
Beliefs and expectations shared by

members.
Habitual ways of feeling, thinking, reacting

applicable at certain point of time.
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FOUR MAIN TYPES OF CULTURE
POWER CULTURE – depends on central
power source – spreading out to groups.
ROLE CULTURE – role, job descriptions,

more important than the individuals who
fills it.
TASK CULTURE – Job or project orientated –

project teams, task force, formed for
specific purpose.
PERSON CULTURE – Individual is central

point.
STRENGTHS
Directs attention to the symbolic significance

of every aspect of the organization.
Shared systems of meaning – values, beliefs,

language, norms, practices.
Encourage seeing the relations between

organization and its environment.
Contribution to understanding of
organizational change.
LIMITATION
Changing culture is difficult and takes time –

re- inventing and re- positioning.
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EXERCISE
WHAT KIND OF ORGANIZATION
DO YOU BELONG?
YOU WANT TO BELONG TO?
EXERCISE
Rank each statement in the order of salience.
Count all 1’s for each item (a, b, c, d)

WHAT KIND OF ORGANIZATION
Write total numbers on the table.
EXERCISE
The highest score is the dominant culture of the organization
A. POWER
B. ROLE
C. TASK
D. PERSON
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STRUCTURAL TYPES
OF
ORGANIZATIONS
SIMPLE STRUCTURE
Type of organization common in small businesses

Run by personal control of an individual
Owner takes most of responsibilities of management
If with partner – no or little clear definition of responsibilities
LIMITATION:
Can operate effectively up to a certain size
SIMPLE STRUCTURE
Owners
Husband-Wife
Secretary/
Admin/Accountant
Sales People/Production Workers, etc.
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FUNCTIONAL STRUCTURE
CHIEF
EXECUTIVE
PRODUCTION SALES AND FINANCE AND PERSONNEL

DEPARTMENT MARKETING ACCOUNTING DEPARTMENT
Based on primary activities of the organization
ADVANTAGES DISADVANTAGES
Chief Exec in touch with all operation Senior Managers overburdened with
routine matters
Reduces/simplifies control mechanism
Senior Managers neglect strategic issues
Clear definition of responsibilities
Difficult to cope with diversity
Specialist at senior & middle mgt level
Coordination between functions-difficult
Failure to adapt
MULTI- DIVISIONAL STRUCTURE

HEAD OFFICE
CENTRAL SERVCS
(Fin. HR, etc)
Division A Division B Division C Division D Division E
FUNCTIONS FUNCTIONS FUNCTIONS FUNCTIONS FUNCTIONS
Subdivided into units on basis of: products, services, areas
Concentration on business area (e.g. Possible confusion over locus of
product/market) responsibility.
Facilitates measurement of unit Conflict between divisions

performance
Basis of inter trading
Ease of addition and divestment of units
Costly
Facilitates senior management attention
to strategy Division grow too large
Encourages general management Complexity of cooperation-too many

development. divisions.
HOLDING COMPANY STRUCTURE

PARENT COMPANY
Company A Company B Company C Company D Company E
Low Central Overheads Risk of individual Business
Offsetting of Individual Business Losses Unavailability of skills at group level
Cheaper Finance for Individual Lack of synergy

Businesses
Difficulties of centralized contol
Spreading of risk
Ease of divestment
Facilitates Devolution
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MATRIX STRUCTURE
CHIEF
EXECUTIVE
The
Merchandise Trading Finance Marketing Board
Director Director Director Director
Trading Companies
Europe USA Far East
Product Group A
The
Product Group B
Operations
Product Group C
Combination of structures taking the form of product and geographical

divisions or functional and divisional structures operating in tandem.
Quality of decision making where Length of time to take decisions.
interests conflict
Unclear job and task responsibilities.
Direct contact replace bureaucracy.
Unclear cost and profit responsibilities.
Increases managerial motivation.
High degree of conflict
Development of managers through
increased involvement in decisions. Dilution of priorities.
Creeping bureaucracy
INTERMEDIATE STRUCTURES
Blending of formal structures to a

new type of structure to meet
environmental requirements.
No specific format – creation of

sections, divisions, and other units
depend on strategy to adapt to
environment and resolution of
conflicts.
Example : moving from functional

to divisional depending on
allocation of resources and control.
NETWORKED ORGANIZATIONS
Drive for organizations to

