organisatinal development and change

8/7/2019 organisatinal development and change

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ORGANISATION STRUCTUREAn organization structure defines how jobs and tasks are formally divided, grouped and co-ordinate.Six key elements are: Work specialization and specification. Departmentalization Chain of control

Span of control Centralization and decentralization FormalizationWork specialization: Example Henry Fords automobile assembly line.1) Work can be performed more efficiently if persons are allowed to specialize.This is also known as division of labour.2) Rather than the entire job, by one individual it is broken down into a numberof steps, with each step being computed by a separate individual. Individuals specialize in doing a part of an activity.3) Management saw this as a means of making the most efficient use of employee skills .They felt that if all workers had to do all activities. They would have had to be trained in all skills demanded by the job. The result is that except he

n doing the most skilled or highly complex task, employees would be working beyond their skill level. They would have to be paid more as wages are determined bythe highest level of skill.4) Skill increases with repetition. Less time is spent in changing tasks, in putting away tools and equipments of one job and getting ready for another. Its easier and less costly to train workers to do highly repetitive work It increases productivity.

5. By the 1960s :- studies revealed that people suffered from boredom , fatigue, stress, low productivity , poor quality , increased absenteeism &high turnover.II Departmentalization:-

1. Once jobs have been divided as per speciation they are to be grouped together so that common tasks can be co-ordinated. This is called departmentalization .it is process of .2. The major benefit is that it provides for efficiency by putting specialists together dividing the work of an organization into various departments3. Jobs can be departmentalsed by the type of product .each product is departmentalized proctor & gambles. Cadburys. this leads to increased accountabilityfor product performance. Since all activity are under the supervision of one manager.

4. It may be departmentalized by the service offered payroll - retirement, expense, taxes, etc.

5. Departmentalization can be done on the basis of geography or territo

ry. Coal fields eastern/western, sales department.6. Process departmentalization: - this is based on the process of production

7. Type of customers: - this helps to solve problem of customers because generally they tend to have similar type of problems & needs.

Chain of command : - authority & unity of command is spelt out.Choosing the basis for departmentalization :Each basis has its own advantages and limitation one basis may not beneficial for another.It has,however been seen that a composite of several basis

Factors :-1.Specialisation:- The organization is merely division of work .Fayol said that the more an organisation structure reflect the economic division of work in a


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n enterprice through grouping of activitiesis a departmental form ,the more effective and efficient it is in attaining organization goals.This is called specialization.but if the work is over specialized ,there is a loss of motivation as well as accomplishme-nt.2.Co.ordination:- Every department has the same organization goal-there may bea difference in departments,the nature of jobs and skills required.Therefore,there must be coordination and cooperation.In order to make the best use,sometimes

different jobs and skills are put under one manager for better coordination.3.Control:- Control means to ensure that work is going on as per plan,and to locate the point of direction where there is adiscrepancy.Departmental bifurcation helps not only in physical control,but also control over production and ensure accountability.4.Economy:- Departmentalisation costs more money.New departments require additional managerial personnel,equipments,manpower etc.After there is interpersonal departmental interaction which require extra time.This may put heavy burden on theorganization.5.Recognition of local condition:- Manpower and departments should be formed asper availability of member and skill of local people available.So that peopleget full-time work.

6. Adequate Attention: - There should be adequate attention for each departmentso that work goes on smoothly and no duplication of work .Future organization requirement should also be kept under consideration.7. Human consideration: - All aspects need not be considered mechanically humanaspects should also be paid to aspects like culture, tradition, value system, attitudes, etc.

[III] Chain of command /span of controlThe span of control also decides the number of individuals to be employe

d. It has to be decided how many persons or departments can be placed under thespan of control of one manager. A superior is responsible for all activities ofpersons working under him. The span of control determines the shape or configura

tion of the organization. It also determines the complexity of individuals managers jobs.FactorsThe number of relationships that can be managed by a superior.(a) Capacity of manager(physical & psychologicalfatigue)attitude,communication,decision-making.(b) Capacity of subordinates: - Efficient subordinates do not need much supervision.(c) Nature of work1. Similar work2. Dissimilar work3. Rate of change4. Type of production-mass scale5. Low rate of change over6. Better technology

4. Degree of Decentralization:-Higher the degree of decentralization, wider

the span of management. Work delegated competently, leaves the manager with moretime for supervision. But if there is not enough authority or there is ambiguity, frequent consultations are required.5. Planning:-

If subordinates know their jobs & there is takencare well at planning stage they need to consult the supervisor less frequently.

