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Organization Design

Understanding Organizations

&

Effectiveness

Session 1

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Setting the context.. Describe the Organization in which you were placed

for summers & the nature of your project.

List five characteristics you observed in theorganization.

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What Is an Organization? Consciously coordinated, social entity

Identifiable boundary- membership

Continuous bonding

Goal oriented

Increase specialization and division of labor

Use large-scale technology:

economies of scale &economies of scope

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Characteristics of an Open System Environmental awareness

Feedback

Cyclic character Negative entropy (microscopic disorder) &

steady state

Movement towards growth & expansion Balance between maintenance & adaptive

functions.

Equifinality (similar goals can be achieved viadifferent routes)

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t

Organization obtains inputsfrom its environment

Raw materials

Money and capital

Human resources

Information and knowledge

Customers of serviceorganizations

Organizations Inputs

Organization transformsinputs and adds value to

them

Machinery

Computers

Human skills and abilities

Organization's Conversion Process

Sales of outputs alloworganization to obtain newsupplies of inputs

Customers

Shareholders

Suppliers

Distributors

Government

Competitors

Organizations Environment

Organization releasesoutputs to its environment

Finished goods

Services

Dividends

Salaries

Value for stakeholders

Organizations Outputs

How an

Organization

CreatesValue

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What is Organization Design ?

It is the process ofCONSTRUCTING andCHANGING an organizations structure to

help it achieve its goals.

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Why is organizational design so

Important ? Affects a companys ability to deal with

contingencies (events that might occur)

Used to manage diversity

Can influence an organizations ability to be

efficient and innovative

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The consequence of ignoring

Organization Design Talented people leave the organization

Resources are harder to acquire

Value creation process slows down

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What Is Organizational Theory? It is the study of how organizations function

and their relationships with their environment.

It involves components ofdesign, structure,

and culture.

The process of organizational design is used

to diagnose and manage the structure and

culture of organizations

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What Is Organizational Theory?

The Relationship among Organizational Theory andOrganizational Structure, Culture, and Design

Organizational Structure

The formal system of task andauthority relationships that

controls how people are tocooperate and use resources to

achieve the organization'sgoals.

Organizational Design

The process by whichmanagers select and manage

various dimensions andcomponents of organizationalstructure and culture so thatan organization can controlthe activities necessary to

achieve its goals.

Organizational Culture

The set of shared valuesand norms that control

organizational membersinteractions with each otherand with people outside theorganization.

Organizational Theory

The study of how organizations function and how they affect andare affected by the environment in which they operate.

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Dimensions of Organization structure1. Complexity- degree of differentiation that

exists within the organization.

2. Formalization-degree to which jobs arestandardized.

3. Centralization- degree to which decisionmaking is concentrated at a single point in anorganization.

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Complexity

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Horizontal Differentiation Specialization

Functional specialization (division of labor)

Social specialization

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Spatial Differentiation Degree of geographical dispersion

All functions duplicated at many locations

SBI

Spatial spread horizontal when different

functions operate out of different locations.

ONGC

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Integration Communication- ( formal /intranet, informal/

water-cooler

Coordination- ( teams & task forces)

Control- ( rules & procedures)

Culture- ( norms & customs)

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Formalization

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What is it? Degree to which jobs are standardized in an

organization.

Enforced through rules, procedures ,instructions & communications.

Measurement ?

Socialization Vs Professionalization

Techniques- selection, training, rolerequirements, rituals.

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Centralization

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How is it achieved? Does it depend on authority?

Can policies override decentralization?

Does Information processing systems aid

decentralization?

Can filtering of info by lower levels

decentralize decision making ?

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Case 1Information systems at Mrs. Fields Cookies.

Case analysis to be written in a paragraph.

All the questions to be answered as required.

Submission : 25th Wednesday.

All assignments must be in Times New Roman, font -12 with 1 spacing.

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