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7/25/2019 Organisational Science Notes
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CHAPTER 1
Def.- Organisational Science
An interdisciplinary science that deals with the study of the behaviour of
organisations, as well as the factors that determine this behaviour and the way
in which organisations can be managed most effectively.
Def.-Effectiveness
The extent to which such activities have succeeded is a measure of their
overall effectiveness. We expressly leave aside the matter of who should carry
out the tasks: it may be the organizations own formal management, or a
consultant, or a member of the advisory board, or even an employee who
cames up with a suggestion during a staff meeting.
Def.-Efficiency
The comparison of what is actually produced or performed with what can be
achieved with the same consumption of resources (money, time, labor, etc.). It
is an important factor in determination of productivity.
Leitmotif- Organisation as a machine or organism
Organisations as Machines
This picture of an organisation implies routine operations, well-defined
structure and job roles and efficient working working inside and between the
working parts of the machine i.e. the functional areas.
Procedures and standards are clearly defined and are expected to be adhered
to.
Key beliefs are:
should be divided into specific roles
Assumptions about organisational change;
y those in
positions of authority
ll planned and well controlled
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Organisations as Organisms
This metaphor sees the organisation as a living adpative system. It also
suggests that different environments favour different types of organisations
and that congruence with the environment is key.
For example in stable environments a more rigid bureaucratic organisation
might prosper whereas in more fluid changing environments a looser less
structured type of organisation would be more likely to survive.
Key beliefs;
ent parts of the system and its
environment is key to success
team and
organisational needs.
Assumptions about change;
environment
the need for
change in order to adapt
cessary strategies for
success
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Scientists on organisations (no names or def. Recognising modes of
thought in short case [ few sentences])
Period before the Indu strial
Revolut ion
First contributions by the ancient Greeks
(for example Socrates and Plato)
management
Machiavelli (Middle Ages)
mainly oriented towards preservation and expansion of power
Adam Smith (18th century)
productive labour is the source of prosperity
Scientif ic Management (Taylor)
Main features of Taylorism scientific analysis of the tasks based on
the study of time and movement (leading to standardisation)
far-reaching division of tasks (routine)
close collaboration between management and workers
management is responsible for the creation of production conditions
and working methodsright person in the right position
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introduction of performance-based pay
General Management Theory (Fayol)
Bureaucracy (Weber)
Characteristics of an ideal bureaucracy/organisation
strong division of tasks
hierarchical command structure
position more important than the person
written records
position is more important than the person
objective criteria and procedures
Human Relations (Mayo)
Counterpart of Scientific Management
Social relationships between people as central point
happy and satisfied people perform best professionally
importance of human factors on effectiveness
Revisio nism (Likert et al.)
Synthesis between
Scientific Management (organisation without people)
and
Human Relations (people without organisation)
Important contributions:
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Likert linking pin
Herzberg motivation theory (based on Maslow's hierarchy of needs)
McGregor theories X and Y
Maslow (Herzberg) - Pyram id
Hierarchy of needs
Motivation of people
Systems approach (Boulding)
An organisation consists of inseparable parts in interaction with the
outside world (environment)
Comprehensive approach to organisational problems
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Cont ingency approach
(Lawrence and Lorsch)
No one best way of management
Taylor en Fayol researched;
Conclusion: organisation is not related tosuccess! External factors are
of great importance, therefore responding to them is as well!
Situation (contingency) determines the best way of organising and
managing
Recent org anisat ional theories and management g urus
- Philip Crosbyquality assurance
- Henry Mintzbergbasic forms of organisation and Rise and Fall of
Strategic Planning
- Tom Petersmanagement principles for excellent business operations
- Peter Druckerknowledge as crucial production factor
- Michael Porterstrategy and competitive advantage
- Michael Hammerrestructuring business processes
Def.- Organisations
An organisation:
Every form of human collaboration for a common goal;
Three characteristics:
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It is about People who
Collaborate to reach
A certain Goal
Def.- Process;
A process can be seen as a series of activities that create value for the
customer.
Def. - Horizontal organisations
A horizontal organization has a less-defined chain of command. Employees
across lines have similar input into how the organization is run. Instead of
each person having clearly defined duties, employees may work in teams, with
everyone on the team having input. Employees may perform many different
function and may report to several supervisors, rather than a single boss.
Project managers or team leaders report to a team of supervisors, with
members of each team being essentially equal in terms of power.
Def.- Organisational structure;
Explicit and implicit institutional rules and policies designed to provide a
structure where various work roles and responsibilities are delegated,
controlled and coordinated. Organizational structure also determines how
information flows from level to level within the company. In a centralized
structure, decisions flow from the top down. In a decentralized structure, the
decisions are made at various different levels.
Def.- Vertical organisations
The vertical organization has a structure with power emanating from the top
down. There's a well-defined chain of command with a vertical organization,
and the person at the top of the organizational chart has the most power.
Employees report to the person directly above them in the organizational
structure. Each person is responsible for a specific area or set of duties.Def.- Management
The theory of directing an organization.
CHAPTER 2
Def.- Environment
Organisations are part of our society, our daily lives. Our society can be
regarded as the environment within which organisations work.
