Introduction to “Organization”

Fundamentals : 6 “M” S of an Organization:

MEN

MACHINE

MATERIALS

METHODS

MARKET

MONEY

6 “M”s of an Organization

MEN MACHINE

MATERIALSMETHODSMARKETMONEY

Introduction to “Organization”

7 “S” Model for Organization :

7 “S”

Introduction to “Organization” Organizational structure

Definition

Formal and informal framework of policies and rules, within which an organization arranges its lines of authority

and communications, and allocates rights and duties.

Introduction to “Organization”

Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical

power structures to industrial structures and today's post-industrial structures.

Introduction to “Organization”

Organizational Structure

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.

Introduction to “Organization”

This structure depends entirely on the organization's objectives and the strategy chosen

to achieve them.

ORGANIZATIONAL STRUCTURE

CENTRALIZED STRUCTURE DECENTRALIZED STRAUCTURE

Introduction to “Organization”

Centralized Structure :

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

Top mgt to take Decision

Exercise of Control over

Departments and Divisions

Introduction to “Organization ”

De Centralized Structure :

In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy.

Dept-2

Dept-3

Dept-1Central

Governance

Introduction to “Organization”

Pre-bureaucratic structures

Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in

smaller organizations and is best used to solve simple tasks. The structure is totally centralized.

The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development.

Introduction to “Organization”

Bureaucratic structures

Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or

larger scale organizations. They usually adopt a tall structure. Then tension between bureaucratic structures and non-

bureaucratic is echoed in distinction between mechanistic and organic structures.

Introduction to “Organization”

Post-Bureaucratic ( Cleaned up Bureaucracy)The term of post bureaucratic is used in two senses in the organizational literature:

one generic and one much more specific .

In the generic sense the term post bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's

ideal type Bureaucracy. This may include Total Quality Management, Culture Management and the

Matrix Organization amongst others. None of these however has left behind the core tenets of Bureaucracy. Hierarchies still exist, authority is still rational, legal type, and

the organization is still rule bound

Introduction to “Organization”Functional Structure

In a functional structure, the division of labor in an organization is grouped by the main activities or functions that need to be performed within the organization -- sales, marketing, human resources, and so on. Each functional

group within the organization is vertically integrated from the bottom to the top of the organization. For example, a Vice President of Marketing would lead all the marketing people, grouped into the marketing department.

Employees within the functional divisions of an organization tend to perform a specialized set of tasks, for instance the engineering department would be staffed only with engineers. This leads to operational efficiencies within that

group. However it could also lead to a lack of communication between the functional groups within an organization, making the organization slow and inflexible.

As a whole, a functional organization is best suited as a producer of standardized goods and services at large volume and low cost.

Introduction to “ Organization”

Divisional StructureAlso called a "Product Structure", the divisional structure groups each organizational

function into a divisions. Each division within a divisional structure contains all the necessary resources and functions within it.

For example, an automobile company with a divisional structure might have one division for SUVs, another division for subcompact cars, and another division for

sedans.

Each division would have its own sales, engineering and marketing departments

Introduction to “Organization”

Matrix StructureMatrix structure groups employees by both function and product. This structure can combine the best of both separate structures.

A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as

well as make up for the weaknesses, of functional and decentralized forms.

An example would be a company that produces two products, "product a" and "product b".

Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department,

"product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service

department, "product b" accounting department. Matrix structure is the most complex of the different organizational structures.

Introduction to “ Organization”

Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the

project. The functional managers maintain control over their resources and

project areas. Balanced/Functional Matrix: A project manager is assigned to oversee

the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional

and projectized organizations. However, this is the most difficult system to maintain as the sharing

power is delicate proposition. Strong/Project Matrix: A project manager is primarily responsible for

the project. Functional managers provide technical expertise and assign resources as needed.

Among these matrixes, there is no best format; implementation success always depends on organization's purpose and function.

Introduction to “Organization ”:

Team structure:One of the newest organizational structures developed in the 20th century is team. In

small businesses, the team structure can define the entire organization .Teams can be both horizontal and vertical. While an organization is constituted as a set of people who,

together, synergize individual competencies to achieve newer dimensions, the Quality of organizational structure revolves around the competencies of Teams in totality.

