Organisational relations and dynamics

1. Organisational Relations and Dynamics
Concept of Organizational Structure
Organizational Structure defines how job tasks are formally divided, grouped
and coordinated. An organizational design is the overall set of structural
elements and the relationship among those elements used to manage the total
organization. It is a means to implement strategies and plans to achieve
organizational goals. Managers need to address six key elements when they
design their organization’s structure: work specialization, departmentalization,
chain of command, span of control, centralization and decentralization, and
formalization.

2. Six key questions that managers need to answer in designing the proper
organization structure
Work specialization To what degree are tasks subdivided into separate
jobs?
Departmentalization On what basis will jobs be grouped together?
Chain of command To whom do individuals and groups report?
Span of control How many individuals can a manager efficiently and
effectively direct?
Centralization and
decentralization
Where does decision making authority lie?
Formalization To what degree will there be rules and regulations to
direct employees and managers?

3. Common organizational Designs
The simple Structure
The simple structure is not elaborated. It has a low degree of
departmentalization, wide spans of control, authority centralized in a single
person, and little formalization,. The simple structure is ‘flat’ organization; it
usually has only two or three vertical levels, a loose body of employees, and
one individual in whom the decision- making authority is centralized. The
strength of the simple structure lies in its simplicity. It’s fast, flexible,
inexpensive to maintain, and accountability is clear.

4. One major weakness is that it’s suitable for only
small organizations. But it does not mean that it
is strictly limited to small organizations, it’s just
harder to make it work effectively in larger firms.
It becomes increasingly inadequate as an
organization grows because it has low
formalization and high centralization tend to
create information overload at the top.

5. As size increases, decision making typically
becomes slower and can eventually come to a
stand still as the single executive tries to
continue making all the decisions. The simple
structure’s other weakness is that it is risky:
Everything depends on one person. Death,
bankruptcy, madness, destroy the organization’s
information and decision making center.

6. 2.Bureaucracy
Max Weber developed this design of the
organization. The Webbrian perspective
suggests that a bureaucracy is a model of
organization design based on a legitimate and
formal system of authority. This model is also
regarded as ‘red tape’/ rigidity. Weber viewed
the bureaucratic form of organization as logical,
rational and efficient. According Weber, the
ideal bureaucracy exhibits five basic
characteristics:

7.  The organization should adopt a distinct division of labor, and
each position should be filled by an expert.
 The organization should develop a consistent set of rules to
ensure that task performance is uniform.
 The organization should establish a hierarchy of positions or
offices that creates a chain of command from the top of the
organization to the bottom.
 Managers should conduct business in an impersonal way and
maintain an appropriate social distance between themselves
and their subordinates.
 Employment and advancement should be based on technical
expertise and employees should be protected from arbitrary
dismissal.

8. The bureaucracy is characterized by highly
routine operating tasks achieved through
specialization, very formalized rules and
regulations, tasks that are grouped into
functional department, centralized authority,
narrow spans of control, and decision making
that follows the chain of command

9. The best examples of bureaucracies today are
government agencies and colleges. As these
organizations have to deal with a large number
people in equal and fair manner rules,
regulations, and standard operating procedures
are needed.
A primary strength of bureaucracy model is that
several of its elements improve efficiency
because of being performed standardized
activities depending upon the fixed rules and
regulation, it results in economies of scale

10. It also has several disadvantages like-
Bureaucratic model is inflexible and rigid, it is
too hard to change the rules once it is
determined. It also neglects the humanity and
social part of the human life.
3. Matrix Organization Structure:- This type of
structure is also called as project organization ,
grid organization or multiple command system.
It is mixed form of organization in which
functional and departmental/project forms
overlap.
especially matrix structure integrates the
efforts of the functional and project authority.

11. The authority of the functional manager
flows vertically down from the superior to the
subordinate. And the project authority flows
horizontally crossing vertical line. In this
structure each subordinate works under two
superiors. As such this structure does not follow
the principle of unity of command.

