The course outline suggests that this course is the first exposure to

the study of management for students in the Faculty of Technology.

However, each student would have been exposed to management in
some form or the other before, be it home management, family
management, school, class, clubs etc.
For us to examine CONCEPTS IN ORGANISATION THEORY AND
DESIGN, we must define the terms, MANAGERS AND
ORGANISATIONS, since :Managers work in organisations.

Managers
Managers get things done through other people.
They make decisions, allocate resources, and direct
the activities of others to attain goals. Managers also
do their work in organisations. (Robbins 1996)

Organisations
Organisations are consciously coordinated social units

composed of two or more people, that function on a

relatively continuous basis to achieve a common goal or
set of goals. (Robbins 1996)
The people who oversee the activities of others and who
are responsible for attaining goals in these organisations
are their managers (also called lead hand, foreman,
supervisor etc)
Organisations are social entities that are goal directed
and are designed as deliberately structured and
coordinated activity systems and are linked to the
internal environment.

 Social entities- coming together as people

Goal directed- exists for a purpose
Why organisations- for structural orders, for getting
greater efficiency.

What is organisational
structure?
An organisational structure defines how job tasks
are formally divided grouped, and coordinated.
(Robbins 1996)
Managers need to address six key elements when
they design their organisationss structure.

The key questions

The answer is provided by

1.

Work specialization

To what degree are tasks

subdivided into separate jobs?

2. On what basis will jobs be grouped Departmentalization

together?

3. To whom do individuals and

groups report?

Chain of command

4. How many individuals can a

manager effectively and
ineffectively direct?

Span of control

5. Where does decision-making

authority lie?

Centralization and decentralization

6. To what degree will there be rules

and regulations to direct
employees and managers.?

Formalization

WORK SPECIALIZATION
By the late 1940s most manufacturing jobs in
industrialized countries were being done with high
work specialization.
Henry Ford became rich and famous by building
automobiles in an assembly line.
Work specialization (or division of labour) is the
degree to which tasks in the organization are
subdivided into separate jobs.

Advantages of work
specialization
Employees allowed to specialize thus allowing efficiency
Specialist/technical (highly skilled) employees only do

tasks accordingly
Training cost reduced
Labour cost reduced (pay based on skill required)
High skilled employees not working below skill level
Employees skills at performing a task successfully
increased through repetition
Less time is spent in changing tasks

By the 1960s increased evidence showed some

disadvantages of specialization- boredom, fatigue, stress
low productivity, poor quality, increased absenteeism and
turnovers
To counter this, it was discovered that JOB ENRICHMENT
rather than JOB ENLARGEMENT was best

JOB ENRICHMENT- is the vertical expansion of jobs

JOB ENLARGEMENT- is the horizontal expansion of jobs

Job enrichment involves but is not limited to job

involvement and job rotation.
Job involvement is the degree to which a person
identifies with his or her job, actively participates in
it, and considers his or her performance important to
self-worth.
Job rotation is the periodic shifting of a worker from
one task to another.

Managers today should not see work specialization

as obsolete nor an unending source of increased
productivity, but rather recognize the economics it
provides in certain types of jobs and the problems it
creates when its carried too far.

DEPARTMENTALIZATION
Jobs divided up through work specialization should
then be grouped together so common tasks can be
coordinated. The basis by which jobs are grouped
together is called DEPARTMENTALIZATION.

Methods of
Departmentalization
FUNCTIONS PERFORMED
Departmentalization by function can be used in all types
of organizations. Only the functions change to reflect the
organizations objectives and activities e.g. engineering,
manufacturing, personnel and purchasing specialist can
be placed into common departments in a manufacturing
plant.
Advantage- obtaining efficiencies and effectiveness by
putting like specialists together
Efficiency- the ratio of effective output to the input
required to achieve it
Effectiveness- achievement of goals

DEPARTMENTALIZATION BY PRODUCT
In very large organizations (manufacturing/service)
departmentalization types of product is common. A
petroleum manufacturing firm may choose to have
fuels, lubricants and waxes, and chemicals under the
authority of vice president who is a specialist in and
responsible for, everything having to do with his or
her product line. Each of these departments would
have its own manufacturing and marketing group.
Advantage- increased accountability for product
performance

