Organisational structuring

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Organisational structuring
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Fundamentals fads Critical evaluation
Guiding ideas
Domains of action (organisational architectures
and processes)
Innovations in infrastructure
Theory, methods, tools
Do they work?
Do they improve?
Adapted from Senge Fifth Dimension Fieldbook
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Approaches to organisational change
Jarvis adapted from Wilson (1992)
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Organisational structure

• more than an organisation chart
• essential relatively unchanging - basics
• 'official' features comprising definitions,
  functional groupings, roles relationships,
  coordinating regulative controls that
  manifest the organisation as an entity designed
  to achieve specific aims outcomes.
• ..a 'solution' or 'aggregate of solutions'
  evolved over time from choices aimed at providing
  order organisation to an enterprise or
  institution.
• ..from grand design to patchwork quilt

http//sol.brunel.ac.uk/jarvis/degreemodules/mg50
13/ Seminar 2
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The rational-legal organisation (bureaucracy)
Focus on mission objectives Direction
stewardship
Hierarchy Delegation of roles, responsibilities,
authority accountability
Max Weber
Appointment on merit to office. Competence
commitment Impersonality and segregation
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Organisation (Classical) Principles

• Unity of command one boss
• Scalar chain clear line of authority
• Span of control boss-subordinate ratio
• Staff and line must not undermine line
• Division of work specialisation for efficiency
• Responsibility Authority effective delegation
  balance of centralised decision making
• Discipline conformity to legitimate rules and
  norms.
• Subordination of individual interest to general
• Initiative to be encouraged at all levels
• Equity fair dealings, kindness and justice,
  rewards
• Stability of tenure
• Esprit de corps

• Henri Fayol 1916
• 14 principles
• See also
• Parker Follet 1926
• Urwick 1947
• Brech 1965

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Structural deficiencies

• Disorderliness, weak coordination
• Inconsistent and arbitrary operation
• Insufficient delegation/clarity
• Slow decision making
• Conflict and division
• Innovative weakness and neglect of direct/change
• Redundancy and capacity gaps
• Creeping inefficiencies
• Membership and morale problems

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Structural Elements - Formalisation
Standardisation

• Size, complexity and growth
• Coordination burden
• Goals of efficiency and economy
• Desire for
• Certainty and consistency
• Flexibility, initiative and creativity
• Renewal

• Mintzberg 1979
• Mutual adjustment
• Direct supervision
• Three Standardisations
• Work processes
• Skills/competencies
• Results

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Methodological Issues

• Levels of Analysis world, block, nation,
  industry, firm, function, group, individual,
  chain etc
• Disciplinary frameworks economic, sociological,
  psychological, political
• Metaphorical images of organisation
• Analytical description
• Normative underpinnings
• Analytical and predictive explanation
• Solutions (prescriptions) to be implemented
• Social interpretation (phenomenological)

• Purposes?
• Understanding
• neutral prediction
• action
• power/influence

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Disciplinary perspectives

• Psychological
• Decision analysis and decision making
• Behavioural (groups, individuals)
• Cognitive (knowing, learning)
• Sociological
• Structural-functionalism
• Social Action/Interpretive
• Radical (Marxists post Marxist)
• Post modernism (discourse)

• Economic
• Market forces
• Economic efficiency
• Monopoly
• Planned economy
• Political
• Unitary/pluralism
• Democracy
• Power inequality
• Managerialism
• Anti-organisational

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Methodological Issues

• "All theories of organisation and management are
  based on implicit images or metaphors that
  persuade us to see, understand, and imagine
  situations in partial ways. Metaphors create
  insight. But they also distort. They have
  strengths. But they also have limitations. In
  creating ways of seeing, they create ways of not
  seeing. Hence there can be no single theory or
  metaphor that gives an all-purpose point of view.
  There can be no 'correct theory' for structuring
  everything we do."
• Gareth Morgan, Images of Organisation

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Morgan - metaphors for thinking about
organisations

• No "one correct way" to define and view an
  organisation
• goal-seeking machine with interchangeable parts
• biological organism that continually adapts to
  change
• central brain that can respond to, and predict,
  change
• centring on a set of shared values and beliefs,
• centring on power and conflict, as a means
  whereby individuals achieve their own aspirations
  or mutual self-interest,
• centring on norms of behaviour, so that the
  organisation is likened to a psychic prison
• flux and transformation
• instrument of domination
• Images of Organisation 1986