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Parties : (Learn the list, def. and examples by heart, for ex. bank is a possible
capital provider); identify an influence in a simple case
- Customers or Buyers
Buyers or consumers, are an important group as they demand products and
services. The organisation gains its right to exist by satisfying these needs.The needs of the consumer often change and organisations must take such
changes into account when determining the composition and features of their
products range.
In the last few years, many new products have arrived on the market as a
result of changing buyer needs. They may include for ex. : new low-fat dairy
products, electrical cars, environmentally friendly washing powders,
smartphones, tablets, medical equipment, cloud computing solutions, battery
switching stations for cars, and new forms of mortgages and insurances.
If an organisation pays insufficient attention to changing consumer needs, the
existing available products may become less popular and as a consequence ,
the organisation will lose customers. Customers certainly exert a powerful
influence on organisations.
- Suppliers
Each organisation uses products or services from other organisations. Thus,
as a buyer, the organisation places demands on its suppliers in respect of
quality, price level and delivery time. The organisations own products and
services are, after all, dependent on this. In recent years, supplier
relationships have undergone great changes. Increased international
competition has, for ex. caused many changes in the choice of suppliers. Inthe past there has been a preference for local suppliers but now the trend is
often to search across national borders for suppliers to do business with.
Another aspect of these busines-to-business relationships that deserves our
attention is that buyers now want to reduce their stock held, and demand just-
in-time delivery from their supplier.
- Media
In the current information era, the media (including the internet, newspapers,
weekly magazines, tv and radio) play a very important role. The attention of the
media is directed at everything that takes place in society and has any
meaning for individuals. Developments in the economy, politics and business
are watched closely. International communication satellites ensure that we are
informed almost immediately about events that take place on the other side of
the world via, for example photographs in daily newspapers and TV bulletins.
Competitors
Almost every organisation has to deal with competition. Competitors more or
less determine the amount of flexibility organisations have in the area of
product features, pricing, quality, distribution channels, R&D activities,
advertising budgets and so on. It is therefore of vital importance to monitor the
activities of major competitors and to analyse their relative market positions.
Employees
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The employees of an organisation are the most important asset and can be
seen as a critical success factor. The modern employee of the 21st century is
more highly trained, liberated and individualistic than his predecessors. These
employees will play an even greater role in product and organisational
innovations as well as in quality improvement.
Government
The execution of government policies is carried out through national and local
government departments. These influence organisations because they keep an
eye on the way that rules and legislation issued by the government are
adhered to by organisations.
Some examples are controls by the police and department of trade inspectors
of regulations relating to shop opening times, and checks made by the Health
and Safety department in relation to working conditions within organisations.
Interest groups
This group of stakeholders includes those bodies that focus on the interests of
a particular group of people. Many such groups exists. They include
federations of emlployees and employers( for example, trade unions and the
national industry confederation), consumer organisations( for ex.,
homeowners associations, car owners associations) and environmental
activists( Greenpeace).
Equity providers or Finaciers
Organisations must maintain good relationships with providers of finance
such as shareholders, financial institutions and the government.
Organisations are often dependent on finance to maintain their activities,expand operations and sometimes even remain in their existing form. When
providers of finance become dissatisfied with the performance or practices of
an organisation, they can turn off the supply of money. This can create huge
problems for the organisation and potentially pose a threat to their survival. In
large enterprises, we often find that major financiers are represented in
supervisory bodies such as the Board of Commissioners.
External influences:(Learn the list, def. and examples by heart, be able to give
examples); identify an influence in a simple case ;
-Environment
The economic growth of the past few decades has led to an increase in the
consumption of goods and services, but linked to this is also a rise in pollution
of the environment and a further exhaustion of natural resources. In spite of
production increases in some parts of the world, during the last 20years, some
of the main factors contributing to prosperity, including those in the areas of
employment, safety and the environment, have been dealt a heavy blow.
Some of the main environment problems are:
- loss of biodiversity
- climate change
- over-exploitation of natural resources- health threats
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- threats to external safety
- changes to the environment we live in
-Demography
Demographic factors are defined as the size, growth and composition of the
population. These factors determine to a large extent which markets anorganisation targets and which products and services they offer.
The Eu is facing unprecedented demographic changes that will have a major
impact on the whole of society. Figures show that from 2005 until 2030, the EU
will be short of 20.8 mil (6.8%) people of working age. In 2030, roughly two
active people (those between 15 and 65 years of age) will have to take care of
one innactive person(65+), in a situation where Europe will have 18mil children
and young people fewer than today.
-Society
There is a societal need to try to exert an influence on organisations because
of concerns about business activities and such issues as environmentally
responsibility, noise pollution, ethical business and employee participation.
Criticism has been levelled by various parties, including employees and local
community groups. Such bodies will often use the media to gain leverage and
in some case, campaigns will even lead to the introduction of new legislation.
-Politics
Governmental authorities use their political powers and responsibilities to try
to steer their economy in a favorable direction. For ex., governments influence
price levels, the distribution of income, the job market, the balance of
payments and therefore economic growth.
-Economy
Economic factors play an important role in the success of organisations. Of
prime significance is growth in national income. This growth generally leads to
higher income for individuals, which then increases purchasing power. Those
organisations that focus on the B2C market will then enjoy increased turnover.
Income distribution can have a significant effect on the size of some markets.
-Technology
In our knowledge-intensive Western society, technological developments are
essential for the internationally competitive position of our business life.
Technological developments are often called the motor of our economy.
