Unit 3: Organisations and Behaviour Assignment 1 An organisation is defined as a clearly bounded group (or groups) of people interacting together to achieve a particular goal in a formally structured and co-coordinated way. A hierarchy organisation is when employees are ranked at various levels within the organisation, each level is one above the other. A tall hierarchical organisation has many levels and a flat hierarchical organisation will only have a few. Flat Hierarchy http://limkokwingmba. files. wordpress. com/2008/08/hierarchies. jpg
Flat hierarchies were introduced to cut costs as fewer people are now being employed as managers or supervisors. This then leaves current staff with greater responsibility as their span of control increases, encouraging employees to make decisions for themselves. However this type of hierarchy could leave staff demotivated as they see no opportunity for promotion. Tall Hierarchy http://limkokwingmba. files. wordpress. com/2008/08/hierarchies. jpg Tall hierarchies are essential to large businesses due to the extent of employees they employ each varying in specialist areas or tasks throughout the business.
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However, communication is slow as there are many different levels of management that have to be informed before any decisions can be made. Span of Control Span of control is the number of subordinates who report to an employee and for whose work that employee is responsible. Businesses can operate on a wide or narrow span of control. Narrow Span of control A narrow span of control allows swift communication between the manager and employees as there are less people to be informed. Employees are aware to whom they are directly answerably to. Wide Span of Control
A wide span of control is less expensive because the business employs fewer supervisors or managers. With only one manager and team leader in the hierarchy below the manager, the employees are mostly all on the same level and can work with each other with clear delegation of duties. Less supervision and control can create a more positive attitude among employees, who appreciate the extra trust and freedom. Structural Types All businesses have a structure that they use. The most common structural types are detailed below: ? Simple Line Structure ? Functional Structure Geographical Structure ? Matrix Structure ? Customer Structure ? Product/ Service Structure ? Clover Leaf Structure Simple Line Structure This type of structure is best suited to small businesses. Each employee working within this structure is accountable to the person who is immediately above them. My part-time job at Sperrin Bakery would operate this type of structure. Functional Structure The above named structure occurs in a large business that operates in many different departments e. g. Finance, Marketing. The College which I currently attend operates on a functional structure.
Geographical Structure A geographical structure is adaptable to businesses that operate throughout a geographical area or region. Each region is its own complete entity and its goals are tied to the overall goals of the business. There is usually a regional manager overseeing the entire operation. Below is a diagram showing how investment firm “Skandia” is geographical structured. http://www. skandia. com/media/organisational_structure. gif Matrix Structure This type of structure is used when a business requires a structural management which is more adaptable and flexible.
It is best suited at dealing with particular projects where different skills are necessary to complete the project to the highest standard. Customer Structure Customer structure suits an organisation which has a wide range of customers therefore leaving the business being able to departmentalise its customers into categories. Product/ Service Structure This structure operates best throughout a large business. It includes organising individual productive units for each product or service that the business produces or offers. This then allows staff to specialise in their specific area. Clover Leaf Structure
This structure provides a “more radical design within a system approach to the entire organisation”. Management is at the centre of the leaf and participates in all 4 major organisational systems co-ordinating the work of each of these systems as well as determining organisational objectives. The four structures I have decided to compare and contrast are; ? Simple line ? Functional ? Matrix ? Clover Leaf A simple line structure is connected by solid, vertical lines connecting staff to display direct line relationships. Senior staff in this structure are referred to as line managers.
This type of structure would operate best for a small business employing a small number of employees, meaning staff are directly responsible to the person immediately above them. This differs to the functional structure as it works best in a large business employing specially trained staff in a particular area i. e. , Marketing, Research and Development and allows employees to use their skills to their full potential. Also each member belonging to a particular part of the functional area responds to the Head of their Department, who then responds to the Board of Directors, whereas in the simple line structure communication is direct.