DEPARTMENTALIZATION BY GEOGRAPHY
Often times very large global and high mass of
volume product/service organizations choose to
departmentalize by geography or territory.
Advantage- easy access to supply or service
- control of viability

DEPARTMENTALIZATION BY PROCESS
Process departmentalization can be used for
processing customers as well as products. By
product, Reynolds Metals aluminum tubing plant is
organized into five departments : casting; press;
tubing; finishing; and inspect, pack and ship. By
customers we can have validation, appreciation, and
documentation, process- checking, payment-finance.
Advantage- use of specific skills

DEPARTMENTALIZATION BY CUSTOMER
This category of departmentalization is driven by the
particular type of customer the organization seeks to
reach or the type that seeks the company products or
services e.g. in office supply- retail, wholesale etc
Advantage- customers have common sets of problems
in the department.
Finally, every large organization may have more than
one or all of the methods of departmentalization.

Chain of command
Three decades ago, the chain of command concept was a
basic cornerstone in the design of organizations. Today
with multitasking, more effective communication and
flexibility in authority and responsibility far less
importance is placed in chain of command.
The chain formed by managers from the highest to the
lowest that clarifies who reports to whom.
It answers two questions:
1. Who do I go to if I have a problem? And
2. Whom am I responsible for?

In discussing chain of command, Authority,

Responsibility and Unity of Command must be
examined.
Authority- refers to the rights inherent in a
managerial position to give orders and expect the
orders to be obeyed. To facilitate coordination, each
managerial position is given a place in the chain of
command and each manager is given a degree in
order to meet his or her responsibility.
The unity of command principles helps preserve the
concept of an unbroken line of authority. It states
that a person should have one and only one superior
to whom he or she is directly responsible.

If the unity of command is broken, a subordinate

might have to cope with conflicting demands or
priorities from several superiors.
However, times have changed and so has the basic
tenents of organization designs. Today with the
trend towards empowering employees and
advancements in computer technology, chain of
command and its supporting systems have
substantially less relevance.

Span of control
The span of control is the number of subordinates a
manager can efficiently and effectively direct. This
issue is important because, to a large degree, it
determines the number of levels and managers an
organization has. All things being equal, the wider
or larger the span, the more efficient the
organization.

Wider Span vs Small Span

1. Obviously wider spans are more efficiently in
terms of cost.
2. However at some point wider spans reduce
effectiveness.
3. When the span becomes too large, employee
performance suffers because supervisors no longer
have the time to provide the necessary leadership
and support.

4. By keeping the span of control small (five or six

employees) a manager can maintain close control.
5. Small spans are expensive because they add levels
of management.
6. Vertical communication in the organization is made
more complex by small span.
7. Additional levels of hierarchy slows down decision
making and tend to isolate upper management.
8. Small span of control often times encourage overly
tight supervision and discourage employee
autonomy.

Organization Design- is a process in which managers

develop or change their organizations structure.
Three of the more common designs found in use are: the
simple structure, the bureaucracy and the matrix
structure.
Excellent organizations are characterized by five (5) design
attributes:
Simple form and less staff
Empowerment to increase entrepreneurship
Horizontal structure and collaboration
A balance between financial and non financial measures
of performance
The use of electronic technology and e-commerce

The recent trend is towards longer spans of

control accompanied by employee training
which leads to greater competence and
less dependence on supervisors which
result in reduced costs, cut overheads,
speed up decision making, increase
flexibility, get closer to customers, and
empower employees.

Centralization and
Decentralization
The best possible understanding of the centralization
and decentralization is the invention of the Regional
system in Guyana.
Centralization- is the degree to which decision making
is concentrated to a single point in the organization.
Decentralization- is where decision discretion is
pushed down to lower-level employees or groups

 An organization characterized by centralization

is an inherently different structural animal from

one that is decentralized.
Action can be taken more quickly to solve
problems
More people provide input into decisions
Employees are less likely to feel alienated from
those who make the decisions that affect their
work lives.