12. General
Manager
Manager
Projects
Manager
Production
Manager
Marketing
Manager
Finance
Manager
Personnel
Project A
Production
group
Marketing
group
Finance
group
Personnel
group

13. Advantages
 The matrix structure is an efficient means for
bringing together the diverse specialised skills
required to solve a certain problem.
 Problem of coordination , which is faced by many
organisations , are minimized. Because in it most
employee works together as a team , such problems
do not arise.
Employees learn each others job better while
working together and importance of such jobs in
achieving the objectives.
 It gives flexibility to organisation. Organisational
resources can be used in more effective and flexible
manner.

14.  Sufficient time for top level management.
Disadvantages
 In practice it is very difficult for employees to
adopt and adjust with matrix structure.
 As there is violation of unity of command ,
employee may face the situation of conflict.
 As this structure is costly because functional
and projects manager’s financial facility is to
be paid.
 Lack of commitment and difficult to balance.

15. 4. Team Structure:- Team organizational structure is
that where emphasis is given on project type teams
having little and some cases no functional hierarchy.
Further team structure is a design in which an
organisation is made up of teams and each team
works towards a common goal. Since the
organisation is made up of groups to perform the
functions of company , team must perform because
they are held accountable for their performance.
In a team structure there is no hierarchy or
chain of command. They are given power so they
can work the way they want to.

16. A team generate positive synergy through
coordinate effort. Fig.

17. Advantages
 Collective goal setting.
 Mutual trust
 Effective communication
 Decision by understanding
 Self directing
Flexible in operation
Disadvantages
 Source of conflict
 Difficult to coordination
Lack of effective control

18.  More interdependence
 Complex in decision
 Spoil in human relation
5. Virtual / Network organisation:- With an
objective of eliminating the unnecessary
department and to perform specialised works
through outsource expert network structure is
designed. In network structure there is a very
small staff in head office to perform
administrative work. On the basis of necessity it
managed temporary workers and outsiders basic
support service to meet the demand of
changing situation.

19. Further , the management identifies its
core competencies and then outsources non
critical task to other organisation on the basis of
contract. At present world’s leading business
houses performs business through computer
network.
Corporate
office
Finance
Marketing
Production
Agencies
Banks
Suppliers

20. Advantages
 Eliminate over departmentalization
 Minimize administrative cost
 Benefit of specialization
 Flexible in operation
 Facilitates in concentration
Disadvantages
 Possibility of conflict
 Lack of secrecy
 Difficult to coordinate
 Increase dependency
 Loss of control

21. 6. Boundary less organisational structure:- In
boundary less structure there is no vertical and
horizontal level. It is not limited by boundary.
The contingency approach leads this approach.
This structure is not restricted by chain of
command and span of control as well.
Information are freely passed. For this computer
links the people.
Advantages
 Globalization , competition and strategic
alliances.

22.  Rapid technological change and innovation
Disadvantages
 Lack of coordination
 Chances of conflict
 Expensive


23. Organization Design and Behaviors
The effects of organization designs in employees
behaviors can be considered in terms of
• Work Specialization( Lowers job satisfaction
but increase productivity)
• Centralization ( Participative decision making)
• Span of control ( No relation between them)

24. Work Specialization( Lowers job satisfaction but
increase productivity):- When a human
repetitively performs same jobs than the
employee feel lower job satisfaction and
monotonous. Along with this there is also
chances of high productivity because of less
error and mistake.

25. • Centralization :- Definitely , in general less
centralized organization have a great amount
of autonomy. And autonomy appears
positively related to job satisfaction. But ,
again while one employee may value freedom
,another may find autonomous environment
frustratingly ambiguous.

26. • Span of control :- It is probably safe to say no
evidence supports a relationship between
span of control and employee satisfaction or
performance. Although , a large spans might
leads to higher employee performance
because they provide more distance
supervision and more opportunity for
personal initiative. Some people like to be
alone and some prefer security of boss.