6. Use of staff assistance:-This helps to reduce the managers load and inc

reases the span of management.


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7. Communication Technique:-If communication is moder and fast, much manag

erial time is saved.8. Supervision from others:-

Optimum span is 5-10Higher level is 8-10Lower level depends on the technology

Centralization & Decentralization:-1. Delegation is the authorization to act in a certain way.2. Authority is delegated to subordinates, but still retains authority.3. Authority delegated can be enhanced, reduced or withdrawn.4. Manager cannot delegate authority which he himself does not possess or his entire authority.5. Can be specific/general- written/unwritten.6. It is an art. There are certain rules.Principles of Delegation:-1. Functional definition- according to activities.2. Delegation of result expected-authority should be adequate.

3. Party of authority & responsibility.4. Unity of command- sub increases single superior.5. Absoluteness of responsibility- responsibility cannot be delegated, onlyauthority to do some work.

Factors of Delegators:-1. Love for authority they want to influence others.2. Democratic style/authoritarian.3. Fear of being exposed because others can do better.4. Want to continue making decisions for posts held earlier does not let go.5. Unwilling to accept risks of blunders made by others so does it himself.6. Managers feel subordinates are not capable.

7. Perception of superior & subordinates differ regarding the need of authority of the others.Factors of Delegants:-1. Subordinates decide the degree of delegation some delegates have the capacity to assume more responsibility.2. Competent subordinates can absorb the work and responsibility of their own as well as those of their weaker colleagues.3. If the superior is weak, overburdened or absent, a strong subordinate taken over.Making delegation effective:-1. Authority & responsibility of managers should be clearly defined: what is expected of him and limits of his authority. Prevent overlapping of authorityand gaps.2. Managers fear to delegate. This can be reduced by giving him some statussymbol and making him feel an important part of the team.3. Work climate free from fear and frustration should be established4. Authority should not be delegated till the goals and plans for the organization are finished5. Proper control techniques should be used to ensure that authority is being used properly6. The delegants should be selected in the light of the job to be delegatedpersons should be trained7. Free and open lines of communication.

CENTRALISATION & DECENTRALISATION

Extent to which the authority is centralized or decentralized :-


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Geographical decentralization = dispersion of the organizationAuthority = dispersion of authorityFunction = dispersion of functions

Centralisation is the systematic reservation of authority at central points within an organization. Decentralization applies to the systematic delegation of authority in an organization wide context ----- Louis M. Allen

These terms are not absolute terms

Difference :-

Decentralization denotes dispersal of physical facilities place wise, function-wise. The authority may or may not be decentralized.

factors determining the degree of decentralization :-

1. Size of the organization2. History of the organization

3. Management philosophy4. Availability of managers5. Pattern of planning6. Control technique7. Decentralized activities8. Rate of change in organization9. Environmental influence

Reasons for centralization :-1. Provides opportunity for personal leadership2. Integration of efforts3. Quick decision making4. Communication is easier

5. Reduces wastages in duplication6. Uniformity of action

Reasons for decentralization :-1. Reduces burden on top management2. Facilitates growth and expansion3. Motivates managers4. Encourages horizontal growth and reduces number of levels5. Pinpoints achievements and failures

EFFECTIVE DECENTRALIZATION1. Centralized top policy and control:-To be effective policy matter must be centralized. This enours unity as a whole.It should be an organization of centralized control with decentralized responsibility.This helps H.Q. to know what the units are doing.

2. APPLICATION OF CONCEPT OF DECENTRALISATION:-Many a times to managers are happy to find so many people working under him andobeying his orders. Yet at the same time unit managers may feel that they are free to do whatever they like. This will create confusion.There is a need for developing a proper climate.unit manager must be given a free hand in operational matters and held responsible for final results.

3. DEVELOPMENT OF MANAGERS:-

Success of decentralization depends on the skill and quality of manager who holdvarious positions. This way manager are trained to assume responsibility.