Consistent with recent management efforts to

make organizations more flexible and
responsive, there has been a marked trend
toward decentralizing decision making.
We used to manage from the top, like an army,
now were trying to create entities that drive
themselves- Renato Riverso former IBM
Europes chairman

Formalization
Formalization refers to the degree to which jobs
within the organization are standardized.

Standardization not only eliminates the possibility of

employees engaging in alternative behaviours, but it
even removes the need for employees to consider
alternatives. If a job is highly formalized, then the
job incumbent has a minimum amount of discretion
over what is to be done, when it is to be done, and
how he or she should do it.

Employees
handle the same input in exactly the same way
produce consistent and uniform output
receive explicit job descriptions
receive lots of organizational rules
receive clearly defined procedures
When formalization is low, job behaviours are relatively
non programmed and employees have a great deal of
freedom to exercise discretion in their work. The degree
of formalization can vary widely between organization
and within organization.

Dimensions of organization
design
To understand further we need to look at the
dimensions that describe specific organizational
traits. These two dimensions describe organizations
much the same way that personality and physical
traits describe people.

Structural dimensions- this provides labels to describe

the internal characteristics of an organization and
create a basis for measuring and comparing
organizations.
1. Formalization- reflected by the number of ?
Documentation within the organization e.g. Miss
Kim lessons vs ABC nursery vs UG.
Documentation includes procedure, job
description, regulations, policy manuals- generally
describing behaviour and activities (see also
previous notes).

2. Specialization- (see previous notes)

3. Hierarchy or authority- describes who reports to
whom and the span of control for each manager.
The number of subordinates any manager can
efficiently control depends primarily on the duties
and abilities of the subordinates.
4. Centralization- organizational decisions that might
be centralized or decentralized include purchasing
equipment, establishing goals, choosing suppliers,
setting prices, hiring employees and deciding
marketing territories (see previous notes).

5. Professionalism- is the level of formal education and

training of employees. ? When employees require
long period of training to hold jobs in organizations.
6. Personnel ratios- refers to the deployment of people
to various functions and departments e.g. admin to
?, clerical to ?

Contextual dimensions- characterize the whole

organization i.e its goals and strategy etc which
describe the organizational setting that influences
and shapes the structural dimensions. Contextual
dimension represents both the organization and the
environment. It can be envisioned as a set of
overlapping elements that underline an
organizations structure and work processes and
include :

1.

2.

3.

Size- which is the organizations magnitude as reflected in the number of

people in the organization. Other measures such as total sales or total
assets also reflects magnitude ??? Give no indication of human (social
system) e.g. an aircraft ? Company. Size can be measured.
Organizational technology- refers to the tools, techniques, and actions
used to transform inputs into outputs. It concerns how the organization
actually produces the products and services it provides for customerscomputer aided, manufacturing, advanced information systems, internet
etc
The environment- includes all elements outside the boundary of the
organization. Key elements include the industry ,government, customers,
suppliers and the financial community. Other organizations are often the
environmental element that affects the organization the most.

4. The organizations goals and strategy define the purpose and

competitive techniques that set it apart from other
organizations. A companys intents are written down as goalsenduring statement. Goals and strategies define the scope of
operations and the relationships with employees, customers
and competitors. A strategy is the plan of action that describes
resource allocation and activities for dealing with the
environment and for reaching organizations goals. The scope
of operations is defined by its goals and strategies which
shows the relationship with employees, customers and
competitors.

5. An organizations culture is the underlying set of

key values, beliefs, understanding, and norms
shared by employees. The provide the glue to hold
organizations members together and may include
ethical behaviour, commitment to employees,
efficiency, or customer service. It is unwritten but
can be observed in its stories, slogans, pride,
ceremonies, dress and office layout.

1.
2.
3.
4.
5.
6.
7.