Thanks to the technological development, there is a continuous improvement
of production methods and innovation of goods and services. A consequence
of this is that the life span of existing products is becoming increasingly
shorter.
Technological development is pre-eminently a market-driven activity.
Important stimuli for technological innovation come from competition and the
demand for more environmentally friendly goods and services of a higher
quality with a lower cost price which can be delivered faster and more
conveniently.
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In the coming years, technological developments will continue at a similar
pace as today. Big technological changes and successes can be expected in
the areas of bio-engineering and information technology.
Def.- Market
An actual or nominal place where forces of demand and supply operate, andwhere buyers and sellers interact (directly or through intermediaries) to trade
goods, services, or contracts or instruments, for money or barter.
Markets include mechanisms or means for determining price of the traded
item, communicating the price information, facilitating deals and transactions,
and effecting distribution. The market for a particular item is made up of
existing and potential customers who need it and have the ability and
willingness to pay for it.
Def.- Outsourcing
Outsourcing or subcontracting, falls into a special category of working
together. As production increases in scale, enterprises have to focus more on
their core activities. The result is that organisations are farming out particular
activities to other enterprises.
CHAPTER 6
Def.- Manager
A manager may be characterised as a person who can stimulate and direct the
behaviour of other people withing an organisation. A manager will usually be
responsible for the financial results of a divison or department via his or her
direction of groups of employees.
Def.- Management team
Management is that group of people responsible for providing leadership to
the organisation. The job may often involve a number of people who are
frequently reffered to as the management team.
Def.- Management levels:
- Top strategic
There are 3 main management levels: top management, middle management
and first line management. Top management it is the responsibility of thesenior level to provide leadership for the organisation.
- Middle management
Middle management directs the activities of operational levels, including the
lower management level(especially within large enterprises).
- Lower management
First line management includes heads of departments or group managers, who
are located between the operational levels and the middle management level.
Within a modern flat organisation there is far less need for multiple tiers of
management as less distinction is made between the lower and the middle
levels of management.
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- Policy-formulating
There are 2 main functions of management are policy forming and executing
tasks.
Policy forming includes diagnosis, prediction, planning and organising
activities.
- Policy-implementing
The executing of tasks relates mainly to the delegation of activities and the
supervision and motivating of employees.
Def.- Managers activities:
- Functional manager
The responsibilities of a functional manager relate to the management and
performance of a single main activity withing an organisation. Employees are
coached by this manager to focus on this task only. Purchasing managers and
marketing managers are two examples of functional managers.
- General manager
A general manager may be made responsible for all the activities within a
certain part of the organisation. Amongst other areas, he might be held
responsible for the production, marketing and finances of the organisation.
The business unit manager or the divisional manager are two examples with
general managerial duties.
- Flattening
Organisational structures are becoming increasingly flatter through the
assimilation of lower and middle management levels. Consequently, the
number of management levels and the number managers has also fallen.
- Business units
There has been a shift away from recruiting of functional managers to the
development of more general managers in the workplace. This has been
caused by the subdivision of organisations into more autonomous business
units (for ex. when a unit is made responsible for all the activities directed
towards a certain product-market combination, with the policy-making tasks
becoming the responsibility of middle management). A key priority for top
management is then to create the required conditions (as the specific and
necessary know-how is found in the functionality of a business unit or
division), which makes adaptations in a changing environment quicker to
perform.
Managers responsibility:(10 roles: identify the role in a short case)
- interpersonal roles
A manager gives guidance to employees and is responsible for the results and
profesionalism of the unit, often using formal and informal networks to build
relationships with team members both inside and outside the organisational
work environment. The main aspects of this role are:
being a figurehead
being a leader being a liaison officer
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This last role includes the making of contacts from outside ones own
organisational unit. These contacts constitude a distinct externally-directed
information system and are used during the daily activities of the unit.
- informational roles
A manager needs to be informed of any changes within the organisation thatwill affect the operational results of the division. The manager will share this
information with both organisation members and other interested parties from
outside the organisation. To be able to react quickly within a changing
environment requires accurate information and thus information is
increasingly important. The main informational roles are:
being an observer
being a disseminator or information
being a spokesperson
- decision-making roles
As the person in charge of a business unit, a manager is responsible for
implementing policy. He or she will make decisions by using all available
information, the contacts that have been maintained and the specific
circumstances of his or her unit(SWOT). A manager needs to continually
evaluate situations in order to achieve the required objectives. He or she will
need to make optimal use of the staff and resources that are available. In order
to make the right decisions in such a complex situation, managers must be
able to rely on their staff. The following are aspects of the decision-making
role:
the entrepreneur the trouble shooter
the provider of resources
the negotiator
CHAPTER 8
Def.- Management
Leading the organisation towards the goals that have been set.Business process:(learn by heart the list and def.)
- primary process
Primary processes are all activities that contribute directly to the making of the
product or service (purchasing, producing, selling, furnishing) and to the
overall goal of the organisation.
- secondary process( supporting process)
Secondary processes include all activities that support primary processes,
such as management of personnel, finances and data systems.
- managerial process( management process)
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Administrative processes are all activities that direct primary processes and
secondary processes, and help to reach the organisations goals.
Def.- Process management
Administrative activities aimed at defining a process, establishing
responsibilities, evaluating process performance, and identifying opportunitiesfor improvement.
