Organization Structure and Process

Topic : Organization Structure & Process

Organization Structure

•

It refers to the formal, established pattern of

relationships amongst the various parts of a

firm or any organization.

•

Organizing is the formal grouping of activities

and resources for facilitating attainment of

specific organizational objectives. It is possible

to achieve objectives without formally

organizing, but there is likely to be wastage of

resources and time.

Elements of an OS

•

Organization chart & Job Description

•

Differentiation(tasks assigned to different

people & departments)

•

Integration (coordinated activities)

•

Authority System(power, status)

•

Administrative system(policies, procedures)

•

Flow of Information & Communication N/W

Formal & Informal Organization

•

The formal structure delineates specific

departments, activities, people and their

reporting relationships.

•

The informal structure refers to the social

groups or friendships which people working

together may form.

Formal Vs Informal Organizations

•

Have planned

structures

•

Deliberate attempts to

create patterned

relationships

•

Usually shown by a

chart

•

Traditional theory

advocates formal

organization

•

Not formally planned

•

Arise spontaneously as

a result of interactions

•

Not depicted in a chart

•

Human relations theory

stresses informal

organization

Factors influencing the choice of

structure

•

Impact of environment (economic, social,

cultural, political, and legal sub-systems)

•

Impact of technology

•

Impact of psychosocial characteristics

(demand of leisure time, worker rights)

Degree of Decentralization

•

Centralization refers to the concentration of

authority and decision making in one single

position in the organization. (Real time

information through adaption of technology)

•

Decentralization is effective when conditions

in each market are so different that only a

high degree of adaption to local conditions

will lead to success.

•

Line (There is a direct relationship of

command from superior to subordinate) and

Staff(more advisory in nature) Relationships

•

Specialisation of work

•

Scalar principle & Unity of Command

•

Span of Control & Levels of Management

MANAGEMENT

MANAGEMENT

Contents



Meaning



Definition



Nature



Functions



Levels and type of managers



Task of a manager



Essential managerial skills



Managerial roles

Meaning

Management is the act of

getting things done by a

group of people with the

effective utilisation of

available resources. A

minimum of two persons

are essential to form a

management.

What is Management?

•

Management as key group

    In-charge of organisational affairs, Making organisation a

purposeful and productive entity. Brings together/

integrates the resources.

•

Management as set of functions

     The functions include Planning, Organising, Directing,

Staffing and Control. Determine goals and activities helps

in allocation of tasks and resources.

•

Management

      Management is an influence process to make things

happen, to gain command over phenomena, to induce

and direct events and people in a particular manner.

Definitions of Managemt



John.F.Mee - Management is the act of securing

maximum results with a minimum of efforts so as to

secure maximum prosperity for the employer and the

employee and give the public the best possible service.



 Henry Fayol - To manage is to forecast and plan, to

organise , to command, to co-ordinate and to control.



Kreitner - Management is the process of working with and

through others to achieve organizational objectives in a

changing environment. Central to this process is the effective

and efficient use of limited resources.

Definitions of Managemt

•

F.W.Taylor - Management is the art of knowing

what you want to do in the best and cheapest

way.

•

Koontz and Weihrich - Management is the

process of designing & maintaining an

environment in which individuals, working

together in groups, efficiently to accomplish

selected aims.

I.

As managers, people carry out the managerial

functions of planning, organising, staffing, leading,

directing, coordinating and controlling.

II.

 Management applies to any kind of organization.

III.

It applies to managers at all organizational levels.

IV.

The aim of all managers is the same : to create

surplus.

V.

The Management is concerned with productivity ;

this implies effectiveness and efficiency. (As Peter

Drucker puts it, efficiency means “doing things right”

and effectiveness means “doing the right things.

Productivity, Effectiveness, and

Efficiency

•

Successful companies create a surplus through

productive operation.

•

P=(O/I) within a time period, quality considered

•

P can be improved

•

1. By increasing outputs with the same inputs

•

2. By decreasing inputs but maintaining the same

outputs

•

3. By increasing outputs and decreasing inputs to

change the ratio favorably

•

P implies effectiveness and efficiency in

individual and organizational performance.

