organization Flashcards
Characteristics of an Organization
distinct purpose
deliberate structure
people
interact with their environments in the continual process of obtaining resource inputs and transforming
them into product outputs in the form of finished goods and/or services
Open system
The environment
supplies
Resource inputs
People
Money
Materials
Technology
Information
The organization
creates
Work activities
turn resources
into outputs
Transformation
Process
The environment
consumes
Product outputs
Finished goods
and/ or
services
can earn a profit
❖ sell a product for more than the cost of making it; or
Business organization
can add wealth to society
❖ 🡪 provide a public service that is worth more than its cost
Nonprofit organization
A common way to describe how well an organization is performing overall.
It measures the quantity and quality of work outcomes
relative to the cost of resources used
Productivity
goals achieved
resources wasted
effective but not efficient
goals achieved
no resources wasted
effective and efficient
goals not achieved
resources wasted
neither effective nor efficient
goals not achieved
no resources wasted
not effective but efficient
Three Major Theories:
*Classical or Traditional Model
*Neoclassical Theory or Behavioral Model
*Systems Theory
Earliest theory mainly concerned with the formal structure of the institution
Ex: church, military (chain of command)
Emphasized rationality, predictability, impersonality, technical
competence and formal division of labor
Classical Theories of Organization
Has 3 schools of thought:
Bureaucratic Model,
Scientific Management
and Principles of Administration school
- There is “one best way” to organize.
- There are “universal” principles of management.
*Organizations are “mechanical” and “closed-systems“. They
ignore human factors, cultural dimensions and external
environment.
*Organizations exist for “production related” goals, thus the
emphasis is on “Internal efficiency“. - Structure of “formal organizations” are defined.
Classical Theories of Organization
*Max Weber - father of Modern
Sociology
*Analysed bureaucracy as the
most logical and rational
structure for large organizations
*Positional authority of a superior
over a subordinate stems from
legal authority
*Charismatic authority stems
from the personal qualities of an
individual
Bureaucratic Model
has only direct, vertical relationships between different levels in the firm.
- authority follows the chain of command.
LINE ORGANIZATIONAL STRUCTURE
Disadvantages
1.Neglects specialists in planning
2. Overloads key persons.
3. As the firm grows larger, line
organization becomes more ineffective
LINE ORGANIZATIONAL STRUCTURE
Advantages
- Tends to simplify and clarify
authority, responsibility and
accountability relationships - Promotes fast decision making
- Simple to understand
LINE ORGANIZATIONAL STRUCTURE
The jobs or positions in an organization can be categorized as:
a. Line position:
* a position in the direct chain of command that is responsible for the achievement of an organization’s goals
Staff position:
* A position intended to provide expertise, advice and support for the line positions.
STAFF OR FUNCTIONAL AUTHORITY
ORGANIZATIONAL STRUCTURE
The ____ have the direct
authority (known as line authority) to be exercised
by them to achieve the organizational goals.
line officers or managers
The staff officers or managers have staff authority
(i.e., authority to advice the line) over the line.
This is also known as__________
functional authority
An organization where staff departments have
authority over line personnel in narrow areas of
specialization is known as functional authority
organization
STAFF OR FUNCTIONAL AUTHORITY ORGANIZATIONAL
STRUCTURE
- Some staffs perform only one of these functions but some may perform two or all the three functions.
- The primary advantage is the use of expertise of staff specialists by the line personnel.
- The span of control of line managers can be increased because they are relieved of many functions which the staff people perform to assist the line.
THREE TYPES OF SPECIALIZED STAFFS
1. advising
2. service
3. control
create conflict between line and staff personnel.
Line managers may not like staff personnel telling
them what to do
Some staff people have difficulty adjusting to the role, especially when line managers are reluctant to accept advice
Staff people may resent their lack of authority
Co-ordination between line and staff may become
difficult
LINE AND STAFF ORGANIZATIONAL STRUCTURE
DISADVANTAGES
Management information system, Operation Research and Quantitative
Techniques, Industrial Engineering, Planning etc
Advisory
Maintenance, Purchase, Stores, Finance, Marketing.
Service
Quality control, Cost control, Auditing etc. Advantages
Control
(i) Use of expertise of staff specialists.
(ii) Span of control can be increased
(iii) Relieves line authorities of routine and specialized decisions.
(iv) No need for all round executives
Quality control, Cost control, Auditing etc. Advantages’