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Prescriptions Goal-setting Organisation
Structuring

• Mission
• Strategy - plans, programmes, positions, ploys
• Objectives - short term statements of results
• Inputs, processes, outputs (results) - systems
  perspective
• Assumptions of control via cascading objectives
• For Integrating organisational and individual
  goals
• Resource allocations zero-based budgeting
• Management by objectives - top-down, bottom-up,
  atomism/cascade
• Key result areas
• Critical success factors
• Standards of performance
• Monitoring and evaluation
• Conflicting objectives
• sub-optimisation
• goal turnover, displacement and immunisation

Chapter 15 Allinson
Quality management Business process reengineering
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Prescriptions Changing structure, function and
hierarchy

• Functional specialisation into manageable,
  'logical' sub-systems
• Task, expertise, accountability structure
• Operating mechanisms Policies, procedures
  (SOPs), rules expectations to guide behaviour.
  Comms control lines. Planning, budgets
  budgetary control. Performance management staff
  appraisal, training, monitoring reporting.
• Delegation Responsibility tasks defined in
  programmes/jobs. Clear authority decision
  points.
• Neo-views?
• Stick to the knitting, focus on core competencies
• Empowerment. Team development semi-autonomous
  groups
• Task forces out-sourcing, supplier partnerships
• Network organisation

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Prescriptions Towards Planned structures. How is
it done?

• SWOT, STEEPLE
• Analysis of situation e.g. benchmarking
• Operational research investigations define
  specific problems
• Method study work measurement to
• identify efficiencies savings
• redefine functions roles
• establish tasks assign to groupings roles
• decide methods, work processes arrangements
• design work points people-machine relationships
• determine work standards, targets
• monitoring, control feedback/reporting
  arrangements
• Acquire, brief train staff. Establish norms
• Decide reward employment rules
• Anticipate problems developments
• Implementation pilot, modular, big-bang
• Supervise, check and follow-up

• Manager initiation
• Productivity improvement team
• Kaizen/CQI

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Productivity improvement (Sci. Mgt. tradition)

• techniques to examine work - what is done how
• systematic analysis of elements, factors,
  resources relationships affecting efficiency
  effectiveness
• investigate work situation, identify weaknesses
  where/why is poor performance happening?
• emphasis on data gathering rational analysis
• narrow assumptions about objectivity of
  efficiency criteria direct
• deterministic relationships between effort
  incentives
• worker as a resource/machine ergonomics, HCI
  improve operating methods thru
• Equipment, layout of operations
• supply materials handling,
• work organisation, effectiveness of planning and
  so on.
• empowerment - neo scientific management
• select train competencies
• reward measured performance using PRP

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Methods study SREDIM

• analysis of ways of doing work (method)
• common-sense heuristics
• select the task to study
• record the facts about the task
• examine these
• develop a new method
• install/implement it
• maintain it

Today's business systems analysis business
process reengineering
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SREDIM - stages of a method study
Examine with PPSPM questions

• select tasks to studyon basis of delays,
  capacity, queues, idle-time, bottlenecks, quality
  problems, high cost, control difficulties. Agree
  focus/scope with senior mgt. Explain to staff
  re-assure
• record the factsby observation, interview or
  experiencing the job. Record e.g. using process
  charts, charts of movement, supply chains etc.

• Purpose What is being done? Why? What else
  could be done? What should be done?
• Place Where is it being done? Why there? Where
  else could it be done? Where should it be done?
• Sequence When is it being done? Why then? When
  else could it be done? When should it be done?
• Person Who does it? Why them? Who else could do
  it? Who should do it?
• Means How is it done? Why that way? How else can
  it be done? How should it be done?

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Rudyard Kipling

• I keep six honest serving men,They taught me all
  I knew,Their names are What and Why and How
• and Where and When and Who

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develop new methods requires - 2

• requires technical know-how
• foresight of possibilities e.g. effects of
  removing a stage or re-allocating to another
  process/person.
• knowledge of new methods/equipment tech.
  feasibility, reliability,
• system charting to "see" the new system
  evaluate it.
• improvement teams to brainstorm ideas on
  fine-tuning implementation
• try reverse engineering or value analysis
• a empowered, participative workplace culture.
  People are ingenious.
• time for experimentation, testing and working
  thru. the detail.
• acknowledgement of learning curve
• Improvement projects (BPR by another name).