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4. Competition among unit:-This should had to healthy competition.

DESIGNING ORGNISATION STRUCTURESStructure is the pattern in which various parts of components are interconnected-describes the various activeties.-describe the interpersonal relationship.

Structure is the arrangements of its subsystems and component at a given momentof time this includes the structure as well as process.

Design involves-work division groups-the co-ordination required

Need:-1. Facilitating management:- in both management & operation different departments are created.

2. Encouraging growth:- it is the framework with their which the organization this requires a flexible structure.3. Optimal use of technical improvement it involves cost and producers results.4. Encouraging human use of human beings:-Provides psychological satisfactions to employees.5. Stimulating creativity:- a sound organization well designed stimulates creativity.

Feature of good organization structureThere is no best way. That design is good which meets the requirements,1. Simplicity2. Flexibility

3. Clear Line of Authority4. Application of ultimate responsibility5. Proper delegation of authority6. Minimum possible managerial levels boll needs7. Unity of direction and command One plan , one man Work should be specifically allotted One person should receiver order from one ..8. Proper Emphasis on staff

Mechanization for Designing structure:-1.What should be the different units of the orgn .2. What components should be joined and what should be kept apart.3. What is the appropriate placement & relationship of different unit ?Different Approaches of Design:-1. Process Approach:- identifying the sequence of events and there decidingthe various units of orgn Emphasizes on; All necessary activities are performed No unnecessary duplication of work All necessary activities are performed in ..mannerAdvantages:-1. It brings about Knowledge of dynamics of operation and requirement of the ..

2. This way proper systems like communication denaturalization can be adopted.3. Helps in improver cooed of function.


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Limitations:-Work well in comparatively smaller organization which consummates on fewer number of related process2. Result Approach:-Steps:-1) Defining business on the basic of market opportunities2) Establishing objectives to be achieved

3) Determining the requirement for success and function skills to meet them.4) Determining the degree of authority and centralization..3) Decision Approach:-Question are asked and answers invited:1) What decision are needed for obtaining organization objectives ?2) What is the nature of such decision ?3) What is the level which such decision are to .taken ?4) What are the activities involved or affected by the decision?The answers would determined this degree of authority in a position, it interaction with other positions and the placement of the position in the organization.There three approaches are integrated aspects of design.

Process in Design:-1) Identification of activities2) Grouping of activities3) Delegation in authority

FORMAL & INFORMAL ORGANIZATIONI) FORMAL ORGANIZATION: Called StructureIt is a deliberately designed organization built on 4 pillars:- division of labor- scalar & functional process- structure- span of control

CHRACTERISTICS:1. Designed by top management to attain organization goal.2. Structure is based on principles of division of labor.3. Stress in given for the performance of a job in totality.4. Authority & Responsibility has to be adhere to5. Procedures and guidelines fix the co-ordination

II) INFORMAL ORGANIZATION:They are natural grouping on the basis of some similarity.CHARACTERSTICS:1. Natural outcome at the workplace. Not designed or planned.2. Created on the basis of similarly amongst members3. Membership is informal. A person may become members if more than on organization at a time.4. Behavior is co-ordinate and controlled by group norms.

DIFFERENCE: FORMAL INFORMAL1. Origin Planned/ deliberate spontaneous2. Purpose well set goals social interaction3. Structure well structured unstructured4. Nature official un

official5. Focus positions persons


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6. Leadership superior any one7. Source of power delegated given by group8. Guidelines for rules &procedures group normsBehavior9. Source of control reward/punishment sanctions10. Abolition any time diffic

ult.

RESONS FOR INFORMAL ORGANISATION- There are inevitable. True picture of organization can be had only when both formed be informal groups are considered. Inadequacy of formal organization structure to needs of both members and organization.1. Desire to socialize with others.2. Psychological fatigue of routine tasks.3. Hierarchical control and communication.4. Various functions & informal organization to control to contribute to member interest.

Protecting their interests. Working as regulatory device.

Protecting of cultural values. Exploitation and development of leadership potential. Filling gaps in managerial attributes.WORKING OF INFORMAL ORGANISATION1. Authority structure no formal structure2. Leadership through persuasion3. Communication- develops its own media and channels mostly oral-speedier-grapevineDIFFICULTIES DUE TO INFORMAL ORGANISATIONInformal organization produces both functional and disfunctional effects especially if it is not handle properly.