Simple line structure is much more ‘simple’ in terms of layout, communication and approach. The second structure which I will compare is a Matrix structure and clover leaf structure. A business may be best to use the matrix structure if they regularly carry out projects, each requiring different skills and when innovation and creativity are essential. A project manager will decide on the composition of the team depending upon the objectives of the project. This results in team members leaving their normal duties and working under the project manager for the duration of the project.
The matrix structure is then more customer orientated and the team members become highly motivated. Whereas in a clover leaf structure a more fundamental design involving a systems approach to the organisation as a whole, is provided. Also in a clover leaf structure there are no Heads of Departments, therefore resulting in employees going straight to management themselves. However like a matrix structure the work from each system co-ordinates with one, another and determines the organisational objectives required to complete the tasks.
An organisation culture is an amalgamation of the values and beliefs of the people in an organisation. It lays down the rules and expectations of behaviour within an organisation. The rules and expectations are set by management whose decisions on policy usually devise the organisations culture. If the organisation operates on a positive culture then staff become highly motivated. On the other hand, if the culture is poor staff may feel dissatisfaction causing them to be less motivated to wanting to achieve the goals of the organisation. The culture can be set upon the; ? Company Policy Work Flow and workload ? Job design ? Organisational structures and relationships ? Management style ? Levels of trust The four types of culture developed by Charles Handy are: ? Power Culture ? Roles Culture ? Task Culture ? Person Culture The power culture is best suited to a small organisation but is based on personalities who retain power throughout the organisation. This type of culture generally operates informally with few rules and regulations. Power culture throughout organisations can be strong and dynamic and ensures the organisation reacts quickly to external demands.
However the organisation is dependant upon the judgement of the central power, resulting in others disagreeing, or if the decision is poor this could cause the organisation to suffer. This culture differs from an organisation operating a role culture as rules and regulations must be abided by. Each individual is appointed to roles based on their ability to carry out the functions and not personalities, unlike the power culture. This culture suits a functional structure and operates on a mechanistic structure.
Also the role culture allows no room for entrepreneurial or innovative ideas and tends to operate in a more stable market, leaving the organisation slow to change. The task culture is made up of small teams who co-operate together to complete a particular project. They are best suited to a matrix structure as they allow room for specialisation. The main concern within a task culture is to get the job whilst achieving the highest standard. Unlike role culture, task culture is flexible and adaptable, also it can change according to the stage of the project.
However there is little room for specialisation as employees may be involved in general problem solving and when the task changes the employee must stick by it. This differs to the person culture which is used mostly by sole traders or partnerships, owing a small business. In this culture the individual is the central point. Unlike the task culture where groups join together to work on a particular project, the person culture concentrates solely on individuals who decide to band together to do their own things i. e. , working in an office. Furthermore this culture only exists for the people concerned as it has no important objectives.
However through person culture the originator is likely to achieve success, leaving the organisation taking on its individual identity and this begins to impose on individuals, so moving towards some of the other cultures. Since the evolution of management theory commenced in the late 19th Century, many of the approaches in the workplace have changed dramatically. Classical management theory emerged into many organisations around the end of the 19th Century. This included: – Scientific Management which focused on appointed employees with particular tasks to maximise efficiency in the workplace. Administrative Management focused on recognising the principles that would result in an efficient system of organisation and management. -Behavioural Management was never an approach to classical management theory. Behavioural management focuses on the people in the organisation and how managers should lead and control employees to ensure the organisations maximum potential is achieved. Scientific management – The evolution of modern management occurred after the industrial revolution swept through many countries.
After this managers from political, educational and economic environments were progressively trying to find better methods of meeting customer’s needs. After observation of organisations it was felt that many routine tasks were being carried out. Fredrick W. Taylor (1856-1915), felt that he could change this. Taylor believed that management could be formulated as an academic discipline and that the best results would come from the partnership between trained and qualified management and a cooperate and innovative workforce.