•

Effectiveness is the achievement of objectives.

•

Efficiency is the achievement of the ends with

the least amount of resources.

What is Management?

Management is what managers do. It is the process

of getting things done, effectively and efficiently,

with and through other people.

Efficiency means doing a task correctly (“doing

things right”) and getting the most output from the

least amount of inputs.

Effectiveness means “doing the right things” by

doing those work tasks that help the organization

reach its goals.

Whereas efficiency is concerned with the 

means

 of

getting things done, effectiveness is concerned with

the 

ends

, or attainment of organizational goals.

Managerial skills and the

organizational hierarchy

•

Conceptual skill (deals with ideas and vision)

•

Human skill (cooperative effort & team work of people)

•

Technical skill (methods, processes,  and procedures to

do a job)

•

Growing Together

- If the people working in a company

grow, the company’s growth will take care of itself.

People work for people. Bring out each other’s

potential; help others. Accept to be challenged and to

be helped. Together we grow, Together we can.

Art of Getting Things Done

•

Mary Parker Follett – Management is the art of

getting things done through others.

•

Harold Koontz – Management is the art of

getting things done through and with people in

formally organized groups.

•

Networking & Teamwork –

 Leverage works. You

can achieve 100 times more through a team or

network of people than you can do it all by

yourself. Teamwork means coming together,

working together, achieving more, the ability to

direct individual accomplishments towards

organizational objectives.

Management as a Process

•

Henry Fayol – To manage is to forecast and plan,

to organise, to command, to co-ordinate, and to

control.

•

Louis Allen – Management is what a manager

does.

•

Everything has to Planned

 – Month-by-month,

day-by-day, minute-by-minute everything has to

be planned, nothing happen by accident. As by

failing to prepare, you are preparing to fail and if

you plan, you can even fly a plane! As it is rightly

said, people don’t plan to fail, they fail to plan.

Management

As A Discipline

•

It is used to connote neither the activity nor the

personnel who performs it, but as a body of

knowledge, a practice and a discipline.

•

It is treated both as an art as well as science. An

art is often regarded as the systematic application

of skill or knowledge in effecting accomplishment

of results.

•

It is regarded as a science because it has

developed certain principles, and techniques

which have more or less universal application.

•

‘science’ will be meaningless and lifeless, if the

‘art’ is forgotten.

Natures

1.

Management is both an art and a

science.

2.

Management is an activity.

3.

Management is a continuous process.

4.

Management achieving pre-determined

objectives.

5.

Management is a factor of production.

6.

Management is needed at all levels.

7.

Management aims at maximising profit.

8.

Decision-making.

9.

management is universally applicable.

10.

Direction and control.

Functions

1.

Planning

- Deciding in advance that

which will be done in the near

future.

2.

Organising

- Distribution of work in

group wise or section wise for

effective performance.

3.

Staffing

- Staffing refers to

placement of right persons in the

right jobs.

4.

Directing

- Directing includes

guidance , supervision and

motivation of employees.

5.

Co-ordinating

- The organized

group activities are co-ordinated

towards the achievement of

objectives of an organisation.

6.   

Motivating

- Motivation increases the speed of

performance of a work and developing a

willingness on the part of the workers.

(incentives  , fair treatment etc.)

7.

Controlling

- Ensuring that achieved objectives

conform to pre-planned objectives.

8.

Innovation

- Preparations of personnel and

organisation to face the changes made in the

business world.(developing new materials, new

products , new techniques etc.)

9.

Representation

- A manager has to act as a

representative of the company.

10.

Decision-making

- It helps in the smooth

functioning of an organisation.

Levels of managers



The top level managers 

:- A small

group policy makers and their

responsibility is to develop the

objectives and strategies of the

organization.



The middle level managers 

:-  Have a

number of responsibilities and linking

activities. They directs the activities of

the first level managers.



The first level managers

:- Direct

contact with the employees,who

usually produce goods or service

outputs of an organization. They

referred to as supervisors or foremen in

some organizations.

Task of a manager

1.

Maintaining firm’s  efficiency in

terms of profit generation.

2.

Meeting the challenge of

increasing competition.

3.

