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ORGANISATIONAL BEHAVIOUR
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LEARNING OUTCOME : 02
Understand how organisational structures and culture impact
on the effectiveness of the organisation
LO 2.1 : Analyse the characteristics of differentorganisational structure
LO 2.2 : Evaluate the importance of organisationalculture theory in developing organisationaleffectiveness
LO 2.3 : Analyse the culture and structure of oneorganisation and evaluate how they impact on itseffectiveness
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WHAT IS ORGANIZATIONAL STRUCTURE?
According to STEPHEN P ROBBINS An organizational structuredefines how job tasks are formally divided, grouped andcoordinated.
According to FRED LUTHANS Organization structure represents theskeleton framework for organizational behavior.
Organizational structure is defined as the framework of tasks,
reporting and authority relationships within which an organizationfunctions.
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NEED FOR FORMAL ORGANIZATION
STRUCTURE
Facilitating Management
Encouraging Growth
Optimum Use of Technological Improvement
Encouraging Human Use of Human Beings
Stimulating Creativity
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Elements oforganization
structure
Department-alization
Chain ofcommand
Formalization
Span ofcontrol
Workspecialization
CentralizationandDe-
centralization
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Work Specialization
Work Specialization or Division Of Labor
refers to the degree to which activities in an
organization are subdivided into separate
jobs.
In essence, individuals specialize in doing part
of an activity rather than the entire activity.
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Departmentalization
The basis by which jobs are grouped togetheris called Departmentalization.
The various ways by which
Departmentalization can be done are:- Functional
Product
Customer
Geographic
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Chain of Command
Who reports to whom?
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Span of Control
How many people can a manager manage?
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Formal decision making authority is held
by a few people, usually at the top
Centralization
Decision making authority is
dispersed throughout the organization
Decentralization
Centralization and Decentralization
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FORMS OF ORGANIZATIONAL STUCTURES
The Line and Staff Organization Structure
The Functional Organization Structure
The Divisional Organization Structure
The Matrix Structure
The Project Organization Structure
Free form Organization Structure Network Organization Structure
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Line and Staff Organization Structure
Line DepartmentsSubstantive (direct) in its contribution toorganizations overall objective
Staff DepartmentsObjective (indirect) in its contribution to
organizations overall objective
Line and Staff conflict
Reasons of conflict are:
Difference in view points
Lack of separation between Line and Staff Lack of proper understanding of authority
Different background
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Functional Organization Structure
Traditional concept of organizing.
The basis of departmentation is the various
functions to be performed by the
organization.
Widely used in medium and large
organizations.
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Divisional Organization Structure
Also known as Profit Decentralization.
Organization is divided into fairly autonomous units.
Each unit is self contained and directly accountable tothe organization.
Basis of Divisionalisation
Product Divisionalisation
Territorial Divisionalisation Strategic Business Divisionalisation
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Product Divisionalisation
Vice President
Sales and
Marketing
Vice President
Research and
Development
Vice President
Materials
Management
CEO
Vice President
Finance
CannedSoups
Division
PDM
FrozenVegetable
Division
PDM
FrozenEntrees
Division
PDM
BakedGoods
Division
PDM
Centralized support functions
Divisions
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Matrix Organization Structure
It is the realization of two dimensionalstructure which emanates directly from two
dimensions of authority.
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Matrix Structure
CEO
Vice President
Engineering
Vice President
Finance
Vice President
Purchasing
Vice President
Sales and
Marketing
Vice President
Research and
Development
Product A
Manager
Product B
Manager
Product C
Manager
Product D
Manager
Product Team
Two-boss employee
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Project Organization Structure
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Free Form Organization
Also known as naturalistic, organic form of
organization structure.
Free form structures reduce the emphasis on
positions, departments and other formal
units, and on the organizational hierarchy.
Free form organizations are suitable for those
industries which have to work in highly
dynamic environments.
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Network organization structure
A recent innovation in organizationalarchitecture is the use of network structures.
A network structure is a cluster of different
organizations whose actions are
coordinated by contracts and agreements
rather than through a formal hierarchy.
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2003 Prentice Hall Inc. Allrights reserved.
What Is Organizational Culture?