1. Resistance to change Every group promotes certain value and norms soon thesebecome law to those groups. Any change is ehemeretly resisted. Modern organization requires many changes.2. Generation of ramous - They usually are the basiss of release of tension. It may go against directives.3. Role conflict Official and satisfaction of others.4. Social conflict - Jokes, gossips, idle conversation at the cost organisationl time is costly.Managing Informal Organisation1. Structural Approach:--Deals with the design of formal organization in such a way as to make room or foster informal organization in such a way that theyare sympathetic to the formal organization.(a) Blocks or work centres can be created that allow the workers to actuallysee their contribution & feel a part of the organization.(b) Pepole with all skills necessary to complete a job should be placed together- It becomes independent & self-contained.(c) Units should be supplied with ful facts.

2. Behavioural Approach:--It can adopt a flexible & accommodating approachtowards informal organization.(a) Managers must make the people feel that they are not against the informal groups be supportive.(b) When changes are invisaged, influence of informal organization should betaken into account.(c) No repressive action to be taken.

Need for formal organization:--(1) Facilitating Management Action: There has be some sort of formal structu


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re.(2) Encouraging efficiency: Helps to bring about efficiency in work.(3) Communication:

PRINCIPLES OF ORGANIZATION DESIGN1. The organization structure should direct management attention to the companies sources of competitive advantage.

The company should aska. Which market should it compete in.b. How will it gain advantage over its competitor?The structure should distribute responsibilities in such a way that management attention is focused on targeted customers. If no particular unit has the responsibility of the target market, the organization structure should be revamped2. The organization structure should enable the corporate parent to add value to the organization.The corporate head quarters have to do such functions as maintaining govt. relation, research, coordination between units. Each assignment must have a manager with specific assignments.3. The structure reflects the strength, weakness and motivation of employee

s.The design should we such as to check whether organization structure provides appropriate responsibilities and reporting relationship for its manager requirement of highly skill staff should be identified changes bring about dissatisfaction.4. The company considers all the constraint that may impede the implementation of the organization structure.While designing, legal aspect have to be taken into consideration the interest of the stock holders must also be taken care of.5. The organization structure protects business units that need distinct cultures.In some organization there are departments like research, product development units which require specialist areas they should be insulted from other departmen

ts.

6. The organization structure provides coordinations solutions for unit to unit link.It is important for different unit to coordinate with each other .this kind of coordination helps in total collaboration between units.7. The organization structure does not have many parents level and units.

Front line units should be allowed to take decision and these decisionsshould be put up to upper level for approval when those decision can add value unnecessary level should be removed.8. Organization structure supports effective control

Accountability for performance is important for decentralizationof work there should be no blurred responsibility and fuzzy measures.9. The organization structure facilitated development of new strategies andprovides the flexibility to adopt to change.A good organization is fit for the present as well as flexible for future.CONTEMP . ORGANISATION TRENDS1. Classical2. Neo classical3. Modern

1. Classical organization theory-a. Pruitt on accounting modelb. Maximizes neatness & controlc. Emphasis on the detection of errors and their correction after they have

happened.d. Classical embodiment of extra pair of hand theory.e. These theory considered man to be relatively homogenous and relatively u


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nmodifiablef. Stability (minimum change within the employees in a goal in the organization.)g. Behavior in centralization and centralization of authority and control.

There are two distract streams in the classical organization theories1. Scientific management stream

2. Administrative

Scientific management: - tylors frank and Lillian gilbraith , henrey Gantt and Harrington Emersson

Effective use of human beings in industrious have been investigated, especially in routine tasks. There jobs are usually performed on the work floor operative levels.1. They are largely repetitive and cyclic in nature.2. The task do not require complex problem-solving problemTylor based on his studies in Midvale and Bethlehem perceived several new function of manager.a. Explain routine jobs with scientific determinants of each method.

b. Scientific training of workmen.c. Co-operations of management and labor.Tylor have given various principles of scientific management as fallow Separation of planning from doing. Supervision of different areas by the some supervisors or job analysis used in time motion and fatigue. Standardization of task, period of work, working condition. Scientific selection and training of worker Financial incentives to motivate workers.Critical analysis :-1. The application was not broad. It limited itself to shop floss.2. They emphasis the psychological variables offering human behavior more relevant to mechanization and automation technical aspects of efficiency rather th

an behavior in an organizationAdministrative management theory -To Max weber , Henry fayol, L Gulick, Oliver Sheldon, J.D. nooney and A.C. Reiley.