Managing for innovation.

4.

Building human organisation.

5.

Sustaining leadership

effectiveness.

6.

Postponing managerial

obsolescence

7.

Coping with increasing level of

aspiration.

8.

Maintaining relations with various

society segments.

Managerial skills

1.

Planning skills

:-

•

Being able to think ahead,

•

Forecast future

environmental trends

affecting the organisation,

•

State organisational

objectives,

•

 Choose strategies that will

help in attaining these

objectives,

2.  

Organising skills

:-

•

Analyse and describe

various organisational jobs,

•

Select ,train and induct

people in jobs,

•

Define authority and span of

control amongst people.

3.  

Leading skills 

:-  Leading people requires that

leader must understand the values, personality,

perception and  attitudes  of these people. These

concepts varies from person to person.

4.   

Controlling skills 

:- The skills of controlling

consists of actions and decisions which managers

undertake to ensure that the actual results are

consistent with desired results.

5.   

Decision-making skills 

:-  A manager’s effectiveness

lies in making good and timely decisions.

      for any decision the manager have to –

•

Identify and define the problem

•

Develop alternative decision

•

Select the decision which will solve the problem

and Implement that decision.

Managerial skills at various levels

1.

Conceptual skills 

:- It deals with

ideas. Ability to see the organization

as a whole and it includes

recognizing how the various

functions of the organization

depend on one another. It requires at

the top level.

2.

Human skills 

:- It deals with people.

Human skill is the manager’s ability

to work effectively as a group

member and to build cooperative

effort within the team he leads.

3.

Technical skills 

:- It deals with jobs.

Ability to work with resources in a

particular area of expertise. It

requires in the lower level.

Managerial roles

   Henry 

Mintzberg isolated

10 roles that are common to

all managers which

grouped in to 3 categories-

Interpersonal ,

informational and

decisional roles.

1.

Interpersonal roles 

:-

There are three

interpersonal role that a

manager plays i.e.

(a)figurehead (b) leader

and (c) liaison.

2.

Informational roles 

:-  Every manager is a

clearinghouse for information relating to the task

at hand. It includes- (a) nerve centre or monitor

(b) disseminator and (c) spokesperson.

3.

Decisional roles 

:- In their decisional roles,

managers balance competing interests and make

choices. Through it strategies are formulated and

put in to action. (a) entrepreneurial - set patterns,

initiates changes, take calculated risks (b)

disturbance handler – conflicts both internal &

external (c) resources allocator – balanced

growth and (d) negotiator – agreements, terms &

conditions with customers, suppliers and other

external agencies, trade unions.

Qualities of a Manager (Physical)

•

Impressive

•

Maintained throughout the career

•

Good appearance, Sound health

•

Cheerful disposition(preparation, readiness)

•

Stamina, Posture, Promptness

•

Dress & cleanliness

Qualities of a Manager (Mental)

•

Alertness, Tactful, Ability to judge, Maturity

•

Farsightedness (Knowing well in advance)

•

Initiative, Good decision-maker, Sharp memory

•

Ambitious, Self-confidence, Tolerance,

•

Sincerity,  Adaptability, Judgment

•

Dependable (worthy of reliance/trust)

•

Ability to understand & learn

•

Mental vigour (active strength of body & mind)

Qualities of a Manager

(Social & Moral)

•

Honesty

•

Good character

•

Willingness to accept responsibility

•

Loyal

•

Integrity

•

Dignity

•

Initiative

Qualities of a Manager (Other)

•

Education

•

Training

•

Communication

•

Relationship management

•

Mentor

•

Special knowledge (peculiar to the function, be it

technical, commercial, financial,managerial etc.)

•

Knowledge/Experience arising from the work

Evolution of Management Thought

Classical School of Management Thought (1850-1950)

(emerged from the Industrial Revolution)

CMT is based on the belief that workers only have

physical & economic needs. It does not take into account

social needs or job satisfaction, but instead advocates a

specialization of labor, centralized leadership and

decision-making, & profit maximization. It focuses on

the efficiency of employees & on improving an

organization’s productivity through quantitative (i.e.,

measurable, data driven) methods.

i)

Scientific Management (Taylor)

ii)

Administrative Management (Theory) (Fayol)

iii)

Bureaucracy (Weber)

i)Scientific Management

•

Frederick Winslow Taylor (1885-1915) “Father of

Scientific Mgmt” : The fundamental principles are

as follows

1.

