Organization structure and process

What is an organization? An organization is a consciously coordinated social entity, with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals. Thats a mouthful of words, so let us break it down into its more relevant parts

 What is organization structure? Our definition of organization recognizes the need for formally coordinating the interaction patterns of organization members. Organization structure defines how task are to be allocated, who reports to whom, and the formal coordinating mechanisms and interaction patterns that will be followed. We define an organizations structure as having three components: complexity, formalization and centralization

 Concepts of organization An organization is a consciously coordinated social entity, with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals According to Ricky w. Griffin, organization is a group of people working together in a structured and coordinated fashion to achieve a set of goals

Meaning of an organization structure

Organization Structure Organization structure defines how tasks are to be allocated, who reports to whom, and the formal coordinating mechanisms and interaction patterns that will be followed. Organization structure has three components that are: complexity, formalization and centralization.

Major factors of organization structure

Complexity refers the extent of differentiation within the organization which includes degree of specialization or division of labor, the number of levels in the organizations hierarchy and the extent to which organizations units are dispersed geographically. Formalization is the degree to which an organization relies on rules and procedures to direct the behavior of employees. Centralization considers where the locus of decision making authority lies. In some organizations decision making is highly centralized. Problems flow upward and the senior executives choose the appropriate action

Process of organizing
Study of jobs Grouping of jobs Division of labor Deciding organization design Coordination of activities

Concept of organization design

It is concerned with constructing and changing an organizations structure to achieve the organizations goals. Constructing or changing an organization structure is not unlike building or remodeling a house. Both begin with an end goal. The designer then creates a means or plan for achieving that goal.

What is organization theory?

From our previous definitions, it is not too difficult deduce what we mean by the term organization theory. It is the discipline that studies the structure and design of organizations. Organization theory refers to both the descriptive and prescriptive aspects of the discipline. It describes how organizations are actually structured and offers suggestions on how they can be constructed to improve their effectiveness.

Designing organizational structures

clarity understanding de-centralization stability and adaptability

Need for organization theory

pervasiveness systematic study of relationships attempting to attribute causes and effects career management requirement of particular degree

Traditional Vs modern approaches to organization

Traditional organizational perspectives Traditional organizations emphasize a strict division of labor, top-down decision-making, and extensive rules and procedures. As global economies emerge, organizations that implement more decentralized organizational structures are faster responders to market changes. The traditional organization is a pyramid with a president at the top, a few vice presidents, and layers of management and the majority of employees at the bottom. Jobs are specialized, and information and authority flow from higher to lower levels. A strict hierarchical organization hinders response to rapidly changing environments. It is slower to react to changes in

 Modern organizational perspectives The contemporary design flattens the traditional pyramid structure, facilitates the flow of information to all parts of the organization and reduces response time to external and internal demands. The matrix structure, the boundary-free organization and the learning organization decentralize decisionmaking power, and allow information and innovation to flow horizontally through a more interdependent organization. In less hierarchical organizations, conflicts may break out related to uncertainty about roles, role conflict between managers and "turf wars." Organizations resolve these problems with training programs run by skilled organizational management trainers.

Types of organizations
Line organization structure: The earliest and simplest form of organization is the line organization structure. This is also known as scalar or military type of structure. In this structure authority is passed down form top management to middle managers in the process of discharging the given responsibility and from them it goes down to supervisors and then workers.

Advantages: Line organization has following advantages: Simple and clear Maintains discipline Minimum red tape Easy to communicate Disadvantages: There are following disadvantages line organization structure: Lack of specialization Managers are unable to pay personal attention Little coordination

 Line and staff organization structure: On the weaknesses of line structure is that it lacks expertise in functional areas. Line-andstaff structure comprises a combination of both line employees (actual managers who are directly responsible for the performance and people) and staff employees (they are functional experts and advises to line staff). In the line-and-staff structure, these experts help line managers providing their functional expertise.

 Advantages of line-staff structure Advantages of line and staff organizational structure as follows: Use of experts Fewer burdens to the line managers Improvement in operational efficiency Unity of command Training to line managers Disadvantages The disadvantages of line and staff organizational structure are as follows: Chances of conflicts Grabbing credit by the staff managers Difficulty in adapting creative ideas

 Bureaucratic organization structure: In large organizations and under well defined conditions, organization structure may be bureaucratic. The essential elements of a bureaucratic organization are: The use of standard methods and procedures for performing work; and A high degree of control to ensure standard performance from the human resources

 Mintzberg (1981) has identified two types of bureaucracies. They are standard and professional bureaucracy. Standard bureaucracy is based on efficient performance of standardized routine work. Professional bureaucracy depends upon efficient performance of standardized but complex work. Thus, it requires a higher level of specialized skills. The structure of standard bureaucracy is based on functions, large technical staff and many mid-level managers. In contrast, professional bureaucracy has few mid-level managers.

 Functional organization structure: It is another type of organization structure where tasks are divided into groups according to the nature of functions needed to run to achieve the organizational goals. The functional experts are produced in this type of organization structure as it divides the jobs to a particular position as per the skill required and qualification posses by the employees. Departments are separated on the basis of functions they have to carry out in the organization.

