Mba Assignments

[Walthari]

3. What are the essential components /indicators/ Determinants of Organizational Climate and Organisational

Culture? Take example of two organizations, list out the component /indicators/ dimensions of their climate and

culture and explain their corresponding perceived major focus, with example. Briefly describe the organizations

you are referring to.

4. What are the element of an organization structure, and the factors influencing its choice? Take example of two

organizations and explain with logic as to how are their structures suited to their requirements or influenced by

the other factors.

5. Why do groups get formed? What are the stages of group formation? Explain the formation of a group and

relate it to the stages with brief description of purpose and structure of the group, as you are aware of. Also

briefly describe the organization, if this group was the part of it.

[Gabor]

ANUPAMA,

Q5  ANSWERS  LEFT  OUT  DUE  TO  SPACE CONSTRAINT.

REGARDS

LEO  LINGHAM

3.  What are the essential components /indicators/ Determinants of Organizational Climate and Organizational Culture? Take example of two organizations, list out the component /indicators/dimensions of their climate and culture and explain their corresponding perceived major focus, with example. Briefly describe the organizations you are referring to. WHAT  IS  ORGANIZATION  CULTURE ??

HOW  AN ORGANIZATION's  CULTURE CAN BE KNOWN ?

Organization culture  can  be  a  set  of  key values , assumptions,

understandings  and  norms that  is  shared  by  members of an

organization.

Organization  values  are fundamental beliefs that  an organization

considers  to  be  important , that are  relatively stable over time,

and  they have an  impact on  employees behaviors and  attitudes.

Organization  Norms  are  shared  standards that define what behaviors  are  acceptable  and  desirable within organization.

Shared  assumptions  are  about  how  things  are  done

in  an  organization.

Understandings  are  coping  with internal /  external  problems

uniformly.

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LEVELS  OF  ORGANIZATION  CULTURE

LEVEL 1---VISIBLE, that can be  seen  at the surface level

-dress  codes

-office layout  [ open  office]

-symbols

-slogans

-ceremonies[ monthly / annual awards/long service/birthdays etc.

etc etc

LEVEL 2-  INVISIBLE , that can be cannot be  seen but only felt.

-stories  about people performance

-symbols [  flag, trademark, logos, etc]

-corporate mission  statements

-recruitment/selection  [ methods  used]

-fairness in treatment

-social  equality

-risk  taking in  business deals

-formality  in  approach

-discipline

-autonomy  for  departments

-responsiveness  to  communication -empowerment  of  staff.

etc  etc.

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Importance of Organizational Culture Organizational culture is even more important today than it was in the past. Increased competition, globalization, mergers, acquisitions, alliances, and various workforce developments have created a greater need for: -Coordination and integration across organizational units in order to improve efficiency, quality, and speed of designing, manufacturing, and delivering products and services  

-Product innovation -Strategy innovation  

-Process innovation and the ability to successfully introduce new technologies, such as information technology -Effective management of dispersed work units and increasing workforce diversity -Cross-cultural management of global enterprises and/or multi-national partnerships -Construction of meta- or hybrid- cultures that merge aspects of cultures from what were distinct organizations prior to an acquisition or merger -Management of workforce diversity -Facilitation and support of teamwork. --------------------------------------------------

In addition to a greater need to adapt to these external and internal changes, organizational culture has become more important because, for an increasing number of corporations, intellectual as opposed to material assets now constitute the main source of value. Maximizing the value of employees as intellectual assets requires a culture that promotes their intellectual participation and facilitates both individual and organizational learning, new knowledge creation and application, and the willingness to share knowledge with others. Culture today must play a key role in promoting -Knowledge management -Creativity  

-Participative management  

-Leadership  

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Effects of Organizational Culture There has been a great deal of anecdotal evidence and some empirical evidence regarding the performance effects of organizational culture.

-Southwest Airlines(21,775% return on investment , -Wal-Mart(19,807% ROI), -Tyson Foods(18,118% ROI), Circuit City(16,410% ROI), and Plenum Publishing(15,689% ROI) .

These winners have strong leadership that promotes unique strategies and a strong culture to help them realize these strategies. Growing evidence that excellent companies do not remain excellent for long also suggests that the traditional notion of a strong culture may need to be replaced with a more discerning understanding of the types and role of culture and the need to change culture over the life cycle of the organization. For example, perhaps a strong consistent culture is useful in the beginning start-up phase of an organization but a mature organization may need to become more differentiated as well as more oriented to change and learning. What is important for long- term organizational success may not be a particular type of organizational culture per se but the ability to effectively manage and change the culture over time to adjust to changes in the situation and needs of the organization. This understanding has pointed to the need for a more dynamic understanding of culture and the role of organizational leaders in ensuring that the culture contributes both to the organization’s current and future success. Leadership today is essentially the creation, the management, and at times the destruction and reconstruction of culture. In fact,“the only thing of importance that leaders do is create and manage culture” and “the unique talent of leaders is their ability to understand and work within culture” . Leaders must be able to assess how well the culture is performing and when and how it needs to be changed. Assessing and improving organizational culture as well as determining when major cultural transformations are necessary is critical to long-term organizational success. Managing differentiated cultures and creating synergies across these cultures is also a critical leadership challenge. Effective culture management is also necessary to ensure that major strategic and organizational changes will succeed. Basically, culture management is a key leadership and management competency. However, effective cultural management does not depend on great individual leaders and charisma. Charisma may be an advantage in times of crisis and change, but solid instrumental leadership can be as, or more, effective in more normal circumstances .

