Assignment Code: MMPH-001/TMA/JULY/2023

Course Code: MMPH-001

Assignment Name: Organisational Theory and Design

Year: 2023

Verification Status: Verified by Professor

Q1) Explain the meaning and characteristics of an organisation and describe the approaches to understand an organisation.

Ans) The term "organization" finds its roots in the Greek word "organon," meaning a tool or instrument. It is conceptualized as the embodiment of persistent efforts to coordinate, influence, and control human behaviour to achieve desired outcomes. Chester I. Bernard defines an organization as "a system of consciously coordinated activities or forces involving two or more persons."

Characteristics of An Organization Include:

Transparent and Definite Boundaries: An organization represents a social unit with clear boundaries, either closed or selective in admitting outsiders. It possesses a distinct collective identity.

Central Coordination System: There exists a central locus of final authority responsible for making and enforcing binding collective decisions. Leaders at the centre manage and direct the concentrated efforts of the organization, establishing a unitary, hierarchical structure.

Internal Differentiation: Internal organizational roles are sharply defined and codified in formally established rules. Decisions are executed by a disciplined, specialized, and continually rational operating staff.

Legitimacy: The organizational order, encompassing the distribution of authority, power, and responsibilities, is considered legitimate. Discipline is rooted in the belief that individuals in certain positions have the authority to issue orders, and others have a duty to obey.

Alignment of Characteristics with Achievements: There is a notable alignment between organizational goals, structures, processes, behaviour, and outcomes. The quality of achievements directly correlates with organizational structures and processes.

Flexibility: Organizations are intentionally designed tools that can be structured and restructured to enhance problem-solving capabilities and achieve predetermined goals.

Part of Societal Transformation: While organizations are viewed as rationally designed instruments, their growth, significance, and acceptance in society reflect broader societal transformations.

This reflects the shift from traditional to modern society, emphasizing a commitment to and maintenance of rationality within the contemporary social context. The essence of an organization can be comprehended through various metaphors, which serve as figurative expressions characterizing one object in terms of another. These metaphors provide distinct lenses through which to view and interpret the nature of organizations, offering complementary and sometimes conflicting insights. According to Morgan, eight archetypical metaphors can be employed to understand organizations: Machines, Organisms, Brains, Cultures, Political Systems, Psychic Prisons, Flux and Transformation, and Instruments of Domination.

Organizations as Machines: Derived from Max Weber's bureaucratic model, this metaphor emphasizes precision, speed, and efficiency through a fixed division of tasks and hierarchical supervision.Suited for straightforward tasks and stable environments, but limitations arise in adapting to change, fostering bureaucracy, and dehumanizing effects.

Organizations as Organisms: Draws parallels between organisms and organizations, emphasizing open systems, adaptation to environments, life cycles, and factors influencing health and development. Views organizations as living systems striving to survive in an uncertain environment.

Organizations as Brains: Rooted in Herbert Simon's decision-making approach, it explores parallels between human and organizational decision-making. Acknowledges bounded rationality, where decisions are based on limited information processing, leading to "good enough" decisions.

Organizations as Cultures: Views organizations as mini societies with distinctive cultural patterns, encompassing shared systems of meaning, values, ideologies, and social practices.

Organizations as Political Systems: Compares organizations to mini-states, where individual-organization relationships mirror individual-society relationships. Three relevant frames of reference are pluralist, unitary, and radical—highlight diverse interests, conflicts, and power dynamics.

Organizations as Psychic Prisons: Introduces the ethical dimension, emphasizing the over-rationalization of organizations. Encourages understanding and addressing unconscious patterns of behaviour and control.

Organizations as Flux and Transformation: Explores chaos, complexity, and mutual causality theories to understand change and transformation. Highlights attractor patterns, feedback loops, and dialectical analysis to navigate change.

Organizations as Instruments of Domination: Traces the historical association of organizations with processes of social domination. Emphasizes the blend of achievement and exploitation, portraying organizations as instruments of domination’s.

Q2) What is organisational effectiveness and discuss the models to understand organisational effectiveness? What criteria to be adopted to measure organisational effectiveness? Discuss.

Ans) Organizational effectiveness is a measure of how successful an organization is in attaining its goals. It reflects the organization's ability to produce the desired results.

