Download organization

THE ORGANIZATION AS AN OBJECT OF
MANAGEMENT. THE EXTERNAL
ENVIRONMENT OF THE ORGANIZATION
LOGO
LOGO
Definition of organization
Basically, an organization in its simplest form (and
not necessarily a legal entity, e.g., corporation or
LLC) is a person or group of people intentionally
organized to accomplish an overall, common goal or
set of goals. Business organizations can range in
size from one person to tens of thousands.
LOGO
Definition of organization
The concept of "organization" is a particular group
of several essential requirements:
 Experience in at least two people who consider
themselves as part of the group;
 Experience of at least one goal (the desired end
result), which take a total of all members of a group;
 Experience in team members who intentionally work
together to achieve meaningful for all purposes.
LOGO
Definition of organization
LOGO
Definition of organization
Organizations include the following
features:
Under way and the goal of education:
formal and informal organization
The number of goals: simple and complex
organization
Largest: large, medium and small
organizations.
For legal status: individuals or legal
entities.
LOGO
Definition of organization
 Formal Organization - This is one which refers to a structure of well
defined jobs each bearing a measure of authority and responsibility. It is a
conscious determination by which people accomplish goals by adhering to
the norms laid down by the structure. This kind of organization is an
arbitrary set up in which each person is responsible for his performance.
Formal organization has a formal set up to achieve pre- determined goals.
 Informal Organization - It refers to a network of personal and social
relationships which spontaneously originates within the formal set up.
Informal organizations develop relationships which are built on likes,
dislikes, feelings and emotions. Therefore, the network of social groups
based on friendships can be called as informal organizations. There is no
conscious effort made to have informal organization. It emerges from the
formal organization and it is not based on any rules and regulations as in
case of formal organization.
LOGO
Organization as a social formation
 At the present stage, all organizations are considered as open
systems, ie, internal elements which interact not only among
themselves but also with the environment.











·
·
·
·
·
·
·
·
·
·
·
The open system has certain properties, namely:
Integrity (the change of one component requires the change of others);
Monocratic rule;
Perspective (development in the direction of improvement);
Independence (possible separation subsystems);
Specialization (ability to perform a specific list of works);
Converting incoming items on weekends;
Centralization (one part is dominant);
Growth (attraction to the extension, increase);
Cyclical development;
Equilibrium;
Unpredictability of possible violations.
LOGO
·
·
·
·
·
·
·
·
Organization as a social formation
There are common features of such
organizations:
Establishing missions and goals;
Experience in resources;
Dependence on the external environment;
Horizontal division of labor;
Vertical division of labor;
Need of management;
Experience in formal and informal groups;
Implementation of certain activities.
LOGO Organization












as a social formation
The success of any organization depends on the following
conditions:
Profitability;
Capitalization;
Survival;
Entrepreneurial initiative;
Of communications;
Effectiveness (efficiency);
Productivity;
Capacity for creating a culture;
Capacity for practical implementation;
Capacity for self-development;
Ability to effectively use the investment;
Capacity for self-management system.
LOGO
Life-cycle of organization
LOGO
Life-cycle of organization
Organizations go through different life-cycles just like
people do. For example, people go through infancy,
child-hood and early-teenage phases that are
characterized by lots of rapid growth. People in these
phases often do whatever it takes just to stay alive, for
example, eating, seeking shelter and sleeping. Often,
these people tend to make impulsive, highly reactive
decisions based on whatever is going on around them at
the moment. Start-up organizations are like this, too.
Often, founders of the organization or program and its
various members have to do whatever is necessary just
to stay in business. Leaders make highly reactive, seatof-the-pants decisions. They fear taking the time to slow
down and do planning.
Life-cycle of organization
LOGO
Size
Birth
Youth
Midlife
Maturity
small
medium
large
very large
Bureaucratic
nonbureaucratic
prebureaucratic
bureaucratic
very bureaucratic
Division of labor
overlapping tasks
some departments
many departments
extensive, with
small jobs and
many descriptions
Centralization
one-person rule
two leaders rule
two department
heads
top-management
heavy
Formalization
no written rules
few rules
extensive
Administrative
intensity
secretary, no
professional staff
increasing clerical
and maintenance
policy and
procedures
manuals
increasing
professional and
staff support
Internal systems
nonexistent
crude budget and
information system
control systems in
place; budget,
performance,
reports, etc..
extensive -planning, financial,
and personnel
added
large-- multiple
departments
LOGO
Team of organization
LOGO
Team of organization
A team is a group of individuals, all working together
for a common purpose. The individuals comprising a
team ideally should have common goals, common
objectives and more or less think on the same lines.
Individuals who are not compatible with each other
can never form a team. They should have similar if
not the same interests, thought processes, attitude,
perception and likings.
LOGO
Team of organization
 Team members
 The team members must complement each other.
All team members should help each other and work
in unison. Personal interests must take a back seat
and all of them must deliver their level best to
achieve the team objective. Team members must
not argue among themselves or underestimate the
other member.
 Organizations have a sales team, administration
team, human resources team operation team and so
on. All the members of the sales team would work
together to achieve the sales target and generate
revenues for the organization.
LOGO
Team of organization
 Team Size
 The team size depends on the complexity of the
task to be accomplished. Ideally a team should
consist of 7-10 members. Too many members also
lead to confusions and misunderstandings.
 It is not always that we require a team. Teams
should be formed when the task is a little
complicated. A single brain can sometimes not take
all critical decisions alone, thus a team is formed
where the team members contribute equally making
the task easy. A team can actually create wonders if
all the team members work in unison.
LOGO







