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INTRODUCTION Organisations are a necessary part of human life and

serve many important needs.

 An understanding of organisations is critical toeffective management

Organisations have an increasing impact on:

Individuals

Other organisations

Environment

ORGANISATION TYPES Private or public sector Profit or not-for-profit

Production or service

Classification By major purpose (economic, protective, associative, public

service or religious) By Prime beneficiary (Mutual benefit, Business concerns,

Service organisation, Commonweal organisations) By primary activity (Productive or economic, Maintenance,

 Adaptive, Managerial) Object moulding or People moulding

COMMON FACTORS IN

ORGANISATIONS

Many different types of organisation

Size, shape, purpose

In ALL organisations; THREE (or four!) commonfactors

People

Objectives

Structure

Management

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Common Factors in Organisation

Interaction of efforts of 

PEOPLE

in order to achieve

OBJECTIVES

Channelled and co-ordinatedthrough

STRUCTURE

directed and controlled by 

MANAGEMENT

Retail Shop

Bank

School

Hotel

Ma nu fa ct ur er H os pi ta l

Government

Dept

University 

Charity 

Hotel

ORGANISATIONS Interrelationships of people, objectives and structure

together with the efficient use of available human andnon-human resources will determine the success orfailure of an organisation (Mullins, 2002)

 Also

Characteristics of individuals making up organisation

 Variety of goals of individuals/groups plus impact onconflict

Interaction between organisation and generalenvironment

Basic components of an

organisation

Operating Component – Production (or provision of 

services) Administrative component – Supervision and co-

ordination

Five components of an organisation

Middle

Mgmt

Top

Mgmt

eg: objectives &

Policy 

Operational

Support

eg: quality control

Organisational

Support

eg: office services

canteen

Operational

Core

 Assembly line,teaching

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Organisation chartsSpans of ControlPolicies and proceduresMission StatementsJob Definitions and descriptionsProduction Efficiency and effectivenessmeasures

Personal Animosities and friendshipsGrapevinesGroup norms and sentiments

Informal leadersPrestige and power structuresEmotional feelings, needs and desiresEffective relationships between managersand subordinates

Personal and group goals and perceptionsPatterns and habit

Formal Organisation:Overt

Informal Organisation:Covert

ORGANISATIONAL ICEBERG

SYSTEMS VIEW

Objectives

and policy

I

n

p

u

t

s

Activities/

Transformation

process

Environment

influences

Formulation

of goals

O

u

t

p

u

t

s

FEEDBACK: measure of achievement

Inputs to

other

systems

Outputs from

Other systems

SYSTEMS VIEWINPUTS

People, raw materials,

components

Cash; information

Management

strategy 

PROCESSES

Production;

Marketing;

Recruitment training

R&D

OUTPUTS

Product; services

Employment

Revenue

Profits; taxes;

 waste

FEEDBACK

Sales turnover

Financial results

Customer surveys

Staff turnover

Legal actions

GOALS

Market leadership

GrowthProfit

Investors in PeopleSatisfied customers

INTERNAL ENVIRONMENTExternal EnvironmentExternal Environment

InternalInternalenvironmentenvironment

Organisational culture,Services and systems

Technology and methodsStrategyPeople

 Activities and tasks

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INTERNAL ENVIRONMENT Strategic development

 Appropriate/effective Product, market, financial, people

Structure/systems  Appropriate, effective to achieve goals Chain of responsibility  Management style Chain of communication Promotion, advancement

Tasks, work Responsibility, achievement Quality, TQM

INTERNAL ENVIRONMENT People

Right people in right job

Training and development

 Appraisals

Technology  Technology to achieve goals

 Appropriately trained staff  Culture

Organisational

national

INTERACTION WITH

ENVIRONMENT Structure, management, functioning of organisation not

only affected by internal envt.

Organisations are also influenced by range of volatileEXTERNAL environmental factors Must respond to challenges, risks, limitations Changes affect inputs, hence transformation or conversion

processes and hence outputs Requires multiple channels of interaction

Emphasises need for systems approach i.e HOLISTICapproach

Major environmental factors  Also constantly changing environmental influences

ENVIRONMENTAL INFLUENCES

Organisation

Socialattitudes

Local/nationalGovt. policies

Trades Unions

Customers

CultureOtherorganisations

Employers’ associations

CBI

Pressuregroups

Training and Enterprisecouncils

Internationalrelations

Competitors

Climate

Shareholders

Suppliers

TechnologicalInnovations

Economicactivity

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Layers of the business environment

The MacroThe Macro--EnvironmentEnvironment

CompetitorsCompetitors

OrganisationOrganisation

Industry (or Sector)Industry (or Sector)

Macro-environmental influences:

PESTEL

Organisation

Political

Political parties and alignment; local,national, internationalLegislation e.g. on taxation andemployment lawRelations between government andorganisationGovernment attitude to monopolies andcompetition

Economic

Total GDP and GDP per headInflationConsumer spending and disposableincomeInterest ratesCurrency fluctuations and ERs.Unemployment

Energy costs, transport costs, rawmaterial costs

Sociocultural

Shifts in values and culturesChanges in lifestyle

 Attitudes to work and leisure‘green’ environmental issuesEducation and healthDemographic changesDistribution of income

Technological

Government and European investmentpolicy Identified new research initiativesNew patents and productsSpeed of change and adoption of newtechnology Level of expenditure on R&D by organisation’s rivals

Environmental

Green issues that affect environmentLevel and type of energy consumedRenewable energy Rubbish waste and disposal

Legal

Competition lawEmployment lawHealth and safety Social CharterProduct safety issues

Porter’s Five ForcesPotentialEntrants

Suppliers Buyers

Substitutes

CompetitiveCompetitive

Rivalry Rivalry 

Bargainingpower

Bargainingpower

Threat of 

Entry

Threat of Substitution

ORGANISATIONAL STRUCTURE The pattern of relationships among positions in

the organisation and among members of theorganisation

Basis for application of management Frame work of order and command Enables planning, direction, organisation and

control Drucker: “Good organisation structure does not by itself 

produce good performance. But a poor organisation structuremakes good performance impossible, no matter how good theindividual managers may be”

Levels of organisation are inter-related: Technicallevel (production), Managerial level, Community level (directors or trustees)

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DIVISION OF WORK Work can be divided below MD level by:

Purpose or function (R&D, Production, Marketing,Finance etc)

Product or Service (Product A, Product B, Product Cetc)

Location (London, Manchester, New York) Nature of work

Common time scales Customer to be served

HRM Manager would typically be in a direct line fromtop management

Centralised or decentralised

Other Reading (Mullins, 2002,

Chapter 13 part 6) Span of Control Scalar Chain Flatter Organisation structures Formal organisational relationships Line and staff organisation Project teams and matrix organisation Effects of a deficient organisation structure Organisation Charts Structure and organisational behaviour Patterns of Structure and work organisation Technology