Organization and its

Context

Organization
An organization is a group of people bound
together to provide unity of action for the
achievement of a predetermined objective.
An organization can be seen as an entity.

"Organization involves the grouping of

activities necessary to accomplish goals and
plans, the assignment of these activities
to appropriate departments and the provision
of authority, delegation and coordination.
Koontz and O'Donnell

Kinds of Organisation
Formal Organisation- It is a planned
pattern of group behaviour designed to
achieve an objective.
Informal
Organisation - the human
interaction that occurs simultaneously and
naturally without overt influence.

Formal Organisation

Informal Organisation

1. Established with the explicit

aim of achieving well-defined
goals.

1 . Springs on its own. Its goals

are ill defined and intangible.

2. Bound together by authority 2. Characterised by a

relationships among members. generalised sort of power
relationships.
3. Recognises certain tasks
and
activities which are to be
carried out to achieve its goals.

3. Informal organisation does

not have
any well-defined tasks.

4. The roles and relationships of 4. The relationships among

people are impersonally
people are
defined
Interpersonal.

Formal Organisation

Informal Organisation

5. Much emphasis is placed on

efficiency, discipline, conformity,
consistency and control.

5. Characterised by relative freedom,

spontaneity,
homeliness and warmth.

6. The social and psychological

needs and interests of members of the
organisation get little attention.

6. The sociopsychological
needs, interests and aspirations of
members get priority.

7. The communication system

follows certain pre-determined
patterns and paths.

7. The communication pattern is

haphazard,
intricate and natural.

8. Relatively slow to respond and

adapt to changing situations and
realities.

8. Dynamic and very vigilant. It is

sensitive to its surroundings.

ORGANIZATIONAL ENVIRONMENT
Set of forces and conditions that are outside the
organizations boundaries and have the potential
to affect the way the organization operates and
the way managers engage in planning and
organizing.
An organizations external environment can
generally be divided into two major categories:
1. The task environment is the set of forces
that affect an organizations ability to obtain
inputs and dispose of its outputs.
2.The general environment that affect the
organization and its task environment.

General environment

Economic conditions - interest rates, inflation rates,

changes in disposable income, stock market fluctuations, and
the general business cycle.
Political/legal conditions
-general political stability of
countries in which an organization does business and the
specific attitudes that elected officials have toward business.
Sociocultural conditions - changing expectations of society.
Societal values, customs, and tastes can change, and managers
must be aware of these changes.
Demographic conditions- physical characteristics of a
population (e.g., gender, age, level of education, geographic
location, income, composition of family)
Technological conditions - changed more rapidly than any
other element of the general environment.
Global factors
-global competitors and global consumer
markets.

THE TASK ENVIRONMENT

Suppliers
Distributors
Customers
Competitors

Organization Environment
Relationship

Environment create uncertainty for

Organizations and they must respond to
adapt or to influence the environment.

Adapting to Environment

Managing Environment
Forces in the Task and General Environments.

Organization and society

Social
ResponsibilityManagements
Obligation to make choices and take actions
that will contribute to the welfare and
interests of society as well as the
organization.

Organisation Structure

An organisation structure shows the

authority and responsibility relationships
between the various positions in the
organisation by showing who reports to
whom.

Peter Drucker has pointed out three specific

ways to find out what kind or structure is
needed to attain the objectives of a specific
business:

Activities Analysis
Decision Analysis
Relations Analysis:

ORGANISATIONAL CULTURE
The organizational culture is a system of
shared beliefs and attitudes that develop
within an organization and guides the
behaviour of its members.
The corporate culture consists of the
norms, values and unwritten rules of
conduct of an organization as well as
management styles, priorities, beliefs and
inter-personal behaviour that prevail.

Basic Elements of Culture

Artefacts: - things that come together to
define a culture and reveal what the culture
is about to those who pay attention to
them. They include products, services, and
even behaviour patterns of the members of
an organization.
Espoused Values: things worth doing, or
the reasons for doing what we do. Values
are the answers to the why questions.
Basic Assumptions: the beliefs that
organization members take for granted.

Successful Organisational
Culture

Adaptability: is the ability to notice and respond

to changes in the organizations environment.
Involvement: In cultures that promote higher
levels of employment in decision making
employees feel a greater sense of ownership and
responsibility.
Clear Mission: Mission is a companys purpose
or reason for existing.
Consistency:
In
consistent
organizational
cultures, the company actively defines and
teaches organizational values, beliefs and
attitudes.

Dimensions of an
organizations culture
Innovation and risk taking
Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability

Process
Culture is transmitted and learned by
employees principally through :
stories,
rituals,
material symbols,
language

Strong versus Weak

Cultures
Organizational factors such as size, age,
employee turnover rate, and intensity of
original culture.
A culture has increasing impact on what
managers do as the culture becomes
stronger.

Strong
cultures
are
found
in
organizations where key values are
intensely held and widely shared.

Internal environment

The internal environment, consists of the

forces operating within an organization and
stemming from the organizations structure
and culture.

Impact on Organization
Structure

They give an organizational identity to employees a defining

vision of what the organization represents.
Organizational culture are an important source of stability and
continuity to the organization, which provide a sense of security
to its members.
Knowledge of the organizational culture helps newer
employees interpret what goes on inside the organization, by
providing an important context for events that would otherwise
seem confusing.
Culture helps to stimulate employee enthusiasm for their tasks
by recognizing and rewarding high-producing and creative
individuals, thereby identifying them as role models to emulate.

Culture is what gives birth to and defines the organizational goals