This theories views the central problem as being one where there must beidentification of tasks necessary for achieving the general purpose of the organization and the grouping of people into department.Max weber has emphasized that autocratic organization is the most rational meansof caring out total control over human being there most specialization hierarchy, authocity, impersonal relation in a bureaucracyFayol classic theory:-The organization functioning from managements point to view and found the activities of an organization to the divided into 6 group-1. Technical2. Financial3. Accounting4. Commercial5. Security6. Manageriala. Planningb. Controllingc. Organizingd. Commandinge. controling

PRINCIPLES OF CLASSICAL THEORY:-1. Division of work:- benefits of specialisation.2. Authority and Responsibility.


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3. Discipline:- obedience, application, energy, behaviour ,respect shown byemployees.4. Unity of command.5. Unity of direction.6. Subordination of individual to general interest.7. Remuneration of personnel.8. Centralisation.

9. Scalar Chain:- ranging from highest to lowest.flowing through each position in the line of

authority.10. Order:-There should be a place for every person and thing.11. Equity:-Combination of justice and kindness. good sense, experience andgood nature.12. Stability of Tenure.13. Initiative:-Thinking out and executing a plan.14. Espirit de Corps:-Union is strength. Team work.

SUMMARY

1. Division of work.2. Departmentalisation.3. Coordination.4. Human Behaviour in Organisation.

CRITICISM1. Close-system Assumptions: no interaction with environment.2. Static-View of Organisation: rigid and static view. no need for adjust.3. Unrealistic about Human Behaviour: ignores socio-psychological and motivational aspects.4. Lack of Empirical Research: based only on personal experience.5. Lack of Universality: None of the principles are applicable in all circu

mstances.

Neo-Classical Theory:-This has developed as a reaction to rationality and efficiency obsession of theclassical theory because it disregarded th impact of human beings on an organization.This theory started from the findings of hawthorne Experiments.

Essence:-1.Organisations started should be viewed not only as an organization of technical and economic existences, but also as a social organization.2.It is important to understand the social process of group behaviour.

The main propositions are:-1. The organization is a social system.2. The social environment of the job affects people and also affects thedepartment. It is not affected by management alone.3. Both informal as well as formal organizations exist within the organization.4. Human beings are not totally rational0-behaviour can be predicted in terms of social and psychological factors.5. Human diverse motivational pattern and tries to fulfill different typesof needs.6. The integration between individuals and the organization is very important.Its importance increases especially when there is a conflict between indivi

duals and organization.7. Communication is necessary because it not only carries information necessary for the functioning of the organ, it also coveys the feelings and sentiment


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s of the people.8. Team -work is essention This does not come automatically, but through behavioural approach.Neo Classical thory & organisation designThe organization should be designed in such a way that meets the basic postulates. The emphasis is on flat stretch and provision of informal organizations. there should be wide span of control.

Essential factors:-1. flat structure:- tall structures lead to increased difference between decision makers & implementers, lack of motivation ,also expensive because of too manylevels.2 . decentralisation:-3.informal organization:- this help the limitation of the formal system to meetthe members need. Especially the psychological needs.Appraisal of neo classical theory:-Has given a new dimension to managed in an organization .the major problem are ,1.neo. Classical theory lack unified approach of organization theory this is merely a modification of classical theory. It suffers from the same problem.2.host of the assumption on which the theoryis based are not true. It is not tru

e that-it is always possible to find a solution that satisfies everybody.-there are sharp confuicts and difference among people