Defining organizational effectiveness is complex, as it is influenced by numerous factors, including mission and goals, internal efficiency, and positioning.

The effectiveness of an organization hinges on its tangible positive impact on shareholders, users, employees, or the environment. As a result, there is not a universal definition of effectiveness; rather, it is contextual to each organization. It can manifest in achieving goals, satisfying stakeholders, allocating sufficient resources for operations, and making a positive impact on society or the environment.

Various models exist for understanding organizational effectiveness, each providing a distinct perspective on what constitutes success.

1. Goal Model: This model focuses on accomplishing organizational goals, primarily measuring output. It emphasizes the results achieved without delving into detailed information on the inputs and processes employed by the organization.

2. Internal Process Model: Emphasizing high-quality internal processes, this model assesses effectiveness based on the smooth functioning of organizational operations. It places importance on documentation and continuous improvement. Unlike outcome-focused models, its primary concern is the efficiency of internal processes.

3. Resource-Based Model: This model centres on obtaining resources essential for high performance. It highlights achieving a competitive advantage through valuable and rare resources that are challenging for others to replicate. Examples include Apple's iPhone or Microsoft Windows, where unique resources contribute to organizational effectiveness.

4. Strategic Constituency Model: Effectiveness in this model is measured by satisfying the strategic constituencies that hold influence over the organization. It focuses on meeting the needs of the prevailing environment, acknowledging potential threats to the organization's survival.

5. Stakeholder Model: This model gauges effectiveness by satisfying various stakeholders, such as employees, customers, and contractors. It recognizes that organizational success depends on meeting the diverse needs and expectations of these key groups.

6. Competing Values Model: Based on Cameron and Quinn’s framework, this model acknowledges the presence of simultaneous opposites within an organization. For instance, an organization may aim to satisfy customers, make a profit, take care of employees, and foster innovation concurrently. Effectiveness is measured by successfully reconciling these competing values.

7. Abundance Model: This model suggests that effectiveness is derived from flourishing and virtuousness within the organization. It posits that realizing the highest potential in the human system of the organization contributes to its overall success. The role of Human Resources (HR) has become paramount in enhancing organizational effectiveness through various strategic practices:

People Practices: Core HR practices like recruitment, learning and development, reward systems, and career planning empower employees, fortifying their capabilities. Strengthened employees are motivated performers, contributing significantly to organizational goals and overall effectiveness.

Workforce Capabilities: Elevating employee capabilities fosters motivation and high performance, directly impacting the organization's effectiveness. Investing in employee skills aligns individual efforts with organizational objectives.

Key Performance Drivers: HR plays a pivotal role in building organizational resources and capabilities, ensuring a competitive advantage. This focus contributes to cultivating a high-performance culture within the organization.

Efficient Processes and Organization: HR contributes to efficient internal processes and smooth operations, minimizing absenteeism and turnover. Strong people practices shape a positive organizational culture, reinforcing employee competencies and aiding goal achievement.

Product and Service Output: Organizations benefit from policies that prioritize customer satisfaction through a positive culture, ethical values, and effective performance evaluation and rewards.

Organizational Objectives: Aligning organizational objectives with societal value, return on investment, market growth, and capital efficiency enhances stakeholder value. HR plays a role in shaping these objectives for overall organizational effectiveness. Conditions conducive to high organizational performance include leadership transparency, accountability at all levels, and an environment fostering innovation and creativity. Strategies emphasizing efficient delivery and customer satisfaction, supported by robust recruitment processes and regular organizational reviews, contribute to effectiveness.

Customer-Centric Approach: Prioritize customer needs in product development to build loyalty and enhance the organization's image and branding.

Emphasize Quality Services: Beyond meeting customer needs, focus on delivering quality services to enhance organizational effectiveness.

Leverage Technology: Regularly update technologies to align with market demands, contributing to the organization's efficiency and effectiveness.

Q3) Explain the purpose of an organisational design and describe and discuss the key factors affecting an organisation design.

Ans) An organization's design serves various overarching objectives, encompassing strategic alignment, resource efficiency, task delegation, coordination, communication, monitoring, adaptability, crisis management, employee motivation, and succession planning. These objectives contribute to the overall effectiveness and success of the organization:

Supporting Organizational Strategy: The structure should align with and support the organization's strategy, ensuring that the design facilitates the achievement of goals and objectives.