Critical  instrumental mechanisms for changing and managing culture include -Strategic planning and the identification of necessarily cultural requisites  

-Ensuring consistency of culture with mission, goals, strategies, structures and processes  

-Creating formal statements of organizational philosophy and values -Establishing consistent incentives, recognition systems, and performance measurement -Maintaining appropriate error-detection and accountability systems -Coaching, mentoring, informal and formal training, and identifying role models  

-Embracing appropriate rites, rituals, symbols, and narratives  

-Taking advantage of the growth of subcultures -Managing and promoting strong communities of practice .

Several requisites for organizational success that organizational culture must now take into account: -The organization must be proactive, not just reactive. -The organization must influence and manage the environment, not just adapt. -The organization must be pragmatic, not idealistic. -The organization must be future-oriented, not predominantly present/past oriented. -The organization must embrace diversity, not uniformity. -The organization must be relationship-oriented, not just task-oriented. -The organization must embrace external connectivity, as well as promote internal integration. These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of internal and external organizational adaptations necessary for future success. They are not, however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts and symbols, as well as accompanied by a particular mission, set of goals, and strategies. Others emphasize more specific cultural mandates, such as that the modern organizational culture must be:  

-Team-oriented.

-Knowledge and learning oriented . -Alliance and partnership oriented . -Another emerging mandate is to -Know when to emphasize and how to balance cultural maintenance and cultural innovation.

-Managers must actively work to keep the existing organization culture relevant to the present and future while maintaining some sense of continuity with the past. Companies with long-term success had a limited but strong set of timeless core values that did not prevent organizational change over time. These companies were able to preserve the core while stimulating progress. --------------------------------------------------------------

Cultural Change Cultural change typically refers to radical versus limited change. It is not easy to achieve; it is a difficult, complicated, demanding effort that can take several years to accomplish. There are three basic types of cultural change -Revolutionary and comprehensive efforts to change the culture of the entire organization -Efforts that are gradual and incremental but nevertheless are designed to cumulate so as to produce a comprehensive reshaping of the entire organizational culture -Efforts confined to radically change specific subcultures or cultural components of the overall differentiated culture. Strategies for effecting cultural change include  

-Unfreezing the old culture and creating motivation to change -Capitalizing on propitious moments—problems, opportunities, changed circumstances, and/or accumulated excesses or deficiencies of the past -Making the change target concrete and clear -Maintaining some continuity with the past -Creating psychological safety through a compelling positive vision, formal training, informal training of relevant groups and teams, providing coaches and positive role models, employee involvement and opportunities for input and feedback, support groups, and addressing fears and losses head on -Selecting, modifying, and creating appropriate cultural forms, behaviors, artifacts, and socialization tactics -Cultivating charismatic leaders -Having a realistic and solid transition plan -Exercising risk management by understanding and addressing the risks and the benefits as well as the potential inequitable distribution of these risks and benefits. ===================================================

Four essential strengths of the organizational culture approach:

•   It focuses attention on the human side of organizational life, and finds significance and learning in even its most mundane aspects(for example, the setup in an empty meeting room). •   It makes clear the importance of creating appropriate systems of shared meaning to help people work together toward desired outcomes. •   It requires members—especially leaders—to acknowledge the impact of their behavior on the organization’s culture. Morgan proposes that people should ask themselves: "What impact am I having on the social construction of reality in my organization?" "What can I do to have a different and more positive impact?" •   It encourages the view that the perceived relationship between an organization and its environment is also affected by the organization’s basic assumptions. Morgan says: We choose and operate in environmental domains according to how we construct conceptions of who we are and what we are trying to do. . . . And we act in relation to those domains through the definitions we impose on them. . . . The beliefs and ideas that organizations hold about who they are, what they are trying to do, and what their environment is like have a much greater tendency to realize themselves than is usually believed.

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HERE  IS  AN EXAMPLE  OF  ''implementing  value based culture''.

the organisation I am  referring to

The  organization, I am  familiar  with  is  a -a  large  manufacturer/ marketer of  safety products

-the products  are  used  as  [personal  protection safety] [ industrial  safety]

-the products  are  distributed through  the distributors as well as  sold directly

-the  products  are  sold  to various  industries like  mining/fireservices/defence/

as  well  as  to  various  manufacturing  companies.

-the  company employs  about  235  people.

-the  company  has  the following  functional   departments

*marketing

*manufacturing

*sales

*finance/ administration

*human resource

*customer  service

*distribution

*warehousing/  transportation

*TQM  

==============================================

IN  THIS  COMPANY, WITH WHICH  I   AM  ASSOCIATED,

Value  based  culture   is  the  management  approach  that  ensures corporations

are run consistently  on   value,  such  as -maximising  shareholders  value

-adding  values  to  the  customers'  service.

etc  etc

THIS  INCLUDES

-creating  value in all actions/strategy

-managing  for values -measuring  value  with the  help  of metrics

etc etc

========================================

THE EMPLOYEES  WHO  LIVE  BY  THE VALUES OF  THE  ORGANIZATIONS

SHOW  IT  BY  THEIR  EFFORTS / PURPOSE/DIRECTION/SUPPORT.

-by  aligning  all  their  actions/programs  with the  organization  vision.

-by  aligning  all  their  actions/programs  with the  organization  mission.

-by  aligning  all  their  actions/programs  with the  organization  objectives.

-by  aligning  all  their  actions/programs  with the  organization  strategies.

-in  maximization of  value creation  for  customers

-in  increasing   value  for  company products  for  the  market

-in aligning  company activties  with  the  interest  of  shareholders

-in  maintaining  quality  communication  internally/ externally

-in  allocation  of  resources [ finance]

-in  allocation  of  resources [ human resources ]

-in  handling  complexity in operation

-in   handling  uncertainty in operation

-in managing   risks  in  operation.