 Advantages: This is the newly developed structure that facilitates to overcome the problems faced in other type of organization structure. The benefits of functional organization structure are discussed as below: Logical reflection of function Maintain power and prestige of major function Follows principle of occupational specialization Simplifies training Furnishes means of tight control at the top

 Disadvantages The disadvantage or the shortcomings of the functional structure are given below: De-emphasizes overall company objectives Overspecializes and narrows viewpoints of personnel Reduces coordination between functions Responsibility for profits is at the top only Slow adaption to changes in the environment Limits development of general manager

 Matrix Organization The matrix design blends two different types of designs, namely project and functional organizational designs (Kolodny, 1979). Since the project type of organizational design is not considered stable, the matrix design attempts to provide permanent management structures by combining project and functional structures.

 Matrix organization structure gives more emphasis on the objectives of the overall organization. Each and every department in the organization will work in the coordinated and integrated way. Matrix structure facilitates the management working a team to achieve the organizations goal. They stay together to discuss and draw the conclusion for the betterment of the organization. Project concept in the organizations is followed. Team work system is adapted in the organization that increases cooperation.

 The main advantage of this combination is that the matrix design balances both technical and project goals and allocates specific responsibilities to both. Technical goals refer to how well work is done, while project goals relate to issues such as type of work to be done and its costs Responsibility and jurisdiction are not clearly defined in matrix organizations. Bosses are also not clearly identified. Consequently, matrix organizations could lean towards chaos and disorder, and even lead to power struggles unless power between line and project manager is skillfully balanced.

 Within the organization, matrix organizations may encourage the formation of cliques since all decisions are made in a group. This could reinforce group loyalties and create intergroup conflicts. Matrix organizations need more human resources, particularly during initial periods. This means higher overheads and increased expenditure. Matrix organization forms are usually found at the lower level of the organization.

 Project organization structure Project design is also called the team or task force type. It is used to coordinate across departments for temporary, specific and complex problems which cannot be handled by a single department. This design facilitates inputs from different areas. Members from different departments and functional areas constitute a team, in which every member provides expertise in their area of specialization. Such a structure generally coexists with the more traditional functional designs. An illustration of project type of the organizational structure is given in Figure.

 Choosing the organizational structure Organization design is a continuous process. While a simple design is needed for simple strategies, complex designs are necessary when organizational strategies involve complex interactions.

 The choice of any type of organizational design should be in consonance with the organizational requirements, strategy and environment. The simple centralized and bureaucratic organizational design based on functional departmentation focuses on work and is thus better suited for getting work done efficiently. The team or project type of organizational design is appropriate where inputs from several functional areas are required. The divisional structure is appropriate if performance and results are to be assessed. Matrix and adhocratic designs focus on coordination and relationship

Properties of modern organization

creating space for software computing inclusion of sociology and sociocy-bernetics consideration of system biology aware of system dynamics adaption of system engineering consideration of system psychology

Common elements in organizations

While there is no universally agreed-upon framework for classifying organizations, Henry Mintzburgs work probably gets closest to it. Mintzburg argues that there are five basic parts to any organization. They are shown in figure and defined as follows: The operating core The strategic apex The middle line managers The techno-structure The support staff

Classification of organization
Organizations are basically classified on the basis of relationships. There are two types of organizations formed on the basis of relationships in an organization: formal organization informal organization

 Formal Organization - This is one which refers to a structure of well defined jobs each bearing a measure of authority and responsibility. It is a conscious determination by which people accomplish goals by adhering to the norms laid down by the structure. This kind of organization is an arbitrary set up in which each person is responsible for his performance. Formal organization has a formal set up to achieve predetermined goals.

 Informal Organization - It refers to a network of personal and social relationships which spontaneously originates within the formal set up. Informal organizations develop relationships which are built on likes, dislikes, feelings and emotions. Therefore, the network of social groups based on friendships can be called as informal organizations. There is no conscious effort made to have informal organization. It emerges from the formal organization and it is not based on any rules and regulations as in case of formal organization.

Relationship between formal and informal organizations

For a concerns working both formal and informal organization are important. Formal organization originates from the set organizational structure and informal organization originates from formal organization. For an efficient organization, both formal and informal organizations are required. They are the two phase of a same concern

Formal organization can work independently. But informal organization depends totally upon the formal organization. Formal and informal organization helps in bringing efficient working organization and smoothness in a concern. Within the formal organization, the members undertake the assigned duties in co- operation with each other. They interact and communicate amongst themselves. Therefore, both formal and informal organizations are important. When several people work together for achievement of organizational goals, social tie ups tends to built and therefore informal organization helps to secure co-operation by which goals can be achieved smooth. Therefore, we can say that informal organization emerges from formal organization.

Systems and life cycle perspective of organization

Definition of a system: A system is a set of interrelated and interdependent parts arranged in a manner that produce a unified whole. Scientists are systems, and so too are automobiles, plants, and human bodies. They take inputs, transform them, and produce some output Characteristics of system Differentiation integration

 Types of systems Open system Close system Characteristics of open system: environmental awareness feedback cyclical character negative entropy steady state movement toward growth and expansion balance of maintenance equifinality

 Close system: Close system is the system which does not interacts with the external environment. This system can be applied after making the decisions and determining the regarding the production process that is going to be adopted. It has no significant impact on the organizational effectiveness. It is not interacting with the external environment and does not gain the strength to survive for the long period of time. Therefore, we here are not focusing more in the close system.

Life cycle perspective

A life cycle refers to a pattern of predictable change. We propose that organization have life cycles whereby they evolve through a standardized sequence of transactions as they develop over a time. Life cycle stages Organization has its life cycles as other product and lives have. The life cycle of the organization can be highlighted as below:

entrepreneurial stage collectivity stage formation and control stage elaboration-of-structure stage decline stage