Organisational Theory and Design
Question 1
(a) Explain with the help of a diagram Mintzberg’s basic organisational framework. (30 marks)
(b) Differentiate between an entrepreneurial organisational structure and a machine
bureaucratic organisational structure. (30 marks)
Question 2
When a company implements strategies, it is important to know if the strategies that
have been implemented have been effective.
Explain the goals approach of measuring the effectiveness of implemented strategies
and evaluate the five (5) main key indicators of this approach that you can use to
measure the effectiveness of the implemented strategies. (40 marks)
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Academic Session 2022 First Semester
January 2022
ASSIGNMENT 1
BMG320/03 Organisational Theory and Design
Instructions: 1. ASSIGNMENT 1 contains TWO (2) questions and you are required to answer ALL
questions.
2. ASSIGNMENT 1 carries 50% of your final total marks. 3. The assignment should be typed using Arial, font size 12 and double spaced,
approximately 2000-3000 words and in essay format. 4. The deadline for the submission of ASSIGNMENT 1 is 20 February 2022, 11:59pm.
A softcopy should be submitted via Online Assignment Submission System.
2
Note to students: You are encouraged to read the wflex course material (Units 1
and 2) as well as the power point slides before attempting the questions.
Question 1
(a) Explain with the help of a diagram Mintzberg’s basic organisational framework.
(30 marks)
(b) Differentiate between an entrepreneurial organisational structure and a machine
bureaucratic organisational structure.
(30 marks)
Question 2
When a company implements strategies, it is important to know if the strategies that
have been implemented have been effective.
Explain the goals approach of measuring the effectiveness of implemented strategies
and evaluate the five (5) main key indicators of this approach that you can use to
measure the effectiveness of the implemented strategies.
(40 marks)
Course Learning Outcome 1: Explain the basic idea of what constitutes an
organisation and theories of organisation Course Learning Outcome 2: Describe how managers can help the organisation attain its objectives through the design of an appropriate organisational structure and
strategic management processes
END OF ASSIGNMENT 1 QUESTIONS
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BMG 320/03 Organisational Theory and Design
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Unit 1
INTRODUCTION TO ORGANISATION
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1.1 The Evolution of Organisation Theory and Design
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A brief history lesson…
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1.1 The Evolution of Organisation Theory and Design
• As economies moved away the agriculture age to the industrial age, it required changes in how people and production were managed.
• Similarly, now as factories become fully automated, artificial intelligence replacing humans in many areas and the internet breaking down communication barriers, new ways of structuring and managing organisations are emerging
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Two organisation approach
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Organisational Changes
Some of the changes that are taking place: • More horizontal in structure • Employees are being empowered • Greater sharing of information which leads
to better decision making • Greater collaboration between companies
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1.2 Organisational Configuration: Mintzberg’s Organisational Framework
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Mintzberg’s Organisational Framework
Technical Core • The technical core includes
people who do the basic work of the organisation.
• This part actually produces the product and service outputs of the organisation.
• This is where the primary transformation from inputs to outputs takes place
Technical Support • The technical support function
helps the organisation adapt to the environment.
• Technical support is responsible for creating innovations and helping the organisation change and adapt.
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Mintzberg’s Organisational Framework
Administrative Support • The administrative support
function is responsible for the smooth operation and upkeep of the organisation.
• This includes human resource activities as well as maintenance activities such as cleaning of buildings and service and repair of machines
Management • Management is a distinct function,
responsible for directing and coordinating other parts of the organisation.
• Top management provides direction, planning, strategy, goals, and policies for the entire organisation or major divisions.
• Middle management is responsible for implementation and coordination at the departmental level. In traditional organisations, middle managers are responsible for mediating between top management and the technical core
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1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types
• In real-life organizations, the five parts are interrelated and often serve more
• than one function. For example, managers coordinate and direct parts of the organization, but they may also be involved in administrative and technical support.
• Mintzberg proposed that the five parts could fit together in five basic types of
Organization.
The five configurations are: • entrepreneurial structure • machine bureaucracy • professional bureaucracy • diversified form, and • adhocracy.
