Organisation Design[1]

8/16/2019 Organisation Design[1]

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Organization Design


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Purpose and Overview

• Overview

– The Meaning of Organizational Design

– Levels of Organization Design

– Systemati !ssessment "efore Design

– Designs for a #ariety of $ealth Servies

Organizations

– %nfluenes on &uture Organization Designs

– Organization in Transition


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The Meaning of Organizational Design

• "uilding (lo)s of organization are

arranged to improve effetiveness and

adaptive apaity

– !uthority

– *esponsi(ility

– !ounta(ility – %nformation

– *ewards


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Dimensions of Organization Design


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The Determinant of Organizational Structure

• Long-term Organizational Goals" The management #hooses an organi$ational str%#t%re &ery #are'%lly. It

e&al%ates (hether it (ants to )elegate a%thority to its employees or

(hether it (ants to ma*e all the 'inal )e#isions.

" I' it )e#i)es on *eeping a%thoritati&e po(ers (ith itsel'+ it #hooses a

hori$ontal organi$ational str%#t%re. Here+ there are &ery 'e( le&els o'

hierar#hies an) the management al(ays ma*es %ltimate )e#isions,

(hether small or big.

" Ho(e&er+ (hen the s#ale o' operations in#rease+ it be#omes )i''i#%lt 'or

the management to get in&ol&e) in small matters+ an) it may )e#i)e on

)elegating po(ers an) a%thority.


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Size of Operations

• The size and sale of operations is a ma7or determinant of the

organizational struture/

• ! restaurant (usiness an afford to entralize its authority and deision

ma)ing- (ut a large omputers manufaturing firm annot/

• !s the (usiness e.pands- it (eomes mandatory to deentralizeauthority and departmentalize all important strategi funtions/

• ! large organization has different departments for different funtions li)e

mar)eting- prodution- finane and human resoures 8$*9/ :ah

department ta)es are of its funtion- and later all hores are ollated to

form organizational tas)s/


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Skills of Employees

" The s*ills an) e)%#ational -%ali'i#ations o' the employees also

in'l%en#e the #hoi#e o' the type o' the str%#t%re.

" A la( 'irm (o%l) be #onstit%te) o' attorneys. These in)i&i)%als (o%l)

ha&e &ast pro'essional an) e)%#ational epertise an) eperien#e.

" It (o%l) get &ery )i''i#%lt to maintain a%thority o&er them at all times.

They m%st be gi&en a 'ree han) to ma*e their o(n )e#isions. /ther(ise+

there are #han#es o' ego #lashes bet(een the employees an) the

management. It is &ery easy to maintain a%thority o&er lo(r%ng

laborers.

•


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Technologies Used

The types o' te#hnologies %se) by the organi$ation

also )etermine the type o' organi$ational str%#t%re.

A #ompany that has a%tomate) its operations #an#hoose to )e#entrali$e its a%thority. The systems

(o%l) monitor progress o' the employee thro%gho%t.

Hen#e+ the tas* o' the employee1s imme)iate

s%perior (o%l) be to pro&i)e g%i)an#e as an) (henre-%ire).

•

e omponents o


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e omponents oOrganizational Structures

• ork !unctions

• !lso referred to as the ;division of la(or-; wor) funtions are

separated and defined in an organizational struture/


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• "o# Groups

• %n organizational strutures- similar 7o( funtions are grouped

together to form separate departments/ Offiially referred to as

;departmentalization-; organizations group 7o(s aording to

funtion- geographi loation- produt or mar)et/ &untional

departmentalization groups 7o(s aording to a ommon tas)- suh

as human resoures- mar)eting or aounting/ Produt

departmentalization groups 7o(s aording to the produt that their

ativities relate to> this type of departmentalization spans several

disiplines/ Mar)et departmentalization groups 7o( funtions

aording to the lient they serve- for e.ample- a third?party ontatenter that groups wor)ers aording to aount/


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• Span of Control

• !nother aspet of organizational strutures is deiding the num(er of

employees that will report to a single manager- or the span of ontrol/

! su(aspet of span of ontrol is deiding the num(er of management

layers that will e.ist/ &or e.ample- a sales organization might employ

hundreds of front?line representatives who report to a front?line sales

manager in groups of 56/ :ah front?line sales manager might report

to a division sales manager who- in turn- might report to a regional

sales vie president/

•

*ead more@

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• Decision-making $uthority

– %n traditional hierarhial strutures- the hain of ommand starts with

the ompany,s top e.eutives and flows downward/ This ulminates in

front?line staff implementing the strategi deisions that top

management has handed down/ :mployees might have little

involvement in the poliies and proedures they must omply with/ !ninformal struture involves giving deision?ma)ing authority to all levels

of employees/ %n this type of struture- front?line employees an

partiipate in the development of the ompany,s poliies and ma)e

deisions onerning their daily wor) routines/

•

e u ng oc s o


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e u ng oc s oOrganizational Structure

