Organization structure

Koontz and Donnel have defined organizational structure as the establishment of authority relationships with provision for coordination between them, both vertically and horizontally in the enterprise structure. Organizational structure is the formal framework by which job tasks are divided, grouped, and coordinated.

Good organizational structure indicates the following:

Reporting hierarchy Orders, policies, procedures, rules and regulations.

Departments

Horizontal & vertical relationship Individual, group and departmental goals with time.

Coordination

Types of Organization structure

Organic form Mechanistic form

FORMS OF ORGANIZATION STRUCTURE

(a) Mechanistic form of organizational structure. An organizational structure based on formalized system that is relatively rigid in nature. This is generally applicable to those organizations that are not influenced by technological, product, market changes and generally maintains a constant pattern.

In mechanistic form of organizational structure, authority is centralized at the top level of management and has a rigid hierarchy of authority.

Decision making is generally reserved at the top level. The tasks are well defined so that the goals set by the top level management are attained smoothly.

The structure is characterized by plenty of written orders and instructions.

(b) Organic form of organizational structure. Organizations those are subject to change due to environmental factors like technology, market changes and product development generally adopt organic form of organizational structure. For example software industry. In such structures authority is delegated to various functional levels/individuals.

Decentralized decision making is practiced that allows people to make their own
decisions based on the environment and that they do not have to look over their shoulders.

Organizational Design

Organization Design

OD is the process of developing or changing an organizations structure Organization Design is a formal, guided process for integrating the people, information and technology of an organization. It is used to match the form of the organization as closely as possible to the purpose the organization seeks to achieve. Through the design process, organizations act to improve the probability that the collective efforts of members will be successful.

Typically, design is approached as an internal change under the guidance of an external facilitator. Managers and members work together to define the needs of the organization then create systems to meet those needs most effectively. The facilitator assures that a

systematic process is followed and encourages creative thinking.

OD process involves six key elements

Span of management.

Standardizati on

Departmentalization. Chain of command.

Centralization & Decentralization

Work Specialization

Types of Organizational Designs

Traditional Organizational Designs

Simple Structure - low departmentalization, wide spans of control, authority centralized in a single person, commonly used by small businesses as organizations increase in size, the structure tends to become more specialized and formalized

Functional Structure - groups similar or related occupational specialties together Divisional Structure - composed of separate divisions each division has relatively limited powers.

Contemporary Organizational Designs

Team-Based Structures
Learning Organization Matrix Structure

Boundary less Organization Autonomous Internal Units

Project Structure

Contemporary Organizational Designs

Team-Based Structures

Entire organization is made up of work teams. Employee empowerment is crucial teams responsible for all work activity and performance complements functional or divisional

structure in large organizations

Matrix Structure - assigns specialists from different functional departments to work on projects led by project managers adds vertical dimension to the traditional horizontal functional departments creates a dual chain of command, violates unity of

command, project managers have authority in areas relative to the projects goals,
functional managers retain authority over human resource decisions (e.g., promotions)

Project Structure - employees work continuously on projects employees do not return to a functional department at the conclusion of a project all work performed by teams comprised of employees with appropriate skills and abilities tends to be very fluid and flexible no rigid departmentalization or organization hierarchy managers serve as facilitators and mentors

Autonomous Internal Units Independent, decentralized business units each has its own products, clients, competitors, and profit goals business units are autonomous there is no centralized control or resource allocation.

Boundary less Organization - Design is not defined by, or limited to, the horizontal,

vertical, or external boundaries imposed by a predefined structure. This type of

organization seeks to eliminate the chain of command, to have limitless spans of control, and to replace departments with empowered teams flattens the hierarchy by removing vertical and horizontal boundaries.

Learning Organization This type of organizational design has developed the capacity to continuously adapt all members take an active role in identifying and resolving work-related issues practice knowledge management by continually acquiring and sharing new knowledge environment is conducive to open communication empowered teams are important leadership creates a shared vision for the future organizational culture provides sense of community

Organizational Culture

Organizational culture consists of norms, values and unwritten rules of conduct of an organization as well as management styles, priorities, belief and interpersonal behaviours that prevail.