become flatter.
Organizations managed to be
less dependent on particular
place of work.
By partnership and
collaboration.
Operation through linkages
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NETWORKED ORGANIZATIONS
APPROACHES
CLIENT
SERVICE A SERVICE B SERVICE C
ONE-STOP SHOP : Complete package offering CLIENT
ONE-START SHOP : Diagnosing client requirements

and referring to appropriate provider
CLIENT
SERVICE NETWORK : Client access all services
MULTINATIONAL COMPANIES
GLOBAL
COORDINATION
Low High
International Global
Local Low Product
Divisions
Independence Companies
and
Responsiveness
International Transnational
High Subsidiaries Corporations
ELEMENTS OF
ORGANIZATIONAL
DESIGN
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ELEMENTS OF DESIGN
WHAT IS
ORGANIZATION
DESIGN?
ELEMENTS OF DESIGN
FORMAL GUIDED PROCESS FOR INTEGRATING
INFORMATION
PEOPLE
PROCESS
TECHNOLOGY
ELEMENTS OF DESIGN
CENTRALIZATION VS.
DEVOLUTION
ORGANIZATIONAL
CONFIGURATION
RESOURCE ALLOCATION
AND CONTROL PROCESSES
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CENTRALIZATION VS. DEVOLUTION
MANAGEMENT STYLE – deciding where

within structure responsibility for
operational and strategic decision
making should lie.
DEVOLUTION – Extent to which the

center of organization delegates
decision making to unit and
managers lower down the hierarchy

STRATEGIC PLANNING
CENTER
(Master Planner)
Detailed Establishment Infrastruc

Budget tures
Capital Procedures Bargaining

Allocation Systems (item by item)
DIVISION/DEPARTMENT

FINANCIAL CONTROL
CENTER
(Shareholder/Banker)
Targets Performance
Capital Bids
Appraisal
DIVISION/DEPARTMENT
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STRATEGIC CONTROL
CENTER
(Strategic Shaper)
Agreed Optional
Policies Svcs &
Business Infrastruc
Plan tures
Overall Short
Strategy Capital Performance Term
Balance Assessment Constraints
Allocation
DIVISION/DEPARTMENT
ORGANIZATIONAL CONFIGURATION
CONFIGURATION – Detailed Design consisting of building blocks

and coordinating mechanisms
STRATEGIC APEX
MIDDLE LINE
OPERATING CORE
IDIOLOGY (Culture)
FACTORS AFFECTING CONFIGURATION
MUTUAL ADJUSTMENT – informal contact between people

in the operating core.
DIRECT SUPERVISION – degree of control of strategic

apex through middle line to the operating core.
STANDARDI ZATI ON OF WORK PROCESSES - how work

should be done – analysts role in Techno structure.
STANDARDI ZATI ON OF OUTPUTS – products and services

– Service Level Agreements.
STANDARDI ZATI ON OF SKI LLS – knowledge and

competences in the organization.
STANDARDI ZATI ON OF NORMS – Organization’s culture.
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CHANGING CONFIGURATIONS - EXAMPLE
FROM TO REASON EXAMPLE
Machine
Simple Growth Manufacturing
Bureaucracy
Machine Growth &

Divisionalized Many Companies
Bureaucracy Diversity
Professional Changing Service

Adhocracy
Bureaucracy Environments Organizations
Professional Network Dynamic Professional

Bureaucracy Organization Environment Service Org
RESOURCE ALLOCATION AND CONTROL
PLANNING SYSTEMS – administrative control achieved

through systems
DIRECT SUPERVISION – control of resource by one or

more individuals.
PERFORMANCE TARGETS - measurement of outputs and

performance indicators.
SOCIAL CULTURAL CONTROL – concerned with

standardization of norms (culture).
MARKET MECHANISMS – formalized bidding or contracting

of resources
SELF CONTROL AND PERSONAL MOTIVATION –

Importance of individuals in the performance of the
organization.
JOB DESIGN
JOB DESIGN
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10/9/2008
Chief Beer Officer
JOB DESIGN
JOB DESIGN – involves managerial actions

and decisions that specify objective job
depth, range and relations to satisfy
ORGANIZATION REQUIREMENTS
IMPROVE QUALITY OF LIFE
PERFORMANCE IMPROVEMENT
CLOSE GAPS OF INDIVIDUAL DIFFERENCES
JOB CHARACTERISTICS
SKILL VARIETY – degree of personal

