ORGANISATIONAL BEHAVIOUR

LEARNING OUTCOME : 02
Understand how organisational structures and culture impact
on the effectiveness of the organisation
LO 2.1 : Analyse the characteristics of different
organisational structure

LO 2.2 : Evaluate the importance of organisational
culture theory in developing organisational
effectiveness

LO 2.3 : Analyse the culture and structure of one
organisation and evaluate how they impact on its
effectiveness
TOPICS TO BE COVERED
Organisational structure
Bureaucracies, stakeholders, re-engineered corporation, modular,
networked and atomised organisations, virtual organisations), line,
staff & functional structures, formal & informal organisations,
designing organisation structure, centralisation, decentralisation
Organisational culture
Harrison - Power, Role, Person, Task cultures, Likert autocratic,
benevolent autocratic, consultative, participative, Mintzberg
simple, machine bureaucracy, divisional, adhocracy Pedlar et al
the learning organisation
How structure and culture impact on effectiveness
Leader as a change agent
WHAT IS ORGANIZATIONAL STRUCTURE?

According to STEPHEN P ROBBINS An organizational structure
defines how job tasks are formally divided, grouped and
coordinated.

According to FRED LUTHANS Organization structure represents the
skeleton framework for organizational behavior.

Organizational structure is defined as the framework of tasks,
reporting and authority relationships within which an organization
functions.

NEED FOR FORMAL ORGANIZATION
STRUCTURE

Facilitating Management
Encouraging Growth
Optimum Use of Technological Improvement
Encouraging Human Use of Human Beings
Stimulating Creativity
Elements of
organization
structure
Department-
alization

Chain of
command
Formalization
Span of
control
Work
specialization
Centralization
and
De-
centralization
Work Specialization

Work Specialization or Division Of Labor
refers to the degree to which activities in an
organization are subdivided into separate
jobs.
In essence, individuals specialize in doing part
of an activity rather than the entire activity.
Departmentalization
The basis by which jobs are grouped together
is called Departmentalization.
The various ways by which
Departmentalization can be done are:-
Functional
Product
Customer
Geographic

Chain of Command

Who reports to whom?




Span of Control

How many people can a manager manage?

Formal decision making authority is held
by a few people, usually at the top
Centralization
Decision making authority is
dispersed throughout the organization

Decentralization
Centralization and Decentralization
FORMS OF ORGANIZATIONAL STUCTURES
The Line and Staff Organization Structure
The Functional Organization Structure
The Divisional Organization Structure
The Matrix Structure
The Project Organization Structure
Free form Organization Structure
Network Organization Structure
Line and Staff Organization Structure

Line Departments Substantive (direct) in its contribution to
organizations overall objective

Staff Departments Objective (indirect) in its contribution to
organizations overall objective

Line and Staff conflict
Reasons of conflict are:
Difference in view points
Lack of separation between Line and Staff
Lack of proper understanding of authority
Different background


Functional Organization Structure
Traditional concept of organizing.
The basis of departmentation is the various
functions to be performed by the
organization.
Widely used in medium and large
organizations.



Divisional Organization Structure
Also known as Profit Decentralization.
Organization is divided into fairly autonomous units.
Each unit is self contained and directly accountable to
the organization.

Basis of Divisionalisation
Product Divisionalisation
Territorial Divisionalisation
Strategic Business Divisionalisation



Product Divisionalisation

Vice President
Sales and
Marketing
Vice President
Research and
Development
Vice President
Materials
Management
CEO
Vice President
Finance

Canned
Soups
Division
PDM
Frozen
Vegetable
Division
PDM
Frozen
Entrees
Division
PDM
Baked
Goods
Division
PDM
Centralized support functions
Divisions
Matrix Organization Structure


It is the realization of two dimensional
structure which emanates directly from two
dimensions of authority.

18

Matrix Structure
CEO
V ice President
Engineering
V ice President
Finance
V ice President
Purchasing
V ice President
Sales and
Marketing
V ice President
Research and
Development
Product A
Manager
Product B
Manager
Product C
Manager
Product D
Manager
Product Team
Two-boss employee
Project Organization Structure
Free Form Organization
Also known as naturalistic, organic form of
organization structure.
Free form structures reduce the emphasis on
positions, departments and other formal
units, and on the organizational hierarchy.
Free form organizations are suitable for those
industries which have to work in highly
dynamic environments.

21
Network organization structure
A recent innovation in organizational
architecture is the use of network structures.

A network structure is a cluster of different
organizations whose actions are
coordinated by contracts and agreements
rather than through a formal hierarchy.