Types of Teams
Permanent teams- These teams perform on a permanent basis and are not dissolved once the task is
accomplished. Let us understand the concept with an example.
Temporary teams - Unlike permanent teams, temporary teams loose their importance, once the task is
accomplished. Such teams are usually formed for a shorter duration either to assist the permanent team or work
when the members of the permanent team are busy in some other project.
Task Force - Such teams are formed for a special purpose of working on any specific project or finding a
solution to a very critical problem.
Committee - Committees are generally formed to work on a particular assignment either permanently or on a
temporary basis. Individuals with common interests, more or less from the same background, attitude come
together on a common platform to form a committee and work on any matter.
Organization/Work Force - Such groups are formed in organizations where team members work together
under the expert guidance of leader. A leader or a supervisor is generally appointed among the members itself
and he along with his team works hard to achieve a common goal. The leader all through must stand by his team
and extract the best out of each team member. He must not underestimate any of his team members and take
his team along to avoid conflicts.
Self Managed Teams - Self Managed Teams consist of individuals who work together again for a common
purpose but without the supervision of any leader. Here as the name suggests every individual is accountable for
his individual performance. The team members of self managed teams must respect each other and should
never loose focus on their target. No leader is appointed and the team members have to take their own
responsibility. Individuals take the initiative on their own and are their own guides and mentors.
Virtual Teams - Virtual teams consist of individuals who are separated by distances and connected through
computer. Here individuals communicate with each other online through internet. Sam at Los Angeles can form a
team with Mandy at Mexico and Sara at Denver all working for a common objective but the communication is
totally digital through internet. Such teams are helpful when employees need to connect with each other and are
located at different places. Individuals supporting any community in social networking sites such as facebook or
orkut also form a virtual team as all the members are from different locations but support a common community.
They all have a common objective -to support and promote their community.
LOGO
THE INTERNAL ENVIRONMENT
The organization is an open system closely connected
with the external world. Simultaneously it is a
complex multifunctional organism, which has the
internal environment and consists of multiple
interdependent parts. The internal components (or
variables) of the organization are situational
factors hardly organization. They are:
 - purposes;
 - tasks;
 - structure;
 - technologies;
 - staff (people).
LOGO
THE INTERNAL ENVIRONMENT
LOGO
THE INTERNAL ENVIRONMENT
To earn enterprises must formulate purposes in
the following areas:
 - market share;
 - development and sale of products;
 - quality of services;
 - training and selection of managers;
 - social responsibility.
LOGO
THE INTERNAL ENVIRONMENT
The tasks are divided into three
categories:
- work with people:
- work with subjects (raw materials,
feedstocks, technical equipment,
instruments, etc.);
- work with information.
LOGO
THE INTERNAL ENVIRONMENT
 Bureaucracy is organizational form, which is
characterized by roles, hierarchy and offices or roles.
The key features of bureaucracy are as follows:
 a. A continuous organization of functions bound by
rules.
 b. Specified spheres of competence.
 c. A hierarchical arrangement of offices,
 d. Appointments made on grounds of technical
competence.
 e. Separation of officials from the ownership,
 f. Offices exist in their own right. g. Rules and decisions
are set down.
LOGO
THE INTERNAL ENVIRONMENT
 The grouping of jobs into departments is a
second major activity required in organizing.
Departmentalization means grouping of related jobs
to form an administrative unit—department, area, or
center. Because the jobs in any department are
similar, for many purposes of the organization, each
department can be considered to be a single piece
of the organization. Departmentalization assists in
the coordination of the jobs of an organization, and
coordinating departments is easier than coordinating
each job separately.
LOGO
THE INTERNAL ENVIRONMENT
 Functional departmentalization is often employed in smaller
companies. It is well suited to organizations that offer a limited
number of goods. It has several advantages for these types of
organizations. First, be-functional departmentalization groups
closely related activities and employees, it permits effective
economies of scale. It allows workers with the related knowledge
and skills to work together on the same type of work issues.
Marketing specialists, for example, work together to develop
promotion campaigns for each of the small number of products of
the company. Second, functional departmentalization promotes
the development of specialized skills and expertise in workers
because they deal with the same issues over time. Third,
managers have an easier time coordinating and planning
because all the jobs that report to them are similar in content.
Finally, this type of departmentalization is often intuitively
simple to the persons involved in the organization in terms of
their learning the lines of communication and authority.
LOGO
THE INTERNAL ENVIRONMENT
 Customer Departmentalization
 An organization employing customer departmentalization
groups jobs so that the job holders interact with a
specific customer group or clientele. Each of
departments has a manager, assistant manager, clerk,
buyer, inventory clerk, and sales clerks. However, the
activities of those positions in any department include
only the product appropriate for its group of clients.
 An
obvious
advantage
of
customer
departmentalization is that it puts to organization in
closer contact with its customers and should give
the firm some advantage in addressing the needs of
that particular clientele.
LOGO
THE INTERNAL ENVIRONMENT
 Product Departmentalization
 Firms employing product departmentalization group
jobs or activities around their principal goods and
services. Many large organizations that have several
different products are similarly organized along
product lines. And organizations grow; they often
move from a functional to a product orientation for
their structure. This is especially true if the firms
produce or acquire a variety of products that may
have some unique manufacturing, marketing, and
distribution needs.
LOGO
THE INTERNAL ENVIRONMENT
 Geographic Departmentalization
 Geographic departmentalization groups
jobs
according
to
physical
geography.
This
departmentalization scheme is often used by firms
with international operations requiring a special
knowledge or sensitivity to each particular nation or
region. Departmentalization by geography can be
based on any set of geographic parameters—for
instance, area, state, or nation.
LOGO
THE EXTERNAL ENVIRONMENT
 Factors of direct influence