-in planning  /  budgeting

========================================

-WATCH   THE   Work  practices

1   Direction - management's style and attitude as it affects employees 2   Commitment - attitudes towards work and the organisation 3   Recognition - motivation and recognition of employees 4   Collaboration - cooperation and teamwork within groups and departments -WATCH   THE   Cultural Values : 1   Risk - attitudes toward risk taking, structure and ambiguity 2   Individuality - attitudes toward contribution and self reliance 3   Compliance - attitudes toward rules and exceptions 4   Dominance - attitudes towards hierarchy, power and equality =============================================================

WHAT   ROLE  IS  PLAYED  BY  TOP  MANAGEMENT  IN  THIS  ORGANIZATION, IN  CREATING  VALUE  BASED  CULTURE  SYSTEM?

THE  TOP  MANAGEMENT  IN CREATING  VALUE  BASED

CULTURE    SYSTEM  PROVIDE

-value  based  corporate  vision  

-develop   a  value  based  mission  statement

-provide  a  value  based  corporate  OBJECTIVES

-provide  a  value  based  corporate  STRATEGIES

-provide  a  value  based  corporate  COMMUNICATION  SYSTEM.

-provide  a  value  based  corporate  GOVERNANCE

-provide  a  value  based  corporate  CULTURE

-provide  a  value  based  corporate  ORGANIZATION  STRUCTURE

-provide  a  value  based  corporate  MANAGEMENT  STYLE

-provide  a  value  based  corporate  DECISION  MAKING  PROCESS.

-provide  a  value  based  corporate  PERFORMANCE  MANAGEMENT  SYSTEM

-provide  a  value  based  corporate  REWARD  PROCESS

-provide  a  value  based  corporate  CLEAR  MANAGEMENT  PRIORITIES.

-provide  a  value  based  corporate  BALANCE  BETWEEN SHORT TERM/LONG TERM TRENDS.

-provide  a  value  based  corporate   SHARED  VALUES

-provide  the  required  skills  to  the employees

etc etc

============================================ The Climate of your Organization is the State of its Health

How your employees feel about their jobs, their supervisors, their peers, top management, and many other factors affects their individual productivity, and collectively the ability of the organization to achieve its objectives.

Without a formal process, finding out about employee attitudes usually relies on the manager's instincts or the employee's own willingness to communicate upward. But managerial instinct rarely provides the kind of hard data needed for decision   making. And most employees are hesitant to communicate anything but positive information to their supervisors.

The formal process generally involves using a climate survey or questionnaire.

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Organizational climate measures attempts to assess organizations in terms of dimensions that are thought to capture or describe perceptions about the climate.

1.   Structure   feelings about constraints and freedom to act and the degree of formality or informality in the working atmosphere.

2.   Responsibility   the feeling of being trusted to carry out important work.

3.   Risk   the sense of riskiness and challenge in the job and in the organization; the relative emphasis on taking calculated risks or playing it safe.

4.   Warmth   the existence of friendly and informal social groups.

5.   Support   the perceived helpfulness of managers and co workers; the emphasis(or lack of emphasis) on mutual support.

6.   Standards   the perceived importance of implicit and explicit goals and performance standards; the emphasis on doing a good job; the challenge represented in personal and team goals.

7.   Conflict   the feeling that managers and other workers want to hear different opinions; the emphasis on getting problems out into the open rather than smoothing them over or ignoring them.   8.   Identity   the feeling that you belong to a company; that you are a valuable member of a working team.

9.autonomy   the perception of self determination with respect to work procedures, goals and priorities; 10.cohesion   the perception of togetherness or sharing within the organization setting, including the willingness of members to provide material risk; 11.trust   the perception of freedom to communicate openly with members at higher organizational levels about sensitive or personal issues, with the expectation that the integrity of such communications will not be violated; 12.resource   the perception of time demands with respect to task competition and performance standards;

13.support   the perception of the degree to which superiors tolerate members' behaviour, including willingness to let members learn from their mistakes without fear of reprisal;

14.   recognition   the perception that members' contributions to the organization are acknowledged;

15.fairness   the perception that organizational policies are non arbitrary or capri¬cious;   

16.innovation   the perception that change and creativity are encouraged, including   risk taking into new areas where the member has little or no  prior experience.

========================================================

The organizational climate consists of:-

? Organisational Structure-

An organization’s structure is actually a ‘snapshot’ of a work process, frozen in time so that it can be viewed. The structure enables the people’s energy to be focused towards process achievement and goal achievement. Employee must have a clear definition of not only the work structure but also the role used to organize the work. If the structure and the role is not clear, people will not know what the work process is, who is responsible for what, whom to go for help and decision, and who can Assist in solving problems that may arise.

? Organisational Culture-

Organisational culture is the pattern of beliefs, knowledge, attitudes, and customs that exists within an organisation. Organizational culture may result in part from senior management beliefs or from the beliefs of employees.

Organizational culture can be supportive or unsupportive, positive or negative. It can affect the ability or willingness of employees to adapt or perform well within the organisation.

The most effective work culture is one that supports the organizations HR strategies by aligning behaviors, processes and methods with the desired results. It is not just achieving results but the methods through which they are achieved that are critical to long-term success.

Before any HR strategy is designed there must be a clear understanding of the organisation, its current values, its structure, its people as well as its goals and vision for the future.

An assessment of organization climate is not a conclusion, it is a starting point. We often implement organizational change based on little more than a few peoples' views about what is needed. A careful, scientific assessment of the climate can identify broad areas of agreement about issues that need attention. This broad agreement translates into greater ownership and a higher probability of success in efforts to change and improve. The organization conducts  organization  climate  survey

annually.

