6.01 Organization Concepts, Forms, Nature and Structure

ORGANISATIONS:
CONCEPTS, FORMS,
STRUCTURE AND NATURE
DR. MEHEDI MASUD

DEPUTY DIRECTOR
LEARNING OBJECTIVES
PARTICIPANTS WILL BE ABLE TO:
 interrelate various concepts of

organisation
 define organisational forms and
structure
 explain why structures and forms
are essential
UNDERSTANDING ORGANISATIONS
 McNamara (2012) suggests that ‘in its simplest
form’ an organisation is ‘... a group of people
intentionally organised to accomplish an overall,
common goal or set of goals’.
 For Huczynski and Buchanan (2007),

organisations are ‘a social arrangement for
achieving controlled performance in pursuit of
collective goals’.
ORGANISATIONS
 We can say that organisations ‘are (1) social
entities that (2) are goal-directed, (3) are
designed as deliberately structured and co-
ordinated activities systems, and (4) are linked
to the external environment’ (Daft 2007, p10)
 So we have a group of individuals working
together to achieve a particular goal/purpose,
and the engagement of the individuals is not
indiscriminate but co-ordinated in a controlled
manner. The engagement then has structure;
it has design.
FORMS OF ORGANISATIONS
 In terms of rules and specified roles
organizations are classified into two types: a)
formal organization and, b) informal organization
 Formal organizations are those organizations that
are based on rationality, authority and
established under any law for achieving long-
term goals (Shtub and R. Karni, 2010).
 An informal organisation is a network of personal
and social relationships. Informal organizations
are those organizations that are formed to
achieve short-term goals (ibid, 2010)
AGAIN,
 Based on authority, there are two forms of
organisations:
Organisation
Line Staff
Line position
 decision-making roles
 related to organizational goals
Staff position
 supportive role
 secondary functions
ORGANISATIONAL STRUCTURE
 An organizational structure is the formal
framework by which job tasks are divided,
grouped and co-ordinated (Robbins and Coutler,
1999).
 Mullins (1993) and Mabey, Salaman and Storey

(2001) describe the structure of an organization
as the pattern of relationships between roles in
an organization and its different parts.
ORGANISATIONAL STRUCTURE
Organizational Structure on the basis of growth
 Mechanistic structure
This is characterised as an organisational
structure in which job functions have been
broken down into specialist tasks that are
‘precisely defined’.
 Organismic structure
Organismic (or ‘organic’) organisations, on the other
hand, have adapted to meet unstable environmental
conditions. Job functions are less easily defined and
supervision is often horizontal or ‘lateral’
NATURE OF ORGANISATIONAL
STRUCTURE
 Bureaucratic Structure
 Functional Structure
 Divisional Structure
 Matrix Structure
BUREAUCRATIC STRUCTURE
 principles of hierarchy, authority, and

notions of control
 Clearly defined roles and responsibilities
CEO
Manager Manager Manager
Staff Staff Staff
Staff Staff Staff

FUNCTIONAL STRUCTURE
 Structuring the organisation on basis of functions

or skills/knowledge
 Based on specialised functional tasks
CEO
Production Marketing Finance

Director Director Director
Production Marketing Finance

Dept. Dept. Dept.
FUNCTIONAL STRUCTURE
Advantages
 Economies of Scale
 Specialisation
 Skills
 Role Clarity
Disadvantages
 Lack of co-ordination
 Micro-bureaucracy
 Territorial disputes
DIVISIONAL STRUCTURE
 Divisional organisations are commonly divided into smaller
units of operation with each division being aligned to a
sales or production unit with supporting sales, production,
finance, HR, and marketing resources operating under a
departmental manager but responsible to the unit manager
and then upwards.
DIVISIONAL STRUCTURE
Advantages
 SBU (Strategic Business Unit)
 Product Promotion
 Operational Speed
 Operational Clarity
Disadvantages
 Silo Approach
 Expensive
 SBU Politics
MATRIX STRUCTURE
 A complex form of differentiation that some

organizations use to control their activities results
in the matrix structure, which simultaneously
groups people in two ways- by the function of which
they are a member and by the product team on
which they are currently working. In practice, the
employee who are members of the product teams
in a matrix structure have two bosses-a functional
boss and a product boss.
MATRIX STRUCTURE
MATRIX STRUCTURE
Advantages
 Resources can be used efficiently
 Products and projects are formally
coordinated across functional departments
 Stronger communication
Disadvantages
 Complex in nature
 Slower decision-making
ORGANISATIONAL STRUCTURE OF A
MINISTRY
 Structure
Ministry
Division Division
Wing Wing
Branch Branch Branch
Section Section Section

CONTEMPORARY ORGANISATIONAL DESIGNS
Boundaryless organisation
 An flexible and unstructured organisational
design
 Removes internal (horizontal) boundaries
 Eliminates the chain of command
 Has limitless spans of control
 Uses empowered teams rather than departments
 Eliminates external boundaries:
 Uses virtual, network, and modular
organisational structures
VIRTUAL ORGANISATION
 a flexible network of independent entities linked by
telecommunication and computing technologies to share
skills, knowledge and access to expertise in non-traditional
ways.
NETWORK ORGANISATION
 Network organizations are flat, flexible structures, with
high reachability and high information access enabling
learning.
MODULAR ORGANISATION
 An organisation structure divideed the business into small,
tightly knit modules which focus on specific elements of
the organizational process.
THE LEARNING ORGANISATION
 An organisation that has developed the

capacity to continuously learn, adapt, and
change through the practice of knowledge
management by employees.
REORGANIZATION FROM FUNCTIONAL STRUCTURE
TO DIVISIONAL STRUCTURE AT INFO-TECH
Structure Info-Tech
Functional President
structure
R& D MFG ACCT MKT
Info-Tech
Divisional President
structure
Electronic Office Virtual

publishing automation reality
R&D MFG ACCT MKT R&D MFG ACCT MKT R&D MFG ACCT MKT
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ORGANISATIONS:

DR. MEHEDI MASUD

PARTICIPANTS WILL BE ABLE TO:

 interrelate various concepts of

 For Huczynski and Buchanan (2007),

 Mullins (1993) and Mabey, Salaman and Storey

 principles of hierarchy, authority, and

Manager Manager Manager

Staff Staff Staff

Staff Staff Staff

 Structuring the organisation on basis of functions

Production Marketing Finance

Production Marketing Finance

 A complex form of differentiation that some

Branch Branch Branch

Section Section Section

 An organisation that has developed the

R& D MFG ACCT MKT

Electronic Office Virtual

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