Production factors:( learn by heart lists and def.)
Input consists of four factors. There are:
- labour: people
- nature: raw material, semi-manufactured produtcs, energy etc.
- capital: money, plant, machinery
- information: about competition, demographic data etc.
These production factors must be bought in by organisations from specialized
markets such as the labour market , the energy market and the information
market. After the transformation, the resulting products and/or services are
sold to the customers and the other interested parties.
Organisations are not only judged by their products and/or services but also
by the quality of their outputs:
- labour: employees leaving the work force(through dismissal, retirement,
long-term disability)
- nature: waste, heat loss, noise, pollution, smell
- capital: profit, depreciation of machinery etc
- information: annual reports, public relations etc.
Def.- Transformation processEvery organization acquires raw materials and resources (input) and
transforms these into products and/or services (output). This transformation
process consists of a number of business processes.
Managerial responsabilities: (learn the list, correlations and def.)
- strategic planning
- planning
- structuring
- the process management
Business processes and added value: (def., learn value chain by heart)
- Porters value chain
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Porters theory is based on the so-called value chain, comprising all
activities needed to offer a product to the market. In other words the value
chain indicates the amount of added value produced by the various parts of
the organization. These different parts are coordinated by what Porter calls
linkages.- added value
A business process adds value to raw materials or semi-manufactured
articles. This added value increases an organisations competitive power
fundamentally, according to Michael Porter. He states that a competitive
advantage is obtained by lowering the cost of production or by creating added
value for products which the customers will pay extra for.
- location of the position of information
According to Porter, information provision within an organization does not
belong to the primary or support activities, but occupies a central position like
that of a spider in a web: it connects the separate primary and support
activities. It can certainly help to increase competitive advantage.
Def., Cover concept- Quality Management
Quality management is that aspect of management that falls under quality
stratedy and is implemented by management as a whole.
Total quality management
Total quality management integrates and performs all quality-related activities
and makes decisions that influence quality, irrespective of position within the
organisations.
Def., Cover concept- Logistics management (825)
To control business processes involves quite a number of logistic issues,
including supply volume and ways of reducing delivery time or the time it
takes customers to place an order. Logistics is about the flow of goods and/or
services withing the business chain.
Deals with the planning and control of the flow of goods and/or services within
the supply chain plus the coresponding information stream.
Def., Cover concept- HRM(826)
All standards and values relating to an organisations employees and the
translation of these into techniques and methods that optimise the use of
existing human qualities and their contribution towards the goals of the
organisation.
The main aspects of HRM :
- acknowledgement by top management of the importance of the
human factor
- the conviction that human qualities can be used better
- the understanding that qualities and motivaton of the staff are
critical factors in implementing the organisatios strategy
- the need to apply systems and tools in a professional and
systematic way, focussing on using the human qualities in orderd toarrive at the organisations goals.
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Def.- Hierarchy
A graded separation between management and operations cause by the need
to delegate activities within the organisation.
Def. and difference- Strategic decisions vs. Operational decisions
Top management deals with strategic decisions, while the more junior staff areresponsible for decisions relating to operational processes. Middle
management is located between these levels, so occupies a pivotal position.
This management level is mainly involved in organisational decisions. It
translates strategic decisions into operational decisions. It fulfils more of an
executing function compared to top management, while it fulfils a directing
function in relation to the first line management.
Briefly specify differences- Types of enterprises VoF, NV, BV
BV
The Dutch BV (private limited liability company) is the most frequently used
legal form by foreign investors (for example: to carry out a business, for direct
investments, as holding company, IP company, finance company, etc.) The
Dutch BV has the advantage that the shareholders are - in general - not
personally liable for legal acts of the B.V. Furthermore, the BV is easy to
incorporate, it requires a minimum capital of 18,000 and the share cannot be
traded freely (e.g. subject to transfer restrictions, which may be beneficial if
you are contemplated to attract several investors).
NV
Alternatively, one may decide to establish a NV (a public limited liabilitycompany), which is the obligatory legal form for stock listed companies, but
which can also be used for non-listed companies. The NV also requires a
minimum capital; however, the minimum capital requirement is (slightly)
higher than the minimum capital for the BV. The minimum capital for a NV is
45,000.
Partnerships
Dutch law distinguishes two types of partnerships, either the general
partnership (VOF) or the limited partnership (CV). The partnership may be
formed by two or more partners that may be either individuals or legal entities
(like for instance a BV). The partnership should be registered at the Chamber
of Commerce (Trade Register). The partners in a general partnership are jointly
and severally liable for all obligations of the partnership. However, the limited
partnership has two types of partners, e.g. the limited liability partner (also
'silent' partner, which has the same features as a shareholder of a BV) and the
general partner. The limited liability partner is liable only up to its capital
contribution in the CV.
Def., emphasis on relationship with management board- Supervisory board
As well as paying attention to general developments within the organization,an organisations supervisory board has to supervise the activities of top
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management. The Board should have the interests of the entire organisation at
heart and not focus on the specific interests of one group of stakeholders
within or outside the organisation. The Board is not involved in the actual
management of the company, as this is the task of top management. The
Board needs an assortment of skills- financial, legal, marketing and so on- inorder to carry out its tasks. Wheter a supervisory board or simply a board of
directors is necessary depends both on the size of the organisation and its
location.
