Organisational Science Notes

7/25/2019 Organisational Science Notes

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CHAPTER 1

Def.- Organisational Science

An interdisciplinary science that deals with the study of the behaviour of

organisations, as well as the factors that determine this behaviour and the way

in which organisations can be managed most effectively.

Def.-Effectiveness

The extent to which such activities have succeeded is a measure of their

overall effectiveness. We expressly leave aside the matter of who should carry

out the tasks: it may be the organizations own formal management, or a

consultant, or a member of the advisory board, or even an employee who

cames up with a suggestion during a staff meeting.

Def.-Efficiency

The comparison of what is actually produced or performed with what can be

achieved with the same consumption of resources (money, time, labor, etc.). It

is an important factor in determination of productivity.

Leitmotif- Organisation as a machine or organism

Organisations as Machines

This picture of an organisation implies routine operations, well-defined

structure and job roles and efficient working working inside and between the

working parts of the machine i.e. the functional areas.

Procedures and standards are clearly defined and are expected to be adhered

to.

Key beliefs are:

should be divided into specific roles

Assumptions about organisational change;

y those in

positions of authority

ll planned and well controlled


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Organisations as Organisms

This metaphor sees the organisation as a living adpative system. It also

suggests that different environments favour different types of organisations

and that congruence with the environment is key.

For example in stable environments a more rigid bureaucratic organisation

might prosper whereas in more fluid changing environments a looser less

structured type of organisation would be more likely to survive.

Key beliefs;

ent parts of the system and its

environment is key to success

team and

organisational needs.

Assumptions about change;

environment

the need for

change in order to adapt

cessary strategies for

success


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Scientists on organisations (no names or def. Recognising modes of

thought in short case [ few sentences])

Period before the Indu strial

Revolut ion

First contributions by the ancient Greeks

(for example Socrates and Plato)

management

Machiavelli (Middle Ages)

mainly oriented towards preservation and expansion of power

Adam Smith (18th century)

productive labour is the source of prosperity

Scientif ic Management (Taylor)

Main features of Taylorism scientific analysis of the tasks based on

the study of time and movement (leading to standardisation)

far-reaching division of tasks (routine)

close collaboration between management and workers

management is responsible for the creation of production conditions

and working methodsright person in the right position


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introduction of performance-based pay

General Management Theory (Fayol)

Bureaucracy (Weber)

Characteristics of an ideal bureaucracy/organisation

strong division of tasks

hierarchical command structure

position more important than the person

written records

position is more important than the person

objective criteria and procedures

Human Relations (Mayo)

Counterpart of Scientific Management

Social relationships between people as central point

happy and satisfied people perform best professionally

importance of human factors on effectiveness

Revisio nism (Likert et al.)

Synthesis between

Scientific Management (organisation without people)

and

Human Relations (people without organisation)

Important contributions:


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Likert linking pin

Herzberg motivation theory (based on Maslow's hierarchy of needs)

McGregor theories X and Y

Maslow (Herzberg) - Pyram id

Hierarchy of needs

Motivation of people

Systems approach (Boulding)

An organisation consists of inseparable parts in interaction with the

outside world (environment)

Comprehensive approach to organisational problems


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Cont ingency approach

(Lawrence and Lorsch)

No one best way of management

Taylor en Fayol researched;

Conclusion: organisation is not related tosuccess! External factors are

of great importance, therefore responding to them is as well!

Situation (contingency) determines the best way of organising and

managing

Recent org anisat ional theories and management g urus

- Philip Crosbyquality assurance

- Henry Mintzbergbasic forms of organisation and Rise and Fall of

Strategic Planning

- Tom Petersmanagement principles for excellent business operations

- Peter Druckerknowledge as crucial production factor

- Michael Porterstrategy and competitive advantage

- Michael Hammerrestructuring business processes

Def.- Organisations

An organisation:

Every form of human collaboration for a common goal;

Three characteristics:


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It is about People who

Collaborate to reach

A certain Goal

Def.- Process;

A process can be seen as a series of activities that create value for the

customer.

Def. - Horizontal organisations

A horizontal organization has a less-defined chain of command. Employees

across lines have similar input into how the organization is run. Instead of

each person having clearly defined duties, employees may work in teams, with

everyone on the team having input. Employees may perform many different

function and may report to several supervisors, rather than a single boss.

Project managers or team leaders report to a team of supervisors, with

members of each team being essentially equal in terms of power.

Def.- Organisational structure;

Explicit and implicit institutional rules and policies designed to provide a

structure where various work roles and responsibilities are delegated,

controlled and coordinated. Organizational structure also determines how

information flows from level to level within the company. In a centralized

structure, decisions flow from the top down. In a decentralized structure, the

decisions are made at various different levels.

Def.- Vertical organisations

The vertical organization has a structure with power emanating from the top

down. There's a well-defined chain of command with a vertical organization,

and the person at the top of the organizational chart has the most power.

Employees report to the person directly above them in the organizational

structure. Each person is responsible for a specific area or set of duties.Def.- Management

The theory of directing an organization.

CHAPTER 2

Def.- Environment

Organisations are part of our society, our daily lives. Our society can be

regarded as the environment within which organisations work.