After close observation in the workplace Taylor felt that each employee could reduce the time spent producing a unit of output, through the use of increased specialisation and the division of labour, therefore production would prove more efficient. Taylor developed the following four principles to try and increase efficiency in the workplace: Principle 1 – Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with improving the way tasks are performed.
To acknowledge the most efficient method of performing specific tasks, Taylor considered how various workers performed their tasks. The method expressed by Taylor was through time-and-motion study. Taylor carefully timed and recorded the actions used to perform a particular task. Once Taylor understood the existing method of performing a task he took it upon himself to test various methods by dividing and coordinating the various tasks necessary to produce a finished product through the use of specialisation.
This involved simplifying jobs and having each employee perform fewer more routine tasks. Further to this, Taylor sought to find ways to improve each employees ability to perform a particular task by reducing the amount of motions being used to complete a task. To accompany this Taylor felt that changing the layout of the work area or the type of tool workers used in order to ensure complete efficiency would help. Principle 2 – Codify the new methods of performing tasks into written rules and standard operating procedures.
The above principle was introduced so that once the best method of performing a task was specified, it should be recorded so that the procedure could be used as training for all employees who carry out the same task. These rules could be used to standardise and simplify jobs, in order to make the jobs even more routine. Through this efficiency could be increased throughout the organisation. Principle 3 – Carefully select workers so that they possess skills and abilities that match the needs of the task, and train them to perform tasks according to the established rules and procedures.
In order for specialisation to be increased in the workplace, Taylor felt that it was essential for workers to understand the tasks they were required to complete, and trained how to complete them in the most effective and efficient way to achieve maximum results. Principle 4 – Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level. The above principle was devised to encourage workers to perform at a high level of efficiency and offer incentives in order for them to develop the most efficient methods for performing specific tasks.
Taylor felt that if workers improved on their performances then they should be rewarded, which would further encourage the surrounding employees. Taylor felt that the employees should be paid bonuses and receive a percentage of the performance gains achieved through the efficient work process developed. The above 4 principles devised by Taylor, through the use of: ? Observation ? Experiment ? Standardisation ? Selection and Training ? Payment by Results ? Cooperation By 1910 the above principles of scientific management had become known and most organisations abided by these and practiced them in their own organisations.
Taylors work has had a permanent effect on management. Management now carefully analyse the basic tasks that must be performed and try to devise the work systems that will allow their organisation to operate most efficiently. The Gilbreth. s followed Taylor on the above principle but they continued to refine his analysis of work movements and contributed largely to the time and motion study. The Gilbreth’s aimed to: Break up and analyse each individual action necessary to perform a particular task into each of its component actions. Find better ways to perform each component action.
Reorganise each of the component actions so that the action as a whole could be performed more efficiently – at less cost and effort. To develop the above aims they often filmed workers performing a task and then separate task actions, into their component movement. The Gilbreth’s aimed to maximise efficiency with which the individual task was performed. The Gilbreth’s became increasingly interested in the study of fatigue. They studied how the physical characteristics such as the lighting, heating, and decor of the workplace contributed to job stress which often lead to fatigue and thus poor performance.
After these studies new advances in management theory were developed. Throughout workshops and factories the work developed by Taylor and the Gilbreths effected the practice of management. When compared to the old system used in many organisations, the new system proved boring and repetitive as a result of scientific management principles, causing employees to feel dissatisfied and less motivated. Further to this, managers tried to initiate work practices to increase performance, on the other hand the employees tried to disclose the true potential efficiency of the work setting to protect their own well-being.