Replacing rules of thumb with science

(organized knowledge) Estimates vs Precise

2.

Obtaining harmony in group action, rather than

discord. (give & take situation)

3.

Achieving cooperation of human beings rather

than chaotic individualism.(Mgmt & Workers)

4.

Working for maximum output, rather than

restricted output. (surplus)

5.

Development of workers (scientific training)

‘ONE BEST WAY’ OF PERFORMING A JOB

(production efficiency, productivity of

employees and profits)

•

Time Study (work study in modern management)

•

Functional Foremanship (Supervisors for

planning should be different from supervisors

responsible for execution)

•

Differential Rate System (higher rate for hard

work)

•

Routing System (sequence of activities)

Henry  L. Gantt (1861-1919)

(task-and-bonus system & Gantt chart)

•

Revised differential price rate system

•

Workers daily work progress rated and

publicly displayed

•

Devised chart for production scheduling

•

An effective planning & control technique

Frank & Lilian Gilbreth

•

To reduce worker fatigue(to lose strength or

energy), promote efficiency and complete the

jobs in less time.

•

Promoting individual worker’s welfare.

•

Gilbreth proposed a three-position plan of

promotion according to which the employee

trains his successor, performs his present job, &

prepares for the next highest one in the mgmt

hierarchy, all at the same time.

Contribution of Scientific Management

•

Stoner stated the SM not only developed a

rational approach to solving organizational

problems but also pointed the way to

professionalization of management

•

Adoption of SM  with ‘division of work’ and

‘one best way’ at its core.

Limitations of Scientific Management

•

Mechanistic & impersonal approach

(emphasis on production output)

•

Lack of attention to psychological needs

(interpersonal relationships among workers

were absent)

•

Job monotony

•

Use a device for exploitation (undesirable

pressure)

•

Unscientific and antisocial (feared of jobs)

ii) Administrative Management

•

Henri Fayol (1841-1925) a French factory

owner & engineer proposed the activities in

the organization are:

•

Technical (production)

•

 Commercial (purchase & sales)

•

Financial (source and control of capital)

•

Security (protection of property & employees)

•

Accounting(balance sheet, records & costing)

•

Administrative (Planning, Organizing,

Commanding, Coordinating, Controlling)

Fayol’s Principles of Management

1.

Division of work

2.

Authority & Responsibility

3.

Discipline

4.

Unity of command(one superior only)

5.

Unity of direction(one head one plan for a group

of activities having similar objectives)

6.

Subordination of individual interest to general

interest

7.

Fair remuneration to workers

Fayol’s Principles of Management

8. Centralization

9. Scalar chain(gang plank)

10. Order(‘a proper place for everything  or everything in its

right place’ and ‘a place for everyone and everyone in his

appointed place’)

11. Equality

12. Stability of tenure of personnel

13. Initiative(to suggest ideas and new methods)

14. Esprit de corps (Cooperation & team work can bring

harmony & unity within the organization. Fayol was

against the policy of ‘divide & rule’ & ‘abuse of written

communication’)

iii. Bureaucracy (Max Weber)

Characteristics of Weberian Bureaucratic model)

1.

Division of labour/work

2.

Hierarchical structure  &  authority

3.

Rules & Regulations (standardization, equality, and

save time & effort)

4.

Impersonal conduct

5.

Appointment based on competence and not on

nepotism

6.

Staffing

7.

A system of procedures for dealing with situation.

(Recorded in writing)

2.Neo Classical School of Management

Thought (The Human Relations Approach)

Hawthorne Experiment

1.

An organization is a social system with a culture

of its own.

2.

Informal groups have a great impact on workers

productivity.

3.

There are frequent conflicts between the

organization and the individuals.

4.

Friendly & liberal supervision has a favorable

influence on human efficiency at work.