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Parties : (Learn the list, def. and examples by heart, for ex. bank is a possible

capital provider); identify an influence in a simple case

- Customers or Buyers

Buyers or consumers, are an important group as they demand products and

services. The organisation gains its right to exist by satisfying these needs.The needs of the consumer often change and organisations must take such

changes into account when determining the composition and features of their

products range.

In the last few years, many new products have arrived on the market as a

result of changing buyer needs. They may include for ex. : new low-fat dairy

products, electrical cars, environmentally friendly washing powders,

smartphones, tablets, medical equipment, cloud computing solutions, battery

switching stations for cars, and new forms of mortgages and insurances.

If an organisation pays insufficient attention to changing consumer needs, the

existing available products may become less popular and as a consequence ,

the organisation will lose customers. Customers certainly exert a powerful

influence on organisations.

- Suppliers

Each organisation uses products or services from other organisations. Thus,

as a buyer, the organisation places demands on its suppliers in respect of

quality, price level and delivery time. The organisations own products and

services are, after all, dependent on this. In recent years, supplier

relationships have undergone great changes. Increased international

competition has, for ex. caused many changes in the choice of suppliers. Inthe past there has been a preference for local suppliers but now the trend is

often to search across national borders for suppliers to do business with.

Another aspect of these busines-to-business relationships that deserves our

attention is that buyers now want to reduce their stock held, and demand just-

in-time delivery from their supplier.

- Media

In the current information era, the media (including the internet, newspapers,

weekly magazines, tv and radio) play a very important role. The attention of the

media is directed at everything that takes place in society and has any

meaning for individuals. Developments in the economy, politics and business

are watched closely. International communication satellites ensure that we are

informed almost immediately about events that take place on the other side of

the world via, for example photographs in daily newspapers and TV bulletins.

Competitors

Almost every organisation has to deal with competition. Competitors more or

less determine the amount of flexibility organisations have in the area of

product features, pricing, quality, distribution channels, R&D activities,

advertising budgets and so on. It is therefore of vital importance to monitor the

activities of major competitors and to analyse their relative market positions.

Employees


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The employees of an organisation are the most important asset and can be

seen as a critical success factor. The modern employee of the 21st century is

more highly trained, liberated and individualistic than his predecessors. These

employees will play an even greater role in product and organisational

innovations as well as in quality improvement.

Government

The execution of government policies is carried out through national and local

government departments. These influence organisations because they keep an

eye on the way that rules and legislation issued by the government are

adhered to by organisations.

Some examples are controls by the police and department of trade inspectors

of regulations relating to shop opening times, and checks made by the Health

and Safety department in relation to working conditions within organisations.

Interest groups

This group of stakeholders includes those bodies that focus on the interests of

a particular group of people. Many such groups exists. They include

federations of emlployees and employers( for example, trade unions and the

national industry confederation), consumer organisations( for ex.,

homeowners associations, car owners associations) and environmental

activists( Greenpeace).

Equity providers or Finaciers

Organisations must maintain good relationships with providers of finance

such as shareholders, financial institutions and the government.

Organisations are often dependent on finance to maintain their activities,expand operations and sometimes even remain in their existing form. When

providers of finance become dissatisfied with the performance or practices of

an organisation, they can turn off the supply of money. This can create huge

problems for the organisation and potentially pose a threat to their survival. In

large enterprises, we often find that major financiers are represented in

supervisory bodies such as the Board of Commissioners.

External influences:(Learn the list, def. and examples by heart, be able to give

examples); identify an influence in a simple case ;

-Environment

The economic growth of the past few decades has led to an increase in the

consumption of goods and services, but linked to this is also a rise in pollution

of the environment and a further exhaustion of natural resources. In spite of

production increases in some parts of the world, during the last 20years, some

of the main factors contributing to prosperity, including those in the areas of

employment, safety and the environment, have been dealt a heavy blow.

Some of the main environment problems are:

- loss of biodiversity

- climate change

- over-exploitation of natural resources- health threats


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- threats to external safety

- changes to the environment we live in

-Demography

Demographic factors are defined as the size, growth and composition of the

population. These factors determine to a large extent which markets anorganisation targets and which products and services they offer.

The Eu is facing unprecedented demographic changes that will have a major

impact on the whole of society. Figures show that from 2005 until 2030, the EU

will be short of 20.8 mil (6.8%) people of working age. In 2030, roughly two

active people (those between 15 and 65 years of age) will have to take care of

one innactive person(65+), in a situation where Europe will have 18mil children

and young people fewer than today.

-Society

There is a societal need to try to exert an influence on organisations because

of concerns about business activities and such issues as environmentally

responsibility, noise pollution, ethical business and employee participation.

Criticism has been levelled by various parties, including employees and local

community groups. Such bodies will often use the media to gain leverage and

in some case, campaigns will even lead to the introduction of new legislation.

-Politics

Governmental authorities use their political powers and responsibilities to try

to steer their economy in a favorable direction. For ex., governments influence

price levels, the distribution of income, the job market, the balance of

payments and therefore economic growth.

-Economy

Economic factors play an important role in the success of organisations. Of

prime significance is growth in national income. This growth generally leads to

higher income for individuals, which then increases purchasing power. Those

organisations that focus on the B2C market will then enjoy increased turnover.

Income distribution can have a significant effect on the size of some markets.

-Technology

In our knowledge-intensive Western society, technological developments are

essential for the internationally competitive position of our business life.

Technological developments are often called the motor of our economy.