To understand and evaluate organizations, one must examine both

structural and contextual dimensions. These dimensions of organizational
design interact with one another and can be adjusted to accomplish the
purpose/importance of organizations (which are) to :
Bring together resources to achieve desired goals and outcomes
(effectiveness)
Produce goods and services efficiently
Facilitate innovation
Use modern manufacturing and computer based technology
Adapt to and influence a changing environment
Create value for owners, customers and employees
Accommodate ongoing challenges of diversity, ethics and the motivation
and coordination of employees.

The organization

Environme
nt

Culture

Goals and
Strategy

Structure
Theee
1. formalization
2. specialization
3. hierarchy of
authority
4. centralization
5.
professionalism
6. personnel
ratios

Size

Technolog
y

Management- Science or
Art

A reasonable question is- whether management is a science or an art. The

complexity inherent in the managers job dictates that effective managers
must blend both science and art.
Management as science Management problems and issues can be approached in ways that are
rational, logical, objective and systematic
Managers can gather and use data, facts and objective information
Use of quantitative models and decision- making techniques to arrive at
correct decisions
Technical, diagnostic and decision making skills are especially important
when practicing the science of management.

Management as Art
Despite the fact that managers make decisions and solve
problems based on science, they often times use INTUITION,
EXPERIENCE, INSTINCT and personal insights.
objective facts (scientific) may prove to be wrong.
Use of CONCEPTUAL, COMMUNICATION,
INTERPERSONAL and TIME-MANAGEMENT skills to
decide between multiple course of action that look equally
attractive.
Thus, managers must blend an element of intuition and personal
insight with hard data and objective facts.

What is management?
Management is a set of functions directed at efficient and effective
utilization of resources in the pursuit of organizational goals. (Griffin
2000)
By EFFICIENT, we mean using resources and successfully
implementing them.
Successful organizations are both efficient and effective
Managers face a variety of interesting and challenging situations
The average executive works upwards of sixty hours a week
Managers face increased complexities thanks to globalization,
domestic completion, government regulation, shareholder pressure,
rapid change, unexpected disruptions, and both minor and major
crises
Managers have opportunities to make differences

Kinds of managers

The different kinds of managers in organizations can

be differentiated by level and by area. Managers can
be differentiated by levels or areas.

Level of Management
There are three (3) distinct levels of management- top, middle and first line.
Top managers are the relatively small set of senior executives who manage
the overall organization- e.g. titles found in the group include president,
vice president and chief executive officer (CEO).
Top managers:
Create the organizations GOALS, OVERALL STRATEGY and
OPERATING POLICIES
Officially represent the organization to the external environment e.g.
government officials and executives of other organizations make decisions
about activities such as acquiring other companies, investing in research and
development, entering or abandoning markets, and building new plants and
office facilities.

 Middle managers is the relatively large set of managers

responsible for implementing the policies and plans

developed by top managers and for supervising and
coordinating the activities of first line managers.
Middle management titles include plant manager,
operations manager, and division head.
Middle managers such as plant managers tasks may
include inventory management, quality control,
equipment failures, and minor union problems.

 First line managers are managers who supervise and

coordinate the activities of operating employees.

Common titles for first line managers are coordinator
and office manager
Often the first step for employees who enter
management from the ranks of operating personnel
They oversee the day-to-day operations
They spend a large portion of their time supervising the
work of subordinates

Levels of Management

Top Managers

Middle Managers

Others

Administration

Operations

Finance

Management

Areas of Management

Human Resources

First Line
Managers

Areas of management
Regardless of their levels, managers may work in various areas within
an organization.
Marketing managers works in areas related to marketing function by
getting consumers and clients to buy the organizations products of
services. Tasks include new product development, promotion and
distribution.
Financial managers deal primarily with an organizations financial
resources, cost management and investments.
Operations managers are concerned with creating and managing the
systems that create an organizations products and services. Typical
responsibilities include production control, inventory control,
quality control, plant layout and site selection.
General managers are not associated with any specialty, but tend to
be generalists. They often serve as administrative managers and
cover all function areas of management
Human resources managers are responsible for hiring and
developing employees. They are typically involved in planning,
recruiting and selecting employees, training and development,
designing compensation benefit system, appraisals and discipline.

