THE CONCEPT OF
ORGANIZATION
1.1.
1.2.
1.3.
1.3.
1.4.
1.5.
Organizational Analysis Levels
Effectiveness. Approaches & Models
Innovation. Types. Exploring and Exploiting Innovation.
Organizational Structure and Organizational Design
Organizational Design Theory
Contemporary Trends
Prof. Dr. Irene Martín Rubio-UPM
Teaching Staff Mobility
Fachhochshule Frankfurt an Main
ORGANIZATIONAL
ANALYSIS LEVELS
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INDIVIDUAL - GROUP - ORGANIZATION
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OUTCOMES OF ORGANIZATIONS
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INTERDISCIPLINARY STUDY
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ORGANIZATION
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ARTIFACT
GOAL DIRECTED
SOCIAL ENTITY
STRUCTURE ACTIVITY
NOMINAL BOUNDARY
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EFFECTIVENESS
MODELS, APPROACHES
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EFFECTIVENESS
Definitions
Ex. Volumen of output, profit, costumer satisfaction, dividends...
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GOAL
EFFECTIVENESS
The degree to which an organization realises its
goals.
Meeting outputs schedules.
The capacity to adapt to changing environments.
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EFFICIENCY
Quantitative dimension
The ratio of inputs to outputs in a process or
organisation.
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APPROACHES TO EFECTIVENESS
• THE SYSTEMS RESOURCE APPROACH
• THE INTERNAL PROCESS APPROACH
– COORDINATION
• THE GOAL APPROACH
• THE STAKEHOLDER APPROACH
– INTEREST GROUPS IN THE
ORGANISATION
• THE INTEGRATIVE APPROACH
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THE SYSTEM APPROACH
INPUTS
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OUTPUTS
External Environment vs. Internal Environment
Sub-Environments:
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Organizational
System
Social ; Technical; Political ; Economic
Functional Systems:
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Financial, Marketing, Operations, Human Resource....
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THE INTERNAL APPROACH
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ORGANIZATION
DESIGN
SUPERVISORS & STRUCTURE
GOOD TEAM SPIRIT
CONFIDENCE AND TRUST
LOCAL DECISION MAKING
ORGANIZATIONAL
COMMUNICATION
BEHAVIOR
CONFLICT RESOLUTION
INTEGRATION
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THE GOAL APPROACH
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GOAL
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STRATEGIC GOALS
OPERATIVE GOALS
CRITERIA PERFORMANCE
( ACCOUNTING)
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THE STAKEHOLDER APPROACH
GOVERNMENT
Local
Authority
Media
COMMUNITY
Other firms
Employees
ORGANIZATION
Clients
Universities
Consumers
Suppliers
Banks
Insuarance
Companies
OWNERS
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AN INTEGRATIVE MODEL OF EFFECTIVENESS
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ENVIRONMENT
 The economy
 Competition
 Resources
INTERNAL EFFECTIVENESS
 Capacity
 Technology
 Physical conditions
 Systems and structure
 Groups and intra-group relations
 Leadership
INDIVIDUAL EFFECTIVENESS
 Ability
 Expectations, outcomes
 Rewards
Organizational
Effectiveness
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INNOVATION
KNOWLEDGE SOCIETY
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INNOVATION
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Innovation
Invent + Commercialization
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Open innovation:
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the use of purposive inflows and outflows of knowledge to accelerate
internal innovation and to expand the markets for external use of
innovation, respectively”. (Chesbrought 2003)
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Invent + Commercialization
PATENT
TECHNOLOGY MARKET
INVENT
VS.
PRODUCT MARKET
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INNOVATION
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Types of innovation, OCDE- Oslo
Manual-2005:
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PRODUCT INNOVATIONS
PROCCESS INNOVATIONS
ORGANIZATIONAL INNOVATIONS
MARKETING INNOVATIONS
http://www.oecd-ilibrary.org/science-and-technology/oslomanual_9789264013100-en
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EXPLORING AND
EXPLOITING INNOVATION
The Roman god Janus had two sets of eyes—one pair
focusing on what lay behind, the other on what lay ahead.
TOMORROW VS. TODAY BUSINESS
EXPLORING AND EXPLOITING
INNOVATION AND EFFECTIVENES
Ambidextrous Organizations:
http://hbr.org/2004/04/the-ambidextrous-organization/ar/1
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The Innovation Paradox
http://www.nasa.gov/offices/oce/appel/ask/issues/41/41i_
paradox.html
Sometimes organizational "support" kills good new ideas.