Def.- Board of directors or top management
- forms of management
Various forms of management can be identified within an organisation, each
differing from each other in terms of composition, task division and decision-
making. The main forms are:
- single person/management vested in one person
With management vested in one person, that one person posseses all the
decision-making power. Such a situation can arise either when there is just
one manager, or when the chairman of the board of management has the final
say in decision-making. The advantage of this form of management is that it
generates fast decision-making. There are potential disadvantages in that
important issues are only considered by one person, continuity could be at
risk at times of long-term illness, and management could be easily become
overburdened.
- multi-person/joint management
Joint management or a board of management is characterised by a division oftasks between, for ex. a general maneger, a financial director and a
commercial director. The additional knowledge and experience available within
this structure allows for any necessary corrections to be made by common
consultation, thus safeguarding continuity and preventing overburdening. On
the other hand, decision-making may be slow, and major differences of
opinion can arise between the board members.
- collegial board/collegial responsibility
Decision-making may be collegial or alliance-based. With collegial
responsibility decisions are made by consensus. All board members need to
agree, so there is equal power of decision. The board members are collectively
responsible for the success of the enterprise as a whole and not merely for a
specific part.
- entente structure/alliance structure
In an alliance structure, the directors have both individual and collective
decision-making power. We see this structure mainly in large organisations
where expertise is required in certain areas. In addition to their individual
decision-making power in a specific area, the directors share collective
decision-making power in more general matters.
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Def.- Middle management
The task of middle management is to implement out the general policy as laid
down by top management. Middle managers also direct a number of
operational staff. Using the policies issued by top management, middle
managers generate policy guidelines for their own departments.
Def.- Operational staff
Operational staff are responsible for the actual transformation process. Input (
labour, natural resources, capital and information) undergoes a
transformational process and becomes output( products or services). This
level is the level of primary processes that contribute directly to the creation of
a product or service.
Def., list- Corporate social responsibility
profit: shareholders/taxpayers/society
people: employees/consumers/neighbors/human rights organisations
planet: governments/environmental organisations/United Nations
Def.- Corporate governance
A system for the directing and managing of enterprises in which transparency
and justification are considered to be the main characteristics of good
reporting. Corporate governance means decent entreprenurial management
that makes justified choices based on political, social, economical and ethical
considerations.
Good governance or Social responsibility
Seeing the purpose of an enterprise as not just profit making or profit
maximisation. Businesses should derive their right to exist not merely from theamount of profit they make but from how they function within a network of
economic, ecological and social factors.
Def.- Works council
The works council does not actually form part of the organisations usual
management levels. Its members are elected directly by the employees of the
organisation. The works council influences decision-making within the
organisation.
Def.- Management by objective
A method in which the manager and subordinate determine the objectives for
the coming period by mutual agreement and agree on the results required at
the end of that period.
Def.- Management by exception
Within certain limits, the middle manager is entitled to define and use specific
means needed to make corrections. If these limits are exceeded, this will be
seen as exceeding the limits of his/her authority. His/her superior will be
informed and the necessary action taken.
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CHAPTER 9
Def. and context- External coordination
External factors that affect the organisation should be taken to account and
any adjustments necessary made, depending on the choice of strategicmanagement process. By setting the strategic objectives, the organisation is
plotting the general direction of the route towards achieving the desired goals.
Def. and context- Internal coordination
Internal factors involving individual staff members, machines and other tools
must be taken into account, with day-to-day operations being given all due
attention. These need to be utilised in such a way as to support each other.
Def. and context- Structuring
Structuring involves the creation of an organisational structure in which
people and resources are optimally utilised to reach the organisationsobjectives. Finding the ideal arrangement will require adjustments at both the
external and internal levels.
Def. and context- Organisational structure
An organisational structure defines tasks, competencies, and responsibility
and sets out the pattern of relationships between positions.
Def.- Vertical differentiation
Organisational tasks grouped together and divided into levels. Cost
considerations will mean that some activities will have to be transferred to a
lower level.
Def.- Task
A task is the technical content of a function and indicates precisely what a
person does: meet, consult, manage, make a call, administrate and so on.
Motives for structuring- def. and list
- costs
Task must be arranged in such a way that efficient functioning and production
is possible.
- management
The way in which tasks are structured and divided must lend itself to
management of the organisation. Supervision of the various tasks and howthey are executed is required.
- social
Jobs must have a certain amount of appeal for individuals. Variety,
reponsibility and decision-making power all come into play.
- society
Society makes demands that must be complied with then tasks are structured:
health and safety precautions, for ex.
Def.- Division of labour
Division of labour = the division of the activities in subtasks that are assigned
to persons or other working contexts within an organisation.
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Vertical division of labour (vertical differentiation)
Horizontal division of labour (horizontal differentiation)
Def. and connection with division of labour- Coordination
The various components of the task must have some connection with each
other. When the tasks are allocated, attention must be paid to how they are tobe coordinated.
Def.- Forming of departments
Related tasks are initially grouped together according to an individuals
position (functionalism). After that, these individual positions are regrouped to
form departments.
Def.- Internal differentiation
An organisationsactivities grouped by function into different divisions.
Def.- Internal specialisation
Activities divided into either products, market or geographical divisions with
grouping based on the end result.