The  survey  provides  a snapshot  of the  organization  reality.

• Accountability: To what extent do people in the

organization see themselves and others following through

on commitments? Are they motivated and do they take

responsibility?

• Collaboration: How well do people communicate with

one another and share information? Do they work and

solve problems together?

• Leadership: What level of commitment do employees

have to their leaders? How do they perceive their leaders

and leadership throughout the organization?

• Alignment: To what extent are people involved in their

organization’s stated mission and the execution thereof ?

Do they feel a sense of belonging to the organization?

• Adaptability: Are people seeking change? Are they ready

to adapt?

• Trust: Do people have a sense of faith and belief in the

organization and its leaders? Are people squandering time

watching their backs – instead of doing their best?

These factors are likely to have a major bottom-line

impact on your organization. High scores in these factors

predict high scores in:

• Customer service

• Performance/productivity

• Retention

In other words: Improving the climate is likely to

offer significant benefits in your organization’s

ability to profitably meet its mission.

======================================================= #############################################

4. What are the element of an organization structure, and the factors influencing its choice? Take example of  two organizations and explain with logic as to how are their structures suited to their requirements or influenced by the other factors.

Factors Affecting Organizational Design

Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and technology.

Organizational structure is the framework companies use to outline their authority and communication processes. The framework usually includes policies, rules and responsibilities for each individual in the organization. Several factors affect the organizational structure of a company. These factors can be internal or external. Small business owners must be responsible for creating their companies organizational structure framework. Business owners may use a management consultant or review information from the Small Business Administration before setting up their organizational structure.

Size

Size is many times the driving factor for a company’s organizational structure. Smaller or home-based businesses do not usually have a vast structure because the business owner is usually responsible for all tasks. Larger business organizations usually require a more intense framework for their organizational structure. Companies with more employees usually require more managers for supervising these individuals. Highly specialized business operations can also require a more formal organizational structure.

Life Cycle

The company’s life cycle also plays an important part in the development of an organizational structure. Business owners attempting to grow and expand their company’s operations usually develop an organizational structure to outline their company’s business mission and goals. Businesses reaching peak performance usually become more mechanical in their organizational structure. This occurs as the chain of command increases from the business owner down to frontline employees. Mature companies usually focus on developing an organizational structure to improve efficiency and profitability. These improvements may be the result of more competitors entering the economic marketplace.

Strategy

Business strategies can also be a factor in a company’s organizational structure development. High-growth companies usually have smaller organizational structures so they can react to changes in the business environment quicker than other companies. Business owners may also be reluctant to give up managerial control in business operations. Small businesses still looking to define their business strategy often delay creating an organizational structure. Business owners are usually more interested in setting business strategies rather than developing and implementing an internal business structure.

Business Environment

The external business environment can also play an important part in a company’s organizational structure. Dynamic environments with constantly changing consumer desires or behavior is often more turbulent than stable environments. Companies attempting to meet consumer demand can struggle when creating an organizational structure in a dynamic environment. More time and capital can also be spent in dynamic environments attending to create and organizational structure. This additional capital is usually a negative expense for many small businesses. Organizational size

The larger an organization becomes, the more complicated its structure. When an organization is small — such as a single retail store, a two-person consulting firm, or a restaurant — its structure can be simple.

In reality, if the organization is very small, it may not even have a formal structure. Instead of following an organizational chart or specified job functions, individuals simply perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are not prevalent and may exist only to provide the parameters within which organizational members can make decisions. Small organizations are very often organic systems.

As an organization grows, however, it becomes increasingly difficult to manage without more formal work assignments and some delegation of authority. Therefore, large organizations develop formal structures. Tasks are highly specialized, and detailed rules and guidelines dictate work procedures. Interorganizational communication flows primarily from superior to subordinate, and hierarchical relationships serve as the foundation for authority, responsibility, and control. The type of structure that develops will be one that provides the organization with the ability to operate effectively. That's one reason larger organizations are often mechanistic—mechanistic systems are usually designed to maximize specialization and improve efficiency.

Organization life cycle

Organizations, like humans, tend to progress through stages known as a life cycle. Like humans, most organizations go through the following four stages: birth, youth, midlife, and maturity. Each stage has characteristics that have implications for the structure of the firm.

•   Birth: In the birth state, a firm is just beginning. An organization in the birth stage does not yet have a formal structure. In a young organization, there is not much delegation of authority. The founder usually “calls the shots.” •   Youth: In this phase, the organization is trying to grow. The emphasis in this stage is on becoming larger. The company shifts its attention from the wishes of the founder to the wishes of the customer. The organization becomes more organic in structure during this phase. It is during this phase that the formal structure is designed, and some delegation of authority occurs. •   Midlife: This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger, with a more complex and increasingly formal structure. More levels appear in the chain of command, and the founder may have difficulty remaining in control. As the organization becomes older, it may also become more mechanistic in structure. •   Maturity: Once a firm has reached the maturity phase, it tends to become less innovative, less interested in expanding, and more interested in maintaining itself in a stable, secure environment. The emphasis is on improving efficiency and profitability. However, in an attempt to improve efficiency and profitability, the firm often tends to become less innovative. Stale products result in sales declines and reduced profitability. Organizations in this stage are slowly dying. However, maturity is not an inevitable stage. Firms experiencing the decline of maturity may institute the changes necessary to revitalize. Although an organization may proceed sequentially through all four stages, it does not have to. An organization may skip a phase, or it may cycle back to an earlier phase. An organization may even try to change its position in the life cycle by changing its structure.