Thanks to the technological development, there is a continuous improvement

of production methods and innovation of goods and services. A consequence

of this is that the life span of existing products is becoming increasingly

shorter.

Technological development is pre-eminently a market-driven activity.

Important stimuli for technological innovation come from competition and the

demand for more environmentally friendly goods and services of a higher

quality with a lower cost price which can be delivered faster and more

conveniently.


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In the coming years, technological developments will continue at a similar

pace as today. Big technological changes and successes can be expected in

the areas of bio-engineering and information technology.

Def.- Market

An actual or nominal place where forces of demand and supply operate, andwhere buyers and sellers interact (directly or through intermediaries) to trade

goods, services, or contracts or instruments, for money or barter.

Markets include mechanisms or means for determining price of the traded

item, communicating the price information, facilitating deals and transactions,

and effecting distribution. The market for a particular item is made up of

existing and potential customers who need it and have the ability and

willingness to pay for it.

Def.- Outsourcing

Outsourcing or subcontracting, falls into a special category of working

together. As production increases in scale, enterprises have to focus more on

their core activities. The result is that organisations are farming out particular

activities to other enterprises.

CHAPTER 6

Def.- Manager

A manager may be characterised as a person who can stimulate and direct the

behaviour of other people withing an organisation. A manager will usually be

responsible for the financial results of a divison or department via his or her

direction of groups of employees.

Def.- Management team

Management is that group of people responsible for providing leadership to

the organisation. The job may often involve a number of people who are

frequently reffered to as the management team.

Def.- Management levels:

- Top strategic

There are 3 main management levels: top management, middle management

and first line management. Top management it is the responsibility of thesenior level to provide leadership for the organisation.

- Middle management

Middle management directs the activities of operational levels, including the

lower management level(especially within large enterprises).

- Lower management

First line management includes heads of departments or group managers, who

are located between the operational levels and the middle management level.

Within a modern flat organisation there is far less need for multiple tiers of

management as less distinction is made between the lower and the middle

levels of management.


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- Policy-formulating

There are 2 main functions of management are policy forming and executing

tasks.

Policy forming includes diagnosis, prediction, planning and organising

activities.

- Policy-implementing

The executing of tasks relates mainly to the delegation of activities and the

supervision and motivating of employees.

Def.- Managers activities:

- Functional manager

The responsibilities of a functional manager relate to the management and

performance of a single main activity withing an organisation. Employees are

coached by this manager to focus on this task only. Purchasing managers and

marketing managers are two examples of functional managers.

- General manager

A general manager may be made responsible for all the activities within a

certain part of the organisation. Amongst other areas, he might be held

responsible for the production, marketing and finances of the organisation.

The business unit manager or the divisional manager are two examples with

general managerial duties.

- Flattening

Organisational structures are becoming increasingly flatter through the

assimilation of lower and middle management levels. Consequently, the

number of management levels and the number managers has also fallen.

- Business units

There has been a shift away from recruiting of functional managers to the

development of more general managers in the workplace. This has been

caused by the subdivision of organisations into more autonomous business

units (for ex. when a unit is made responsible for all the activities directed

towards a certain product-market combination, with the policy-making tasks

becoming the responsibility of middle management). A key priority for top

management is then to create the required conditions (as the specific and

necessary know-how is found in the functionality of a business unit or

division), which makes adaptations in a changing environment quicker to

perform.

Managers responsibility:(10 roles: identify the role in a short case)

- interpersonal roles

A manager gives guidance to employees and is responsible for the results and

profesionalism of the unit, often using formal and informal networks to build

relationships with team members both inside and outside the organisational

work environment. The main aspects of this role are:

being a figurehead

being a leader being a liaison officer


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This last role includes the making of contacts from outside ones own

organisational unit. These contacts constitude a distinct externally-directed

information system and are used during the daily activities of the unit.

- informational roles

A manager needs to be informed of any changes within the organisation thatwill affect the operational results of the division. The manager will share this

information with both organisation members and other interested parties from

outside the organisation. To be able to react quickly within a changing

environment requires accurate information and thus information is

increasingly important. The main informational roles are:

being an observer

being a disseminator or information

being a spokesperson

- decision-making roles

As the person in charge of a business unit, a manager is responsible for

implementing policy. He or she will make decisions by using all available

information, the contacts that have been maintained and the specific

circumstances of his or her unit(SWOT). A manager needs to continually

evaluate situations in order to achieve the required objectives. He or she will

need to make optimal use of the staff and resources that are available. In order

to make the right decisions in such a complex situation, managers must be

able to rely on their staff. The following are aspects of the decision-making

role:

the entrepreneur the trouble shooter

the provider of resources

the negotiator

CHAPTER 8

Def.- Management

Leading the organisation towards the goals that have been set.Business process:(learn by heart the list and def.)

- primary process

Primary processes are all activities that contribute directly to the making of the

product or service (purchasing, producing, selling, furnishing) and to the

overall goal of the organisation.

- secondary process( supporting process)

Secondary processes include all activities that support primary processes,

such as management of personnel, finances and data systems.

- managerial process( management process)


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Administrative processes are all activities that direct primary processes and

secondary processes, and help to reach the organisations goals.

Def.- Process management

Administrative activities aimed at defining a process, establishing

responsibilities, evaluating process performance, and identifying opportunitiesfor improvement.