Theory of Bureaucracy – The theory of bureaucracy came into place at the turn of the 20th Century when Germany was undergoing its industrial revolution. Max Weber (1864-1920) developed the principles of bureaucracy. A formal system of organisation and administration was designed to ensure efficiency and effectiveness. Further to this Webber express what a bureaucracy could contain when working in an organisation. ? System of written rules and standard operating procedures that specify now employees should behave. ? Clearly specified hierarchy of authority. Selection and evaluation systems that rewards employees fairly and equitably. ? Clearly specified system of task and role relationships. From this, Weber developed the following 5 principles for the bureaucratic system: Principle 1 – In a bureaucracy, a manager’s formal authority derives from the position he/she holds in the organisation. Weber believed that authority in the workplace had the power to hold people accountable for their actions. Authority was seen as a way for managers to control and direct the employees accountably to them, in order to ensure the organisation’s goal are achieved efficiently and effectively.
The employees were seen to abide by the manager as they occupy a position associated with a level of authority and responsibility. Principle 2 – In a bureaucracy, people should occupy positions because of their performance, not because of their social standing or personal contacts. The above principle was rarely used in organisations through Webber’s time and even in society today. Managers when recruiting or promoting seldom abide by it. It is expressed that many organisations are still effected by social networks, through which personal contacts and relations have an influence on employers today.
Throughout society today this is now recognised as discrimination, thus giving all employees equal rights. Principle 3 – The extent of each position’s formal authority and task responsibilities, and its relationships to other positions in an organisation, should be clearly specified. It is important for managers and workers to perform to their best ability. In order to do this successfully they need to be aware of the tasks and authority associated with various positions which should be specified clearly.
An organisation can hold its employees strictly accountable for their actions, when each manager knows whom they are directly responsible for. Principle 4 – So that authority can be exercised effectively in an organisation, positions should be arranged hierarchically, so employees know whom to report to and who reports to them. Webber felt that an organisational hierarchy of authority should be devised as it would lay out who reports to whom and to whom managers and employees should report to if conflicts or problems arise.
It is extremely important that managers at the top level are able to hold subordinates accountable for their actions. Principle 5 – Managers must create well-defined systems of rules, standard operating procedures, and norms so that they can effectively control behaviour within an organisation. Weber discovered that rules, standard operating procedures, and norms should be used throughout the workplace to provide behavioural guidelines for an increase in the performance of the bureaucratic systems, as they specify the best way to accomplish organisational tasks.
The rules are formal written instructions specifying what actions to be taken under different circumstances, thus improving efficiency in the workplace. The standard operating procedures will specify written instructions about performing a certain aspect of a task and norms which are unwritten, informal codes of conduct, highlighting how people should act in particular circumstances. Webber believed that if all organisations implemented the above 5 principles a bureaucratic system would be established, thus improving the employee’s performance within the organisation.
The use of rules and the standard operating procedures were developed on how tasks were performed making it easier for managers to organise and control their subordinates. Also fair and equitable selection and promotion systems improved the managers feeling of security and encouraged organisational members to act ethically, thus promoting the interests of the organisation. Bureaucracies when worked properly can benefit the organisation in many ways, however when managed wrongly it can occur many problems for both the employer and employees.
If managers allow the rules and regulations to overtake the management style of the company then decision making becomes slow and inefficient. Management staff should use their own skills and judgment along with a properly managed bureaucracy, to ensure that the organisation achieves its maximum results. Functions and principles of management – Henry Fayol developed a comprehensive theory of administration. This described and classified administrative management roles and processes. Like Taylor, he observed the workplace and used his own experiences of what worked well in the organisation.
Fayol developed 14 principles that he considered as an essential part of increasing the efficiency in the workplace. Specialisation/ Division of Labour – The workers are employed to concentrate on their allocated activities, allowing them to specialise in the roles they perform best. This holds the employees focus and increased efficiency, which further improves job satisfaction. Authority with corresponding responsibility – Managers in the workplace have direct authority and responsibility over their subordinates.
Responsibility involves being accountable for, having obligations or duties, and acting reasonably. It involves communicating, and being aware of your relationships with others. Moreover authority involves having the power to enforce obedience or compliance. It can also involve a sense of having the right to control others. Discipline – Managers need to discipline their staff in order for them to strive for the organisation’s goals. If the employees are disciplined properly, high standards can be set and employees adhere to rules laid out by management.