As the life-cycle concept implies, a relationship exists between an organization's size and age. As organizations age, they tend to get larger; thus, the structural changes a firm experiences as it gets larger and the changes it experiences as it progresses through the life cycle are parallel. Therefore, the older the organization and the larger the organization, the greater its need for more structure, more specialization of tasks, and more rules. As a result, the older and larger the organization becomes, the greater the likelihood that it will move from an organic structure to a mechanistic structure.

Strategy

How an organization is going to position itself in the market in terms of its product is considered its strategy. A company may decide to be always the first on the market with the newest and best product(differentiation strategy), or it may decide that it will produce a product already on the market more efficiently and more cost effectively(cost-leadership strategy). Each of these strategies requires a structure that helps the organization reach its objectives. In other words, the structure must fit the strategy.

Companies that want to be the first on the market with the newest and best product probably are organic, because organic structures permit organizations to respond quickly to changes. Companies that elect to produce the same products more efficiently and effectively will probably be mechanistic.

Environment

The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological, and natural environment conditions. Environments are often described as either stable or dynamic.

•   In a stable environment, the customers' desires are well understood and probably will remain consistent for a relatively long time. Examples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products. •   In a dynamic environment, the customers' desires are continuously changing—the opposite of a stable environment. This condition is often thought of as turbulent. In addition, the technology that a company uses while in this environment may need to be continuously improved and updated. An example of an industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers. In general, organizations that operate in stable external environments find mechanistic structures to be advantageous. This system provides a level of efficiency that enhances the long-term performances of organizations that enjoy relatively stable operating environments. In contrast, organizations that operate in volatile and frequently changing environments are more likely to find that an organic structure provides the greatest benefits. This structure allows the organization to respond to environment change more proactively.

Technology

Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how.

In the early 1960s, Joan Woodward found that the right combination of structure and technology were critical to organizational success. She conducted a study of technology and structure in more than 100 English manufacturing firms, which she classified into three categories of core-manufacturing technology:

•   Small-batch production is used to manufacture a variety of custom, made-to-order goods. Each item is made somewhat differently to meet a customer's specifications. A print shop is an example of a business that uses small-batch production. •   Mass production is used to create a large number of uniform goods in an assembly-line system. Workers are highly dependent on one another, as the product passes from stage to stage until completion. Equipment may be sophisticated, and workers often follow detailed instructions while performing simplified jobs. A company that bottles soda pop is an example of an organization that utilizes mass production. •   Organizations using continuous-process production create goods by continuously feeding raw materials, such as liquid, solids, and gases, through a highly automated system. Such systems are equipment intensive, but can often be operated by a relatively small labor force. Classic examples are automated chemical plants and oil refineries. small-batch and continuous processes had more flexible structures, and the best mass-production operations were more rigid structures.

Once again, organizational design depends on the type of business. The small-batch and continuous processes work well in organic structures and mass production operations work best in mechanistic structures.

Organization Design

Formal and informal framework of policies and rules, within which an organization arranges its lines of authority and communications, and allocates rights and duties. Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. This structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy. An organization chart illustrates the organizational structure. ===================

PRINCIPLES  OF  ORGANIZATIONAL  DESIGN

Division of Labour Departmentalization

Specialization Authority and Responsibility Line and staff authority

Authority and power Contingency Factors Environment and technology

Knowledge technology: task variability & problem analyzability Spans of Control Levels of contro

Centralization and decentralization Contingency Factors

Knowledge technology: task variability & problem analyzability Basic Characteristics of Organizational Structure •   Division of labor: dividing up the many tasks of the organization into specialized jobs

•   Hierarchy of authority: Who manages whom.

•   Span of control: Who manages whom.

•   Line vs staff positions

•   Decentralization

•   Hierarchy of Authority •   Tall vs flat hierarchies

•   Autonomy and control

•   Communication

•   Size

•   Span of Control •   A wide span of control: a large number of employees reporting,

•    A narrow span of control: a small number employees reporting

•   The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.

•   Line vs Staff Positions •   Line vs Staff:

–    Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.

–   Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service

•   Decentralization •   The extent to which decision making is concentrated in a few people or dispersed through out the organization

•   Advantage: benefits associated with greater participation and moving the decision closest towards implementation

•   Disadvantage: Lack of perspective and information, lack of consensus -----------------------------------------------------------------------

EFFECTIVE   ORGANIZATIONAL    DESIGNS

Use functional structures  ,  when the organization is small, geographically centralized, and provides few goods and services.

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When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.

Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.

Use lateral relations to offset coordination problems in functional and divisional structures.

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When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.

To adopt the matrix structure effectively, the organization should modify many traditional management practices.

=================================================================== Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively. The design  approach is guided by the following core principles:    Organization design is more than just structure – it is the integration of structure, processes, people, culture, systems and technology        Strategy is the starting point – organization design must be driven by, and supportive of, overall strategy    Clarity and accountability underpin sound organization design –when good people know what to do and are held accountable, they achieve results    Transitioning to a new organization end-state requires an integrated approach to change management ======================================================= Strategic Organization Design

The Need:

Senior organizational leaders are constantly facing the need to restructure their organizations.  Changes in leadership, a shift in strategy, or changing factors within an organization often create the need for reorganizing.  Organization design is one of the most potent tools available to senior managers for shaping the direction of their organizations.  It can be a key leverage point for directing attention and energy to certain critical activities in an organization.

Organizational leaders, however, often lack the tools necessary to help them in making decisions about how to structure their organizations.  Efforts at restructuring are often uneven and unsystematic.  Decisions to reorganize are often made with insufficient information and without a clear process to guide the effort.  The result is that reorganizations often fail to produce the desired effects, leading instead to further confusion or problems within the organization.