Production factors:( learn by heart lists and def.)

Input consists of four factors. There are:

- labour: people

- nature: raw material, semi-manufactured produtcs, energy etc.

- capital: money, plant, machinery

- information: about competition, demographic data etc.

These production factors must be bought in by organisations from specialized

markets such as the labour market , the energy market and the information

market. After the transformation, the resulting products and/or services are

sold to the customers and the other interested parties.

Organisations are not only judged by their products and/or services but also

by the quality of their outputs:

- labour: employees leaving the work force(through dismissal, retirement,

long-term disability)

- nature: waste, heat loss, noise, pollution, smell

- capital: profit, depreciation of machinery etc

- information: annual reports, public relations etc.

Def.- Transformation processEvery organization acquires raw materials and resources (input) and

transforms these into products and/or services (output). This transformation

process consists of a number of business processes.

Managerial responsabilities: (learn the list, correlations and def.)

- strategic planning

- planning

- structuring

- the process management

Business processes and added value: (def., learn value chain by heart)

- Porters value chain


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Porters theory is based on the so-called value chain, comprising all

activities needed to offer a product to the market. In other words the value

chain indicates the amount of added value produced by the various parts of

the organization. These different parts are coordinated by what Porter calls

linkages.- added value

A business process adds value to raw materials or semi-manufactured

articles. This added value increases an organisations competitive power

fundamentally, according to Michael Porter. He states that a competitive

advantage is obtained by lowering the cost of production or by creating added

value for products which the customers will pay extra for.

- location of the position of information

According to Porter, information provision within an organization does not

belong to the primary or support activities, but occupies a central position like

that of a spider in a web: it connects the separate primary and support

activities. It can certainly help to increase competitive advantage.

Def., Cover concept- Quality Management

Quality management is that aspect of management that falls under quality

stratedy and is implemented by management as a whole.

Total quality management

Total quality management integrates and performs all quality-related activities

and makes decisions that influence quality, irrespective of position within the

organisations.

Def., Cover concept- Logistics management (825)

To control business processes involves quite a number of logistic issues,

including supply volume and ways of reducing delivery time or the time it

takes customers to place an order. Logistics is about the flow of goods and/or

services withing the business chain.

Deals with the planning and control of the flow of goods and/or services within

the supply chain plus the coresponding information stream.

Def., Cover concept- HRM(826)

All standards and values relating to an organisations employees and the

translation of these into techniques and methods that optimise the use of

existing human qualities and their contribution towards the goals of the

organisation.

The main aspects of HRM :

- acknowledgement by top management of the importance of the

human factor

- the conviction that human qualities can be used better

- the understanding that qualities and motivaton of the staff are

critical factors in implementing the organisatios strategy

- the need to apply systems and tools in a professional and

systematic way, focussing on using the human qualities in orderd toarrive at the organisations goals.


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Def.- Hierarchy

A graded separation between management and operations cause by the need

to delegate activities within the organisation.

Def. and difference- Strategic decisions vs. Operational decisions

Top management deals with strategic decisions, while the more junior staff areresponsible for decisions relating to operational processes. Middle

management is located between these levels, so occupies a pivotal position.

This management level is mainly involved in organisational decisions. It

translates strategic decisions into operational decisions. It fulfils more of an

executing function compared to top management, while it fulfils a directing

function in relation to the first line management.

Briefly specify differences- Types of enterprises VoF, NV, BV

BV

The Dutch BV (private limited liability company) is the most frequently used

legal form by foreign investors (for example: to carry out a business, for direct

investments, as holding company, IP company, finance company, etc.) The

Dutch BV has the advantage that the shareholders are - in general - not

personally liable for legal acts of the B.V. Furthermore, the BV is easy to

incorporate, it requires a minimum capital of 18,000 and the share cannot be

traded freely (e.g. subject to transfer restrictions, which may be beneficial if

you are contemplated to attract several investors).

NV

Alternatively, one may decide to establish a NV (a public limited liabilitycompany), which is the obligatory legal form for stock listed companies, but

which can also be used for non-listed companies. The NV also requires a

minimum capital; however, the minimum capital requirement is (slightly)

higher than the minimum capital for the BV. The minimum capital for a NV is

45,000.

Partnerships

Dutch law distinguishes two types of partnerships, either the general

partnership (VOF) or the limited partnership (CV). The partnership may be

formed by two or more partners that may be either individuals or legal entities

(like for instance a BV). The partnership should be registered at the Chamber

of Commerce (Trade Register). The partners in a general partnership are jointly

and severally liable for all obligations of the partnership. However, the limited

partnership has two types of partners, e.g. the limited liability partner (also

'silent' partner, which has the same features as a shareholder of a BV) and the

general partner. The limited liability partner is liable only up to its capital

contribution in the CV.

Def., emphasis on relationship with management board- Supervisory board

As well as paying attention to general developments within the organization,an organisations supervisory board has to supervise the activities of top


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management. The Board should have the interests of the entire organisation at

heart and not focus on the specific interests of one group of stakeholders

within or outside the organisation. The Board is not involved in the actual

management of the company, as this is the task of top management. The

Board needs an assortment of skills- financial, legal, marketing and so on- inorder to carry out its tasks. Wheter a supervisory board or simply a board of

directors is necessary depends both on the size of the organisation and its

location.