• &ierarchy

• One of the primary omponents of any organizational struture is

the hierarhy- or how many layers the organization has/ ! layer

typially signifies a level of management that an order or idea must

pass through/ The e.eutive (oard is the top layer of the (usiness-

and the (ottom layer is made of the entry level wor)s/ Sometimes

many levels of managers are found in (etween the two- espeially in

mehanial strutures/ Sometimes there is only one or two levels of

management- whih ours more often in organi strutures/

•


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• !ormalization

• &ormalization refers to how orders- deisions and ompany

standards are transmitted to all employees throughout the ompany/

This is tightly tied to leadership and hierarhy/ Some (usinesses

prefer a very (ureaurati system of administering orders (y strit

methods and pu(lishing them through dependa(le hannels that are

unFuestiona(le/ Gonversely- other (usinesses prefer to olla(orate

when ma)ing deisions- inviting employee dissent and enouraging

alternative ideas or a reversal of plans even after they are reated/

Ghannels of ommuniation are not as rigid in these types of

organizational strutures/


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• Di'isions

• $ow a ompany sets up its divisions is also a very important

omponent of an organization,s struture/ Small (usinesses an

often get away with only one division that handles all operations/

Some larger ompanies- meanwhile- divide the ompany (ased on

departments- with aounting- %T- $* and other departments

reated as needed/ Other organizations reate divisions that

produe different produts ?? for e.ample- one division for vauum

leaners and another for washing mahines/

•


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• Temporary Constructs

– Temporary onstruts are those elements of a (usiness

organization that are freFuently used to solve pro(lems (ut do

not last as individual entities themselves/ Many (usinesses

reate temporary teams in order to omplete speifi pro7ets/Some (usinesses do not li)e to use teams (ut will assign a

speial pro7et to a dediated trou(leshooter/ $ow a ompany

aepts or re7ets these more fluid elements (eomes an

important part of the organization/

•


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Organization Gulture

The values and (ehaviors that ontri(ute to the uniFue

soial and psyhologial environment of an organization/

Organizational ulture inludes an organization,s

e.petations- e.perienes- philosophy- and values thathold it together- and is e.pressed in its self?image- inner

wor)ings- interations with the outside world- and future

e.petations/

%t is (ased on shared attitudes- (eliefs- ustoms- andwritten and unwritten rules that have (een developed

over time and are onsidered valid/


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Organization Gulture

" Also #alle) #orporate #%lt%re+ it1s sho(n in

34 the (ays the organi$ation #on)%#ts its b%siness+ treats its

employees+ #%stomers+ an) the (i)er #omm%nity+

24 the etent to (hi#h 'ree)om is allo(e) in )e#ision ma*ing+

)e&eloping ne( i)eas+ an) personal epression+54 ho( po(er an) in'ormation 'lo( thro%gh its hierar#hy+ an)

4 ho( #ommitte) employees are to(ar)s #olle#ti&e ob7e#ti&es.

Organizational culture is uni(ue for e'eryorganization and one of the hardest things to

change)


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Le'els of

OrganizationalCulture

$rtifacts * ssym(ols of

ulture in the physial

and soial wor) environment

+aluesEspoused, what mem(ers of

an organization say they valueEnacted, refleted in the way

individuals atually (ehave

$ssumptions * deeply held (eliefs that guide (ehavior and tell

mem(ers of an organization how

to pereive and thin) a(out things

Le'els of



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Types of !rtifats

• Geremonies and *ites

• Stories – !(out the (oss

– !(out getting fired

– !(out reloating

– !(out promotions

– !(out risis situations

• *ituals

• Sym(ols


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&untions Of Organization Gulture


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Understanding OrganizationalCulture