Def. and connection with differentiation and specialisation- F, P, M, G
structures
Internal specialisation activities revolve not only around products. They may
also be concerned with markets or buyers and geographical areas, the so-
called Product, Market, and Geographical divisions of tasks.
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organisational structure (F-structure)
for example: purchasing, production and sales
geographical region (G-structure)
for example: province or country
market structure (M-structure) for example: low-volume users and bulk consumers
product structure (P-structure)
for example: cars and motorcycles
The choice between internal differentiation and internal specialisation will
depend on the organisations given situation. Small organisations almost
always chose internal differentiation. As soon as a company has reached a
certain size and also manufactures and sells different products, there will be
same basis for internal specialisation within the organisation.
Def.- Qualifications
A special skill or type of experience or knowledge that makes someone
suitable to do a particular job or activity.
Def.- Responsibilities
Responsibility is both the moral obligation to perform a task to the best of your
ability as well as the duty to report back concerning the progress of that task.
Def.- Delegating
When tasks with their associated authority and responsibility are handed over,
this is known as task delegation.
Def.- Vertical and horizontal division of labourVertical division of labour
Division of activities into different levels
(vertical)
motives
cost motive
management motive
social motive
public motive
Horizontal division of labour
Introducing cohesion between activities
(grouping)
two main forms
internal differentiation
grouping according to similar activities
-F-structure
internal specialisation
grouping on the basis of end result
- P, M or G-structures
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Def.- Centralisation and Decentralisation
If the power to make decisions is concentrated in one place(at top), this
suggests centralization. In such a situation, a significant proportion of
important decisions will be made high up in the organisation. There will be
little delegation.In contrast, with decentralization, the decision-making powers will be
distributed over a greater number of positions, including those lower down the
organisational structure. In such a situation, significant decisions will also be
made at lower levels in the organisation. There will be a lot of delegation.
Def.- Scope of control
Scope of control = the number of employees that a manager can effectively
manage
horizontal dimension
the number of direct subordinates that a manager is in charge of
vertical dimension
the number of levels that is managed (in)directly
Def.- Flat and bureaucratic organisational science
A large span of control for managers will cause a flatter organisational
structure to develop.
Def.- Span of control
Span of control is simply the number of staff that report to a manager. Some
companies also have an ideal span of control, which is the number of reports
they feel a manager can effectively manage. In this case, if a manager has
fewer reports than the ideal, they may feel he or she is not being effectivelyused, while if he or she is handling more they may feel that the manager is
over-stretched and the reports will not receive enough direction.
Def.- Depth of control/Span depth
The number of levels directly and indirectly under a managers control and in
particular, the degree of influence that a manager exercises on the lowest
levels of the organisation.
Def.- Personal assistant
Appointing a personal assistant ( ex. secretary) to the manager to take over
some routine activities. He/she will not have any supervisory authority over
the managers subordinates.
Def.- Organizational chart ( be able to read it )
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Def. and difference- Formal organisation and Informal organisation
It is formal in the sense that the task divisions, job descriptions, manuals
and procedures are all written down and have an official nature. The formal
organisation is the organic structure plus the staff structure.
Other contacts, relationships and divisions of tasks occur within the
organisation but do not fall under the formal organisation.
All activities and relationships that do not fall under the formal organisation
can be included in the informal organisation. Informal organizational behaviour
can influence the organisation in a positive or a negative way. When negative
informal organizational behaviour occurs, the undesirable activities need to be
corrected or addressed by imposing additional rules.
Def. and be able to recognise in the organizational chart- Organizational types:
- line organisation
The line organisation is the most traditional organisational structure and theform from which most other structures are derived. The main characteristic of
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a line organisation is that orders travel exclusively along a simple line, with
strict hierarchical relantionships maintained between manager and
subordinates.
- line-staff organisation
Where staff with specialist knowledge and expertise (support staff) assist
managers in a line organisation, this is described as a line and staff
organisation. Support staff are often located in staff departments.
- line and functional staff organisation
If the advice of the support staff becomes so specialised that the line official
can no longer assess it, the advice will take form of an instruction or task(legaladvice) that has to be followed. The staff relationship will therefore develop a
functional character.
- line-staff-committee organisation
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All communication needs to go along the line. Theoretically, this means no
consultation between employees of the various departments other than that
between the departmental heads. However, it is often necessary to involveother departments and their staff in business activities
- matrix organisation
A matrix organisation is an organisational form in which professional
specialists from various departments are temporarilly transferred for a specific
project over a limited time span.
- pure project organisation
In contrast to the line or the line-staff organisation, a PBO gives project
managers control of all elements necessary to manage the projects. Project
elements dominate the organisation. Another characteristic is the splitting up
of the organisation into different divisions or pools.
- internal project organisation
The goal of the internal projects is to provide a vehicle for accomplishing the
objectives of the research group. Therefore, each of the internal projects
presented here focuses on a different objective of the research group and
aims to produce methods and tools that in the long run can be integrated and
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provide complete educational or industrial solutions for contemporary
problems in their respective areas.
- divisional organisation
In a divisional organisation, the activities and processes within a company are
grouped around a number of related products or markets and located withindivisions. This organisational form is found in big, often multinational,
enterprises that produce a variety of products for various markets and are
often located in a number of different locations.