SUPPLIERS
Organizations must acquire resources from their environment and convert those resources into
products or services to sell. Suppliers provide these resources. Every business must acquire
people (supplied by universities, trade schools and employment services), raw materials (supplied
by producers, wholesalers, and distributors), and capital (supplied by banks, investment funds,
stockholders, sponsors and other sources). Suppliers are important to an organization for reasons
beyond the resources they provide. Suppliers can raise their prices or provide poor quality goods
and services.
CUSTOMERS
Customers purchase the products or services the organization offers. Without customers, a
company wouldn't survive. There are a final consumers, who buy a goods for own use, and
intermediate consumers, who buy raw materials or wholesale products and then sell to final
consumers. Intermediate customers actually make more purchases than individual final
consumers do. Examples of intermediate customers include hospitals, which buy medicines from
wholesalers, and manufacturers' representatives for use them to patients, and industrial buyers,
who buy raw materials (such as chemicals) before converting them into final products.
COMPETITORSOrganizations must identify their competitors including (1) overseas firms,
especially their first, unobtrusive entry into small niches; (2) small domestic firms, especially their
entry into tiny, premium markets; (3) big new domestic companies exploring new markets; (4)
strong regional competitors; and (5) unusual entries such as TV home shopping and the explosion
of retail catalogers.
LOGO
THE EXTERNAL ENVIRONMENT
 Factors of the indirect influence








Political factor. Government policies both impose strategic constraints and provide opportunities. The
government can affect business opportunities through tax laws, economy, and international trade
rulings.
The economy. The international environment is an important contributor to another crucial component
of the macro environment: the economy.The economic environment dramatically affects companies'
ability to function effectively and influences their strategic choices. Interest and inflation rates affect the
availability and cost of capital, the ability to expand, prices, costs, and consumer's demand for products.
Technology. Today a company cannot succeed without incorporating into its strategy the astonishing
technologies that exist and continue to evolve. Technological advances create new products, production
techniques, and ways of managing and communicating. As technology evolves, new industries, markets,
and competitive niches 1 develop. The advent of computers created a huge industry.
Social/cultural factor. Social/cultural environment implies installation, life value and traditions, which
influence upon organization. One example of restraint on business action is the standards regarding
bribery. In some countries, bribes and kickbacks are common and expected ways of doing business. But
for U.S. firms, these are illegal, unethical and oral practices. Social/cultural factors influence on
consumption of some products and facilities including medicines. Market factors:
•
demographic structure of the population;
•
incomes of the population and their dynamics;
•
market conditions;
•
level of competition in the branch.
LOGO
THE EXTERNAL ENVIRONMENT
CHARACTERISTICS OF THE EXTERNAL
ENVIRONMENT:
 > interconnection of factors (level of strength, with
which change of one factor acts upon others);
 > complexity (number of factors, vastly influencing
upon activity of the or-ganization);
 > mobility (velocity of changes in the environment);
 > uncertainty (the amount of information on
ambience and level of confidence in this
information).
LOGO
THANK YOU FOR ATTENTION!!!