The Process:

Strategic Organization Design is a four-phase participative process intended to provide senior leaders with a systematic, step-by-step method for examining the structure of their organizations.  The four-phases are as follows:

?  Preliminary Analysis

?   Strategic Design

?   Operational Design

?   Implementation

The preliminary analysis involves the collection of information necessary for making design decisions.  Structured interviews are conducted focusing on the strategy of the organization, the key tasks being performed and current strengths and weaknesses of the organization.  Operational design involves the structuring of supervisory roles, information flows, and jobs within the context of the strategic design decisions.  Implementation involves managing the transition from the current design to a new design.

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Strategic Organization Design

The key restructuring decisions are made during the strategic design phase.  This phase involves six steps:

Step 1. Identify design criteria.

Step 2. Generate grouping alternatives.

Step 3. Evaluate grouping alternatives against the criteria.

Step 4. Generate linking mechanisms.

Step 5. Conduct an impact analysis.

Step 6. Select a new design.

The goal of the strategic design phase is to develop grouping and linking combinations that best support the strategy and basic work of the organization.  Before any design decisions are made, the management group identifies design criteria - statements about what the new design will need to be able to do.  These statements are reflections of the organization's strategy, its basic tasks, and the current strengths and weaknesses identified during the preliminary analysis.

Next, several different grouping alternatives are developed by the group and assessed against the design criteria.  Linking or coordinating mechanisms such as liaison roles, integrator departments, etc. are then generated for each of the possible grouping alternatives.  This step depends on the need for information exchange between groups in a particular design.  Finally, an impact analysis is conducted to determine the effect that the new design will have on the organization.  At this point a final design can be selected using the information and ideas generated during each step.  Often the final design is a hybrid of several alternatives considered during the process.

Who Should Be Involved?

This process is highly participative, involving each member of senior leadership staff of an organization, i.e. a Vice President and each of his or her direct reports.  The process draws heavily on the knowledge of the organization that each senior staff member has, and its success depends on the sharing of their ideas, concerns, and work-related needs.  To complete the process usually requires one to two days time for each member of the senior staff.

The process is not only for those groups who have an immediate need to restructure.  Leadership groups who only want to modify their organization slightly, or who simply want to reexamine their current structure may also benefit from using this process.  The process can help managers to solidify their strategy and ensure that their structure is consistent with it.

Strategic Organization Design Process Outline

Objective:    To provide a systematic participative process to help leaders structure their organizations in a way which helps accomplish the overall business strategy as well as the day-to-day work.

Phase I: Preliminary Analysis          Conduct structured interviews to:          ? Identify strengths and weaknesses of the existing organization          ? Clarify issues related to business strategy and organizational design

Phase II: Strategic Organization Design

?  Design Criteria:  Review information from the preliminary analysis and     generate criteria for a new design

? Grouping:  Generate several design options and evaluate against criteria

- Grouping By Output – Product, Service, or Project

- Grouping By Activity – Function, Work Process, Knowledge or Skill

- Grouping By Customer – Market Segment, Customer Need, Or Geography

?  Linking: Identify information flow requirements, select ways to     facilitate the flow of information to meet the requirements, and     evaluate against the criteria

?  Impact Analysis: Analyze each option to determine feasibility given the     existing leadership skills, power relationships, and work environment.

Phase III: Operational Design

?  Carry out the operational homework necessary to put organization design     decisions in place

?  Design work charters, reporting relationships, information flows, etc.

Phase IV: Implementation

? Develop a strategy for implementing the new design

? Assess the potential resistance to the new organization

? Determine the best way to manage the transition from the old     organization to the new one.

============================================== EXAMPLE S   OF   ORGANIZATION DESIGN / STRUCTURE

1.APPLE  COMPUTERS THE  EMPHASIS  IS  ON

(1) How to divide work among the organization's subunits?(2) How to coordinate and control the efforts of the units created? A WORLDWIDE PRODUCT STRUCTURE

1   Implements strategies that emphasize global products

2   Each product division assumes responsibility to produce and sell its products or services though out the world  

A WORLDWIDE GEOGRAPHIC STRUCTURE 1   Implements a multinational or regional strategy 2   Country-level divisions 3   Separate divisions for large market countries       

APPLE’S GEOGRAPHIC STRUCTURE

HYBRIDS AND WORLDWIDE MATRIX STRUCTURE

1   Support strategies that include local adaptation and concern for globalization.  

2   Mix geographic units with product or function units

3   Managers report to multiple supervisors

4   Conflict, confusion, loss of accountability

5   Amplified by distance, time, culture, language

THE TRANSNATIONAL NETWORK STRUCTURE

1   Implements the transnational strategy

2   Combines functional, product, and geographic subunits in networks

3   Has no symmetry or balance in its structural form 4   Resources, people, and ideas flow in all directions  

5   Nodes or centers in the network coordinate product, functional, and geographic information NETWORK STRUCTURES HAVE

1   Dispersed subunits

2   Specialized operations

3   Interdependent relationships

Key characteristics of transnational organizations

1   Multidimensional perspectives

2   Distributed, interdependent capabilities

3   Flexible integrative processes

Multidimensional perspectives

1   National subsidiary management senses needs of local customers and host governments

2   Global business management tracks competitors and coordinates response

3   Functional management concentrates knowledge and facilitates transfer among organizational units

Distributed, interdependent capabilities

1   Centralize activities for which global scale or centralized knowledge is important

2   Involve relevant national units in developing technology, products, marketing strategy

3   Interdependence of worldwide units is high – the integrated network

Flexible integrative processes

1   Centralization

2   Formalization

3   Socialization

EXAMPLE PRODUCT LINKS

CONTROL AND COORDINATION SYSTEMS

1   Top managers must design organizational systems to control and coordinate the activities of their subunits.         BASIC FUNCTIONS OF CONTROL 2   Measure or monitor the performances of subunits

