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THE CONCEPT OF ORGANIZATION

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Presentation on theme: "THE CONCEPT OF ORGANIZATION"— Presentation transcript:

1 THE CONCEPT OF ORGANIZATION
1.1.          Organizational Analysis Levels 1.2.          Effectiveness. Approaches & Models 1.3. Innovation. Types. Exploring and Exploiting Innovation. 1.3.            Organizational Structure and Organizational Design 1.4.            Organizational Design Theory 1.5.            Contemporary Trends Prof. Dr. Irene Martín Rubio-UPM Teaching Staff Mobility Fachhochshule Frankfurt an Main

2 ORGANIZATIONAL ANALYSIS LEVELS
INDIVIDUAL - GROUP - ORGANIZATION OUTCOMES OF ORGANIZATIONS INTERDISCIPLINARY STUDY

3 ORGANIZATION ARTIFACT GOAL DIRECTED SOCIAL ENTITY STRUCTURE ACTIVITY
NOMINAL BOUNDARY

4 EFFECTIVENESS MODELS, APPROACHES

5 EFFECTIVENESS Definitions
GOAL EFFECTIVENESS EFFICIENCY Ex. Volumen of output, profit, costumer satisfaction, dividends... The degree to which an organization realises its goals. Meeting outputs schedules. The capacity to adapt to changing environments. Quantitative dimension The ratio of inputs to outputs in a process or organisation.

6 APPROACHES TO EFECTIVENESS
THE SYSTEMS RESOURCE APPROACH THE INTERNAL PROCESS APPROACH COORDINATION THE GOAL APPROACH THE STAKEHOLDER APPROACH INTEREST GROUPS IN THE ORGANISATION THE INTEGRATIVE APPROACH

7 THE SYSTEM APPROACH External Environment vs. Internal Environment
Sub-Environments: Social ; Technical; Political ; Economic Functional Systems: Financial, Marketing, Operations, Human Resource.... Organizational System INPUTS OUTPUTS

8 ORGANIZATIONAL BEHAVIOR
THE INTERNAL APPROACH ORGANIZATION DESIGN SUPERVISORS & STRUCTURE GOOD TEAM SPIRIT CONFIDENCE AND TRUST LOCAL DECISION MAKING COMMUNICATION CONFLICT RESOLUTION INTEGRATION ORGANIZATIONAL BEHAVIOR

9 THE GOAL APPROACH GOAL CRITERIA PERFORMANCE ( ACCOUNTING)
STRATEGIC GOALS OPERATIVE GOALS CRITERIA PERFORMANCE ( ACCOUNTING)

10 THE STAKEHOLDER APPROACH
Local Authority GOVERNMENT Media COMMUNITY Other firms Employees ORGANIZATION Clients Banks Consumers Universities OWNERS Suppliers Insuarance Companies

11 AN INTEGRATIVE MODEL OF EFFECTIVENESS
ENVIRONMENT The economy Competition Resources INTERNAL EFFECTIVENESS Capacity Technology Physical conditions Systems and structure Groups and intra-group relations Leadership INDIVIDUAL EFFECTIVENESS Ability Expectations, outcomes Rewards Organizational Effectiveness

12 INNOVATION KNOWLEDGE SOCIETY

13 INNOVATION Innovation Invent + Commercialization Open innovation:
the use of purposive inflows and outflows of knowledge to accelerate internal innovation and to expand the markets for external use of innovation, respectively”. (Chesbrought 2003)

14 Invent + Commercialization
PATENT TECHNOLOGY MARKET INVENT VS. PRODUCT MARKET

15 INNOVATION Types of innovation, OCDE- Oslo Manual-2005:
PRODUCT INNOVATIONS PROCCESS INNOVATIONS ORGANIZATIONAL INNOVATIONS MARKETING INNOVATIONS

16 EXPLORING AND EXPLOITING INNOVATION
The Roman god Janus had two sets of eyes—one pair focusing on what lay behind, the other on what lay ahead. TOMORROW VS. TODAY BUSINESS EXPLORING AND EXPLOITING INNOVATION AND EFFECTIVENES Ambidextrous Organizations:

17 The Innovation Paradox
Sometimes organizational "support" kills good new ideas. Entrenched ways of doing things and bureaucratic caution can and do discourage innovation in organizations, but even organizational support for new ideas can be a mixed blessing. How should the designed the organizations to promote INNOVATION?

