The Functional Divisions and General Purposes of an Organization - Assignment Example

Strategic thinking and making holistic and linear approach may assist longevity of organisation Table of Contents Strategic thinking and making holistic and linear approach may assist longevity of organisation 1 Table of Contents 2 Introduction 3 Strategy making and open systems theory 3 Linkage between organizational performance, open systems and strategy making 7 The Open-Systems View of Organizations 8 References 12 Bibliography 14 Introduction The basis of Open systems view of organisation is that the creation of values takes place through a set of complex dynamics in between input, transformation and outputs apart from the processes in the context of environment in which an organisation operates. The main premise of open systems theory is that almost all the organisations have a set of common characteristics with all the other living systems including plants and microscopic organisms as well as plants and animals. An understanding of the characteristics of these species allows us to work according to the natural tendencies of an organisation. A system is defined as an organised, unit which is wholly composed of two or even more interdependent components, subsystems which are delineated by environment identifiable bodies. Eg Mountain systems, river systems etc. Most organisations have the following components namely Mission, Goals, Objectives, Behaviour. The mission defines the organisations reasons for its existence. Goals are the functional divisions or general purposes of an organisation which are specific for the stakeholders as well as the client base of the company, Objectives are the measurable specific outcomes related to goals. Behaviour is defined as the ordinary task and productivity of the employees. (APS Univesity) Strategy making and open systems theory Management control systems are composed of all organizational structure, processes, and subsystems which are designed to elicit the behavior that achieves the strategic objectives of an organization at the highest level of performance having the least amount of unintended consequences and risks to the concerned organization. ( Ansari, p. 1) Management control is all about achieving strategic objectives which must be achieved at superior levels of performance while minimizing chances of unintended consequence. Processes form the activities that ensure that the quality controls are accomplished. Subsystems provide the right incentives which are required to shape the behavior. The most important feature in open systems is that of communication. Communication serves as the vital link between the different processes and the internal as well as the external environment. Hence managers must pay stress on communication while devising strategies for their companies. This is important as absence of communication would render an organization to the closed state in which the organization would cease to exist. The managers should also lay stress on internal communication as well as external communication. Internal communication refers to the communication between the employees in the organization. The strategists should ensure that there is a good communication channel in between the employees as well as the top management and every employee grievance is properly addressed by the top management. This would lead to a major trust among the employees and would ensure a good working environment. A lack of communication may result in dissatisfaction among the employees which would affect productivity and efficiency in the long run. Employee dissatisfaction may also lead to high attrition rate among the employees. People in an organization play their roles differently than stated by their script. The formal organization many times set the stages for creating human organizations. The human organization is the method of how the system actually works. The script with its rigidity defines the requirements like chain of commands gets interrupted by the people who actually work in the system which results in the formation of a new organization having its own characteristics, roles, values and social norms. The organizations must innovate or adjust the normal dynamics of the company. Defining the human organization as an organic and living entity provides a better insight into a mangers role. Four major communication models are discussed below Dyadic Context Dyadic communication refers to the communicative relationship between two people. In organizations this form of communication occurs between superiors and subordinates as well as among the coworkers. The strategists need to take care of this form of communication as the inability to interact in a one to one context may cripple an organization. Group Context This refers to the communication among the individuals of an organization in small groupings. These groups often provide an important context where the information is exchanged. Total Quality management lays greater emphasis on improving group context in an organization. Public context This provides the focus on the communication between an organization and its external audience. Public communication takes into account the relationships an organization has with its legal, Political, technological, competitors, government regulators, equipment suppliers, trade and professional bodies etc,. This assumes importance as all the above stated set ups have an important part of the organization as they form a part of the important stakeholders of a firm. Hence an efficient public context communication is very important for the growth of an organization. Technological Context This describes the human communications that occur with the help of aids like e mail, mobile phone, fax, pager etc. Here the technological characteristics provide the required frame of reference which creates a new context for human interaction. (Kennan, p 24, 25) The strategists also need to take care of the external communications channels so that the stakeholders have complete faith in the organization and that the organization does not grow into a closed system which would lead to its collapse. Open system also lays stress on the importance of the environment Hence strategists should ensure that the system is in proper co ordination with the environment both internal as well as external in which it is operating. A proper coordination ensures that the system stays in the open state. Linkage between organizational performance, open systems and strategy making Organizational performance is directly related to efficiency of the management in handling the stakeholders namely the employees, owners and suppliers. An open system requires an effective communication amongst the three stakeholders of a firm. In order to obtain high efficiency an organization can employ techniques like Total Quality Management Practices , Six Sigma techniques which aim at achieving operational efficiencies through well controlled operations aimed at minimizing defects. An efficient open system leads to constant flow of ideas from the employees as well as ensuring that there are no grapevine communications amongst the employees. Fig.1 The Organization: A system based framework. In order to understand