Change comes from anywhere, and is the only constant. Propelled by the driving force of technology and globalization, the economic landscape continuously transform in a way that has come to undermine the relevance of received wisdom on how a firm should be managed and what underlies its success. In this new millennium, it is more challenging for an organization to sustain its competency or even survive in the diversity market. When an organization is threatened by environmental changes such as crisis or competition, it results in the increasing needs for communication as technology develops rapidly and higher customer demands will be foreseen. Organizational change is not an option; it constitutes a fundamental necessity for success within the new competitive landscape. An organization need to evaluate its performance and review its business strategies, corporate structure, operational process and HR policies to identify the areas that need transformation. To maintain its competitive Continue reading
Management Concepts
Six Elements of Organizational Structure
An organizational structure is a diagram displaying the hierarchical arrangement of lines of authority, roles and duties within an organisation and how they relate to one another. A structure is dependent upon the objectives and strategy of which the organization is focussed on. There are six basic elements of an organizational structure: Specialisation Departmentalisation Chain of Command Span of control Centralisation and Decentralisation Formalisation Work specialization gives employees specific duties and roles they are expected to perform within the company, factoring in their qualifications and skills. Having descriptions of duties for staff members helps the organisation to fully meet the workforce needs and to ensure there are no unnecessary duplications within roles. Departmentalization refers to how the organisation breaks down the functions and teams needed to run the company and carry out the essential tasks. Departments are usually made up of staff members who perform similar tasks in the same Continue reading
3 Common Types of Organizational Structure
Organizational structure is the internal, formal framework of a business that shows the way in which management is linked together and how the authority is transmitted. It is basically a framework used to describe the hierarchy in an organisation. Every business needs to have their own organizational structure as it helps in identifying the job at each level of an individual followed by its functions and it also assists in obtaining their own goals for development. There is a need for every type of organisation to have their own structure specially when it comes to large enterprises as it becomes difficult activities of the various departments and functions. A business will opt for an organisation structure which is best suited to them and the way they would like to be working, and the chart they create will reflect this. A flat organisation is one that has eliminated most or all Continue reading
Six Elements of Organizational Design
Organizational design is a process of developing and changing the organization’s structure by its managers. It is a chart containing the reporting structure i.e. who reports to whom. Organizational structure is thus a framework on which an organization is patterned for coordinating and carrying out organizational tasks. Organizational design involves decisions about the following six elements: 1. Work Specialization: Work specialization describes to which the overall task of the organization is broken down and divided into smaller component parts. For example, one person would paint a wall and another person fixes a door. So by breaking jobs up into small tasks, it could be performed over and over every 10 seconds while using employees who had relatively limited skills. The main thought of this process is that the entire job is not done by an individual and it is broken down into steps, and a different person completes each step. Continue reading
Jay Galbraith’s Star Model of Organizational Design
Organizational design is not simply about structure and the resulting organizational chart. It is about the relationships between people, work, formal structures and informal practices and behaviors. It is about the way in which an organization structures and coordinates its people and process so it can benefit from its unique capabilities over the long-term. It determines who makes decisions and how those decisions will be made. It changes the role of the leaders as they become less decision makers and more decision shapers. Through organizational design, leaders become the shapers of the organization’s decision-making process. Organizational design and the resulting capabilities are the last sustainable sources of competitive advantage. Star Model of Organizational Design is a well-known model that has been used for decades to identify the key elements of an organization and focus on the issue of strategy and strategy implementation. Developed by Jay Galbraith, an American consultant and Continue reading
Management by Objectives (MBO) Derivatives
One of the pre-requisites for effective implementation of Management by Objectives (MBO) is a clear thinking at the corporate level translated into long-term plans. Many organizations have over the years, implemented MBO and improved their operations and performance. Effective implementation of MBO requires a good reporting system. This is necessary for taking timely remedial action in case of deficiency is noticed in any area. As organization grows in size, this reporting system becomes complex and time consuming. It may not be possible for top management to directly supervise each and every activity at lower interested in critical activities rather than every activity. Thus, as a bye product of MBO, large organizations introduced what is called Management By Exception (MBE). In this management technique, higher levels of management will concentrate only on exceptional situations, i.e., critical areas. Both MBO and MBE are scientific forms of management. However, they can be successful Continue reading