Efficient Resource Arrangement: Designing the organization to efficiently allocate and utilize resources is essential for optimizing performance and achieving objectives.

Effective Division of Tasks and Accountabilities: The structure should delineate clear responsibilities and accountabilities, ensuring that tasks are appropriately distributed among individuals and groups.

Coordinated Activities and Decision-Making: The design should facilitate effective coordination of activities and clarify decision-making processes to ensure smooth organizational functioning.

Enhanced Communication Lines: The structure should promote clear lines of communication both vertically and horizontally within the organization, fostering efficient information flow.

Monitoring and Review: An effective organizational design allows for the systematic monitoring and review of the organization's activities to ensure alignment with goals and strategies.

Adaptability to Change: The design should incorporate mechanisms that enable the organization to cope with changes in markets, products, and the internal and external environments, fostering adaptability.

Crisis Management: The structure should include provisions for handling crises and problems, ensuring that the organization can navigate challenges effectively.

Employee Motivation and Satisfaction: A well-designed organization should contribute to motivating, managing, and providing job satisfaction to individual members of the organization, promoting a positive and productive work environment.

Management Succession: The design should provide for effective management succession, ensuring a smooth transition of leadership roles to maintain organizational stability and continuity. The selection of an appropriate organizational design is contingent upon numerous factors, with size, environment, strategy, and technology playing pivotal roles.

Size and Organizational Design: Size is a critical contingency factor affecting various structural aspects. Two contrasting perspectives influence organizational design based on size. The "bigger is better" model asserts that larger organizations achieve cost efficiencies, while the "small is beautiful" approach contends that oversized organizations can encounter behavioural issues. Recent research suggests a middle ground, emphasizing complexity over size as a central issue.

Environment and Organizational Design: Organizations, as open systems, interact with their environment and receive inputs while delivering outputs. The general environment encompasses cultural, economic, legal-political, and societal conditions, while the specific environment involves owners, suppliers, distributors, and competitors.

Environmental complexity, determined by richness, interdependence, and uncertainty, influences organizational design. Richer environments offer opportunities and dynamism, necessitating adaptable organizational designs. Interdependence with external factors may shape design strategies, and uncertainty often calls for more organic structures.

Alliances and Environmental Dominance: In dynamic and uncertain environments, organizational design may extend beyond internal boundaries. Inter-firm alliances, cooperative agreements, or joint ventures between independent firms become crucial. Japan's Keiretsu model, a network of interlinked organizations, exemplifies such alliances.

Differentiation and integration are essential forces in organizational design. The Lawrence and Lorsch study underscore the need for a balanced approach, emphasizing that successful organizations exhibit a higher degree of both differentiation and integration as environmental complexity increases.

Dynamism and Organizational Effectiveness: Dynamism, reflecting the stability or instability of the environment, contributes to uncertainty. High dynamism signifies a degree of unpredictability, emphasizing the importance of uncertainty as a strategic element.

The mechanistic versus organic organizational design comparison introduced by Burns and Stalker highlights the distinction between rigid bureaucracies (mechanistic) and flexible networks of multitalented individuals (organic). The choice between mechanistic and organic structures depends on the task and environmental uncertainty contingency.

Q4) Describe and discuss contemporary organisational designs and their relevance in the present day context.

Ans) Contemporary organizational designs have evolved to meet the dynamic challenges of the present-day business environment. These designs reflect a departure from traditional hierarchical structures and embrace flexibility, agility, and adaptability. Various models have gained prominence, each tailored to address specific organizational needs in the fast-paced, interconnected, and technologically advanced landscape.

Flat Organizational Structure:

Description: Flat structures minimize hierarchical levels, promoting a broader span of control and direct communication channels.

Relevance: In the era of quick decision-making, flat structures facilitate agility and responsiveness. They empower employees by reducing bureaucratic layers, fostering innovation, and enhancing communication flow.

Matrix Organizational Structure:

Description: Matrix structures blend functional and project-based reporting lines, allowing employees to work on multiple projects simultaneously.