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Entrenched ways of doing things and bureaucratic
caution can and do discourage innovation in
organizations, but even organizational support for new
ideas can be a mixed blessing.
How should the designed the organizations to promote
INNOVATION?
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Organizational Structure
And
Organizational Design
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ORGANISATIONAL STRUCTURE

The fundamental and relatively
unchanging features of an organisation
which are officially sanctioned by those
who control it and consist of the way
activities and component parts are
grouped, controlled and coordinated in
order to achieve specific aims and
outcomes.
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ORGANISATIONAL CHART
MANAGING
DIRECTOR
MARKETING
DIRECTOR
SALES
MANAGER
ADVERTISING
MANAGER
FINANCE
& ADMON
DIRECTOR
MANAGER
MANAGEMENT
ACCOUNTS
MANAGER
FINANCIAL
ACCOUNTS
OPERATIONS
DIRECTOR
PRODUCTION
MANAGER
MAINTENANCE
MANAGER
TECHNICAL
DIRECTOR
R&D
MANAGER
DESIGN OFFICE
MANAGER
Mgm.ACC1
Mgm.ACC2
PUBLICITY
MANAGER
Mgm ACC3
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MACRO AND MICRO
STRUCTURE
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MACRO STRUCTURE
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Expresses the general form of structure and what is
expected of organisational members.
Organizational Chart, Board Committes, Planning &
Control Procedures, Departmentation, CoordinationMechanism
MICRO STRUCTURE: OPERATING MECHANISMS
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Indicates in greater detail what is expected of
individuals in a structure.
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Job Descriptions, Training & Development, Staff
Appraisal, Control & Operating Procedures
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ORGANISATIONAL DESIGN
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It consists of a body of knowledge that provides
guidelines for designing appropriate structures.
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ORGANIZATIONAL DESIGN
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FORMAL ORGANIZATION
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ORGANIZATIONAL CHART &
STRUCTURE
INFORMAL ORGANIZATION
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ORGANIZATIONAL BEHAVIOUR
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ORGANISATIONAL DESIGN
THEORY
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CLASSICAL APPROACH
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TAYLOR
FAYOL
MAX WEBER AND BURAUCRACY
CONTINGENCY THEORY
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ORGANISATIONAL SIZE
TECHNOLOGY
ENVIRONMENT
CULTURE, STRATEGY
STRUCTURAL
CONFIGURATION:
ORGANIC vs.
MECHANIC
ORGANIZATION
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CLASSICAL APPROACH
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TAYLOR
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THE FATHER OF THE SCIENTIFIC MANAGEMENT
CONSULTING ENGINEER
INCREASING EFFICIENCY IN PRODUCTION
NOT ONLY TO LOWER COSTS AND RAISE PROFITS, BUT ALSO TO MAKE POSSIBLE
INCREASED PAY FOR WORKERS THROUGH HIGHER PRODUCTIVITY.
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THE PRINCIPLES OF SCIENTIFIC MANAGEMENT
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REPLACING RULES OF THUMB WITH SCIENCE (ORGANIZED KNOWLEDGE)
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OBTAINING HARMONONY IN GROUP ACTION, RATHER THAN DISCORD
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ACHIEVING COOPERATION OF HUMAN BEINGS, RATHER THAN CHAOTIC
INDIVIDUALISM
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WORKING FOR MAXIMUM OUTPUT
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DEVELOPING ALL WORKERS TO THE FULLEST EXTENT POSSIBLE FOR THEIR
OWN AND THEIR COMPANY’S HIGHEST PROSPERITY
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!!! DESIGN WORK SYSTEM. SPECIALIZATION
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OTHER AUTHORS: GANTT, GILBRETH
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CLASSICAL APPROACH
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FAYOL ( MODERN MANAGEMENT
THEORY)
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ACTIVITIES OF A FIRM:
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THECNICAL: PRODUCTION
COMMERCIAL: SELLING AND EXCHANGE
FINANCIAL: SEARCH FOR OPTIMUM USE OF
CAPITAL
SECURITY: PROTECTION OF PROPERTY AND
PERSONS
ACCOUNTING: INCLUDING STATISTICS
MANAGERIAL: PLANNING, ORGANIZATION,
COMMAND, COORDINATION AND CONTROL.