3   Provide feedback to subunit managers regarding the effectiveness of their units  

COORDINATION SYSTEMS

1   Provide information flows among subsidiaries 2   Link the organization horizontally

CONTROL SYSTEMS

1   Output 2   Bureaucratic    

3   Decision making

4   Cultural

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EXAMPLE S   OF   ORGANIZATION DESIGN / STRUCTURE

2.  MSA  SAFETY  CO. THE  EMPHASIS  IS  ON

(1) How to divide work among the organization's subunits?(2) How to coordinate and control the efforts of the units created? A  REGIONAL  PRODUCT STRUCTURE

3   Implements strategies that emphasize REGIONAL  products

4   Each product division assumes responsibility to produce and sell its products or services though out the REGION. A  REGIONAL  GEOGRAPHIC STRUCTURE 4   Implements a  regional strategy 5   Country-level divisions    

MSA ’S  REGIONAL  STRUCTURE MATRIX STRUCTURE

6   Support strategies that include local adaptation and concern for REGION.  

7   Mix geographic units with product or function units

8   Amplified by distance, time, culture, language

THE TRANSNATIONAL NETWORK STRUCTURE

6   Implements the transnational strategy

7   Combines functional, product, and geographic subunits in networks

8   Has no symmetry or balance in its structural form 9   Resources, people, and ideas flow in all directions  

10   Nodes or centers in the network coordinate product, functional, and geographic information NETWORK STRUCTURES HAVE

4   Dispersed subunits

5   Specialized operations

6   Interdependent relationships

Key characteristics of transnational organizations

4   Multidimensional perspectives

5   Distributed, interdependent capabilities

6   Flexible integrative processes

Multidimensional perspectives

4   National subsidiary management senses needs of local customers and host governments

5   REGIONAL  business management tracks competitors and coordinates response

6   Functional management concentrates knowledge and facilitates transfer among organizational units

Distributed, interdependent capabilities

4   Centralize activities for which global scale or centralized knowledge is important

5   Involve relevant national units in developing technology, products, marketing strategy

6   Interdependence of  REGIONAL  units is high – the integrated network

Flexible integrative processes

4   Centralization

5   Formalization

6   Socialization

EXAMPLE PRODUCT LINKS

CONTROL AND COORDINATION SYSTEMS

4   Top managers must design organizational systems to control and coordinate the activities of their subunits.         BASIC FUNCTIONS OF CONTROL 5   Measure or monitor the performances of subunits

