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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