Organizational Design and Effectiveness - Essay Example

Running Head: Organization Organization of the of the Organization Organizational design and effectiveness The blockcentered on the definition οf organizational design (the way managers structure the organization to reach the organizations goals) and the use οf organization chart is fairly clear. Organization charts are common in most all business organizations. They depict the formal authority and communication channels οf the organization--and also give a graphic representation οf the degree and type οf specialization the organization utilizes. Your author is correct in stating that the communication and authority relationships are incompletely depicted. The informal networks within the organization are rarely depicted (if they are known at all!) The background concepts you have seen before. Remember Appendix A? I am still amazed at how the work οf Randolph and Dess has persisted. We still use much οf the terminology they coined. Some distinction is made about the differences between line and staff personnel. The concept οf line vs. staff authority is not really addressed. Line authority is clear positional authority to make decisions relating to the work οf the firm. Classically this means the manager on the line producing the product. Line authority is real, legitimate authority--within the legitimate realm οf the manager. Staff authority is advisory--staff experts make recommendations that line managers may use or not. No business can function unless it has a firm grasp on the environment it "lives" in. You must foresee changes in the environment that will affect the firm. The information perspective--asks managers to assess the uncertainty in the external environment. Two possible strategies: design structures in the organization that increase information gathering about the environment. Or, design flexibility into the organization. Environmental uncertainty is affected by the complexity οf the external environment and whether that environment is stable or rapidly changing. Higher complexity and rapid change creates the most uncertainty. This harkens back to the idea that mechanistic organizations tend to be possible in very stable environments and organic organizations tend to be successful in complex, unstable ones--like the microcomputer industry. Reference Randolph, W. Alan; Gregory G. Dess. The Congruence Perspective οf Organization Design: A Conceptual Model and Multivariate Research Approach. Academy οf Management. The Academy οf Management Review (pre-1986); Jan 1984 Structural Evolution from Management Science Management has a specific economic & social objective hence is can be applied everywhere. It is a continuous, multidisciplinary, dynamic process. "Management is a multipurpose organ that manages a business manages a manager and manages workers and work" as defined by Peter Druker. Management is the combination οf Arts, science & profession. As arts requires skills so does management. Skills like conceptual, technical, human relations & decision making comprise management. To perform management functions properly one needs to have clarity οf concept as to what, where, how, why etc. Technical skills and know how is also important as it streamlines the functions & increases the efficiency. As management exists in everyday life comprising the human beings and dealing with human relationships is an art hence its a part οf management too. Decision making is an important aspect οf management. It can also be stated as an art because it requires a lot οf inputs by way οf facts & analysis. Management needs knowledge and information from various areas like finance, marketing, technology, production etc. As art needs inputs from other areas so does management. To manage effectively & efficiently one would require information from different fields. Information οf how, what ,where in production, how & by what means in marketing, what is the latest update and how it can be used to increase the efficiency in technology & last but not the least the monetary aspect being the financial terms οf how to obtain finance to complete the task in hand. All this requires Information i.e. knowledge. Management is a form art as it requires creativity. The aspect οf creativity is very prominent in marketing & competition. If a company plans to launch a new product in market then there would be a series οf functions it would follow. As it would first do a market research, know about the competitors & their products. Then plan, & implement new marketing strategies for their products. All this requires artistic skills. The formula for success lies in implementing unique marketing strategy such as to attract the customers hence creating a need for the product. Reference Thomas, W. Malnight, Emerging structural patterns within multinational corporations: Toward proce... Academy οf Management Journal; Dec 2001 Organizational Relationships Organizations operate in a complex business environment where things can and cannot be controlled. Managers are skilled and trained to how analyze and improve the organization for it to survive, grow and improve in the changing world. Carroll and Khessina say in this article that the management system is divided into two levels. Internal factors in an organization can usually be managed and dealt with, like labor, money, materials and equipments. These inputs can be turned into useful products, goods or services and make it available to the consumer. On the other hand external factors are hard to manage. They consist οf all outside institutions: competitors, customers, suppliers and economic, technological, political, cultural and demographic objectives. Organizations internal environment consists οf owners, board οf directors, employees, and the actual physical work area. Owners are either individuals or partners who have legal ownership to the company. Board οf directors is chosen by stockholders. They rarely get involved in how the company is being run; they just oversee the management οf the company. Employees are the workforce οf the company. Today that workforce is getting more and more diverse. More women and minorities are entering in into the workforce. These employees receive full company benefits, most οf them are union workers. Also companies are taking advantage οf temporary agencies. These "temps" work for short periods οf time, they are not qualified for any benefits, and they just perform their duties and move on. These employees could be working in any work environment; it could be an office in a skyscraper in downtown, or warehouse in the valley. Some companies have offices or cubicles for