Together they create climate that influences how well people communicate, plan and make decisions

Organizational culture originates from the founders of the organization based on value system held by

them. It is further passed on, down the line.

Organizational culture is also a function of the nature of work and goals of the organization. It is visible from the organizational structure.

Centralized command and control, strict hierarchy and fixed communication are indicative of formal

culture with little freedom of action and with slight attention to innovation and creativity.

While decentralized work culture will promote autonomy that will lead to greater job satisfaction.

Building Culture

Socialization of employees

Pre arrival stage

Encounter

Metamorphosis

Outcomes (Commitment & Productivity)

Guidelines to change culture

Cummings & Worley give the following six guidelines for cultural change: 1. Formulate a clear strategic vision: In order to make a cultural change effective a clear vision of the firms new strategy, shared values and behaviors is needed.

2. Display Top-management commitment :It is very important to keep in mind that

culture change must be managed from the top of the organization, as willingness to
change of the senior management is an important The top of the organization should be very much in favor of the change in order to actually implement the change in the rest of the organization.

3. Model culture change at the highest level :

In order to show that the management team is in favor of the change, the change has to be notable at first at this level. The behavior of the management needs to symbolize the kinds of values and behaviors that should be realized in the rest of the company. It is

important that the management shows the strengths of the current culture as well, it must
be made clear that the current organizational does not need radical changes, but just a few adjustments.

4. Modify the organization to support organizational change . Culture eats change for breakfast! Your three options are: 1) change the change 2) change the culture, or 3) prepare to fail.

5. Remove obstacles and bureaucratic practices. You will gain respect and credibility by breaking the chains of bureaucracy. By freeing people from unnecessary rules and procedures, you clear the way for them to show initiative.

Your people will have a difficult time contributing to the new cause if they are bind by the old, rituals and rules.

6. Select and socialize newcomers and terminate the unfits: A way to implement a culture is to connect it to organizational membership, people can be selected and terminate in terms of their fit with the new culture.

7. Develop ethical and legal sensitivity : Changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners.

Change of culture in the organizations is very important and expected. Cultural innovation is bound to be more difficult than cultural maintenance. People often resist

changes hence it is the duty of the management to convince people that likely gain will
outweigh the losses.

Organizational Change & Development

In an organization, it is very essential to have regular changes and development in order to bring effectiveness. Organization brings a change mainly because of planned and unplanned change. However, there are external as well as internal forces, which also contribute towards bringing a change in the organization. Sometimes organization is

resistant to change. This is mainly because of direct costs, saving, fear of the unknown,
breaking routines. Thus, an organization has to take into consideration various factors in order to have a successful change

Organizational development is a long term efforts, led and supported by top management to improve an organizations visioning, empowerment, learning and problem solving processes,

through an ongoing, collaborative management with special emphasis on the culture of intact
work teams and other team configurations.

Organizational development is a planned process of change in an organizations culture through utilization of behavioral science technologies.

Objective of Organizational Development

1. 2.

Individual and group development. Development of organizational culture and processes by constant interaction between members irrespective of levels of hierarchy.

3. 4. 5. 6.

Inculcating team spirit. Focus of value development.

Employee participation and problem solving and decision making at various levels.
Evaluate present systems and introduction of new systems thereby achieving total system change if required.

7.

Transformation and achievement of competitive edge of the organization.

8.

Achieve organizational growth by total human inputs by way of research and

development, innovations, creativity and exploiting human talent.

RESISTANCE TO CHANGE
Job Security

New Practices

Lack of Communication

Technology

Rapidity and Extent of Change

Loss of Power

Group Phenomenon

Emotions

STEPS IN MANAGING CHANGE

Evaluation & Feedback Develop new goals and objectives

Implementation of Plan

Select an agent for change

Strategy for implementation

Diagnose the problem

Develop Plan

Select Methodology

 Change agent are factors that are responsible for

the change in individual behaviour.