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“Modern” Structural
Organization Theory
What is Structure of an Organization?

Positions

Group of Positions
(Units)

Work Processes
Structural Organization Theory

Vertical Differentiations

Horizontal Differentiations
“Modern” Structural
Organization Theory

Organizational efficiency is the essence of
organizational rationality

Have been influenced by the neoclassical,
human relations-oriented, and systems
theorists of organization
Basic Assumptions of Structural
Perspective (Bolman & Deal, 1991)
Organizations are rational institutions
whose primary purpose is to accomplish
established objectives
 There is a “best” structure for any
organization – or at least a most
appropriate structure
 Specialization and the division of labor
increase the quality and quantity of
production
 Most problems in an organization result
from structural flaws


Mechanistic and Organic Systems
By Tom Burns and G. M. Stalker

The Concept of Formal Organization
By Peter M. Blau and W. Richard Scott

Organizational Choice: Product Vs. Function
By Arthur H. Walker and Jay W. Lorsch

The Five Basic Parts of the Organization
By Henry Mintzberg

Hierarchy
By Elliot Jaques
Mechanistic and Organic
Systems of Organization

Mechanistic Form of Organization –
used in stable conditions

Organic Form of Organization –
used in a more dynamic conditions
The Concept of Formal
Organization
Social Organization

Refers to the ways in which the human
conduct becomes socially organized
rather than to their physiological or
psychological characteristics as individuals
Two Basic Aspects of Social
Organizations

The structure of social relations in a
group of people

The shared beliefs and orientations that
unite the members of the group and
guide their conduct
Formal and Informal
Organization
Informal Organization
Structure is flexible and unplanned
 No defined relationship
 Involves spontaneous relationship
 Membership is on voluntary basis
 People have the right to join more than
one informal group at the same time

Formal Organization
Official rules
 Formal hierarchy of authority
 One actual organization
 Often very large and complex
 “Bureaucratic organization”

Organizational Choice:
Product vs. Function

Elements to consider:
1. Technical Criteria
2. Economic Criteria
Organization by Function
Guarantees the maximum utilization of up-todate technical skill
 Makes possible the economies of maximum
use of labor-saving machinery
 Encourages coordination in all of the
technical and skilled work
 Furnishes an excellent approach to the
development of central coordination and
control

Organization by Product
Product or product line is an important
basis for departmentalizing
 Permits the maximum use of personal
skills and specialized knowledge
 Facilitates the employment of specialized
capital and makes easier a certain type of
coordination

Differentiation in Plants F and P
Dimensions of
Differentiations
Plant F
Plant P
Goal Orientation
More differentiated and
focused
Less differentiated and
more diffuse
Time Orientation
Less differentiated and
shorter term
More differentiated and
longer term
Formality of Structure
Less differentiated, with
more formality
More differentiated, with
less formality
Observed Characteristics of the Two
Organizations
Characteristics
Plant F
Plant P
Differentiation
Less differentiation except
in goal orientation
Greater differentiation
in structure and time
orientation
Integration
Somewhat less effective
More effective
Conflict Management
Confrontation of
Confrontation – avoidance,
conflict; open, face to
restricted communication
face communication
Effectiveness
Efficient, stable production; Successful in improving
but less successful in
capabilities, less effective
improving capabilities
in stable production
Employee Attitudes
Prevalent feeling of
Prevalent feeling of
satisfaction, but less feeling stress and involvement,
of stress and involvement less satisfaction
Five Basic Parts of the
Organization
Operating Core
 Strategic Apex
 Middle Line
 Technostructure
 Support Staff

Hierarchy
Way to structure unified working
systems with thousands of employees
 To simplify complexity of tasks
 To identify and nail down accountability
at each stage of process or function
 To place people with necessary
competence at each organizational
layering

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