To cite an example, every one of “Whole Foods Market” stores, the largest natural-foods grocer in the US developing a focused strategy, is an autonomous profit centre composed of an average of 10 self-managed teams, while team leaders in each store and each region

are also a team. Larger bureaucratic organizations can benefit from the flexibility of teams as well. Xerox, Motorola, and DaimlerChrysler are all among the companies that actively use teams to

perform tasks.

Introduction to “Organization”

Network structure:Another modern structure is network. While business giants risk becoming too clumsy to pro act, act and react efficiently ,

the new network organizations contract out any business function, that can be done better or more cheaply.

In essence, managers in network structures spend most of their time coordinating and controlling external relations,

usually by electronic means. H&M's is outsourcing its clothing to a network of 700

suppliers, more than two-thirds of which are based in low-cost Asian countries.

Not owning any factories, H&M can be more flexible than many other retailers in lowering its costs, which aligns with its

low-cost strategy.

Introduction to “Organization”

Boundary less structure The most radical concept in today's organizational design is the

concept of 'boundary less ness', which seeks to overcome traditional boundaries between layers of management (vertical), functional areas (horizontal), as well as geographic boundaries.

Some claim the boundary less structure is a combination of team and network structures, with the addition of temporariness .

Ikea, the world's largest furniture manufacture, has been successful in implementing the boundary less structure. The company works closely with suppliers by providing technical

assistance, leasing them equipment, and giving advice. It also refined the role of the customer, putting responsibility on them to cart the furniture home and assemble it themselves. As a result, the company can offer lower prices which supports its

low-cost focused strategy.

Introduction to “ Organization”

Virtual Organization:A special form of boundary less organization is virtual.

It works in a network of external alliances, using the Internet. This means while the core of the organization can be small but still the company can operate globally be a market leader in its

niche. According to Anderson, because of the unlimited shelf space

of the Web, the cost of reaching niche goods is falling dramatically.

Although none sell in huge numbers, there are so many niche products that collectively they make a significant profit, and

that is what made highly innovative Amazon.com so successful .

Introduction to “ Organization”

Current trend of Organization: As we can see, organizations develop, modify and change their

structures so that they align with their strategies. And the main trend for the last decades seems to be coming

back to flatter structures. Although this structure seems suitable for small companies only,

large organizations can take elements of it in harder times. Being at risk of losing profits or even going bankrupt due to the major financial downturn today, a lot of companies are moving

to flatter structures . Not only are they unable to maintain multiple management

levels any more, they are also in need of a more flexible structure to cope with new threats.

Introduction to “ Organization”MANAGEMENT - DEFINITION

As a discipline, management comprises of the interlocking functions of formulating corporate-policy

and organizing, planning, controlling, and directing the firm's resources to achieve the policy's objectives.

The size of management can range from one person in a small firm to hundreds or thousands of managers in

multinational companies. In large firms the board of directors formulates the policy

which is implemented by the chief executive officer. Some business analysts and financiers accord the highest

importance to the quality and experience of the managers in evaluating an organizations current and

future worth.

Introduction to “Organization”

STAKE HOLDER - DefinitionPerson, group, or organization that has direct or indirect stake in an organization because it can

affect or be affected by the organization's actions, objectives, and policies. Key stakeholders in a

business organization include creditors, customers, directors, employees, government

(and its agencies), owners (shareholders), suppliers, unions, and the community from which

the business draws its resources.

Introduction to “Organization”

Aptitude - Definition

Acquired or natural ability (usually measurable with aptitude tests), for learning and proficiency

in a specific area or discipline. Aptitude is expressed in interest, and is reflected

in current performance which is expected to improve over time with training.

Introduction to “Organization”

Attitude-DefinitionPredisposition or a tendency to respond positively or negatively towards a certain idea, object, person, or

situation. Attitude influences an individual's choice of action, and

responses to challenges, incentives, and rewards (together called stimuli).

Four major components of attitude are (1) Affective: emotions or feelings.

(2) Cognitive: belief or opinions held consciously. (3) Conative: inclination for action.

(4) Evaluative: positive or negative response to stimuli.