Relevance: Matrix structures are suitable for complex projects requiring diverse skills. They enhance collaboration across departments and provide a dynamic framework for organizations engaged in diverse, cross-functional activities.

Network Organizational Structure:

Description: Network structures rely on strategic partnerships, outsourcing, and collaboration with external entities to achieve organizational goals.

Relevance: In an interconnected global economy, network structures facilitate agility, allowing organizations to leverage external expertise, share resources, and adapt swiftly to market changes.

Holacracy:

Description: Holacracy is a decentralized organizational system that distributes authority across self-organizing teams or circles.

Relevance: Holacracy promotes a culture of empowerment, autonomy, and continuous improvement. It is suitable for organizations valuing flexibility, innovation, and employee engagement.

Boundaryless Organization:

Description: Boundaryless organizations emphasize the elimination of barriers, both internal and external, fostering collaboration and knowledge sharing.

Relevance: In a globalized world, boundaryless organizations break down silos, encouraging seamless communication, and enabling organizations to tap into diverse talents and perspectives.

Virtual Organizations:

Description: Virtual organizations operate with a geographically dispersed workforce, relying on technology for communication and collaboration.

Relevance: With the rise of remote work and advanced communication technologies, virtual organizations reduce costs, enhance work-life balance, and attract a broader talent pool.

Eco-Systemic Organization:

Description: Eco-systemic organizations operate within a broader business ecosystem, collaborating with partners, suppliers, and customers.

Relevance: In a hyper-connected business environment, eco-systemic structures facilitate innovation, co-creation, and the ability to adapt to changing market conditions through strategic alliances.

Agile Organization:

Description: Agile organizations prioritize adaptability, iterative processes, and customer feedback, often adopting Agile methodologies in project management.

Relevance: In industries marked by rapid technological advancements and evolving customer preferences, agile organizations ensure quick responses to changes, reducing time-to-market and enhancing customer satisfaction.

Q5) Write an essay on emerging trends in work organisation.

Ans) The pressures of globalization and privatization have ushered in significant changes in the workplace, with companies shaping their work systems around four key pillars: virtual organizations, a flexible and adaptive workforce, contingent pay, and democratic governance at the workplace. Sustaining employee engagement and emphasizing their contribution to the organization's mission are crucial in this evolving landscape.

Job Insecurity and Work Intensification: Job intensification is exemplified by the case of the Eicher factory, where production targets surged over the years. Incentives initially used to boost productivity eventually became the new norm, contributing to increased workloads. Job insecurity and work intensification are linked to reduced staffing levels, driven by market pressures, leading to negative impacts on employee health and family relationships. Stress and ill-health are exacerbated by the combination of job insecurity and demands for increased productivity.

Flexibilization & Casualization: Flexibilization, while beneficial for those with interesting jobs, often leads to resistance and challenges for working-class individuals in less favourable positions. Flexibility imposed on certain jobs can result in labour turnover, absenteeism, low commitment, and deficient performance.

Conversely, casualization increases employer power by introducing 'zero hour' contracts, transferring risks to workers. These trends create challenges for workers' rights and protections under the law.

McDonaldization: McDonaldization, akin to modern Taylorism, breaks down work processes into discrete, controllable actions to maximize profit. This system, also known as Toyotism, emphasizes just-in-time production, multi-jobbing, and quality control. While bosses may be satisfied with output quantity, the quality often suffers. The commodification of not only work but also consumption and leisure further contribute to a mechanized and mass-manufactured culture.

Commodification: The shift in focus from the producer to the product has diminished the social and personal value of work. Work has become a means of reproducing capitalism, producing money but lacking social value. The supremacy of consumption and the commodification of personal life trap individuals in a cycle of artificial needs and desires.

Rescheduling Working Arrangements: Alternative scheduling methods, such as compressed workweeks, part-time work, job sharing, and telecommuting, have become more common. These arrangements aim to accommodate individual needs, improve work-life balance, and reduce costs for organizations. Challenges such as finding compatible job-sharing partners and maintaining effective communication in telecommuting exist.

Call Centres: The growth of call centres presents unique challenges related to employee motivation, performance measurement, stress management, and ensuring the necessary skills and training. Maintaining morale in such intensive environments and addressing the stress associated with the work are critical considerations for organizations.