competencies and abilities to carry out the
job.
TASK IDENTITY – completeness of the job

from beginning to end with visible outcome
TASK SIGNIFICANCE – degree to which

employees perceives the job as having
significant impact on people’s lives.
AUTONOMY – degree to which job provides

freedom, independence and discretion
JOB FEEDBACK – clear and direct

information about effectiveness of
performance – appraisal.
36
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JOB MODEL CONTENT
Job Title
Department
Reporting Responsibility
Subordinates
Job Summary
Tasks
Knowledge
Knowledge
Skills
Abilities
Work Activities
Education
Minimum Experience in Previous Job(s)
Physical Demand
Environmental Condition
Tools and Technology
Core Competencies
JOB MODEL CONTENT
Job title : FI NANCI AL MANAGER

Reports to : Group Finance Director
Supervises : Asst. Accounts Manager
Secretary
JOB SUMMARY
Direct financial activities, such as planning,

procurement, and investments for all or part of an
organization.
JOB MODEL CONTENT
TASKS
1. Plan, organize, coordinate, direct and control all functions of
finance and account sections
2. Prepare and file annual ZAKAT or prepare financial information in

this regard
3. Prepare or direct preparation of financial statements, business

activity reports, financial position forecasts, annual budgets,
and/or reports required by regulatory agencies.
4. Direct employees performing financial reporting, accounting,

billing, collections, payroll, and budgeting duties.
5. Delegate authority for the receipt, disbursement, banking,
protection, and custody of funds, securities, and financial
instruments.
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10/9/2008
JOB MODEL CONTENT
KNOWLEDGE
English Language — Knowledge of the structure and content of the English
language including the meaning and spelling of words, rules of composition,
and grammar.
Economics and Accounting — Knowledge of economic and accounting

principles and practices, the financial markets, banking and the analysis and
reporting of financial data.
Administration and Management — Knowledge of business and

management principles involved in strategic planning, resource allocation,
human resources modeling, leadership technique, production methods, and
coordination of people and resources.
Mathematics — Knowledge of arithmetic, algebra, geometry, calculus,

statistics, and their applications.
JOB MODEL CONTENT
SKILLS
Management of Financial Resources — Determining how money will be
spent to get the work done, and accounting for these expenditures.
Mathematics — Using mathematics to solve problems.
Reading Comprehension — Understanding written sentences and

paragraphs in work related documents.
Critical Thinking — Using logic and reasoning to identify the strengths and
weaknesses of alternative solutions, conclusions or approaches to problems.
Active Listening — Giving full attention to what other people are saying,
taking time to understand the points being made, asking questions as
appropriate, and not interrupting at inappropriate times.
Time Management — Managing one's own time and the time of others.
JOB MODEL CONTENT
ABILITIES
Deductive Reasoning — The ability to apply general rules to specific
problems to produce answers that make sense.
Oral Comprehension — The ability to listen to and understand information

and ideas presented through spoken words and sentences.
Problem Sensitivity — The ability to tell when something is wrong or is likely

to go wrong. It does not involve solving the problem, only recognizing there is
a problem.
Speech Clarity — The ability to speak clearly so others can understand you.
Written Comprehension — The ability to read and understand information

and ideas presented in writing.
38
10/9/2008
JOB MODEL CONTENT
WORK ACTIVITIES
Interacting With Computers — Using computers and computer systems
(including hardware and software) to program, write software, set up
functions, enter data, or process information.
Getting Information — Observing, receiving, and otherwise obtaining

information from all relevant sources.
Processing Information — Compiling, coding, categorizing, calculating,

tabulating, auditing, or verifying information or data.
compile data for financial reports
Analyzing Data or Information — Identifying the underlying principles,

reasons, or facts of information by breaking down information or data into
separate parts. Analyze financial data. Make revenue forecasts
JOB MODEL CONTENT
EDUCATION
Must have at least a Bachelor Degree in Accounting or Finance,
preferrably with additional higher specialized certificates in Finance or
Management / Cost Accounting, such as CMA, CFM, CPA
MI NI MUM EXPERI ENCE I N PREVI OUS JOB( S)