3.various structures and designs gives by the neo classical theory are not applicable to allsituations. Consideration on for the people working in an organization is important but it has the limitations .a suitable organization is which takes care of different variables and factor. people may by fast one of the factors.Modern organisation theory:-This is a sophisticated and scientific way of explaining a complex organization.It is comparatively systematic and highly constructively .it has the system approach & contingencies approach.system approach:- an integrative system which deals with the organization is its

totality .it studies and analysis the mutually dependent variables is the organization. It suggests 3 aspects of organization structure.1.modern organization model:- this approach recognizes the problems involved inmanaging large and complex organization .it understands the need for flexibility and adaptability in organization structure. they use different models such asmatrix task forces etc. they easily copy with the envero dynamics.2:- lateral relationships:- emphasis is laid on the lateral approach and relationship among people. This is in contrast to vertical relationship emphasized by classical theory. And horizontal relationship of new- classic theory. Though bothare important later relationship achieves co-ordination more effectively by eliminating heirarchial control3. cybernetics:- means direction of involves communication and control. it is concerned with the flow of information in complex systems. It is applicable is notonly mechanistic organization ,but also in social systems it regulates complexsystems , it has become a model for thinking in regard to advanced information technology. That is why M.I.S system are adopted in modern organisationORGANISATIONAL EFFECTIVENESSThis is also called organisation process or grwoth. It is called efficiency, productivity, profiatbility, organisation growth..

AMITAI ETZIONI: Effiectiveness may be defined as the degree to which an organisation realises its goal.JOHN KIMBERLY: Effectiveness of an organisation can be seen in terms survival ofthe organisationEPHRAM YERKHMAN: An organisation remains effective as long as it uses its resour

ces in an effective as long as it uses its resources in an effeicient manner & contributes to the large system.JOHN P.CAMPBEL: Since an organization can be effective or non effective on a num


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II. BEHAVIORAL APPROACH:In this approach,organisation effectiveness is measured by taking intoaccount the behaviour of the people who make up the organisation.Assumptions:- 1. Individuals have one knid of goal & collectively. They have other goals.

2.Degree of organisation effectiveness depends on the degree of integrat

ion of organisation & individual Goals.Alternatives:- Low degree of goal integration:- Effectiveness is individual opposed to organisation goals. Moderate degree of goal organisation:- there is moderate degree of integration of organisation and individuals. High degree of goal interaction:-Limitations:-1. It doesnot really offer criteria for measuring effectiveness in an organisation.2. It provides clues for achieving effectiveness & helps in assessing effectiveness.

III. SYSTEM-RESOURSE APPROACH:-INPUT THOROUGHPUT OUTPUTThis model emphasises the distinctiveness of the organisationas an identifiablesocial structure or entity & it emphasises the interdependency of processes. This takes the form of INPUT OUTPUT transactions of various kinds relating to various things. These are scarce and valued resources. They are generally means or facilities that are potentially controlled by social organisations and are usuablein relationship between an organisation and its enviornment.organisation effectiveness is defined in terms of bargaining position, as reflected in the abilityof the organisation, in either absolute or relative terms, to exploit its enviornment in the acquisition of scarce and valued resources. It excludes any specific goal as the ultimate criterion of organisation to genearte its own resources.

Specific goals may be incorporated in 2 ways:-1. As a specification of the means or strategies employed by members towrdsenhancing the bargaining position of the organisation.2. As a specification of personal goals of certain members or classes of members within an organisation.Thus the better the bargaining position of the organisation. The more capable itis in obtaining its varied goals. It also becomes more capable of attaining thepersonal goals of its members.The mobilisation of resources is not a sufficient cause for organisation effectiveness.Effectiveness also includes the process and the output of the inputs.thismust be compared with organisation in the external enviornment. To do this, thefollowing steps must be taken:-1. To make a list of all resources required (taxonomy)2. Identify different types of resources that are required.3. To determine their relative positions of the compared organisation.Limitations:-1. Measurement of resources required to attain goals is difficult.2. Movement towards achievment of goals is impossible to measure.3. The goal is not greatly different from the goal approach.

IV. STRATEGIC CONSTITUENCIES APPROACH:-This approach considers only relevant enviornment of the organisation iunder refrence and takes into account those factors which have impact on the operation ofthe organisation.

This pproach considers not only the inputs received from the enviornment, but also the exports tat are outputs to the enviornment. The organisation effectiveness depends on the degree to which the organisation is able to satisfy the constit


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uences.1. Identify the relevant 7 strategic constituences & their impact on the organisation.2. Identify the expectations of the constituencies & the way to meet lose expectations.

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