Unity of command – Fayol developed this on the basis that employees should receive instructions from one supervisor. If many supervisors are responsible for few employees, one may tell them do one job whereas the other may tell the employees to do the opposite, causing confusion and disagreements between the supervisors and employees. Unity of direction – The organisation should have one plan of action to guide managers. Subordination of individual interests – Fayol also felt that the action of one employee or those of a group should not influence the organisation as a whole.
He believed that the employees should share the values of the organisation and the reasons for activities and decisions in the organisation should be neutral, with no supervisor ‘taking sides’. Remuneration of staff – This principle was developed to ensure that the system used by managers to reward staff is ‘fair’ and is equitable for the employees and the organisation. Centralisation –Fayol believed that centralisation is a key to any organisation. He argued that authority should not be concentrated at the top of the chain of command.
Scalar chain/Line of authority – The scalar chain of command needs to be sensible and clearly laid out in order for the relationships of the manager, supervisor and employees to be clearly understood. Order – It is necessary for employees to be aware of how important them and their role is to the organisation. This should result in employees being more aware of rules and regulations, and how their actions are understood by management. This thus improves the employees confidence which increases efficiency in the workplace, thus providing employees with motivating career opportunities.
Initiative – Managers need to allow their employees to be innovative and creative which may benefit the organisation. Esprit de corps – In this principle, Fayol felt that managers should encourage the development of comradeship and enthusiasm amongst all employees. Alfred P Sloan (executive head of General Motors) reorganised the company into semi-autonomous divisions in the 1920s. This was very much in line with Fayol’s principles. The Behavioural School – This school focused on how managers should personally behave in order to achieve a highly motivated workforce, thus ncouraging them to perform at their maximum potential. It pushes employees to be fully committed in achieving the goals and aims of the organisation. This approach was newer than what the classical approach would be. They believed that the organisation ‘is’ people. The behavioural school concentrated on the 3 main aspects of the workplace: ? Human Relations Movement ? Behavioural Science ? NEO HR Movement The Human Relations movement was developed by Mayo, Maslow and McGregor and gained momentum in the 1930s.
This challenged the approach of classical management theory as it tried to push up output by incentives and fear of punishment. This examined the effects of social relations, motivation and employee satisfaction on the organisations performance. The Systems Approach – This was developed in the 1960s by Daniel Katz, Robert Kahn and James Thompson. This approach viewed the organisation as a system: ? Input stage – The organisation obtains its inputs from the environment, e. g. , raw materials, money and capital and human resources. Conversion stage – Organisation transforms the inputs and add value to them by using machinery, current IT and human skills. ? Output stage – The organisation releases its outputs to the environment, e. g. , goods or services, profits and losses. Contingency Theory – Contingency approaches were developed concurrently in the late 1960s. This suggested that previous theories such as Weber’s bureaucracy and Taylor’s scientific management had failed because they neglected that management style and organizational structure were influenced by various aspects of the environment.
This sent out the message that there is ‘no one best way to organise’. The organisational structure and the control systems that managers operate, depend on characteristics of the external environment in which the organisation operates. It is important that managers allow the organisation’s departments to organise and control their activities on how best to obtain sources, given the restrictions on the environment they face. From providing an overview of the above management approaches, it is clear there are many different ideas and approaches. In today’s world the classical approach is thought by many to be outdated.
Although, in contrast it is used in many organisations and these organisations achieve objectives. It is difficult to comectly select the best method. However, from the previous tasks studies it is important that structure, culture and management approach are all linked. ———————– Owner Manager Staff Board of Directors Production Sales & Marketing Purchasing Finance Research & Development Personnel Holmes Cash & Carry Management Business/ Private Wholesale/Retail Public / Private Sector Organisation Resources Information Systems Operational Processes External Relations (Marketing)