Antecedents

• Founder’s values

• Industry &

businessenvironment

• National culture

• Senior leaders’vision andbehavior

Organizational Structure &

Practices

• Reward

systems• Organizational

design


• Observableartifacts

• s!oused values

• "asic

assum!tions

Group &Social

Processes• Socialization

• #entoring

• $ecisionma%ing

• rou!dynamics

• 'ommunication

• In(uence &em!owerment

• )eadershi!Organizationa

l Outcomes

• *ectiveness

• Innovation &stress

CollectiveAttitudes &

Behavior

• +or% attitudes

• ,obsatisfaction

• #otivation


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mportance of Culture in Organizations

• Unity, ! shared organizational ulture helps to unite employees of

different demographis/ Many employees within an organization ome

from different (a)grounds- families and traditions and have their own

ultures/ $aving a shared ulture at the wor)plae gives them a sense

of unity and understanding towards one another- promoting (etter

ommuniation and less onflit/

• Loyalty, Organizational ulture helps to )eep employees motivated and

loyal to the management of the organization/ %f employees view

themselves as part of their organizationHs ulture- they are more eager

to want to ontri(ute to the entity,s suess/ They feel a higher sense of

aomplishment for (eing a part of an organization they are a(out andwor) harder without having to (e oered/


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• Competition, $ealthy ompetition among employees is

one of the results of a shared organizational ulture/

:mployees will strive to perform at their (est to earn

reognition and appreiation from their superiors/ This in

turn inreases the Fuality of their wor)- whih helps theorganization prosper and flourish/

• Direction, Iuidelines ontri(ute to organizational ulture/

They provide employees with a sense of diretion and

e.petations that )eep employees on tas)/ :ah employeeunderstands what his roles and responsi(ilities are and how

to aomplish tas)s prior to esta(lished deadlines/


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• dentity, !n organizationHs ulture defines its

identity/ !n entity,s way of doing (usiness is

pereived (y (oth the individuals who omprise

the organization as well as its lients andustomers- and it is determined (y its ulture/

The values and (eliefs of an organization

ontri(ute to the (rand image (y whih it

(eomes )nown and respeted/


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Types of Organization Gulture

• Clan oriented ultures are family?li)e- with a fous on

mentoring- nurturing- and Jdoing things together/K

• $dhocracy oriented ultures are dynami and

entrepreneurial- with a fous on ris)?ta)ing- innovation-

and Jdoing things first/K

• .arket oriented ultures are results oriented- with a

fous on ompetition- ahievement- and Jgetting the 7o(

done/K

• &ierarchy oriented ultures are strutured and

ontrolled- with a fous on effiieny- sta(ility and Jdoing

things right/K


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" Normative Culture: In a normati&e organi$ation+ the organi$ation stresses on

implementing the organi$ational pro#e)%res in the #orre#t manner+ an)

a##or)ing to the norms an) r%les )e'ine). This *in) o' #%lt%re is per#ei&e) to

portray a high stan)ar) o' b%siness ethi#s.

" Pragmatic Culture: In #ontrast to normati&e #%lt%res+ stress is lai) on satis'yingthe (ish o' their #lients. In this type o' organi$ational str%#t%re+ the #lient is

&irt%ally )ei'ie). The prime #on#ern o' e&ery employee is to #ater to the nee)s o'

the #lient+ attain+ an) retain the b%siness they may in&ite thro%gh the #lients.

"


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" Academy Culture: In this *in) o' #%lt%re+ employees

are highly s*ille)+ an) the organi$ation pro&i)es an

en&ironment 'or the )e&elopment+ an) honing o'

employee s*ills. amples o' this *in) o' #%lt%re arehospitals+ %ni&ersities+ an) large #orporations.

mployees ten) to stay (ith the organi$ation+ an)

gro( (ithin4 it.

.


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" Collaborate Work Culture: An organi$ation that a)opts a

#ollaborate #%lt%re o''ers a #ongenial an) amiable

en&ironment to (or* in. The 'eeling one )eri&es (hile

(or*ing in this type o' organi$ation is that o' #om'ort an) high

moti&ation. This organi$ation #onsists o' s%periors (ho pro&i)e more o' g%i)an#e+ an) less o' go&ernan#e.