18 Organizational Structure
And Organizational Design

19 ORGANISATIONAL STRUCTURE
The fundamental and relatively unchanging features of an organisation which are officially sanctioned by those who control it and consist of the way activities and component parts are grouped, controlled and coordinated in order to achieve specific aims and outcomes.

20 ORGANISATIONAL CHART

21 MACRO AND MICRO STRUCTURE
MACRO STRUCTURE Expresses the general form of structure and what is expected of organisational members. Organizational Chart, Board Committes, Planning & Control Procedures, Departmentation, Coordination-Mechanism MICRO STRUCTURE: OPERATING MECHANISMS Indicates in greater detail what is expected of individuals in a structure. Job Descriptions, Training & Development, Staff Appraisal, Control & Operating Procedures

22 ORGANISATIONAL DESIGN
It consists of a body of knowledge that provides guidelines for designing appropriate structures.

23 ORGANIZATIONAL DESIGN
FORMAL ORGANIZATION ORGANIZATIONAL CHART & STRUCTURE INFORMAL ORGANIZATION ORGANIZATIONAL BEHAVIOUR

24 ORGANISATIONAL DESIGN THEORY
CLASSICAL APPROACH TAYLOR FAYOL MAX WEBER AND BURAUCRACY CONTINGENCY THEORY ORGANISATIONAL SIZE TECHNOLOGY ENVIRONMENT CULTURE, STRATEGY STRUCTURAL CONFIGURATION: ORGANIC vs. MECHANIC ORGANIZATION

25 CLASSICAL APPROACH TAYLOR THE FATHER OF THE SCIENTIFIC MANAGEMENT
CONSULTING ENGINEER INCREASING EFFICIENCY IN PRODUCTION NOT ONLY TO LOWER COSTS AND RAISE PROFITS, BUT ALSO TO MAKE POSSIBLE INCREASED PAY FOR WORKERS THROUGH HIGHER PRODUCTIVITY. THE PRINCIPLES OF SCIENTIFIC MANAGEMENT REPLACING RULES OF THUMB WITH SCIENCE (ORGANIZED KNOWLEDGE) OBTAINING HARMONONY IN GROUP ACTION, RATHER THAN DISCORD ACHIEVING COOPERATION OF HUMAN BEINGS, RATHER THAN CHAOTIC INDIVIDUALISM WORKING FOR MAXIMUM OUTPUT DEVELOPING ALL WORKERS TO THE FULLEST EXTENT POSSIBLE FOR THEIR OWN AND THEIR COMPANY’S HIGHEST PROSPERITY !!! DESIGN WORK SYSTEM. SPECIALIZATION OTHER AUTHORS: GANTT, GILBRETH

26 CLASSICAL APPROACH FAYOL ( MODERN MANAGEMENT THEORY)
ACTIVITIES OF A FIRM: THECNICAL: PRODUCTION COMMERCIAL: SELLING AND EXCHANGE FINANCIAL: SEARCH FOR OPTIMUM USE OF CAPITAL SECURITY: PROTECTION OF PROPERTY AND PERSONS ACCOUNTING: INCLUDING STATISTICS MANAGERIAL: PLANNING, ORGANIZATION, COMMAND, COORDINATION AND CONTROL.