The Evolution of
Management
The history of management theory is a study in
contradiction-society concerned with effective
practice of management for thousands of years vs
the scientific study dates only from the 19th century.
Many different theories that relate to parts of the
management process but no unified general theory
of management has yet emerged.

Why study history and

theory?

THEORY
Both history and theory are useful to the practicing manager.
Karl E Weick (researcher) suggests that as people get closer to their goals they are
increasingly motivated to work harder to reach them (observation of people walking
on an escalator)- every day observation provides a theory that explains behaviour in
certain situations.
Management definition is practiced in real world as useful management theories.
Organizations apply different theory of management
Today a mixture of the theory is found best?
Theory helps us by organizing information and providing a systematic framework for
action.
A theory is simply a blueprint or road map to guide the manager towards
achievement of the organizations goals.

HISTORY
Two of the first true management pioneers were Robert
Owen (1771-1858)- employer well being and Charles
Babbage (1791-1871)- efficiency of production.
The study of the industrial revolution, the early labour
movement, the Great Depression and the railroads, oil
and steel industry gives us a good insight to
management.
The first discipline devoted to commerce was economicswhich generally assumed that managerial practice was
efficient.

The Classical Management

Perspective
The classical management perspective is the first important idea to emerge
(early 20th century). It consists of two distinct branches-scientific
management and administrative (organization) management.
Scientific Management
The father of scientific management and four (4) others: Frederick W Taylor
(1856-1915), Frank Gilbreth (1868-1924), William Gilbreth (1878-1972), Henry
Gantt (1861-1919) and Harrington Emerson (1853-1931).
Scientific management is concerned with the management of work and
workers- (individually productivity)
The concern was productivity
Taylor observed soldiering-employees deliberately working at a pace slower
than their capabilities.

Steps in Scientific
Management
Develop a
science for
each
element of
job to
reduce old
rule of
thumb
methods.

Scientifically
select
employees
and then
train then do
the job as
describes in
Step 1.

Supervise
employees
to make
sure they
follow the
prescribed

methods for
implementi
ng their
jobs.

Continue
to plan the
work but
use
workers to
actually
get the
work
done.

Taylor believed(and it was proven) that managers who

followed his guidelines would improve the
efficiency of their workers.
N.B- His detractors (labour) argued that scientific
management was just a device to get more work
from each employee and reduce the number of
workers.

Administrative Management
Focuses on managing the total organization
Main contributors Henri Fayol (1841-1925) with
support of Lyndall Urwick (1891-1983), and Max
Weber (1864-1920).
Fayol developer- management functions
Urwick- advanced the functions of planning,
ongoing and controlling as he integrated scientific
management with Fayol and other administrative
management theorist (synthesis and integration
work of others.
Max Weber was noted for his work on bureaucracy.

Assessment of the classical perspective

Focus serious attention on the importance of
effective management and helped pave the way.
Concepts developed are still in use. Job
specialization, time and motion studies are still in
use.
Human element of organization ignored.

The Behavioural Management Perspective

Early advocates of classical management perspective viewed
organizations and jobs from a mechanistic point of view.
The Behaviour management perspective placed much
emphasis on individual attitudes and behaviours and on
group processes and recognized the importance of
behavioural processes in the workplace.
Stimulated by industrial psychology i.e. the practice of
applying psychological concepts to industrial settings.
Advocate Mark Parker Follett (adult education & vocational
guidance) who believed that organizations should become
more democratic in accommodating employees and managers.
Hugo Munsterburg (1863-1916) German psychologist
suggested that psychologists could make valuable
contributions to managers in the area of employee selection
and motivation.

Work of Elton Mayo (1880-1949)

The Hawthorne studies at western electric- Chicago

Hawthorne plant (1927-1932)
i. Manipulating illumination in a group and comparing
productivity in groups without change (production
went up in both)
ii. Piecework incentive pay plan (however workers
informally established an acceptable level of output)
over produced- note busters and under producerschiselers.
iii. Other studies led Mayo and his associates to conclude
that the human element was much more important
than previous theorists felt.