2003 Prentice Hall Inc. All
rights reserved.
What Is Organizational Culture?
Characteristics:
1. Innovation and risk
taking
2. Attention to detail
3. Outcome orientation
4. People orientation
5. Team orientation
6. Aggressiveness
7. Stability
2003 Prentice Hall Inc. All
rights reserved.
1823
What Is Organizational Culture?
(contd)
2003 Prentice Hall Inc. All
rights reserved.
1824
What Do Cultures Do?
Cultures Functions:
1. Defines the boundary between one organization
and others.
2. Conveys a sense of identity for its members.
3. Facilitates the generation of commitment to
something larger than self-interest.
4. Enhances the stability of the social system.
2003 Prentice Hall Inc. All
rights reserved.
1825
What Do Cultures Do?
Culture as a Liability:
1. Barrier to change
2. Barrier to diversity
3. Barrier to acquisitions and
mergers
2003 Prentice Hall Inc. All
rights reserved.
1826
Stages in the Socialization Process
2003 Prentice Hall Inc. All
rights reserved.
A Socialization Model
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rights reserved.
How Organization Cultures Form
2003 Prentice Hall Inc. All
rights reserved.
How Organizational Cultures Have
an Impact on Performance and
Satisfaction
Questions for Cultural Analysis
What is the background of the founders?
What explains the organizations growth and
survival?
What does the organization stand for? What
is its motto?
What values does the organization talk
about?
What values does the organization act
about?

leadershipcultivation.blogspot.com

LIKERTS
Exploitive authoritative
In this style, the leader has a low concern for
people and uses such methods as threats and
other fear-based methods to achieve
conformance. Communication is almost
entirely downwards and the psychologically
distant concerns of people are ignored.

Benevolent authoritative
When the leader adds concern for people to an
authoritative position, a 'benevolent dictatorship'
is formed. The leader now uses rewards to
encourage appropriate performance and listens
more to concerns lower down the organization,
although what they hear is often rose-tinted,
being limited to what their subordinates think
that the boss wants to hear. Although there may
be some delegation of decisions, almost all major
decisions are still made centrally.

Consultative
The upward flow of information here is still
cautious and rose-tinted to some degree,
although the leader is making genuine efforts
to listen carefully to ideas. Nevertheless,
major decisions are still largely centrally made

Participative
At this level, the leader makes maximum use
of participative methods, engaging people
lower down the organization in decision-
making. People across the organization are
psychologically closer together and work well
together at all levels.

Mintzbergs-
Five Generic Structures
There are five generic organisation structures
which can be described in terms of the five-part
theory:
Simple structure,
Machine bureaucracy,
Professional bureaucracy,
Divisionalised form,
Adhocracy

SIMPLE STRUCTURE
The simple structure, typically, has
little or no techno structure, few support
staffers,
a loose division of labour, minimal
differentiation among its units, and a small
managerial hierarchy.
The behaviour of simple structure is not
formalised and planning, training, and liaison
devices are minimally used in such structures

Machine Bureaucracy
The design of a machine bureaucracy tends to be as
follows:
highly specialised, routine operating tasks;
very formalised procedures in the operating core;
a production of rules, regulations, & formalised
communication;
large-sized units at the operating level;
reliance on the functional basis for grouping tasks;
relatively centralised power for decision making;
an elaborate administrative structure with sharp
distinctions between line and staff.

Professional Bureaucracy
The professional bureaucracy relies for coordination on:
the standardization of skills and its associated
parameters such as design, training and instruction.
In professional bureaucracy type structures duly
trained and indoctrinated specialists -professionals- are
hired for the operating core, and then considerable
control over their work is given to them.
Most of the necessary coordination between the
operating professionals is handled by the
standardization of skills and knowledge especially by
what they have learned to expect from their colleagues

Divisionalised Structure
Divisionalised form type organizations are
composed of semi-autonomous units - the
divisions. The divisionalised form is probably a
structural derivative of a Machine Bureaucracy -
an operational solution to co-ordinate and
controls a large conglomerate delivering:
Horizontally diversified products or services
In a straight-forward, stable environment
Where large economies of scale need not apply

Adhocracy Structure
Adhocracy includes a highly organic structure, with:
little formalization of behaviour;
job specialization based on formal training;
a tendency to group the specialists in functional
units for housekeeping purposes but to deploy
them in small, market-based project teams to do
their work;
a reliance on connection devices to encourage
mutual adjustment, the key coordinating
mechanism, within and between these teams

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