Mintzberg- some biographical information
Dr. Henry Mintzberg, OC, OQ, FRSC (1939) is an internationally renowned
academic, author and researcher. He is currently professor of Management
Studies at the Desautels Faculty of Management of McGill University in
Montreal, Quebec, Canada. Henry Mintzberg is especially interested in and
passionate about topics within management and business strategy.
Organizational units: (learn the list and def. by heart)
- executive core
The so-called primary processes- work that is directly related to the production
of goods and services- form the basis of an organisation. Mintzberg calls them
the operational core (executive core).
- strategic top
Every organisation needs to have at least one manager who is able to
supervise all processes and manage the organisation. This individual is
located within the strategic apex. In larger organisations, the Board of
Directors and the Council of Commisioners form the strategic apex.- mid-level
When an organisation increases in size there will be a need for more
managers. They do not necessary have to be managers who direct staff, but
may include managers who direct other managers. An intermediate or middle
line will thur arise.
- technical staff
The more complex the organisation becomes, the more need there will be for
staff who are able to analyse and support the primary processes. These staff
will make plans and manage the work. This section of the organisation is
known as the technical staff area. Supervisors, planners, and planning
engineers fall under this category.
- support staff
Many organisations have support staff who supply services of one kind or
another to the various departments. Salary administrators, public relations
officers and R&D staff fall under this category.
Coordination mechanisms: (learn the list and def by heart; identify in a short
case; connection with organisational units Ranking of coordination
mechanisms)
- mutual coordination/mutual adjustment
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This method is characterised by significant formal and informal
communication between workers. Regular consultation, evaluation sessions,
speech and communication techniques, internships, meetings facilities and
informal contact are some examples of the form that this communication may
take.- direct supervision
Managers issue assignments and instructions to staff in respects of tasks to
be performed. This can happen during a review of progress or as part of a
performance evaluation interview. The manager will make use of various
techniques and skills as well as applying his/her own experience and
knowledge.
- standardisation
of activities/work processes: In this method, tasks are specified
and standardised (usually by technical staff). This is done on the
basis of set procedures, manuals and instructions. Machanisation
and automation are essential aspects of this processes (the
production of standardised letters for making offers etc.)
of results/outputs: In this method, a specification of results is
drawn up. It may be related to financial targets for each company
unit, to the content of contracts, to customer satisfaction norms,
to quality criteria for the products to be developed, and so on.
of competences/skills: The activities to be performed are
coordinated on the basis of the training and experience of the
individuals. For ex. a surgeon and an anaesthetist will be able toanticipate each others standardised procedures virtually
automatically.
of standards/norms: In this method the staff within an
organisation will behave similarly as they will share a similar set
of opinions. Norms can also develop from a point of view shared
by those in an organisation.
Organisational forms: ( learn the list by heart, be able to clarify, connection
with coordination mechanisms; be able to identify in Mintzberg diagram; be
able to name typical examples like for ex, hospital as professional):
- entrepreneurial orgasnisation
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- machine organisation
- professional organisation
- diversified organisation
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- innovative organisation
- mission organisation
- political organisation
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Def.- Communication and consultative structures
Communication process- know and clarify
Designing a communication and consultative structure is one of the necessary
aspects of creating an organizational structure. After all, company activities
must be linked to each other. It is very easy for coherence to disappear during
a division of tasks as some activities may be split and transferred toemployees in various different departments. Coherence can be restored by
providing a good communication and consultative structure.
Def.- Personal and non-personal communication
Communication can take place in two ways within an organisation: via
personal communication between two or more people and via impersonal
communication using communicative means such as memos, e-mail and staff
magazines. Personal information is, in general, the more affective, because of
the possibility of obtaining direct feedback. Impersonal information has the
advantage that the receiver can decide himself when he will take in the
information. The disadvantage is lack of certainty about the quality of
reception: will the message will be understood? Will it even be read?
Def.- Horizontal communication
This includes communication between divisions, departments or even
individuals at the same hierarchical level of the organisation.
Def.- Vertical communication
In contrast, this is communication between divisions, departments, or
individuals at different hierarchical levels.
Def.- Lateral communication
This refers to relatively open communication that takes place between allindividuals within the organisation, irrespective of their hierarchical level.
Def.- Linking pin
The so-called linking pin structure developed by Rensis Likert, depicts less
standard consultative situations.
Likert described an organisational structure which features overlapping
groups. The linking pin is the leader of a lower-level group. This person
participates in and can influence decision-making withing a higher level group.
The link may be horizontal, vertical or diagonal.
New organisational structures: ( def. and identify most important differencewith traditional organisations):
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- horizontal organisations
Traditionally, organisations are structured according to functional divisions
such as purchasing, production, marketing, sales and distribution. These are
known as functional organisations.
One of the disadvantages of such a form of structuring is that while the reultsachieved by the various divisions may be excellent, this will not necessarily
lead to the best end result for the customer and therefore for the company. The
problem may lie in insufficient interface between the activities of the divisions.
Organisations that are designed to optimise coordination between activities in
the various divisions are known as horizontal or workflow organisations. The
main reasons for transforming functional organisations into organisations that
are more horizontal are:
increased customer satisfaction
boosting of product and service quality
reduction in operating costs
increases in company process efficency
- network organisatons
Today, many organisations and individuals work together in networks. Thanks
to mutual cooperation, these organisations and individuals can make use of
each others strengths, creating added value for a common customer base. A
network organisation can be described as collaboration or a partnership
between interdependant independent organisations or individuals who try to
achieve common goals which cannot be achieved individually. What
characterises a network organisation is that the added value cannot beachieved without the network. It is also true to say that the cooperating parties
depend on each other. The added value can differ for each network, and can,
for ex. include joint product development or development of mutually
beneficial expertise. A clear advantage of a network organisation is that the
risk is also reduced by co-operating and sharing.