2.Neo Classical School of Management

Thought (The Human Relations Approach)

Hawthorne Experiment

5. Free flow of communication in the

organization creates cordial relationship &

good relations.

6. Non-economic rewards such as praise, status,

inter-personal relationships play a crucial role

in motivating workers.

Behavioural Science Approach(A.H. Maslow,

Douglas McGregor, Frederick Herzberg)

•

It is an interdisciplinary approach (Knowledge)

•

Organization as a social system

•

Individuals differ in terms of personality, belief, attitude,

value, perception etc.

•

Informal groups exercise great influences on the attitude,

behaviour & performance of the employee.

•

New areas like motivation, leadership, communication,

change & development, group dynamics dominate the core

concept of management.

•

Workers were treated like human beings instead of

machine operators.

Contribution of Abraham Maslow

(US psychologist) Hierarchy of needs

•

Physiological needs such as food, cloth, shelter

•

Safety needs such as job security, insurance,

safety

•

Social needs such as contact with friends,

membership of groups

•

Esteem/Ego needs (status, recognition, power,

achievements etc.)

•

Self-actualization needs (meaningful life, learning

new skills, taking challenges, personal growth)

Contribution of Douglas McGregor

•

Theory X - It is a traditional view which holds

that work is distasteful to employees, who

must be motivated by force, money or praise.

•

Theory Y  - This theory assumes that people

like work and view it as an opportunity to

develop their creative capabilities and derive

satisfaction from doing good work.

Major contributions of Behavioural Scientists

•

People do not dislike work, If they have helped to

establish objectives, they will want to achieve

them.

•

Most people can exercise a great deal of more self

direction, self control, and creativity than those are

required in their current jobs (T-Y).

•

The manager’s basic job to use the untapped

human potential in the service of the organization.

•

The manager should create a healthy environment.

Renis Likert’s Management(Leadership) Styles Approach

(Institute of Social Sciences, Michigan,USA)

•

Exploitative autocratic (no confidence on

workers, hence minimal participation)

•

Benevolent autocratic (Senior & subordinates

have a master servant relationship)

•

Participative(Subordinates allowed to

participate in decision making)

•

Democratic (Leaders have full confidence on

their subordinates)

Quantitative or Management Science

School (World War II)

•

Focused on optimal utilization of resources

with help of quantitative modeling and

analysis.

•

This approach yields best result when it is

used with qualitative and relational

judgements.

3. Modern Management Theories

(William G. Scott)

1. The Systems approach (System & subsystem, Open

& closed systems, boundary, Flow, Feedback,

Synergy, Static & dynamic, Goal seeking)

2.Contingencies approach (Situational Theory)

(Circumstances in the organization’s external

environment. The internal strengths & weakness of

the organizations. The values, goals, skills and

attitude of the managers and workers in the

organization. The type of tasks, resources and

technologies the organization uses.)

Dynamic Engagement Approach

(Stoner, Freeman & Gilbert)

i.

New Organizational Approach (internal as

well as external environment)

ii.

Ethics & Social Responsibility

iii.

Globalization (borderless, equidistant)

iv.

Organizational Re-engineering (BPR)

v.

Multiculturalism

vi.

Focus on Quality (TQM)

Think Positive…Believe in Yourself

He who dares wins. Don’t be afraid of

failures. So Think Big. Think positive and

become a Winner. If you believe you can,

you probably can. What drives a great

organization? A positive Attitude and a

strong belief in one’s capabilities.

The Value of Commitment

Nothing happens without Commitment. It

is Commitment, not chance, that

determines success in today’s competitive

world . Be Committed to success. The

characteristics of today’s high performers

is that they are Committed.

The Power of Communication

The more we connect, the better we relate to

each other and the more we can achieve for

ourselves. Speaking about things that trouble

us is a good approach to sort out matters and

strengthen the bond that exists. When we do

not communicate, we build negative energy

and erode our self confidence.

Strategies for Success

Think cost as fuel for growth. Achieve a

competitive cost structure to differentiate

your offerings and enter new market. Innovate

faster to retain customers. Co-create with

customers and partners, undertake cutting

edge research in global R & D centres. Harvest

information to create profit, improve

efficiency and identify new revenue

opportunities.