Characteristics:
1. Innovation and risktaking
2. Attention to detail3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
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2003 Prentice Hall Inc. Allrights reserved.
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What Is Organizational Culture?
(contd)
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2003 Prentice Hall Inc. Allrights reserved.
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What Do Cultures Do?
Cultures Functions:
1. Defines the boundary between one organization
and others.
2. Conveys a sense of identity for its members.
3. Facilitates the generation of commitment to
something larger than self-interest.
4. Enhances the stability of the social system.
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2003 Prentice Hall Inc. Allrights reserved.
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What Do Cultures Do?
Culture as a Liability:
1. Barrier to change
2. Barrier to diversity
3. Barrier to acquisitions and
mergers
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2003 Prentice Hall Inc. Allrights reserved.
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Stages in the Socialization Process
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H O i ti l C lt H
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2003 Prentice Hall Inc. Allrights reserved.
How Organizational Cultures Have
an Impact on Performance and
Satisfaction
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Questions for Cultural Analysis
What is the background of the founders?
What explains the organizations growth andsurvival?
What does the organization stand for? Whatis its motto?
What values does the organization talk
about? What values does the organization act
about?leadershipcultivation.blogspot.com
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LIKERTS
Exploitive authoritative
In this style, the leader has a low concern for
people and uses such methods as threats and
other fear-based methods to achieve
conformance. Communication is almost
entirely downwards and the psychologically
distant concerns of people are ignored.
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Benevolent authoritative
When the leader adds concern for people to anauthoritative position, a 'benevolent dictatorship'is formed. The leader now uses rewards to
encourage appropriate performance and listensmore to concerns lower down the organization,although what they hear is often rose-tinted,being limited to what their subordinates think
that the boss wants to hear. Although there maybe some delegation of decisions, almost all majordecisions are still made centrally.
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Consultative
The upward flow of information here is still
cautious and rose-tinted to some degree,
although the leader is making genuine efforts
to listen carefully to ideas. Nevertheless,
major decisions are still largely centrally made
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Participative
At this level, the leader makes maximum use
of participative methods, engaging people
lower down the organization in decision-
making. People across the organization are
psychologically closer together and work well
together at all levels.
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Mintzbergs-
Five Generic Structures
There are five generic organisation structureswhich can be described in terms of the five-part
theory: Simple structure,
Machine bureaucracy,
Professional bureaucracy,
Divisionalised form,
Adhocracy
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SIMPLE STRUCTURE
The simple structure, typically, has
little or no techno structure, few supportstaffers,
a loose division of labour, minimaldifferentiation among its units, and a smallmanagerial hierarchy.
The behaviour of simple structure is notformalised and planning, training, and liaisondevices are minimally used in such structures
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Machine Bureaucracy
The design of a machine bureaucracy tends to be asfollows:
highly specialised, routine operating tasks;
very formalised procedures in the operating core;
a production of rules, regulations, & formalisedcommunication;
large-sized units at the operating level;
reliance on the functional basis for grouping tasks;
relatively centralised power for decision making; an elaborate administrative structure with sharp
distinctions between line and staff.
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Professional Bureaucracy
The professional bureaucracy relies for coordination on:
the standardization of skills and its associatedparameters such as design, training and instruction.
In professional bureaucracy type structures dulytrained and indoctrinated specialists -professionals- arehired for the operating core, and then considerablecontrol over their work is given to them.
Most of the necessary coordination between theoperating professionals is handled by thestandardization of skills and knowledge especially bywhat they have learned to expect from their colleagues
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Divisionalised Structure
Divisionalised form type organizations are
composed of semi-autonomous units - the
divisions. The divisionalised form is probably a
structural derivative of a Machine Bureaucracy -an operational solution to co-ordinate and
controls a large conglomerate delivering:
Horizontally diversified products or services
In a straight-forward, stable environment
Where large economies of scale need not apply
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Adhocracy Structure
Adhocracy includes a highly organic structure, with:
little formalization of behaviour;
job specialization based on formal training;
a tendency to group the specialists in functionalunits for housekeeping purposes but to deploythem in small, market-based project teams to dotheir work;
a reliance on connection devices to encouragemutual adjustment, the key coordinatingmechanism, within and between these teams
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