Def.- Board of directors or top management

- forms of management

Various forms of management can be identified within an organisation, each

differing from each other in terms of composition, task division and decision-

making. The main forms are:

- single person/management vested in one person

With management vested in one person, that one person posseses all the

decision-making power. Such a situation can arise either when there is just

one manager, or when the chairman of the board of management has the final

say in decision-making. The advantage of this form of management is that it

generates fast decision-making. There are potential disadvantages in that

important issues are only considered by one person, continuity could be at

risk at times of long-term illness, and management could be easily become

overburdened.

- multi-person/joint management

Joint management or a board of management is characterised by a division oftasks between, for ex. a general maneger, a financial director and a

commercial director. The additional knowledge and experience available within

this structure allows for any necessary corrections to be made by common

consultation, thus safeguarding continuity and preventing overburdening. On

the other hand, decision-making may be slow, and major differences of

opinion can arise between the board members.

- collegial board/collegial responsibility

Decision-making may be collegial or alliance-based. With collegial

responsibility decisions are made by consensus. All board members need to

agree, so there is equal power of decision. The board members are collectively

responsible for the success of the enterprise as a whole and not merely for a

specific part.

- entente structure/alliance structure

In an alliance structure, the directors have both individual and collective

decision-making power. We see this structure mainly in large organisations

where expertise is required in certain areas. In addition to their individual

decision-making power in a specific area, the directors share collective

decision-making power in more general matters.


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Def.- Middle management

The task of middle management is to implement out the general policy as laid

down by top management. Middle managers also direct a number of

operational staff. Using the policies issued by top management, middle

managers generate policy guidelines for their own departments.

Def.- Operational staff

Operational staff are responsible for the actual transformation process. Input (

labour, natural resources, capital and information) undergoes a

transformational process and becomes output( products or services). This

level is the level of primary processes that contribute directly to the creation of

a product or service.

Def., list- Corporate social responsibility

profit: shareholders/taxpayers/society

people: employees/consumers/neighbors/human rights organisations

planet: governments/environmental organisations/United Nations

Def.- Corporate governance

A system for the directing and managing of enterprises in which transparency

and justification are considered to be the main characteristics of good

reporting. Corporate governance means decent entreprenurial management

that makes justified choices based on political, social, economical and ethical

considerations.

Good governance or Social responsibility

Seeing the purpose of an enterprise as not just profit making or profit

maximisation. Businesses should derive their right to exist not merely from theamount of profit they make but from how they function within a network of

economic, ecological and social factors.

Def.- Works council

The works council does not actually form part of the organisations usual

management levels. Its members are elected directly by the employees of the

organisation. The works council influences decision-making within the

organisation.

Def.- Management by objective

A method in which the manager and subordinate determine the objectives for

the coming period by mutual agreement and agree on the results required at

the end of that period.

Def.- Management by exception

Within certain limits, the middle manager is entitled to define and use specific

means needed to make corrections. If these limits are exceeded, this will be

seen as exceeding the limits of his/her authority. His/her superior will be

informed and the necessary action taken.


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CHAPTER 9

Def. and context- External coordination

External factors that affect the organisation should be taken to account and

any adjustments necessary made, depending on the choice of strategicmanagement process. By setting the strategic objectives, the organisation is

plotting the general direction of the route towards achieving the desired goals.

Def. and context- Internal coordination

Internal factors involving individual staff members, machines and other tools

must be taken into account, with day-to-day operations being given all due

attention. These need to be utilised in such a way as to support each other.

Def. and context- Structuring

Structuring involves the creation of an organisational structure in which

people and resources are optimally utilised to reach the organisationsobjectives. Finding the ideal arrangement will require adjustments at both the

external and internal levels.

Def. and context- Organisational structure

An organisational structure defines tasks, competencies, and responsibility

and sets out the pattern of relationships between positions.

Def.- Vertical differentiation

Organisational tasks grouped together and divided into levels. Cost

considerations will mean that some activities will have to be transferred to a

lower level.

Def.- Task

A task is the technical content of a function and indicates precisely what a

person does: meet, consult, manage, make a call, administrate and so on.

Motives for structuring- def. and list

- costs

Task must be arranged in such a way that efficient functioning and production

is possible.

- management

The way in which tasks are structured and divided must lend itself to

management of the organisation. Supervision of the various tasks and howthey are executed is required.

- social

Jobs must have a certain amount of appeal for individuals. Variety,

reponsibility and decision-making power all come into play.

- society

Society makes demands that must be complied with then tasks are structured:

health and safety precautions, for ex.

Def.- Division of labour

Division of labour = the division of the activities in subtasks that are assigned

to persons or other working contexts within an organisation.


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Vertical division of labour (vertical differentiation)

Horizontal division of labour (horizontal differentiation)

Def. and connection with division of labour- Coordination

The various components of the task must have some connection with each

other. When the tasks are allocated, attention must be paid to how they are tobe coordinated.

Def.- Forming of departments

Related tasks are initially grouped together according to an individuals

position (functionalism). After that, these individual positions are regrouped to

form departments.

Def.- Internal differentiation

An organisationsactivities grouped by function into different divisions.

Def.- Internal specialisation

Activities divided into either products, market or geographical divisions with

grouping based on the end result.