6   Provide feedback to subunit managers regarding the effectiveness of their units  

COORDINATION SYSTEMS

3   Provide information flows among subsidiaries 4   Link the organization horizontally

CONTROL SYSTEMS

5   Output   

6   Decision making

7   Cultural

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1.   Organizational structure can be viewed from many perspectives, but I find viewing it from a decision making perspective most useful. Structure exists to perform two essential functions within the organization: A.   Control- Insuring that decision makers at all levels use the managerial or hierarchical constraint as one of the criteria in making their decisions, and B.   Coordination- Insuring that decision makers at all levels use lateral or peer constraints as criteria in their decision making. 2.   There are various control and coordination mechanisms used to perform these functions. As control and coordination problems arise, organizations generally respond by developing or modifying a control or coordination mechanism. The organization's structure at any point in time is the sum total or the mechanisms it as developed and modified to achieve control and coordination. A.   Control Example - A program director of a radio station in an attempt to increase rating establishes to fixed program format and requires all DJ's to follow it.(For additional information on Control see: Commitment & Control Strategies) B.   Coordination Example - A new product in a bank is slow in developing, so the CEO assigns a product manager, who reports directly to her, and works with all the departments involved in the new product. 3.   There are many different types of structures and for years researchers and practitioners attempted to determine what type of structure was is fact the most effective. This line of inquiry has led ultimately to a contingency view of structure, that is, the most appropriate structure for a given organization is a function of the type of environment that organizational operates within and the technology it utilizes. 4.   Organizational Control A.   A control system requires two elements: 1.   A base of power 2.   A control mechanism- The following are the four generic types of control mechanisms employed by organizations. All control mechanism fall into one of these four generic types: a.   Centralization- Managers achieve control over decision making by either making all decision themselves or requiring the decision maker to have all decision approved before implementation. b.   Formalization- Development of rules, procedures, guidelines, and policies that act to guide the decision making process(mechanism in example above) c.   Output Control- Establishing goals or objectives that act as a criterion in the decision making process. d.   Cloning- Establishing a set of shared values and expectations that act to guide the decision making process. With this control mechanism, a strong base of power is not necessary. This is the basis of organizational culture. Many argue that organizational culture and organizational structure are functional alternatives, that is, they both function to achieve control. When culture is strong, strong structures are not necessary. B.   We discussed some of the situations which lead to the use of formalization, or process control and, by contrast, situations that lend themselves to output control. 1.   Process Control- a.   Stable environment, where one best way exists and is known. b.   Situations where we cannot afford an unfavorable outcome. c.   Decision makers lack expertise or information necessary. d.   Situations where consistency among decision makers is important e.   Situations where a defining clear, measurable objective is difficult 2.   Output Control a.   A clear, measurable objective exists b.   There are multiple effective means of achieving the objective. c.   The proper process depends on factors that must be determined at time of the decision. d.   Decision makers have expertise and access to information necessary. e.   The decision makers have access to knowledge of results which provide feedback necessary to modify future processes and decisions. 5.   An organization's structure is, in part, a function of the control mechanisms it utilizes. Those organizations making heavy use of centralization and formalization are said to be mechanistic in form. Those using output control and cloning are termed organic. 6.   Coordination A.   The major question addressed during this class was, "How do organizations composed of differentiated departments achieve a high degree of coordination or integration." B.   We started by defining the two fundamental ways in which differentiation, or departmentation takes place. Additionally, we discussed the major benefits of each type of structure and which type of customer based performance pressure each responds to best. 1.   Functional- Major activities are broken up and organized my management function(e.g., Marketing, Engineering, Production) a.   Responds best to PRICE and QUALITY performance pressures 1.   Economies of scale realized by centralizing functional activity 2.   Greater degree of specialization and reinforcement of expertise by grouping people with other functional experts 2.   Divisional, by either Product, Geography, Client/Customer, or Project 1.   Responds best to TIME and SERVICE performance pressures 1.   Greater degree of coordination achieved by grouping all those working on a single product, project, etc., together. Coordination also achieved through single common goal. 2.   Greater service result of pinpointing of responsibility, and expertise related to single customer needs. 7.   Functional and Divisional structures represent two pure structural types found at opposite ends of the structural continuum. A given environment places demands or performance pressure on an organization, which it responds to by altering its structure, thus moving it along this continuum. Performance pressures of Quality and Cost push the structure towards the Functional end of the continuum, while pressures for Time and Service push the structure towards of Divisional end of the continuum. 8.   The need for coordination increases directly with the amount of reciprocal interdependence among units. Where interdependence is pooled few resources and relatively little effort need be directed toward coordination. Sequential interdependence requires more efforts toward coordination, while reciprocal interdependence requires constant adjustments with concomitant requirements for communication and resolution of conflicts. Thus more resources are necessary to facilitate communication and resolve conflicts in an integrative(win-win) manner. 1.   Reciprocal interdependence between functional units is greatest during the development and product introduction stages of a product's life cycle. 2.   Therefore, organizations with multiple products, with short life cycles have greater requirements for cross functional integration. 9.   Cross Functional Integration Mechanisms- These are arranged in order of increased cost, but increased effectiveness as well. Thus the Hierarchy requires the least amount of additional resources, but becomes the weakest mechanism when increased complexity(amount of reciprocal interdependence) exits. 0.   Hierarchy- Cross functional communication is achieved through a mutual superior. Conflict among functional units is resolved through mutual supervisor. 1.   Creates time delays 2.   Where multiple products exist, the general manager must focus on operational issues of all products 1.   Direct Contact- When the chain of command get overburdened individual begin communicating directly with counterpart in other functional departments. This has a tendency to speed up decision processes. 1.   Communications with and involvement of the appropriate functional units is left of the discretion and initiative of individuals. 2.   When conflict occurs between these individuals, their relative power tends to determine the outcome. An integrative(win-win) decision is not encouraged. Leads to a trade off of performance pressures, rather than development of an innovative way to meet multiple performance pressures. 2.   Liaison Role- A Facilitator, expediter, project manager, etc. is appointed to smooth conflicts and encourage communication among those working on a single project or product. No formal base of power. Must rely on building identification with the project(referent power). Also tends to get work done through reciprocity(exchange of favors). 1.   Lack of formal power often put this type of project manager at a disadvantage. When faced with competing demands from a project manager and functional manager, the employee generally attempt to satisfy the functional manger. 3.   Task Groups- The project manager now is assigned specific individuals from the various functional units to work with on the project. The team meets regularly and motivation is achieved through identification with the team. Increased communication is achieved though regular meetings. The conflict mediation, or facilitation skills of the team leader are an essential part of the success of this mechanism. The leader must focus on both team goals and functional member interests to be effective. 1.   Team members often devote time and energy toward the project when they see that their efforts are making a measurable difference in results of the project. This is especially true when positive projects results are attributed to their competencies(Internal and External Self Concept Motivation). However, this type of motivation is often compromised when the time and effort spent on the project comes at the expense of performance in the eyes of the functional manager. 4.   Integrating Role- The titles may be the same,(project manager, expediter, etc.) however, this individual is given increased power through the allocation of resources. In all other mechanisms, resources are distributed among functional departments. In this case, resources are divided between functional managers and project managers. The project manager gain increased power through his/her ability to allocate resources. 5.   Integrating Department- This is a task group with a budget. 6.   Matrix Structure- Here there is a theoretical balance of power between the functional manager and the project manager. They both have budgets and influence over personnel decisions. It is designed to force a conflict between the functional manger's desire for quality, and the project managers push for time and service. It also takes advantage of economies of scale, necessary to hold down costs, by encouraging the fluid deployment and re-deployment of expertise to projects as needed. 1.   Matrix structures are difficult to manage and require different leadership styles and conflict resolution styles than traditional functional structures. They should only be used when the following three conditions exit. 0.   Multiple performance pressures- 1.   If faced with time, quality, and service, but you can pass on costs; move toward divisional and over-staff. 2.   If quality and cost are important, but time is not; move toward functional 3.   You get the idea. 1.   There are benefits from economies of scale- If your big enough so that you can achieve all the expertise you need in separate divisions, and fully utilize these people; move toward divisional. Also, if you are more toward the conglomerate end of the diversification continuum(rather than the concentric end) you probably will not benefit from economies of scale except for broad based administrative services. 2.   High information processing needs- Reciprocal interdependence, that is, relatively high amount of new product development. 10.   The Other side of the Continuum(Between matrix and divisional). We find a mirror image, however on this side power rests with the divisional manager with functional managers acting as advisors and facilitators. ##############################################