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1.3 Organisational Configuration: Mintzberg’s Five Organsationtion Types
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1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types
Entrepreneurial Structure • A new, small start-up company • It consists mainly of a top manager
and workers in the technical core • The organisation is managed and
coordinated by direct supervision from the top
• Few support staff are needed • The primary goal of the organisation is
to survive and become established in its industry
• There is little formalisation or specialisation
• Suited to a dynamic environment
Machine bureaucracy • Very large and mature
organisation • Often oriented to mass production • The narrow middle
management area reflects the tall hierarchy for control.
• This form reflects extensive formalisation and specialisation • Primary goal of efficiency • Suited to a simple, stable environment
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1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types
Professional Bureaucracy • The size and power of the
technical core, which is made up of highly skilled professionals,
• professionals make up the bulk of the organisation.
• A large administrative support staff is needed to support the professionals
• The primary goals are quality and effectiveness.
• Professional organisations typically provide services rather than tangible goods. Example – hospitals, law firms, universities
Diversified Form • Mature firms that are
extremely large and are subdivided into product or market groups
• There is a larger administrative support staff to support the divisions
• Small top management & small technical support group
• The diversified form helps to solve the problem of inflexibility experienced by a too-large
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• machine bureaucracy by dividing it into smaller parts
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1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types
Adhocracy • The adhocracy develops in a complex, rapidly changing
environment • The design goal is frequent innovation and meeting
continually changing needs such as aerospace and defence industries
• The main structure consists of many overlapping teams rather than a vertical hierarchy
• Adhocracies are usually young or middle-aged organisations
• Employees are engaged in the administration and support of their own teams
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Question for Disussion
Q1 Explain how Mintzberg’s five basic parts of the organization fit together to perform needed functions.
Q2 Based on what you know about the following organizations, how would you categorize them according to Mintzberg’s Five Organizational Types : • Berjaya Corporation? • Facebook? • Toyota Motor Corporation?
Q3 Do you think that a small entrepreneurial company can maintain its structure as its business grows? What are your reasons?
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End of Slide
Thank you for your attention!
- Slide 1
- Slide 2
- 1.1 The Evolution of Organisation Theory and Design
- A brief history lesson…
- 1.1 The Evolution of Organisation Theory and Design (2)
- Two organisation approach
- Organisational Changes
- 1.2 Organisational Configuration: Mintzberg’s Organisational Fr
- Mintzberg’s Organisational Framework
- Mintzberg’s Organisational Framework (2)
- 1.3 Organisational Configuration: Mintzberg’s Five Organsiation
- 1.3 Organisational Configuration: Mintzberg’s Five Organsationt
- 1.3 Organisational Configuration: Mintzberg’s Five Organsiation (2)
- 1.3 Organisational Configuration: Mintzberg’s Five Organsiation (3)
- 1.3 Organisational Configuration: Mintzberg’s Five Organsiation (4)
- Question for Disussion
- Slide 17
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BMG 320/03
Organisational Theory and Design
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1
Unit 2
ORGANISATIONAL PURPOSE AND STRUCTURAL DESIGN
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2
2.1 Organisational Structure
There are three key components in the definition of organisation structure:
Organisation structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers
Organisation structure identifies the grouping together of individuals into departments and of departments into the total organisation.
Organisation structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments.
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2.2 Application of the structural design
Organisations can have structures such as :
Functional structure
Divisional structure
Matrix structure
Horizontal structure
Network structure
Hybrid structure
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Functional Structure
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Divisional Structure
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Matrix Structure
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Horizontal Structure
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Network Structure
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Hybrid Organisation Structure
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2.2 Application of the structural design
Functional structure – uses task specialisation and strict chain of command for efficient control of resources but it tends to be inflexible and not innovative
Horizontal structure – innovative and promotes learning but tends to waste resources
Virtual network structure – greater flexibility and rapid response
Hybrid structure – combines characteristics of various structural types.
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Question for discussion
Why do companies using horizontal structure have cultures that emphasis openness, employee empowerment and responsibility?