Def. and connection with differentiation and specialisation- F, P, M, G

structures

Internal specialisation activities revolve not only around products. They may

also be concerned with markets or buyers and geographical areas, the so-

called Product, Market, and Geographical divisions of tasks.


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organisational structure (F-structure)

for example: purchasing, production and sales

geographical region (G-structure)

for example: province or country

market structure (M-structure) for example: low-volume users and bulk consumers

product structure (P-structure)

for example: cars and motorcycles

The choice between internal differentiation and internal specialisation will

depend on the organisations given situation. Small organisations almost

always chose internal differentiation. As soon as a company has reached a

certain size and also manufactures and sells different products, there will be

same basis for internal specialisation within the organisation.

Def.- Qualifications

A special skill or type of experience or knowledge that makes someone

suitable to do a particular job or activity.

Def.- Responsibilities

Responsibility is both the moral obligation to perform a task to the best of your

ability as well as the duty to report back concerning the progress of that task.

Def.- Delegating

When tasks with their associated authority and responsibility are handed over,

this is known as task delegation.

Def.- Vertical and horizontal division of labourVertical division of labour

Division of activities into different levels

(vertical)

motives

cost motive

management motive

social motive

public motive

Horizontal division of labour

Introducing cohesion between activities

(grouping)

two main forms

internal differentiation

grouping according to similar activities

-F-structure

internal specialisation

grouping on the basis of end result

- P, M or G-structures


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Def.- Centralisation and Decentralisation

If the power to make decisions is concentrated in one place(at top), this

suggests centralization. In such a situation, a significant proportion of

important decisions will be made high up in the organisation. There will be

little delegation.In contrast, with decentralization, the decision-making powers will be

distributed over a greater number of positions, including those lower down the

organisational structure. In such a situation, significant decisions will also be

made at lower levels in the organisation. There will be a lot of delegation.

Def.- Scope of control

Scope of control = the number of employees that a manager can effectively

manage

horizontal dimension

the number of direct subordinates that a manager is in charge of

vertical dimension

the number of levels that is managed (in)directly

Def.- Flat and bureaucratic organisational science

A large span of control for managers will cause a flatter organisational

structure to develop.

Def.- Span of control

Span of control is simply the number of staff that report to a manager. Some

companies also have an ideal span of control, which is the number of reports

they feel a manager can effectively manage. In this case, if a manager has

fewer reports than the ideal, they may feel he or she is not being effectivelyused, while if he or she is handling more they may feel that the manager is

over-stretched and the reports will not receive enough direction.

Def.- Depth of control/Span depth

The number of levels directly and indirectly under a managers control and in

particular, the degree of influence that a manager exercises on the lowest

levels of the organisation.

Def.- Personal assistant

Appointing a personal assistant ( ex. secretary) to the manager to take over

some routine activities. He/she will not have any supervisory authority over

the managers subordinates.

Def.- Organizational chart ( be able to read it )


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Def. and difference- Formal organisation and Informal organisation

It is formal in the sense that the task divisions, job descriptions, manuals

and procedures are all written down and have an official nature. The formal

organisation is the organic structure plus the staff structure.

Other contacts, relationships and divisions of tasks occur within the

organisation but do not fall under the formal organisation.

All activities and relationships that do not fall under the formal organisation

can be included in the informal organisation. Informal organizational behaviour

can influence the organisation in a positive or a negative way. When negative

informal organizational behaviour occurs, the undesirable activities need to be

corrected or addressed by imposing additional rules.

Def. and be able to recognise in the organizational chart- Organizational types:

- line organisation

The line organisation is the most traditional organisational structure and theform from which most other structures are derived. The main characteristic of


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a line organisation is that orders travel exclusively along a simple line, with

strict hierarchical relantionships maintained between manager and

subordinates.

- line-staff organisation

Where staff with specialist knowledge and expertise (support staff) assist

managers in a line organisation, this is described as a line and staff

organisation. Support staff are often located in staff departments.

- line and functional staff organisation

If the advice of the support staff becomes so specialised that the line official

can no longer assess it, the advice will take form of an instruction or task(legaladvice) that has to be followed. The staff relationship will therefore develop a

functional character.

- line-staff-committee organisation


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All communication needs to go along the line. Theoretically, this means no

consultation between employees of the various departments other than that

between the departmental heads. However, it is often necessary to involveother departments and their staff in business activities

- matrix organisation

A matrix organisation is an organisational form in which professional

specialists from various departments are temporarilly transferred for a specific

project over a limited time span.

- pure project organisation

In contrast to the line or the line-staff organisation, a PBO gives project

managers control of all elements necessary to manage the projects. Project

elements dominate the organisation. Another characteristic is the splitting up

of the organisation into different divisions or pools.

- internal project organisation

The goal of the internal projects is to provide a vehicle for accomplishing the

objectives of the research group. Therefore, each of the internal projects

presented here focuses on a different objective of the research group and

aims to produce methods and tools that in the long run can be integrated and


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provide complete educational or industrial solutions for contemporary

problems in their respective areas.

- divisional organisation

In a divisional organisation, the activities and processes within a company are

grouped around a number of related products or markets and located withindivisions. This organisational form is found in big, often multinational,

enterprises that produce a variety of products for various markets and are

often located in a number of different locations.