each employee, or they work in one big office. Sometimes there are computers in the big glass office and/or no chairs for them to sit. External environment is divided into two: general and task. General environment consists οf economic, technological, polital and legal levels. In the 21st century businesses face some key challenges; the threat οf international terrorism, the shift οf global economy, the aging οf population, shrinking the labor pool, changing nature οf work, very diverse workplace, the need to improve product and customer service, and to enhance competitiveness οf every countries workforce. Technology is certainly making a difference in the workplace. Technology is the business application οf knowledge based on scientific discoveries, inventions, and innovations. New technologies allow businesses to provide new goods and services for consumers, also improve customer service. However technology is changing the shape οf a company. It opens new questions about business ethics and social responsibility, computer crime, etc. Legal side is the relationship between the company and the government. Government has an influence on a business. They set rules and regulations οf what they can and cannot do. The service industry has to deal with FDA. If there is an issue with an employee, then the manager has to deal with EDD, OSHA or SDIs rules and regulations. Businesses face obstacles in the global marketplace. Companies have to be sensitive to social, cultural differences such as languages, values and religions. Each country has its own law regulations. Trade restrictions and administrative barriers are also challenges in the international business. The task environment includes competitors, customers, suppliers, regulators and strategic partners. Competitors are organizations that compete with other organizations. Customers are people that will pay money to receive a companys goods and services. Organizations constantly compete with each other to attract customer. Todays consumer is looking for quality goods and services at a fair value. Quality includes the customers satisfaction, the ability οf the good and service to meet or exceed the buyers needs and expectations. Global competivenss requires nations and companies to work efficiently at producing goods and services. Since productivity is used to measure companies efficiency, then the total productivity οf the business is the measure οf its economic strengths, standard οf living and ability to compete. Suppliers provide resources for a company. When the company decides what product to buy, they choose a supplier. The manager compares the quality, prices dependability οf delivery, and services offered by competing companies. Different supplier may offer a product οf same quality and price, and it is up to the manager to decide. Manager should not even try to purchase everything from same supplier, if the supplier goes bankrupt, then the manager has the spend the time on finding another provider. U.S. Companies are regulated at federal and state levels. These groups control the companys polices. Some companies work together to achieve the same goal. These companies sometimes merge to share costs, risks, management and profits. These merges can be beneficial to a company or create a ciaos. Managers in the new century need vision; the ability to perceive marketplace needs and how their firm can satisfy them. Critical thinking skills and creativity allows managers to pinpoint problems and opportunities and plan to solutions. Managers are dealing with rapid change, and they need skills to help steer the organizations through shifts in internal an external conditions. Reference Carroll, Glenn R. and Olga M. Khessina., The Ecology Οf Entrepreneurship. Administrative Science Quarterly, 1990 Organizational Pathologies Organizational design is the process οf choosing and implementing structures that best arrange resources to serve the organizations mission and objectives. This article explains the ultimate purpose οf organizational design is to create an alignment between supporting structures and situational challenges. Bureaucratic (or mechanistic) organizational designs are vertical in nature and perform best for routine and predictable tasks. Adaptive or organic organizational designs are horizontal in nature and perform best in conditions requiring change and flexibility. Bureaucracy is a form οf organization based on logic, order, and the legitimate use οf formal authority. Its distinguishing features include a clear-cut division οf labor, strict hierarchy οf authority, formal rules, and procedures, and promotion based on competency. Mechanistic designs, thriving in the 1960s by Tom Burns and George Stalker when the environment was stable, are a highly bureaucratic organizational design. It was centralized with many rules and procedures, such as a clear-cut division οf labor, narrow spans οf control and formal coordination. The organizational design trend is now toward more adaptive organizations that operate with a minimum οf bureaucratic features and with cultures that encourage worker empowerment and participation. They display features οf the organic designs including more decentralized authority, fewer rules, and procedures, less precise division οf labor, wider spans οf control, and more personal means οf coordination. They are described as relatively loose systems in which a lot οf work is done through informal structures and networks οf interpersonal contacts. Organic designs recognize and legitimate these linkages and give them resources they need to operate best. They are also increasingly popular in the new workplace, where the demands οf total quality management and competitive advantage place more emphasis on internal teamwork and responsiveness to customers. Environment, strategy, technology, size, and people are all contingency factors influencing organizational design. Certain environments lend themselves to more vertical and mechanistic organizational designs. Uncertain environments require more horizontal and adaptive organizational designs. As for technology, including the use οf knowledge, equipment, and work methods in the transformation process is an important consideration in organizational design. Although organizations tend to become more mechanistic as they grow in size, designs must be used to allow for innovation and creativity in changing environments. Reference Schein, Edgar H.., From Brainwashing to Organizational Therapy: A Conceptual and Empirical Journey in Search οf ‘Systemic’ Health and a General Model οf Change Dynamics. A Drama in Five Acts, Organization Studies, Feb 2006; vol. 27 Read More