the functioning of an unit there are some basic fundamental questions such as the apparent goal of the organization that makes activities coordinated in a pattern, the key outputs as well as the boundary transactions, the key transformation processes and the delivery of the reactivity feedbacks. (Jackson p 7,11) The Open-Systems View of Organizations Open systems theory was developed by Ludin von Bertanlanffy (1956), who was a biologist but the theory gained acceptance across all the disciplines. This theory defines the concept of a system in which all the systems are defined by a combination of different parts and assemblage of parts which makes them interdependent. Daniel katz and Robert L. Kahn defined a framework of open systems that takes into account the energic organisational inputs, transforming the inputs in the system, outputs of energy, and recycling. Energic inputs include the familiar resources like raw materials, employees and capital. They also take into account the intangible external influences like recognition, satisfaction, and other personal rewards. The process of transformation involves energies or inputs for creating products and services. The energic inputs are composed of the products and services which are distributed to the customers. Recycling is the fact that the outputs are recycled back into the organisations. In addition to the four above stated phases of an open system Katz and Kahn also stated several other organisational characteristics which support the open systems theory having implications towards the design of successful organisations. Katz and Kahn stated the example of the Universal law of entropy, which states that all organisations move towards their death or disorganisation. They however stated that an open system can survive by importing energy from the environment and achieving negative entropy. Katz and Kahn defined ten characteristics of open systems 1. Energy importation from the environment (resources) 2. Throughput (Resource transformation) 3. Output 4. Systems as event cycles 5. Negative Entropy 6. Negative feedback, information output, and coding process 7. Dynamic homeostasis and the steady state 8. Specialization and differentiation 9. Coordination and integration 10. Equifinality. (Babson, no date) Katz and Kahn stated that another characteristic of organisations is that they show a state of dynamic homeostasis which implies that every successful organisation should be able to achieve balance between the subsystems. They also stated that subgroups should maintain a rough state of balance while adapting to external influences. Apart from this the authors of this theory also stated that open systems are also characterised by equifinality which suggests that all organisations can reach to the final state using a number of different paths which is not fixed but develop organically as \the external and internal influences intervene. (Katz and Kahn, no date) Kartz and Kahn (1978) focussed on the roles of the independent components that make up an organisation. They defined role behaviours as “the recurring actions of an individual, appropriately interrelated with the repetitive activities of others to yield a predictable outcome.” (Jackson, p.1-29) Michael D Ensley and Craig L Pearce studied two samples of organization from inc 500 and found out that group processes lead to development of shared strategic condition are important than the outcome of shared cognition in terms of predicting organizational performance. (Ensley, Pearce p 1,2,3) A study by Asian development bank suggests that the importance of creating a learning organisation backed by a multi disciplinary argument. (Serrat p,1,2) Described three reasons to re examine the system paradigms namely identification of beliefs that have been perpetuated by organisational scholars, identifying missed opportunities for utilising the systems paradigm to further the development of the organisation theory and identification of the missed opportunities for enriching and updating the paradigms. The systems paradigm in organisation theory correcting the record and setting the future. (Ashmos, Huber P 1,2) Open systems versus closed systems In the Systems theory an organisation is defined as an open system when it adapts to the environment by interacting dynamically with it. This occurs through a cycle of events in which the systems output becomes a part of the system. Open systems interact with the environments and survive whereas closed systems do not interact with the environment and ultimately cease to exist. Kennan 2002, Illustrated this using the example of a truck manufacturing organisation. He states that a truck manufacturing organisation can be called an open system. The organisation takes input from the environment like tires, engines, suspension parts, seats, windshields, Human resources, equipment etc., and changes or transforms them into a new finished product. Here the output is the finished truck. The truck operates in its own environment and the owners of the truck may find the truck as a high quality product and may purchase more trucks from the manufacturer. This shows how an output becomes a new input for the system. The common points among all the open systems are communication. In the above stated example the truck manufacturing company could not have determined which trucks to build without exchanging information from the environment. Hence communication is very vital in open systems. There are thousands of processes occurring in organisations everyday, with almost all the processes depending heavily on communication. Organisations which do not negotiate with these complex cycles eventually transform into closed systems and cease to exist. (Radford University Chapter 3) References Ansari, S. Teaching Note syetems theory and management control. No date. September 14, 2009 . Ashmos D, Huber G, 2001. The Systems Paradigm in Organization Theory:Correcting the record and setting the Future, September 14, 2009 ,< http://pcbfaculty.ou.edu/classfiles/MGT%206253%20Seminar%20in%20Org%20&%20Admin/Readings/Week03/Ashmos-Huber.pdf> ASP University, 2008. Foundations of Organisational Theory, September 14, 2009, < http://www.apsu.edu/oconnort/4000/4000lect01.htm> Babson University September 14, 2009 Ensley M, Pearce C. No Date Journal of Organizational Behavior. September 14, 2009 Jackson. Open View of Organisations. No date, September 14, 2009 < http://www.rci.rutgers.edu/~jraiello/OpenSystemsViewofOrganizations.pdf > 2009 < http://www.radford.edu/~spch-web/chapters/chp3.pdf > Jackson,E Understanding Human Resource management in the context of Organisations and their environment. 1993, September 14, 2009 Kennan, W. A Theoretical Base For Organizational Communication Study. 2002. September 14, Katz, Kahn. Organisation Theory. No date, September 14, 2009 Serrat O, Dimensions of Learning Organisations, No Date. September 14, 2009 ,< http://www.adb.org/Documents/Information/Knowledge-Solutions/Dimensions-Learning-Organization.pdf> Bibliography ICMR, Organisational Behaviour, 2007. Management Control Systems, 2008, ICMR Robbins, Stephens,2007. Pearson Publication Woodward J, 1965, Industrial Organisation Theory and Practice, London : Oxford University Press. Read More