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Management and Organisational BehaviourManagement and Organisational Behaviour

7th Edition7th Edition

CHAPTER 4CHAPTER 4

The Nature of OrganisationsThe Nature of Organisations

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D

efining organisationsD

efining organisations

Farnham & HortonFarnham & Horton define organisations as:define organisations as:

....social constructs created by groups in society to achievesocial constructs created by groups in society to achievespecific purposes by means of planned & cospecific purposes by means of planned & co--ordinatedordinated

activities.activities.

These activities involve using human resources to act inThese activities involve using human resources to act inassociation with other inanimate resources in order toassociation with other inanimate resources in order to

achieve the aims of the organisation.achieve the aims of the organisation.

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Management Key ConceptsManagement Key ConceptsManagement Key ConceptsManagement Key Concepts

Organization:Organization: A structure whereby people are workingA structure whereby people are workingtogether and coordinating their actions to achievetogether and coordinating their actions to achievespecific goals.specific goals.

Goal:Goal: A desired future condition that the organizationA desired future condition that the organizationseeks to achieve.seeks to achieve.

Management:Management: The process of using organizationalThe process of using organizationalresources to achieve the organizations goals byresources to achieve the organizations goals by

Planning, Organizing, Directing/Leading, andPlanning, Organizing, Directing/Leading, andControllingControlling

(Ref: Henri Fayol)(Ref: Henri Fayol)

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Formal organisationsFormal organisations

ScheinSchein defines a formal organisation as.defines a formal organisation as.

the planned, cothe planned, co--ordination of the activities of aordination of the activities of anumber of people for the achievement of somenumber of people for the achievement of some

common, explicit purpose or goal, through thecommon, explicit purpose or goal, through the

division of labour & function, & through adivision of labour & function, & through a

hierarchy of authority & responsibilityhierarchy of authority & responsibility

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Formal organisationsFormal organisations

Formal organisations are:Formal organisations are:

Deliberately planned and createdDeliberately planned and created Concerned with the coConcerned with the co--ordination of activitiesordination of activities

Hierarchically structured with stated objectivesHierarchically structured with stated objectives

Based on certain principles such as theBased on certain principles such as thespecification of tasks and defined relationshipsspecification of tasks and defined relationshipsof authority & responsibilityof authority & responsibility

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Basic components of an organisationBasic components of an organisation Figure 4.3

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Basic components of anBasic components of an

organisationorganisation

Operational coreOperational core the direct performance of thethe direct performance of thetechnical or productive operations and the carrying outtechnical or productive operations and the carrying outof actual task activitiesof actual task activities

Operational supportOperational support concerned indirectly with theconcerned indirectly with thetechnical or productive process but closely related totechnical or productive process but closely related to

the actual flow of operational workthe actual flow of operational work

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Basic components of anBasic components of an

organisationorganisation Organisational supportOrganisational support the provision of services forthe provision of services for

the whole organisation, including the operational corethe whole organisation, including the operational corebut usually outside the actual flow of operational workbut usually outside the actual flow of operational work

Top managementTop management concerned with the broadconcerned with the broadobjectives and policy & strategic decision makingobjectives and policy & strategic decision making

Middle managementMiddle management

concerned with the coconcerned with the co--ordination & integration of activities & providing linksordination & integration of activities & providing linkswith operational support staffwith operational support staff

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Private enterprise & public sectorPrivate enterprise & public sector

organisationsorganisationsPrivatePrivate

Owned & financed byOwned & financed byindividuals, partners, orindividuals, partners, orshareholders accountableshareholders accountableto their owners orto their owners ormembers.members.

Main aim is of aMain aim is of acommercial nature suchcommercial nature suchas profit, return on capitalas profit, return on capitalemployed, marketemployed, marketstanding or sales levelsstanding or sales levels

Public sectorPublic sector

Created by governmentCreated by government

Do not generally haveDo not generally have

profit as their goal butprofit as their goal but

have a political purposehave a political purpose

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Organisational goalsOrganisational goals

Market leadershipMarket leadership

GrowthGrowth

ProfitabilityProfitability

To be the best in fieldTo be the best in field

To invest in our peopleTo invest in our people

To be professionalTo be professional

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Environmental influences on organisationsEnvironmental influences on organisationsFigure 4.6

Political, Economics, SocioPolitical, Economics, Socio--cultural, technological, Environmental, and Legal Influencescultural, technological, Environmental, and Legal Influences

PESTEL ANALYSISPESTEL ANALYSIS

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The informal organisationThe informal organisation

The informal organisation arises from:The informal organisation arises from:

the interaction of people working in the organisationthe interaction of people working in the organisation their psychological and social needstheir psychological and social needs

the development of groups with their ownthe development of groups with their own

relationships and norms of behaviour, irrespective ofrelationships and norms of behaviour, irrespective of

those defined within the formal structurethose defined within the formal structure

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The formal & informal organisationThe formal & informal organisation Figure 4.9Figure 4.9

SourceSource: Reproduced with permission from Kenneth Lysons, Organisational Analysis,: Reproduced with permission from Kenneth Lysons, Organisational Analysis,Supplement to the British Journal of Administrative ManagementSupplement to the British Journal of Administrative Management, no. 18, March/April 1997., no. 18, March/April 1997.

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The formal organisationThe formal organisation Organisation chartsOrganisation charts

Spans of controlSpans of control

Job definitions &Job definitions &

descriptionsdescriptions

Production efficiencyProduction efficiency

Policies & proceduresPolicies & procedures

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The informal organisationThe informal organisation Personal animosities &Personal animosities &

friendshipsfriendships

GrapevinesGrapevines

Group norms &Group norms &

sentimentssentiments

Informal leadersInformal leaders

Prestige & powerPrestige & power

structuresstructures

Emotional feelings, needsEmotional feelings, needs

& desires& desires

Effective relationshipsEffective relationships

Personal & group goalsPersonal & group goals