Mintzberg- some biographical information

Dr. Henry Mintzberg, OC, OQ, FRSC (1939) is an internationally renowned

academic, author and researcher. He is currently professor of Management

Studies at the Desautels Faculty of Management of McGill University in

Montreal, Quebec, Canada. Henry Mintzberg is especially interested in and

passionate about topics within management and business strategy.

Organizational units: (learn the list and def. by heart)

- executive core

The so-called primary processes- work that is directly related to the production

of goods and services- form the basis of an organisation. Mintzberg calls them

the operational core (executive core).

- strategic top

Every organisation needs to have at least one manager who is able to

supervise all processes and manage the organisation. This individual is

located within the strategic apex. In larger organisations, the Board of

Directors and the Council of Commisioners form the strategic apex.- mid-level

When an organisation increases in size there will be a need for more

managers. They do not necessary have to be managers who direct staff, but

may include managers who direct other managers. An intermediate or middle

line will thur arise.

- technical staff

The more complex the organisation becomes, the more need there will be for

staff who are able to analyse and support the primary processes. These staff

will make plans and manage the work. This section of the organisation is

known as the technical staff area. Supervisors, planners, and planning

engineers fall under this category.

- support staff

Many organisations have support staff who supply services of one kind or

another to the various departments. Salary administrators, public relations

officers and R&D staff fall under this category.

Coordination mechanisms: (learn the list and def by heart; identify in a short

case; connection with organisational units Ranking of coordination

mechanisms)

- mutual coordination/mutual adjustment


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This method is characterised by significant formal and informal

communication between workers. Regular consultation, evaluation sessions,

speech and communication techniques, internships, meetings facilities and

informal contact are some examples of the form that this communication may

take.- direct supervision

Managers issue assignments and instructions to staff in respects of tasks to

be performed. This can happen during a review of progress or as part of a

performance evaluation interview. The manager will make use of various

techniques and skills as well as applying his/her own experience and

knowledge.

- standardisation

of activities/work processes: In this method, tasks are specified

and standardised (usually by technical staff). This is done on the

basis of set procedures, manuals and instructions. Machanisation

and automation are essential aspects of this processes (the

production of standardised letters for making offers etc.)

of results/outputs: In this method, a specification of results is

drawn up. It may be related to financial targets for each company

unit, to the content of contracts, to customer satisfaction norms,

to quality criteria for the products to be developed, and so on.

of competences/skills: The activities to be performed are

coordinated on the basis of the training and experience of the

individuals. For ex. a surgeon and an anaesthetist will be able toanticipate each others standardised procedures virtually

automatically.

of standards/norms: In this method the staff within an

organisation will behave similarly as they will share a similar set

of opinions. Norms can also develop from a point of view shared

by those in an organisation.

Organisational forms: ( learn the list by heart, be able to clarify, connection

with coordination mechanisms; be able to identify in Mintzberg diagram; be

able to name typical examples like for ex, hospital as professional):

- entrepreneurial orgasnisation


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- machine organisation

- professional organisation

- diversified organisation


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- innovative organisation

- mission organisation

- political organisation


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Def.- Communication and consultative structures

Communication process- know and clarify

Designing a communication and consultative structure is one of the necessary

aspects of creating an organizational structure. After all, company activities

must be linked to each other. It is very easy for coherence to disappear during

a division of tasks as some activities may be split and transferred toemployees in various different departments. Coherence can be restored by

providing a good communication and consultative structure.

Def.- Personal and non-personal communication

Communication can take place in two ways within an organisation: via

personal communication between two or more people and via impersonal

communication using communicative means such as memos, e-mail and staff

magazines. Personal information is, in general, the more affective, because of

the possibility of obtaining direct feedback. Impersonal information has the

advantage that the receiver can decide himself when he will take in the

information. The disadvantage is lack of certainty about the quality of

reception: will the message will be understood? Will it even be read?

Def.- Horizontal communication

This includes communication between divisions, departments or even

individuals at the same hierarchical level of the organisation.

Def.- Vertical communication

In contrast, this is communication between divisions, departments, or

individuals at different hierarchical levels.

Def.- Lateral communication

This refers to relatively open communication that takes place between allindividuals within the organisation, irrespective of their hierarchical level.

Def.- Linking pin

The so-called linking pin structure developed by Rensis Likert, depicts less

standard consultative situations.

Likert described an organisational structure which features overlapping

groups. The linking pin is the leader of a lower-level group. This person

participates in and can influence decision-making withing a higher level group.

The link may be horizontal, vertical or diagonal.

New organisational structures: ( def. and identify most important differencewith traditional organisations):


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- horizontal organisations

Traditionally, organisations are structured according to functional divisions

such as purchasing, production, marketing, sales and distribution. These are

known as functional organisations.

One of the disadvantages of such a form of structuring is that while the reultsachieved by the various divisions may be excellent, this will not necessarily

lead to the best end result for the customer and therefore for the company. The

problem may lie in insufficient interface between the activities of the divisions.

Organisations that are designed to optimise coordination between activities in

the various divisions are known as horizontal or workflow organisations. The

main reasons for transforming functional organisations into organisations that

are more horizontal are:

increased customer satisfaction

boosting of product and service quality

reduction in operating costs

increases in company process efficency

- network organisatons

Today, many organisations and individuals work together in networks. Thanks

to mutual cooperation, these organisations and individuals can make use of

each others strengths, creating added value for a common customer base. A

network organisation can be described as collaboration or a partnership

between interdependant independent organisations or individuals who try to

achieve common goals which cannot be achieved individually. What

characterises a network organisation is that the added value cannot beachieved without the network. It is also true to say that the cooperating parties

depend on each other. The added value can differ for each network, and can,

for ex. include joint product development or development of mutually

beneficial expertise. A clear advantage of a network organisation is that the

risk is also reduced by co-operating and sharing.