" The organi$ation is base) on (or*er(el'are+ (here yo% ha&e

the employees1 interest in the 'oregro%n) (ith his s*ills

&al%e)+ an) per'orman#es han)somely re(ar)e). De&elopingteam(or* is the most &ital element o' the organi$ation


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" Adhocracy Work Culture: It is a type o' organi$ation i)eas are

en#o%rage)+ an) o%to'thebo thin*ing is appre#iate). Dynamism

is )e'ine) best (hen the (or*'or#e has the 'ree)om to thin* ne( 8

)i''erent, the )e&elopment o' (hi#h+ may lea) to s%##ess,

ina)&ertently+ to higher le&els o' morale+ an) monetary in#enti&es." Macho Culture: The most important aspe#t o' this *in) o' #%lt%re

is big re(ar)s+ an) -%i#* 'ee)ba#*. This *in) o' #%lt%re is mostly

asso#iate) (ith -%i#* 'inan#ial a#ti&ities, li*e+ bro*erage+ an)

#%rren#y tra)ing. It #an also be relate) to a#ti&ities+ li*e+ a sports

team+ a poli#e team+ or bran)ing o' an athlete.


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" Club Culture: 9s%ally+ the employees stay (ith the organi$ation 'or a

long time+ an) get promote) to a senior post+ or le&el. These employees

are the one (ho possess the spe#i'i# s*ills re-%ire) an) )esire)+ by the

organi$ation. amples o' this *in) o' organi$ation are la( 'irms+ the

military+ et#.

" Baseball Team Culture: In this *in) o' #%lt%re+ the employees are

1'ree agents1+ an) are highly pri$e). These employees 'in) employment

easily in any organi$ation+ an) are highly in )eman). There is+

ho(e&er+ a #onsi)erable amo%nt o' ris* atta#he) to this #%lt%re+ as it is

&ery 'astpa#e). amples o' this *in) o' #%lt%re are a)&ertising+ an)in&estment ban*ing+ to name a 'e(.


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"

Work Hard/Play Hard Culture: This type o' organi$ation )oes not in&ol&e

m%#h ris*+ as the organi$ations+ alrea)y+ #onsist o' a 'irm base #o%ple) (ith a

strong #lient relationship. This *in) o' #%lt%re is pre)ominantly opte) by the

larges#ale) organi$ations that ha&e gaine) their #%stomers1 tr%st an) s%pport. The

organi$ation is -%ali'ie) (ith m%ltipleteam meetings.

Bet Your Coma!y Culture: In this *in) o' #%lt%re+ the #ompany ma*es big+ an)

important )e#isions o&er high sta*e en)ea&ors. It ta*es time to see the

#onse-%en#e o' these )e#isions. Companies that post%late eperimental pro7e#ts+

an) resear#hes as their #ore b%siness proposition+ a)opt this *in) o' #%lt%re, 'or

instan#e+ a #ompany )esigning eperimental military (eapons may implement thesai) type o' #%lt%re.


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" Process Culture: This type o' #%lt%re )oes not

in#l%)e the pro#ess o' 'ee)ba#*. In this *in) o'

#%lt%re+ the organi$ation is etremely #a%tio%s abo%t

the a)heren#e to la(s+ an) pre'ers to abi)e by them.This #%lt%re besto(s #onsisten#y %pon the

organi$ation+ pre)ominantly meant 'or p%bli#

ser&i#es.


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Organizational Gulture

• One of the most diffiult tas)s to underta)e in an organization- is to hange

its wor) ulture/ ! hange in the organizational ulture reFuires an

organization to ma)e amendments to its poliies- wor)plae ethis- and

management system/ %t needs to start right from its (ase funtions>

inluding- support funtions- operations- and the prodution floor- whih

finally affets the overall output of the organization/ %t reFuires a omplete

overhaul of the entire system- and not many organizations prefer it as the

proess is a long- and tedious one- whih reFuires patiene- and endurane/

$owever- when an organization sueeds in ma)ing a hange on suh a

massive level- the results are almost always positive- and fruitful/ The

different types of organizational ultures aforementioned- surely- must have

helped you to understand them/ ou an also adopt one of them for yourown organization> however- persistene- and patiene- ultimately- is the

essene/


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Constructive Culture

High priority on constructiveinterpersonal relationships, and ocuson !or" group satisaction

A#liative

Participative, employee

centered, andsupportive

Humanistic$encouraging

%alue sel$developmentand creativity

Sel$actualizing

Goal and achievementoriented

Achievement

OrganizationalCharacteristics

ormativeBelies


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Passive Defensive Culture

egative re!ard system and 'eensiveavoid accounta(ility

Avoidance

onparticipative, centralized decisionma"ing, and employees do !hat theyare told

'ependent

Conservative,(ureaucratic, andpeople ollo! the rules

Conventional

Avoid con)ict, strive to

(e li"ed (y others, andapproval oriented

Approval


ormativeBelies


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Aggressive-DefensiveCulture

Perectionistic, persistent, and hard!or"ing

Perectionistic

*inning is values and a!in$lose approach isused

Competitive

onparticipative, ta"echarge o 'eensivesu(ordinates, andresponsive to superiors

Po!er

Conrontation and

negativism re!arded

Oppositional


ormativeBelies

O i ti l C lt


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Organizational CultureResearch Suggests:

