Sunday, May 31, 2009

Organisation Design

Discuss the meaning and theories of Organisation Design. Describe the key factors affecting organisation design with suitable organisational examples.

New organisation designing are created either by existing organisation or by individuals who create new organisation. Experience shows that personal vision, beliefs and preference of entrepreneur on matters such as delegation determine the shape of an organisation at the time of its foundation and also over time. The shape changes depending on the nature of issues in integration and control. Aging and growth lead to complexity and uncertainty and turbulence in environment (including technology) and provide impetus to reshape or restructure organisations. Discovery of doing things in a better way or dissatisfaction with the existing structure may provide occasions and opportunity to come up with new strategies and structures. Organisations of the future are likely to emphasize on innovation. As such, the design components of an innovative organisation also merit consideration here.
For the purpose of the organisation designing strategies, the following five could be considered as critical dimensions of organisation design:

(i) Environment
(ii) Technology
(iii) Size
(iv) Ownership
(v) Social change and Human aspects

These above five aspects are briefly discussed with a view to discerning their possible effect on organisation design.

(i) Environment
An organisation should be well structured in order to support plans at all hierarchical levels. Without the structure plans cannot be implemented and goals cannot be achieved. Most organisations design a structure that suits their particular purpose and the skills of their staff. A structure needs constant attention if the organisation is to develop.
We intend to help you to understand some of the issues that management has to understand when running an organisation effectively. You will find topics such as internal and external environment, PEST analysis, SWOT analysis, 6M reporting tool, 7S framework, organisational design, organisational Chart, horizontal and vertical communication, and the mission statement.
To begin with, we may consider the broad features of environment such as whether it is relatively stable or not, the rate of change (if any), and the degree of complexity. These aspects are considered to affect the organisation and therefore the design strategy should permit an appropriate fit between the structure of an organisation and its external environment.

To sum up the extreme categories of organisational environment the major propositions are following:
• Organisations with category 1 environment have relatively amend information problems; can design long-range strategies, operations, and tactics more easily-more rapidly and in more detail - and implement them without large alternations; have relatively little internal conflict potential; possess a more mechanical structure; have clearly described and predictable, gradually changing coalitions; and have relatively few problems with their existing decision-making programmes when the environment changes.
• Organisations confronted with a category 49 environment experience the same problems as do those with a category 1 environment; but they experience a higher degree of uncertainty concerning timing in the control of internal problem states.
• Organisations confronted with a category 64 environment have large information problems; have very abstract, tentative sets of strategies, operations and tactics and cannot execute them without expecting large alternations; have very vague coalitions that change unpredictably; and are constantly redesigning decision-making programmes or constantly creating exceptions to existing decision-making programmes.
• Organisations confronted with a category 16 environment have the same problems as are experienced by organisations with a category 64 environment, but they are able to predict and control internal problem states much more easily.

Particular cell represents a separate situation. This typology is not a matrix of interdependencies. Knowing the environmental map or the direction of its movement may mean switching from one category to another.

(ii) Technology
TCS has the following offerings in this area:
S-RCP (Secure Recovery and Continuity Planning Practice):
Business operations are often interrupted by unforeseen events — a tornado that destroys communication lines, a massive computer failure, or the latest virus on the loose can bring your organisation to a grinding halt.

Our Secure Recovery and Continuity Planning (S-RCP) practice can help your organisation to face such challenges. We follow current appropriate standards and established risk management techniques to assess the business effect of unforeseen disasters.

In the context of information systems, disaster recovery entails the restoration of computing and telecommunications services after they have been disrupted by some event.

We approach disaster management in terms of a system's capability to function at an acceptable level in the face of untimely mishaps. In this context, we consider the system in the broadest possible sense to include large-scale systems and entire networks.

How can enterprises arm themselves to address the increasing risks to information security? TCS's S-RCP offering addresses this fundamental question and provides a robust framework for organisations to conduct their operations in an uninterrupted manner in the face of unforeseen disasters

The choice of technology influences how well an organisation can maximise its effectiveness. The basic structure of a TCS organisation should facilitate a technology appropriate to a chosen strategy. Thus there should be a fit between strategies concerning structure and those of environment and technology.


While technological changes affect organisation design choice and strategy and vice-versa, the options depend on a number of limitations and possibilities that the choices create. Sometimes what happens in other organisation in the same sphere of activity might force a kind of consensus on the relevant technology strategy for the organisations.

(iii) Size
The structure of an organisation is, in some ways, a function of size. With raise in size, complexity rises in an organisation and the movement from centralization to decentralization takes a full circle with centralized decentralisation for purposes of optimally designed control and coordination.

(iv) Ownership
In the past it is believed that the organisational purposes vary with the nature of ownership. But such distinctions are less pronounced these days than before. The organisation structures need not vary based on ownership, more so in form than in substance.
To classify sectorally organisations are often sought based on ‘ownership’ criterion. It is further believed that the nature of ownership influences the goals of an organisation, nature of control and attitudes to market situation.

In reality, however, the private enterprises have major public holding and public sector has an element of mixed or joint ownership and enterprise. The rise of Modern Corporation led to definite degree of divorce between ownership and control. The public sector is compelled not to ignore the profit motive altogether while the private sector is under great pressure and obligation to keep public good in mind and discharge its social objectives. Protection and monopoly are transient phases in most economic systems and there is neither pure capitalism nor pure communism anywhere. Therefore notions concerning distinctive nature of organisations in separate sectors have to be updated keeping in mind the changes in the environment of each economic system at separate points of time. The elements and features of organisation, particularly when they are seen in action, do not any longer have universal distinctiveness merely on the basis of ownership criterion.

(v) Social change and Human aspects
Though last motioned, entire five aspects, this is the most influential factor shaping and reshaping the organisation structures warranting, as indicated by the growing body of knowledge on human behaviour, a movement away from traditional control systems to systems based on consensus and commitment.

A number of basic socio-cultural conditions impinge on organisations and their functions. There is a view that in numerous cases socio-cultural restrictions have tended to be the chief cause of below development and poverty in developing societies likes India. It is true hard to measure and quantify whether and how these factors affect organisation and management systems. A definite sense of fatalism, limited aspirations and assigning a low value to time are cited as some of the characteristics of traditional societies like ours. In Hindi the words ‘tomorrow’ and ‘yesterday’ are identical, only distinguished by usage. Both mean one day from now. As the noted social anthropologist Margaret Mead pointed out in her study on Spanish Americans, in traditional societies there is an unable to move easily resistance to change as based on the belief that “it has been so whole along and it continues to be so”.

Group membership shapes the aspirations and desires of a good majority of the people. The joint or extended family consisting of a number of family units-father, mother, sons and their wives, children, nephews and their families living together in one roof pooling and sharing resources. Usually the eldest male member wields authority and control over the members and resources. Over the years caste related mores and taboos are gradually changing and the joint family system is undergoing erosion. While in the past authority and dependence was a part of family and cast structure, progressive strides in urbanisation and modernization have changed the system. Parochial considerations, inter-laced with religion, language and region have had adverse effects on group cohesiveness, cooperation and productivity even in organisational context. Notwithstanding the many changes in the society the dependency among masses continues. There is a tendency to show loyalty to individuals that institutions and excel in individual tasks than group performance. Discount on physical labour and a civil service premium on professional skill through occupational values.