27 FAYOL’S PERSPECTIVE Division of work: Specialization of managerial as well as technical work Authority and responsibility: He sees both of them as a combination of official (position) and personal ( intelligence, experience, moral growth, past service, etc.) factors. Discipline: Discipline as “respect for agreements which are directed at achieving obedience, application, energy, and the outward marks of respect. Unity of command and direction: Employees should receive orders from one superior only. Each group of activities have the same objetive and the same plan. Subordination of individual to general interest Remuneration : Fair and to satisfay employees and employers. Centralization Scalar chain: Chain of superiors Order: Material and social order. “A place for everything and everyone”- Equity: Justice when dealing with subordinates Stability of tenure Initiative: It is one of the “keenest satisfaction for an intelligent man” Esprit of corps: “In union there is strenght”. The need for teamwork and the importance of communications in obtaining it.

28 CLASSICAL APPROACH MAX WEBER AND BUREAUCRACY
THREE BASIC FORMS OF AUTHORITY: CHARISMATIC: TRADITIONAL RATIONAL-LEGAL IDEAL TYPE BUREACRACY SPECIALISATION HIERARCHY RULES IMPERSONALITY APPOINTMENT PROGRESSION EXCLUSIVITY SEGREGATION ACCURATE WRITTEN RECORDS CRITICS: GOAL DISPLACEMENT, FRUSTRATION

29 THE CONTINGENCY APPROACH
THE MOST APPROPRIATE STRUCTURE FOR AN ORGANISATION IS ONE THAT MATCHES ITS PARTICULAR CIRCUMSTANCE. CONTINGENCY FACTORS: ORGANIZATIONAL SIZE, ORG. AGE TECHNOLOGY ENVIRONMENT OTHERS: STRATEGY, CULTURE, POWER, KNOWLEDGE SYSTEM.

30 THE CONTINGENCY APPROACH
MECHANISTIC ORG. BUREAUCRACY Rigid structure Environment : Stable Specialization Hierarchic structures Precise definitions of rights, obligations and technical methods Knowledge is located at the top of the organization. Loyalty Governed by superiors Vertical relationships EFFICIENCY ORGANIC ORG. Fluid sets of arrangements Environment: Turbulent Special knowlege is valued. Continual redifinition of individual task Spread of commitment Network structure of control authority. Communication consists of information and advice rather than instructions and decisions FLATTER ORG. AND LOWER DEGREES OF SPECIALISATION, CENTRALISATION OF AUTHORITY AND STANDARDISATION. INNOVATION

31 ORGANIC vs. MECHANISTIC
Innovation Formalization Small close knit groups Informal organization Large specialized groups Hierarchical organization

32 STRUCTURAL CONFIGURATIONS
CONTINGENCY DESIGN PARAMETERS FACTORS DESIGN DESIGN AGE & SIZE PARAMETER PARAMETER JOB DESIGN Job Job Specialization Specialization ENVIRONMENT Behavior Formalization Behavior Formalization TECHNOLOGY Training & Training & Indoctrination STRATEGY SUPERSTRUCTURE Unit grouping (Departm.) Unit grouping DESIGN CULTURE Unit Size Unit Size Centralisation Centralisation POWER LATERAL Planning Planning & Control Control Systems LINKAGES KNOWLEDGE Liasion devices DESIGN Coordination Mechanism STRUCTURAL CONFIGURATIONS

33 COMTEMPORARY TRENDS

34 CONTEMPORARY TRENDS GLOBALISATION:
CUSTOMER RELATIONS AND ADAPTABILITY: FLEXIBLE SPECIALISATION ADVANCED TECHNOLOGY: COMPUTER INTEGRATED MANUFACTURE HUMAN RESOURCES: TQM, JIT. FEWER ROUTINE JOBS. TEAMWORK DOWNSIZING, RIGHTSIZING AND DELAYERING: FLATTER HIERARCHIES BUSINESS PROCESS RE-ENGINEERING: New radical approaches to organisational designs WORKPLACE CHALLENGES: Heteregeneous and diverse working population and working arrangements THE CHALLENGE OF ETHICS: ROLE REQUIREMENTS: Personality and role of the job LEARNING ORGANISATIONS: Every experience is regarded as a learning opportunity. Thus experimentatios is encouraged

35 QUESTIONS ? SUGGESTIONS? IDEAS?


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