+ Organizational culture correlated !ithemployee attitudes and (ehavior

- Congruence (et!een an individual.s valuesand the organization.s values associated

!ith organizational commitment, /o(satisaction, intentions to 0uit, andturnover

1 Organizational culture did not predict acompany.s 2nancial perormance

3 4ergers re0uently ailed due toincompati(le cultures

-h i th l ti hi


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-heories on the relationshi!between organizational culture and

!erformance

Strong Culture /erspecti'e

!it /erspecti'e

$dapti'e /erspecti'e


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Strong Gulture

an organizational culture 0ith a

consensus on the 'alues that dri'e

the company and 0ith an intensity that

is recogniza#le e'en to outsiders


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BECAUSE BECAUSE • They are haraterized (y goal

alignment• They reate a high level of motivation

(eause of shared values (y the

mem(ers• They provide ontrol without the

oppressive effets of (ureauray

Strong 'ultures Facilitate.erformance


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&it Perspetive

$ culture is good only if it fits the

industry or the firm1s strategy


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Three partiular industryharateristis affet ulture@

5/Gompetitive environment

2/Gustomer reFuirements

'/Soietal e.petations

Fit .ers!ective


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!daptive Gulture

$n organizational culture that encourages

confidence and risk taking among employees2

has leadership that produces change2 and

focuses on the changing needs of customers


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/da!tive vs0 Nonada!tive 'ultures


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Most %mportant :lements

in Managing Gulture

•


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Organizational Socialization

• Phase 5@ !ntiipatory

• Phase 2@ :nounter

• Phase '@ Ghange and aFuisition


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Organizational Soialization Proess


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Phases Perceptual andSocial Processes

+ Anticipatorysocializationlearning thatoccurs prior to /oining theorganization

Anticipating realitiesa(out the organization

and the ne! /o(

Anticipatingorganization.s needs orone.s s"ills and a(ilities

Anticipating

organization.s sensitivityto one.s needs andvalues


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- 5ncounter values,s"ills, andattitudes start toshit as ne!recruit discovers!hat theorganization is

truly li"e

4anaging liestyle$versus$!or" con)icts

4anaging intergroup rolecon)icts

See"ing role de2nitionand clarity

Becoming amiliar !ith

tas" and group dynamics


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6



1 Change andac0uisition recruitmasters s"ills androles and ad/uststo !or" group.svalues and norms

Competing role demandsare resolved

Critical tas"s aremastered

Group norms and valuesare internalized


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5

Outcomes of Socialization

ewomers who are suessfully

soialized should e.hi(it@

– Iood performane

– $igh 7o( satisfation

– %ntention to stay with organization

– Low levels of distress symptoms

– $igh level of organizational ommitment

How cultures are embedded in


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2

How cultures are embedded in

organizations

• &ormalApu(li statements

• Physial Layout

• Slogans- o/ lingo

• Mentoring- modeling• :.pliit rewards- promotion riteria

• Stories- legends- myths

• Proesses and outomes- measurement

•


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'

Mentoring

• Outomes for Mentees

• Outomes for Mentors

• Outomes for Organizations

• Maintaining the Gulture


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+

Functions of Mentoring

• Career 6unctions1 Sponsorship

1 57posure$and$%isi(ility

1 Coaching

1 Protection

1 Challenging Assignments

• Psychological 6unctions1 8ole 4odeling

1 Acceptance$and$Con2rmation

1 Counseling

1 6riendship


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0

Organizational Gulture %nventory

&ouses on (ehaviors that help employees fitinto the organization and meet owor)ere.petations

Nses MaslowHs hierarhy ofneeds to measure twelveultural styles


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ilmann?Sa.ton Gulture?Iap Survey

&ouses on what atually happens in theorganization and the e.petations of others

Two underlying dimensions – tehnialAhuman andtime/

Interventions for Changing


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uestions on Culture

• Gan the organizational ulture hange

– $ow

•


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Organisation Design[1]

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Transcript of Organisation Design[1]