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2.2 Structural Alignment
Managers need to find the balance between vertical control and horizontal co-ordination.
Vertical control is associated with goals of efficiency and stability
Horizontal co-ordination is associated with learning, innovation and flexibility
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Symptoms of Structural Deficiencies
Managers try to achieve the best fit between internal reporting relationships and the needs of the external environment.
When organisation structure is out of alignment with organization needs symptoms of structural deficiency appears such as:
Decision making is delayed or lacking in quality.
The organization does not respond innovatively to a changing environment.
Employee performance declines
Absence of collaboration among units/departments
Goals are not being met
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2.3 Role of Strategic Direction in Organisation Design
| External Environment |
| Opportunities Threats Uncertainty Resource Availability |
| Internal Situation |
| Strengths Weaknesses Distinctive competence Leader Style Past Performance |
| Strategic Intent | ||
| Define Mission, Official Goals | Select Operational Goals, Competitive strategies |
| Organisation Design |
| Structural Form- le arning vs efficiency Information & control systems Production Technology HR policies, incentives Organisational culture Interorganisational linkages |
| Effectiveness Outcomes |
| Goal attainment Resources Efficiency Strategic constituents |
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SWOT Analysis & Strategic Intent
The direction setting process begins with SWOT analysis – assessing the Strengths, Weaknesses, Opportunities and Threats in the external and internal environment.
Next is defining the strategic intent which involves defining the overall mission and goals
Leaders then formulate operational goals & strategies to accomplish the overall mission
Organisation design reflects the way goals & strategies are implemented so that the organisation’s attention & resources are consistently focused towards achieving the mission and goals.
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Examples of Mission Statements
Tesla: To accelerate the world’s transition to sustainable energy.
IKEA: To create a better everyday life for the many people.
Amazon: To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.
Google: To organize the world’s information and make it universally accessible and useful.
Loreal: To provide the best in cosmetics innovation to women and men around the world with respect for their diversity.
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Organisation Design
Organisation Design is the administration & execution of the strategic plan.
Managers make decisions about the structural form – organic (learning & innovation) or mechanistic (efficiency
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Effectiveness & Outcomes
Managers evaluate the effectiveness of organisational efforts
The performance measurements feedback to the internal environment so that past performance of the organisation is assessed by managers in setting new goals & strategic direction for the future.
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Measuring Organisational Effectiveness
Resource
Inputs
Product & Service Outputs
Organisation
Internal Activities & processes
Resource- based Approach
Goal Approach
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Measuring Effectiveness
Goal approach
The goal approach to effectiveness consists of identifying an organisation’s output goals and assessing how well the organization has attained those goals.
This is a logical approach because organizations do try to attain certain levels of output, profit, or client satisfaction.
The goal approach measures progress toward attainment of those goals.
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Measuring Effectiveness
Indicators tracked with the goal approach include:
Profitability—the positive gain from business operations or investments after expenses are subtracted
Market share—the proportion of the market the firm is able to capture relative to competitors
Growth—the ability of the organization to increase its sales, profits, or client base over time
Social responsibility—how well the organization serves the interests of society as well as itself
Product quality—the ability of the organization to achieve high quality in its products or services
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Measuring Effectiveness
Resource based approach
The resource-based approach looks at the input side of the transformation process.
It assumes organizations must be successful in obtaining and managing valued resources in order to be effective.
From a resource-based perspective, organizational effectiveness is defined as the ability of the organization, in either absolute or relative terms, to obtain scarce and valued resources and successfully integrate and manage them.
The resource-based approach is valuable when other indicators of performance are difficult to obtain.
In many nonprofit and social welfare organizations, for example, it is hard to measure output goals or internal efficiency
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Measuring Effectiveness
Indicators tracked with the resource-based approach include:
Bargaining position – the ability of the organization to obtain valuable resources eg. Quality employees, financing, raw materials etc
The ability of the organization’s decision makers to perceive and correctly interpret the external environment
The abilities of managers to use tangible and intangible resources to achieve superior performance
The ability of the organization to respond to changes in the resource sector of the environment
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End of Slide
Thank you for your attention!
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