- cluster organisations with teams

Organisations are making increasing use of people with large amounts of

knowledge, skill and experience. All organisational forms make use of teams:

project teams, quality teams, cross-functional teams. Professional specialists

may form part of one or more teams. Teams are disbanded once the goals

have been reached.

An organisational form in which a team structure is central is known as a

cluster organisation. According to the management guru, Peter Drucker, most

organisations will be structured around teams in the future.

- virtual organisations

Up until the industrial revolution, employees worked at home under the

instruction of employers. The industrial revolution saw to it that worked moved

from the home to large factories, and later to modern offices.

The arrival of the Internet and other technologies has made it possible forpeople to communicate with each other, to consult, to learn and to exchange


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information without actually having to come together in a physical location

such as an office.

They may e-mail each other or send text messages etc.

One consequence of this is that companies are no longer dependent for the

execution of their activities upon people who are situated in a particular office.They can make use of people in geographically different parts of the world,

and not only freelancers but also company employees. Companies that wish to

enter a strategic alliance to jointly develop or sell new products and services

have enhanced opportunities as a result. Companies that rely heavily on such

communicative situations are known as virtual or network organisations. Such

a kind of organisation is also termed an unlimited company.

This organisational structure can deliver huge cost savings since there is no

need to develop and to maintain a complex, international organisational

structure. Many people in such organisations do not even have an employment

contract but are bound to the virtual organisation via project work.

- flattened organisations with limited complexity

The traditional organisation has a great number of management levels. The

task of management has always been managing people and at the same time

obtaining, processing and distributing information. The Internet and the othet

technologies have ensured that the latter aspect has been significantly

simplified and consequently is less time-intensive. Managers are also

delegating an increasing number of the tasks that they used to do, such as job

planning, reporting and administrative work.

CHAPTER 10

Effectiveness(Know list and def and connection with change)- technical and economicThe degree to which the resources of an organisation are effectively deployed.Efficient utilisation of resouces if using the fewest possible means ofproduction(input) to reach a certain output.- psychosocialThe degree to which the needs of employees are recognised.

- socialThe degree to which the needs of external parties are recognised.- managerial

The degree to which the organisation can react to changing situations with

flexibility and decisiveness.

Greiners growth model(Basic thought behind this model;Know the list;Def)- Growth through creativity leadership crisis- Growth through direction autonomy crisis- Growth through delegation control crisis- Growth through coordination red-tape crisis- Growth through collaboration internal growth crisis

- Growth through alliances identity crisis- Growth through integrated people- and environment based policy


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Phase 1: growth through creativity

This is the starting or the pioneer phase of the organisation, in whichcreativity is the most important factor. The emphasis lies on development ofthe product and of the market. In this phase, there is hardly any question of aformal organisation and there is a lot of informal communication within theorganisation. If the organisation grows substantially, a leadership crisis willarise. Organising and managing the activities will become more important. Thetime for different management will have arrived.

Phase 2: growth through control

The new management will either put emphasis on greater control or willoccupy it-self with guiding the organisation towards expansion.The organisations members will find their independence limited. If thiscontinues for a long time, a situation will arise in which the individualmembers or departments will need greater responsibility. An autonomy crisiswill rise.

Phase 3: growth through delegation

By creating more autonomy, the organisation will become more independent.This will take the form of delegating: transferring responsibilities andcompetencies to lower levels of the organisation. This carries the advantage ofthe organisations members growing more motivated. Top management willfeel it is no longer in control. This result will be a control crisis.

Phase 4: growth through coordination

To regain the lost territory, extra coordination mechanisms must be built in.Consequently, there will be an increase in communication and informationbinding the organisations members to rules and procedures. This outcome

will be an inflexible organisation. A Red Tape crisis will arise.


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Phase 5: growth through cooperation

To increase the decisiveness and flexibility of the organisation, various formsof cooperation must arise between departments, committees and workinggroups. The purpose of these is to enhance work effectiveness. The

consultation required to attune various activities to each other is time-consuming. If the result is a consultative culture, a consultation crisis willarise.

Phase 6: growth by commercialisation and deregulation

During phase 5, the emphasis was on consultation aimed at attuning activitiesbetter. The drive to achieve results took backseat. To bring it again to theforeground, superfluous procedures and consultative structures will have todisappear. The organisation will deregulate itself. Internal entrepreneurshipwill also come to the fore. Business units that have a large degree of

independence will arise. There will be a certain cooling off, with the pursuit ofa higher degree of efficiency and a cutting into organisational structurespredominating. Internally, a situation will arise that may be termed a socialidentity crisis. Externally, it will be seen as an identification crisis.

Phase 7: growth by integrating human and environmental policy

During this phase, management will emphasise the public good. A lot of timewill be devoted to environmental issues, to an effective organisational culture,to the organisations image and identity, and to finding how to satisfy staffmembers while enhancing the quality, efficiency and productivity of theorganisation.

Organisational Science Notes

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