2 years in the job of Accountant
2 years in the job of Senior Accountant
2 years in the job of chief Accountant or Assistant Accounts Manager
2 years in the job of Accounts Manager
JOB MODEL CONTENT
PHYSICAL DEMAND
Sitting 80%
Standing 10%
Walking 10%
Lift small & low weight objects
ENVI RONMENTAL CONDI TI ON
Normal Office condition
Rare outoor acrtivities
39
10/9/2008
JOB MODEL CONTENT
TOOLS AND TECHNOLOGY

TOOLS USED IN THIS OCCUPATION:
Adding machines — 10-key calculators
Desktop computers
Notebook computers
Personal computers
Personal digital assistant (PDA)s or organizers
Table computers
TECHNOLOGY USED IN THIS OCCUPATION:

Accounting software
Data base user interface and query software
Electronic mail software
Enterprise resource planning ERP software; SAP software
Financial analysis software
Office suite software
Spreadsheet software
Word processing software
JOB MODEL CONTENT
LEVELS
1 2 3 4 5
Managing Performance
Oral Communication
Diagnostic Information Gathering
Analytical Thinking
Written communication
Technical Expertise
Descriptions of Levels Level 5 : Expert

Level 4 : Advanced
Level 3 : Upper Intermediate
Level 2 : Intermediate
Level 1 : Basic
JOB DESIGN
EXERCISE
Describe Your Job
40
10/9/2008
JOB DESIGN
Indicate the extent to which you

agree or disagree in each
statement.
1 – Strongly Disagree
2 – Disagree
3 – Uncertain
4 – Agree
5 – Strongly Agree
JOB DESIGN
Sum the points for items 1, 7, 11
Add up the total scores
JOB DESIGN
1, 7, 11 – Skill Variety
3, 12, 14- Task Identity
5, 9, 15 - Task Significance
2, 6, 10 - Autonomy
4, 8, 13 - Job Feedback
60 -75
POSITIVE PSYCHOLOGICAL STATE
DESIRABLE PERSONAL & WORK OUTCOMES
41
10/9/2008
SUMMARY
SUMMARY
Managers and professionals must become
skilled in the art of reading situations to
become effective managers.
Organization is the skeleton of the business –
framework for high performance and best
management.
SUMMARY
Structure is a means to an end (improved
performance – Inappropriate choice of
structure can impede success
There are many type of structures – it is
important to understand their strengths and
weaknesses
Key issue of organizational design is
centralization/devolution decision
Organization design needs attention at
detailed level – building block and
coordinating mechanisms.
CASE STUDY
CASE STUDY
42
10/9/2008
RATING METHOD
LITERATURE /THEORY - 30%
ANALYSIS - 30%
SUMMARY
DELIVERY - 25%
PRES.MATERIAL - 15%
TOTAL SCORE - 100%
Time is deducted from delivery!
ANALYZING A CASE
SUMMARY STUDY
SOME TIPS
WHAT IS
SUMMARY
A
CASE STUDY?
43
10/9/2008
WHAT IS A CASE STUDY
A description of a situation that

has existed or exists within an
organisation.
SUMMARY
Stories about things that have
happened in business.
WHY
SUMMARY
A
CASE STUDY?
WHY A CASE STUDY

TO TEST PARTICIPANT’S
KNOWLEDGE, UNDERSTANDING AND
ABILITY
knowledge of the theoretical
SUMMARY
underpinnings relevant to the question /
case study
understanding of how the theoretical

underpinnings would help solve a
question or problem
ability to formulate specific conclusions

or recommendations of practical
managerial value
44
10/9/2008
IMPLICATION OF
CASE STUDIES
SUMMARYTO
MANAGERIAL
PRACTICE
IMPLICATIONS
Management is not often about the solution

of clear, focused, simple problems.
Management is more about the untangling

of a complex problem to identify the
SUMMARY
underlying issues.
Identification of appropriate methods of

solving these underlying issues.
Distinguish between symptoms- often the

most visible and immediate signs of
problems- and underlying causes.
THE HOW TO’s OF A

