1 org theory session 1 [compatibility mode]

8/13/2019 1 Org Theory Session 1 [Compatibility Mode]

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Organizing is a subset of larger activity of managing. It is theprocess by which the structure of an organization is createdand maintained. The process includes

The determination of the specific activities to

accomplish the objectives

The grouping of activities and assigning these tospecified positions/ persons

e crea on o ne wor o pos ons persons or epurpose of planning, motivation, communication,coordination & control


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Bureaucracy - Max Weber

Rules and regulation

Hierarchy

Paper work

Professional qualifications and Expert Training


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Administrative Theory - Henri Fayol 1916 French Industrialist

1. Division of Work2. Authority & Responsibility

3. Discipline

4. Unity of Command

5. Unity of Direction

6. Subordination of Individual Interest to General Interest

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8. Centralization

9. Scalar Chain

10.Order

11.Equity

12.Stability of tenure of personnel

13.Initiative

14.Espirit de corps Union is strength


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Scientific Management F W Taylor 1900 Micro

Four Principles of Scientific Management

1. Develop science for each element of mans work which

replaces the old rule-of-thumb approach

2. Scientifically select and then train, teach and develop the

workman (where as earlier he decided)

3. Management should heartily cooperate with the workers so as

to ensure all the work being done in accordance with theprinciples of scientific management

4. There is almost equal division of work between management

and workmen. Management should take over the work for

which they are better suited.


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Neo Classical Viewpoint Human Relations Theory

Hawthorne experiments at Western Electric Company by Elton

Mayo 1924 to 1932

1924 to 27 variation in illumination productivity raised

1927 to30 Telephone operator work conditions

Social interaction amongst employee supervisor influenced

productivity

1931 study How group norms affect group efforts and output

IMPORTANT: Neo classical theory does not replace classicalview


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ORGANIZATION STRUCTURE & DESIGN

need an effective structure to achieve org.

goals/plans/strategies

org. structure formal framework for jobs,

tasks to be divided, grouped and coordinatedorg. design process that involves decisions

about

- work specialization- departmentalization

- chain of command

- span of control- centralization and decentralization

- formalization


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WORK SPECIALIZATION

Early in 2oth century, Henry Ford divisionof labor concept in his assembly line, workersassigned specific, repetitive task-helpedincrease productivity

Today Work specialization means degree towhich tasks in an organization are dividedinto separate jobs

too specialized offset the advantages boredom, fatigue, stress, poor quality Managers see it as important organizingmechanism but not source of ever-increasingproductivity Broaden job scope, teamwork and reducedwork specialization


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DEPARTMENTALIZATION

process of grouping together jobs and people into

separate units to accomplish org. goals. 5 common forms

functional departmentalization(group by functions performed)

geographic departmentalization(basis of territorial area)

departmentalization

customer departmentalization(on the basis of common customers)

process departmentalization

(group on basis of product process or customer flow)

customer departmentalization used to better monitorcustomer needscross functional teams flexible interdisciplinary teams

replaced traditional functional groupings


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NEW DEVELOPMENTS Authority, responsibility, chain of command less relevantbecause of IT and employee empowerment

Employees can access info that used to be available tomanagers

Also using computers employees can communicate directlywithout going through chain of command

Employees empowered to make decisions managementuse self-managed teams

New organization designs with multiple bosses continue tobe implemented, therefore traditional concepts of authority,

responsibility and chain of command becoming irrelevant


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SPAN OF CONTROL no. of employees a manager can supervise effectively and efficiently.

Classical view not more than 6 (small span) Helps determine no. of levels and managers

1

2

3

4

1

8

64

512

new (contemporary) viewpoint span of control increasing flatter organization

less direct supervision, well trained and experienced staff

new (contemporary) viewpoint span of control increasing flatter organization less direct supervision, well trained and experienced staff

5 4096


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CENTRALIZATION AND DECENTRALIZATION

how much decision making authority has beendelegated lower levels classical centralized decision-making

as org. become more complex and dynamic decentralize decision making decisions should be made by those who have best

empowerment is a managerial approach in whichemployees are given substantial authority and say tomake decisions on their own

- involve business decisions- design & prod. Of products- front line/desk service counters


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FORMALIZATION

Degree to which jobs within org. are

standardized

Extent to which employed behavior guided

y ru es an proce ures

Explicit job descriptions, clearly defined

procedures covering work processes


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ORGANIZATIONAL DESIGN DECISIONSmechanistic org.- rigid, tightly controlled

organic highly adaptive and flexible

Mechanistic Organic

High specialization Cross-functional Teams

Rigid Departmentalization Cross-Hierarchical Teams

Clear Chain of Command Free Flow of Info.

Narrow Spans of Control Wide Spans of Control

Centralization Decentralization

High Formalization Low Formalization


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Contingency Factors Deciding Org. Design

Strategy and Structure innovators need flexibility, costminimizes seek efficiency, tight controls of mechanisticstructure

Size and Structure large (2000 employees) more

specialize, departments > mechanistic whereas Small co. organic, loose, flexible

Technolo and Structure Batch or unit roduction

organic, Mass production mechanistic, and Continuousprocess production organic

Environmental Uncertainty and Structure mechanisticstructure suitable for stable simple environment. Global

competition, accelerated product innovation bycompetitors, increased demands for high quality and fastdelivery are dynamic environmental forces. Need lean, fastflexible

1 org theory session 1 [compatibility mode]

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