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irstmost important thing to know about <br />Organizational Design<br />“…there is no best structure available anywhere. There are no good or bad structures. There are only structures that match or do not match with the requirements of a strategy…”<br />
The purpose of the organizational design is to create the right structure, that fits the requirements of the strategy to be implemented.<br />Organizational change is meant to modify existing structures that have gone wrong over a period of time and no longer fit the requirements of the strategy being implemented.<br />
Organization Design<br />Dimensions<br />Structural Dimensions<br />“…describe the internal characteristics of an organization…”<br />2. ContextualDimensions<br />“…describestheorganizationalsettingthatinfluenceandshapesthestructuraldimensions…”<br />
sub-dimensions ofStructural Dimension<br />Formalization is the amount of written documentation, including procedures, job descriptions, regulations and policy manuals.<br />Specialization is the degree to which organizational tasks are subdivided into separate jobs.<br />Hierarchy of authority describes who reports to whom and the span of control for each manager. Span of control is the number of subordinates reporting to superior.<br />Centralization is the extent to which decision-making is done by the top management. Decentralization is the extent to which authority to make decision is delegated to lower levels of management.<br />Professionalism is the level of formal education and training of employees.<br />Personnel Ratios refer to deployment of people to various functions and departments. There could be administrative ratio, clerical ratio or ratio of indirect to direct labor employees.<br />sub-dimensions of Contextual Dimension<br />Environment<br />Goals and Strategy<br />Culture<br />Technology<br />Size<br />
Steps to development of an organizational design<br />Identification of key activities necessary to be performed for the achievement of objectives and realization of mission through the formulated strategy.<br />Grouping of activities that are similar in nature and need a common set of skills to be performed.<br />Choice of structure that could accommodate the different group activities.<br />Creation of departments, divisions, etc. to which the group of activities could be assigned.<br />Establishing interrelationship between different departments for the purpose coordination and communication.<br />
Organizational Change<br />Change, rather than stability, is the norm in contemporary organizations in India and the world.<br />Organizational change is the one major area where change is effected within organizations; the others being technology, products and services and culture.<br />Organizational change takes place along two broad dimensions: the structural changes and the accompanying behavioral changes. <br />Structural changes are related to modifications in structural relationships or creation or disbandment of departments or managerial positions.<br />The second type of change relates to the concomitant behavioral modifications, that are essential to absorb the impact of organizational changes.<br />In the past, when the environment was relatively stable , managers were content with making small, incremental, continual changes to resolve problems as they occurred. The perspective of the past may not be suitable in current environment that often requires big, radical and sudden changes.<br />