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develop new methods requires - 2

• seeing effect on job composition and staff
  earnings opportunities
• install/implement new methods
• once agreed costed
• staff consultation, briefing and training
• goodwill requires sensitivity, planning
  resourcing.
• detailed project plan budget.
• cut-over pilot, phased?
• reduce risk and offer time for learning
  dissemination of experience.
• If big-bang then need complete certainty that
  going to work.
• maintain it new method needs
• new sequences of operator action different
  perspectives.
• team member commitment
• update process specifications documentation
• hit squad for teething troubles
• formal review of new method/performance.

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Mechanistic-Organismic - Burns and Stalker 1961

• Technological market factors organisation
  structure
• Mechanistic
• Stable environment
• Functionally differentiated tasks, precise roles
  and responsibilities, hierarchical, expertise
  direction from the top, prestige internally
  locally
• Procedure-oriented
• Organismic
• dynamic, turbulent environment
• Fluid redefinition of tasks, precise roles etc.
• Individual know-how focus. Lateral coordination.
  Distributed, empowered, decisions - locus of
  expertise
• Flatter, goal-oriented

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Mintzberg - Organisation Types and Change

• Simple Structure
• Fluid working and report relationships. Small mgt
  hierarchy. Few functional specialists.
  Multiskilled roles. CEO entrepreneurial vision,
  intuitive risk-taker.
• Machine Bureaucracy (MB)
• Stable environment - airline, consumer goods,
  hotel chain. Large, well-oiled integrated,
  regulated systems. Decentralised operations with
  well-defined authorities monitoring.
  Incremental change gt new radical strategy.
• Divisionalised Form
• semi-autonomous units. Product or market focus.
  MB derivative for conglomerate or "federation".
  Parental appointments, MbO, HQ meetings,
  corporate values
• Professional Bureaucracy
• Professionals support staff e.g. collegiate,
  doctor or solicitor partnership. Some MB
  adhocracy (e.g. finance systems).
• Adhocracy
• organismic, "task culture", team focus. Smaller,
  fluid, often temporary. Controlled by
  appointment, MbO/R, budgets etc. May run counter
  to MB regulation.

Mintzberg H Quinn J, 1988 The Strategy
Process, Prentice
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Organisational Forms

• Fixed form bureaucracy
• Centralised, decentralisation - SBUs, profit
  cost centres
• Franchise-based organisation
• Loose, collaborative network
• Bureaucracy with cross-dept. teams task groups
• Matrix, project centred
• Core-periphery firm (functional numeric
  flexibility)
• Core primary, functional, flexible staff
• Periphery - short-term, part-time
• Servicing - sub-contractors, agencies,
  outsourcing
• Belief in empowerment lean, flat, flexible
  structures
• Formal partner networks
• Distributed and virtual organisations

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Structural Elements - Configuration and Grouping

• Functional
• Process
• Product--service
• Market or customer
• Geographic
• Matrix

Vertical Span of control Flat/Tall
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Horizontal Structuring

• Division specialisation by function
• Grouping by expertise concentrates know-how,
  coordination
• But can lead to compartmentalisation, separated
  communication vested interests
  (sub-optimisation)

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Horizontal Structuring - by Process
Products and services
cost or profit centre

• Grouping by process-orientation
• Benefits problems like functional
• 'Process' may have local functional expertise of
  its own (duplication).

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Horizontal Structuring - by market, customer or
region
cost or profit centre

• Customer focus and local PEST knowledge
• Local functional expertise central
• Regional loyalties?
• The global corporation?

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Matrix organisation

• horizontal, product grouping on top of
  functional structure
• Project members are subordinates of function or
  geographic managers but 'assigned to project (two
  bosses - dual loyalty?)
• 'B' has projects on the go. E is 'seconded'
  (home location?)
• Team decision making focus (distributed team
  coordination)?
• Project budget - cost and profit centre

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Job re-design group/cell technology

• From late 60s - job enrichment, flexibility
  empowerment e.g. Herzberg Volvo
• team at a work station - a cell - manage own
  activities, roles methods
• multi-skilling, job rotation QA by by team
  itself.
• re-engineer how technology is implemented.
• adapt technology to people - not viz.
• Form cells (workstations) where work can stop
  operators (team) can do a series of tasks
• Team emphasis - group problem-solving supported
  by specialists management when needed.