Organization structure

Koontz and Donnel have defined organizational structure as the establishment of authority
relationships with provision for coordination between them, both vertically and horizontally in the
enterprise structure.
Organizational structure is the formal framework by which job tasks are divided, grouped, and
coordinated.

Good organizational structure indicates the following:

Reporting
hierarchy
Orders,
policies,
procedures,
rules and
regulations.

Departments

Horizontal &
vertical
relationship

Coordination
Individual,
group and
departmental
goals with
time.

Types of Organization structure

Organic
form
Mechanistic
form

FORMS OF ORGANIZATION STRUCTURE

(a) Mechanistic form of organizational structure.

An organizational structure based on formalized system that is relatively rigid in nature.

This is generally applicable to those organizations that are not influenced by technological,
product, market changes and generally maintains a constant pattern.

In mechanistic form of organizational structure, authority is centralized at the top level of

management and has a rigid hierarchy of authority.

Decision making is generally reserved at the top level. The tasks are well defined so that the
goals set by the top level management are attained smoothly.

The structure is characterized by plenty of written orders and instructions.

The term mechanistic structure is used to describe an organizational structure that is designed
to induce employees to behave in predictable, accountable ways All of the employees
working in a mechanistic structure have assigned duties that they must perform and are
prohibited to take on additional duties unless they are told so by management.

(b) Organic form of organizational structure.

Organizations those are subject to change due to environmental factors like

technology, market changes and product development generally adopt organic form of
organizational structure. For example software industry. In such structures authority is
delegated to various functional levels/individuals.

Decentralized decision making is practiced that allows people to make their own
decisions based on the environment and that they do not have to look over their
shoulders.

Organizational Design

Organization Design

OD is the process of developing or changing an organizations structure

Organization Design is a formal, guided process for integrating the people, information
and technology of an organization. It is used to match the form of the organization as
closely as possible to the purpose the organization seeks to achieve. Through the design
process, organizations act to improve the probability that the collective efforts of
members will be successful.

Typically, design is approached as an internal change under the guidance of an external

facilitator. Managers and members work together to define the needs of the organization
then create systems to meet those needs most effectively. The facilitator assures that a

systematic process is followed and encourages creative thinking.

OD process involves six key elements

Span of
management.

Departmentalization.

Centralization &
Decentralization
Chain of command.

Work Specialization

Standardizati
on

Types of Organizational Designs

Traditional Organizational Designs

Simple Structure - low departmentalization, wide spans of control, authority centralized in a

single person, commonly used by small businesses as organizations increase in size, the
structure tends to become more specialized and formalized

Functional Structure - groups similar or related occupational specialties together

Divisional Structure - composed of separate divisions each division has relatively limited
powers.

Contemporary Organizational Designs

Team-Based
Structures
Learning
Organization

Matrix
Structure

Boundary less
Organization

Project
Structure
Autonomous
Internal Units

Contemporary Organizational Designs

Team-Based Structures

Entire organization is made up of work teams. Employee empowerment is crucial teams

responsible for all work activity and performance complements functional or divisional

structure in large organizations

Matrix Structure - assigns specialists from different functional departments to work on

projects led by project managers adds vertical dimension to the traditional horizontal
functional departments creates a dual chain of command,

violates unity of

command, project managers have authority in areas relative to the projects goals,
functional managers retain authority over human resource decisions (e.g., promotions)

Project Structure - employees work continuously on projects employees do not return

to a functional department at the conclusion of a project all work performed by teams
comprised of employees with appropriate skills and abilities tends to be very fluid and
flexible no rigid departmentalization or organization hierarchy managers serve as
facilitators and mentors

Autonomous Internal Units Independent, decentralized business units each has its
own products, clients, competitors, and profit goals business units are autonomous there
is no centralized control or resource allocation.

Boundary less Organization - Design is not defined by, or limited to, the horizontal,

vertical, or external boundaries imposed by a predefined structure. This type of

organization seeks to eliminate the chain of command, to have limitless spans of control,
and to replace departments with empowered teams flattens the hierarchy by removing
vertical and horizontal boundaries.

Learning Organization

This type of organizational design has developed the capacity to continuously adapt all
members take an active role in identifying and resolving work-related issues practice
knowledge management by continually acquiring and sharing new knowledge
environment is conducive to open communication empowered teams are important
leadership creates a shared vision for the future organizational culture provides sense of
community

Organizational Culture

Organizational culture consists of norms, values and unwritten rules of conduct of an

organization as well as management styles, priorities, belief and interpersonal behaviours that
prevail.