- cluster organisations with teams
Organisations are making increasing use of people with large amounts of
knowledge, skill and experience. All organisational forms make use of teams:
project teams, quality teams, cross-functional teams. Professional specialists
may form part of one or more teams. Teams are disbanded once the goals
have been reached.
An organisational form in which a team structure is central is known as a
cluster organisation. According to the management guru, Peter Drucker, most
organisations will be structured around teams in the future.
- virtual organisations
Up until the industrial revolution, employees worked at home under the
instruction of employers. The industrial revolution saw to it that worked moved
from the home to large factories, and later to modern offices.
The arrival of the Internet and other technologies has made it possible forpeople to communicate with each other, to consult, to learn and to exchange
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information without actually having to come together in a physical location
such as an office.
They may e-mail each other or send text messages etc.
One consequence of this is that companies are no longer dependent for the
execution of their activities upon people who are situated in a particular office.They can make use of people in geographically different parts of the world,
and not only freelancers but also company employees. Companies that wish to
enter a strategic alliance to jointly develop or sell new products and services
have enhanced opportunities as a result. Companies that rely heavily on such
communicative situations are known as virtual or network organisations. Such
a kind of organisation is also termed an unlimited company.
This organisational structure can deliver huge cost savings since there is no
need to develop and to maintain a complex, international organisational
structure. Many people in such organisations do not even have an employment
contract but are bound to the virtual organisation via project work.
- flattened organisations with limited complexity
The traditional organisation has a great number of management levels. The
task of management has always been managing people and at the same time
obtaining, processing and distributing information. The Internet and the othet
technologies have ensured that the latter aspect has been significantly
simplified and consequently is less time-intensive. Managers are also
delegating an increasing number of the tasks that they used to do, such as job
planning, reporting and administrative work.
CHAPTER 10
Effectiveness(Know list and def and connection with change)- technical and economicThe degree to which the resources of an organisation are effectively deployed.Efficient utilisation of resouces if using the fewest possible means ofproduction(input) to reach a certain output.- psychosocialThe degree to which the needs of employees are recognised.
- socialThe degree to which the needs of external parties are recognised.- managerial
The degree to which the organisation can react to changing situations with
flexibility and decisiveness.
Greiners growth model(Basic thought behind this model;Know the list;Def)- Growth through creativity leadership crisis- Growth through direction autonomy crisis- Growth through delegation control crisis- Growth through coordination red-tape crisis- Growth through collaboration internal growth crisis
- Growth through alliances identity crisis- Growth through integrated people- and environment based policy
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Phase 1: growth through creativity
This is the starting or the pioneer phase of the organisation, in whichcreativity is the most important factor. The emphasis lies on development ofthe product and of the market. In this phase, there is hardly any question of aformal organisation and there is a lot of informal communication within theorganisation. If the organisation grows substantially, a leadership crisis willarise. Organising and managing the activities will become more important. Thetime for different management will have arrived.
Phase 2: growth through control
The new management will either put emphasis on greater control or willoccupy it-self with guiding the organisation towards expansion.The organisations members will find their independence limited. If thiscontinues for a long time, a situation will arise in which the individualmembers or departments will need greater responsibility. An autonomy crisiswill rise.
Phase 3: growth through delegation
By creating more autonomy, the organisation will become more independent.This will take the form of delegating: transferring responsibilities andcompetencies to lower levels of the organisation. This carries the advantage ofthe organisations members growing more motivated. Top management willfeel it is no longer in control. This result will be a control crisis.
Phase 4: growth through coordination
To regain the lost territory, extra coordination mechanisms must be built in.Consequently, there will be an increase in communication and informationbinding the organisations members to rules and procedures. This outcome
will be an inflexible organisation. A Red Tape crisis will arise.
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Phase 5: growth through cooperation
To increase the decisiveness and flexibility of the organisation, various formsof cooperation must arise between departments, committees and workinggroups. The purpose of these is to enhance work effectiveness. The
consultation required to attune various activities to each other is time-consuming. If the result is a consultative culture, a consultation crisis willarise.
Phase 6: growth by commercialisation and deregulation
During phase 5, the emphasis was on consultation aimed at attuning activitiesbetter. The drive to achieve results took backseat. To bring it again to theforeground, superfluous procedures and consultative structures will have todisappear. The organisation will deregulate itself. Internal entrepreneurshipwill also come to the fore. Business units that have a large degree of
independence will arise. There will be a certain cooling off, with the pursuit ofa higher degree of efficiency and a cutting into organisational structurespredominating. Internally, a situation will arise that may be termed a socialidentity crisis. Externally, it will be seen as an identification crisis.
Phase 7: growth by integrating human and environmental policy
During this phase, management will emphasise the public good. A lot of timewill be devoted to environmental issues, to an effective organisational culture,to the organisations image and identity, and to finding how to satisfy staffmembers while enhancing the quality, efficiency and productivity of theorganisation.