Organizational Structure

1
Chapter 3

• Organizational Structure

2
Organizational Structure

• History and Theories
• Organizational Climate and Culture
• Organizational Effectiveness

3
Introduction

• This chapter provides a big picture of the
  organizational environment by present the
  organization as a whole.

4
History

• Focus of I/O Psychology all organizations in
  which people work.
• Find a better way to structure an organization.
• Variables that influence the structure
• Employees and the organization

5
Theories

• Bureaucratic Structures

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Bureaucratic Structures

• Created by Max Weber, a German social scientist
  (1947).
• Purpose Salvation from chaos
• The idea a rational, legal organization
  structure with formal rules and procedures.

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Bureaucratic Structures

• Principles of Bureaucracy

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Bureaucratic Structures

• Division of Labor defined functions in terms of
  activities and responsibilities.Example

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Bureaucratic Structures

• 2. Merit-based Employment The person who does
  the best job gets and keeps the job
• This principle considers only job related issues
  in job hiring process, promotions, etc.
• It avoids favoritism, seniority, nepotism.

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Bureaucratic Structures

• 3. Chain of Command

• The hierarchical structure is designed as a
  pyramid.
• It helps to define who reports to whom.
• The top has the greatest amount of power and
  authority.

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Bureaucratic Structures

• 4. Span of Control It refers to the number of
  employees reporting to a supervisor.
• Kinds of organization
• Flat organizations
• Tall organizations

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Bureaucratic Structures

• Advantages
• People in higher levels in the company feels
  satisfied because of their authority and control.
• Written policies and rules
• Creates Job specialization, simple products or
  outputs, use of unskilled or semiskilled people

• Disadvantages
• Lower- level employees tend to feel frustrated
  because they are out of the loop.
• Written policies are harder to be changed and a
  slow process.

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• The dissatisfaction with the bureaucratic
  structure and influence of Hawthorne Studies led
  to the development of a new organizational
  system

Human Relations Structures
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Human Relations Structures

• Focus on employees as interacting social
  individuals

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Theories

• Theory X and Theory Y

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Theory X and Theory Y

• Concept developed by Douglas McGregor (1960)
• He developed assumptions to show the
  dissatisfaction with the bureaucratic structure

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Theory X and Theory Y

• Theory X
• Most people naturally dislike work and will avoid
  it in any way they can.
• Constant threats of punishments and offers of
  rewards are the only way to get people to do the
  required work. They must be supervised and
  directed closely by management.
• People want decisions to be made for them. They
  want to avoid responsibility and want the
  security of formal organizational structures
  although they are not concerned about
  organizational needs
• People are self-centered and resistant to change.

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Theory X and Theory Y

• Theory Y
• Work in terms of physical and mental efforts is
  desirable and actively desired by most.
• People are internally directed to achieve to
  achieve the goals they want to reach.
• Commitment to achieve goals and desire for
  responsibility come from the individual s
  ability to satisfy personal needs for growth.
• Most people are imaginative and creative.

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Human Relations Structured

• Advantages
• Lead to greater productivity based on employees
  satisfaction and personal growth (theory Y)
• Works for people that do not want enlarged jobs
  (theory X)

• Disadvantages
• As other systems is hard to find the best way
  that can satisfy everyone
• Not always people are motivated by same things

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Theories

• Systems Theory

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Systems Theory

• System A system is a set of interrelated parts
  that function as a whole to achieve a common
  purpose. (Daft, 2003)
• Originated in the field of Biology.
• Concept of Homeostasis state of balance in the
  different parts of a system
• Based in observation of constantly animals
  changes to meet internal and external demands

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Systems Theory

• Characteristics of Open and Closed Systems
• Open respond to external and internal
  environment
• Closed ignores changes and search for a stable
  ideal
• Contingency Models
• Suggest that the best organizational structure
  depends on being responsive to continuing changes
  in the environment

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Systems Theory

• The Advantages of open systems
• An organization that is responsive to internal
  and external changes in environment.

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Systems Theory

• Open Systems characteristics
• Entropy If a system do not receive new inputs
  and energy coming from the environment, it will
  someday die. Negative entropy means to move
  against death.
• Differentiation Organizations move forward
  greater specialization and complexity.
• Equifinality It refers to the concept that there
  are many ways to attain a similar goal

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Systems Theory

• The advantages of closed systems
• Close systems characteristics
• An organization that is not responsive to
  internal and external changes in the environment.
  

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Systems Theory
Contrast Open x Closed Systems
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Theories

• Sociotechnical Systems Structures

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Sociotechnical Systems Structures

• Both social and technological aspects of an
  organization must be studied in order to
  understand an organizations productivity problem

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Sociotechnical Systems Structures

• Autonomous Work Group
• The employee groups are given the responsibility
  for planning and accomplishing their work
• Employees with responsibility for planning and
  accomplishing their work

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Sociotechnical Systems Structures

• Advantages
• Ability to change constantly and be flexible
• Employee that pleases the customer most (through
  products and services) is rewarded over person
  pleasing boss
• Job no longer task and activities, but
  opportunity to earn money using skill on
  assignments

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Sociotechnical Systems Structures

• Disadvantages
• If individual doesnt respond to changes in
  system and technology and develop new skills and
  abilities they will loose job.

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Organizational Climate and Culture
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Main aspects of organizational climate and culture

• Organizational culture is the deep pattern of
  basic assumptions that is passed on as the
  correct way to perceive, think, and feel in an
  organization (refers to the basic underlying
  assumptions of an organization).

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Main aspects of organizational climate and
culture.

• If this is successful it will result in the
  survival of the organization, if it is not it
  will result in the decline or death of the
  organization.
• Organizational climate refers to the individual
  perceptions of cultural events in an
  organization
• How individual employees or groups interpret what
  happens in the organization

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Ways that organizational climate and culture are
measured and change

• Measurement of organizational culture
• Getting a complete picture of organizational
  culture requires time and the exploration of many
  different situations.
• Survey instruments such as the Organizational
  Culture Inventory and the Corporate Culture
  survey have been developed to gather information
  from employees at many different levels in the
  organization.

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Ways that organizational climate and culture are
measured and change

• Organizational culture change
• Cultural changes in organizations fall into one
  of three basic categories
• The overthrow and comprehensive change of the
  cultures of the entire organization
• Specific subcultures or subunits within an
  organization are singled out for change
• A slow gradual change of the entire
  organizational culture

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Ways that organizational climate and culture are
measured and change

• Measurement of organizational climate-(often
  measured by questionnaires answered by all or
  many employees)
• Individual perceptions of attributes of the place
  of work
• A measure of climate should focus on what each
  individual says rather than generating an
  organizational summary or average

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The basic features of organizational
effectiveness and how it is measured

• Organizational effectiveness refers to the
  success of an organization in meeting its goals,
  getting needed resources, minimizing conflict,
  and satisfying stakeholders.
• Personnel audits are a good way to measure
  organizational effectiveness because they show
  where to trim the organization but still maintain
  its success.