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FAYOL’S PERSPECTIVE
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Division of work: Specialization of managerial as well as technical work
Authority and responsibility: He sees both of them as a combination of official (position)
and personal ( intelligence, experience, moral growth, past service, etc.) factors.
Discipline: Discipline as “respect for agreements which are directed at achieving
obedience, application, energy, and the outward marks of respect.
Unity of command and direction: Employees should receive orders from one superior only.
Each group of activities have the same objetive and the same plan.
Subordination of individual to general interest
Remuneration : Fair and to satisfay employees and employers.
Centralization
Scalar chain: Chain of superiors
Order: Material and social order. “A place for everything and everyone”Equity: Justice when dealing with subordinates
Stability of tenure
Initiative: It is one of the “keenest satisfaction for an intelligent man”
Esprit of corps: “In union there is strenght”. The need for teamwork and the importance of
communications in obtaining it.
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CLASSICAL APPROACH
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MAX WEBER AND BUREAUCRACY
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THREE BASIC FORMS OF AUTHORITY:
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CHARISMATIC:
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TRADITIONAL
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RATIONAL-LEGAL
IDEAL TYPE BUREACRACY
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SPECIALISATION
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HIERARCHY
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RULES
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IMPERSONALITY
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APPOINTMENT
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PROGRESSION
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EXCLUSIVITY
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SEGREGATION
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ACCURATE WRITTEN RECORDS
CRITICS: GOAL DISPLACEMENT, FRUSTRATION
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THE CONTINGENCY APPROACH
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THE MOST APPROPRIATE STRUCTURE
FOR AN ORGANISATION IS ONE THAT
MATCHES ITS PARTICULAR
CIRCUMSTANCE.
CONTINGENCY FACTORS:
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ORGANIZATIONAL SIZE, ORG. AGE
TECHNOLOGY
ENVIRONMENT
OTHERS: STRATEGY, CULTURE, POWER,
KNOWLEDGE SYSTEM.
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THE CONTINGENCY APPROACH
MECHANISTIC ORG.
BUREAUCRACY
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Rigid structure
Environment : Stable
Specialization
Hierarchic structures
Precise definitions of rights,
obligations and technical methods
Knowledge is located at the top of
the organization.
Loyalty
Governed by superiors
Vertical relationships
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EFFICIENCY
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ORGANIC ORG.
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Fluid sets of arrangements
Environment: Turbulent
Special knowlege is valued.
Continual redifinition of individual task
Spread of commitment
Network structure of control authority.
Communication consists of information
and advice rather than instructions and
decisions
FLATTER ORG. AND LOWER
DEGREES OF SPECIALISATION,
CENTRALISATION OF AUTHORITY
AND STANDARDISATION.
INNOVATION
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ORGANIC vs. MECHANISTIC
Innovation
• Small close knit groups
• Informal organization
Formalization
• Large specialized groups
• Hierarchical organization
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DESIGN PARAMETERS
DESIGN
PARAMETER
JOB DESIGN
•Job Specialization
•Behavior Formalization
•Training &
Indoctrination
SUPERSTRUCTURE •Unit grouping (Departm.)
DESIGN
•Unit Size
•Centralisation
LATERAL
LINKAGES
DESIGN
•Planning & Control
Systems
••Liasion devices
•Coordination Mechanism
CONTINGENCY
FACTORS
• AGE & SIZE
•ENVIRONMENT
•TECHNOLOGY
•STRATEGY
•CULTURE
•POWER
•KNOWLEDGE
STRUCTURAL
CONFIGURATIONS
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COMTEMPORARY TRENDS
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CONTEMPORARY TRENDS
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GLOBALISATION:
CUSTOMER RELATIONS AND ADAPTABILITY:
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FLEXIBLE SPECIALISATION
ADVANCED TECHNOLOGY: COMPUTER INTEGRATED
MANUFACTURE
HUMAN RESOURCES: TQM, JIT. FEWER ROUTINE JOBS.
TEAMWORK
DOWNSIZING, RIGHTSIZING AND DELAYERING: FLATTER
HIERARCHIES
BUSINESS PROCESS RE-ENGINEERING: New radical approaches
to organisational designs
WORKPLACE CHALLENGES: Heteregeneous and diverse
working population and working arrangements
THE CHALLENGE OF ETHICS: ROLE REQUIREMENTS:
Personality and role of the job
LEARNING ORGANISATIONS: Every experience is regarded as a
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learning opportunity. Thus experimentatios is encouraged
QUESTIONS ?
SUGGESTIONS?
IDEAS?
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