CASE STUDY
SUMMARY
45
10/9/2008
HOW TO’s
1. READ THROUGH – DEVOTE TIME TO UNDERSTAND
AND APPRECIATE THE COMPLEXITY OF THE CASE
Which organisations and industries does it relate
to?
SUMMARY
Is the organisation doing well or badly now, and
how has it performed in the past?
Is it a company that has an unbroken record of

success? Or a successful company that has
fallen on hard times?
What are the main issues and choices

confronting the company?
Is it in an expanding industry, or a maturing one?
HOW TO’s
1. READ THROUGH – DEVOTE TIME TO UNDERSTAND
AND APPRECIATE THE COMPLEXITY OF THE CASE
Who are the customers? Are customer needs
changing?
SUMMARY
Does the firm confront a variety of opportunities?
Or is there a particular business decision that the
case is oriented towards?
What information is there in the case, as tables

and annexes?
Allow the case to ‘speak to you’- carefully

consider the questions posed, rather than
impose your views on the case.
HOW TO’s
2. UNDERTAKE A MORE RIGOROUS STUDY OF THE CASE
Make notes of the issues to be addressed and the

underlying theory that is involved
SUMMARY
Look at the development of the organization over
time – successes - failures
Use tools and techniques of management

theories?
Analyze data and available information.
Use SWOT Analysis
46
10/9/2008
HOW TO’s
3. RELATE THE ANALYSIS TO SPECIFIC SETS OF
QUESTIONS
What elements of the strategic
SUMMARY
analysis do you require to carry out
the task, and how do they relate to it?
Is there further information or analysis

that you need?
HOW TO’s
4. BE LOGICAL AND CRITICAL
Think hard about your conclusions and
recommendations.
Have you really demonstrated them,

SUMMARY
backing up your reasoning with evidence
(events and results) from the case study?
Have you allowed yourself to be swayed

by the opinions of the organisation’s own
managers? They have a vested interest in
showing their actions in the best possible
light. You do not have to agree. Do the
facts support their claims of success, or
their excuses for failure?
HOW TO’s
4. BE LOGICAL AND CRITICAL
Have you distinguished symptoms from

causes?
SUMMARY
Use theory to analyse the manager’s
explanations.
47
10/9/2008
HOW TO’s
4. MAKE SURE TO BE CLEAR WHAT YOU ARE
RECOMMENDING
In developing recommendations
Consider alternatives
SUMMARY
Make clear why the recommendations you
have made is the best.
Look at the downside of the proposal –

not to cause failure or easily copied by
competitors.
HOW TO’s
Bear in mind that there may be more than

one acceptable answer.
The fact that your answer might differ

from someone else’s (or, even, everyone
SUMMARY
else’s) does not mean that they are right
and you are wrong (or vice versa).
If everyone’s answer is based on proper

study, appropriate theory, proper analysis
and logical conclusions, then everyone
might be right, even if they have different
answers.
SUMMARY
48

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10/9/2008

“To reach our greatest potential, we

Be too calm for worry,

I WILL MAKE A DIFFERENCE

“I am committed to treating everyone with courtesy and respect, cultivating relationships by

SIX MAJOR DEPARTMENTS OF PERSON’S LIFE

SIX MAJOR DEPARTMENTS OF PERSON’S LIFE

SIX MAJOR DEPARTMENT OF PERSON’S LIFE

Be too calm for worry,

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Gaining competitive advantage

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Ability to contribute solutions to

Ability to evaluate and exploit

COMMON SKILLS GAINED FROM MBA DEGREE

Ability to make decisions with

Better leadership skills and

Clearly and effectively

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ESTABLISHING A BUSINES – MAJOR FRAMEWORKS

Financial Operating Human & Other

HIGH PERFORMANCE BUSINESS

BEST MANAGED COMPANIES

Different theories and schools of

Structural types and

Greek Word – “Organon” – Tool/Instrument

STRUCTURES – POLICIES –CORPORATE CULTURE

HI STORY OF ORGANI ZATI ONAL THEORY

Taylorism (scientific mgt)

Neo- human relations

HI STORY OF ORGANI ZATI ONAL THEORY

Taylorism (scientific management)

Frederick the Great of Russia – 1740 to 1746

Frederick Taylor – American Engineer (1915)

“Enemy of working man”

Principles of Scientific Management

HI STORY OF ORGANI ZATI ONAL THEORY

Taylorism (scientific management)

Shift all the responsibility for the organization of

Use scientific methods to determine the

Select the best person to perform the job

Train the worker to do

Monitor work performance - appropriate

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CLEAR DELINEATION OF AUTHORITY

SEPARATION OF PLANNING FROM OPERATIONS