Together they create climate that influences how well people communicate, plan and make
decisions

Organizational culture originates from the founders of the organization based on value system held by

them. It is further passed on, down the line.

Organizational culture is also a function of the nature of work and goals of the organization. It is
visible from the organizational structure.

Centralized command and control, strict hierarchy and fixed communication are indicative of formal

culture with little freedom of action and with slight attention to innovation and creativity.

While decentralized work culture will promote autonomy that will lead to greater job satisfaction.

Building Culture

Socialization of employees

Pre arrival stage

Encounter

Metamorphosis

Outcomes
(Commitment
&
Productivity)

Guidelines to change culture

Cummings & Worley give the following six guidelines for cultural change:

1. Formulate a clear strategic vision: In order to make a cultural change effective a

clear vision of the firms new strategy, shared values and behaviors is needed.

2. Display Top-management commitment :It is very important to keep in mind that

culture change must be managed from the top of the organization, as willingness to
change of the senior management is an important The top of the organization should be
very much in favor of the change in order to actually implement the change in the rest of
the organization.

3. Model culture change at the highest level :

In order to show that the management team is in favor of the change, the change has to be
notable at first at this level. The behavior of the management needs to symbolize the
kinds of values and behaviors that should be realized in the rest of the company. It is

important that the management shows the strengths of the current culture as well, it must
be made clear that the current organizational does not need radical changes, but just a
few adjustments.

4. Modify the organization to support organizational change .

Culture eats change for breakfast! Your three options are: 1) change the change 2) change the
culture, or 3) prepare to fail.

5. Remove obstacles and bureaucratic practices.

You will gain respect and credibility by breaking the chains of bureaucracy. By freeing people
from unnecessary rules and procedures, you clear the way for them to show initiative.

Your people will have a difficult time contributing to the new cause if they are bind by the old,
rituals and rules.

6. Select and socialize newcomers and terminate the unfits:

A way to implement a culture is to connect it to organizational membership, people can be

selected and terminate in terms of their fit with the new culture.

7. Develop ethical and legal sensitivity :

Changes in culture can lead to tensions between organizational and individual interests,
which can result in ethical and legal problems for practitioners.

Change of culture in the organizations is very important and expected. Cultural

innovation is bound to be more difficult than cultural maintenance. People often resist

changes hence it is the duty of the management to convince people that likely gain will
outweigh the losses.

Organizational Change & Development

In an organization, it is very essential to have regular changes and development in order

to bring effectiveness. Organization brings a change mainly because of planned and
unplanned change. However, there are external as well as internal forces, which also
contribute towards bringing a change in the organization. Sometimes organization is

resistant to change. This is mainly because of direct costs, saving, fear of the unknown,
breaking routines. Thus, an organization has to take into consideration various factors in
order to have a successful change

Organizational development is a long term efforts, led and supported by top management to
improve an organizations visioning, empowerment, learning and problem solving processes,

through an ongoing, collaborative management with special emphasis on the culture of intact
work teams and other team configurations.

Organizational development is a planned process of change in an organizations culture

through utilization of behavioral science technologies.

Objective of Organizational Development

1.

Individual and group development.

2.

Development of organizational culture and processes by constant interaction between

members irrespective of levels of hierarchy.

3.

Inculcating team spirit.

4.

Focus of value development.

5.

Employee participation and problem solving and decision making at various levels.

6.

Evaluate present systems and introduction of new systems thereby achieving total
system change if required.

7.

Transformation and achievement of competitive edge of the organization.

8.

Achieve organizational growth by total human inputs by way of research and

development, innovations, creativity and exploiting human talent.

RESISTANCE TO CHANGE
Job Security

Lack of
Communication

New Practices

Rapidity and Extent

of Change

Technology

Group
Phenomenon

Loss of Power

Emotions

STEPS IN MANAGING CHANGE

Evaluation &
Feedback

Implementation of
Plan

Strategy for
implementation

Develop Plan

Develop new goals

and objectives

Select an agent for

change

Diagnose the
problem

Select Methodology

 Change agent are factors that are responsible for

the change in individual behaviour.