Human Relations Movement

Grew from the Hawthorne studies and was popular
for many years-workers respond primarily to the
social context of the workplace-social conditioning,
group norms and interpersonal dynamics.
Manager concern leads to increased satisfaction:
resulting in improved performance.

Abraham Maslow- Hierarchy of Needs, Douglas

McGregor- Theory X,Y
Maslow-people must satisfy five group of needs in order.
These are psychological, security, belongingness, esteem
and self-actualization.
McGregor- Theory X: workers pessimistic and negative,
consistent with scientific management. Theory Y:
positive view of workers; representing the assumptions
that HR advocates made.
N.B Contemporary theorists (have noted the work of
Munsterberg, Mayo, Maslow, McGregor etc) and opined
that many of the assertions were simplistic and
inadequate. Today OB draws-psychology, sociology,
anthropology, economics and medicine.
The behavioural perspective has and continues to change
managerial thinking.

Quantitative Management Perspective

The third major school of management (WWII)- Govt
and scientists helped the military in efficiency and
effectiveness.
Used the mathematical approach of Taylor and Gantt
The approach is concerned with applying quantitative
techniques to management
Focuses on decision making, economic effectiveness
etc. The quantitative approach has two (2) branches
:management science and operations management.

Management Science-focuses specifically on the

development of mathematical models.
The basic level is focus of models, equations and similar
representation of reality-computer simulations. The
simulations give precise information and avoids the cost of
many test ?????
Operations Management is less mathematical and
statistically sophisticated and can be applied directly to
managerial situations. It is a form of applied managerial
science. It is also concerned with helping the organization
produce its products and services more efficiently.
N.B Like all other management perspectives, the quantitative
perspective has made significant contributions, but it also
has certain limitations.
The upside are-decision making tools and techniques,
planning and control and the overall organizational
processes. But, the assumptions may not be realistic, they
cannot account for individual behaviours and attitudes,
and it retards the development of other management skills.

Contemporary Management Theory

Recognizing that the classical, behavioural and quantitative
approaches to management are not necessarily
contradictory or mutually exclusive is important
o They are specific but complement each other
o All 3 are important and should be appreciated
o Contemporary management theory (systems and
contingency) perspective builds from the three system
perspectives.
o Important contemporary management theory
o By viewing organizations as system managers can better
understand the importance of their environment and the
level of interdependence among subsystems within the
organization
o Managers must understand how their decisions affect and
are affected by other subsystems within the organization.

Inputs from
the
environment:
material,
human,
financial and
information
inputs.

Transformatio
n process:
technology,
operating
systems,
administrative
systems and
control
systems.

Outputs into the

environment:
products/servic
es, profit/losses,
employee
behaviours and
information
systems

 System- an interrelated set of elements

functioning as a whole
Open system- an organizational system that
interact with its environment
Closed system- an organizational system that
does not interact with its environment
Subsystem- a system within another system
Synergy- two or more subsystems working
together to produce more than the total of what
they might produce working alone
Entropy- a normal process leading to design

The Contingency Perspective

A noteworthy addition to management thinking
is the contingency perspective
The classical behavioural and quantitative
approaches are considered UNIVERSAL
PERSPECTIVE (one best way)
Contingency perspective that organizations are
unique and thus no universal way
Hence appropriate managerial behaviour in a
given situation depends on or is contingent on
unique elements in that situation.

CONTEMPORARY MANAGEMENT ISSUES AND

CHALLENGES:
DOWN SIZING
DIVERSITY AND THE NEW WORK FORCE
INFORMATION TECHNOLOGY
NEW WAYS OF MANAGING
GLOBALIZATION
ETHICS AND SOCIAL RESPONSIBILITY
MANAGING QUALITY
SERVICE ECONOMY

Managers as agents of change

Change always has an unsettling effect upon an organization.
Hardly any area of activity is immune to change. Change is
inevitable in an organization. To manage any organization
effectively in these contemporary times, managers must
understand change.
Organization change is any substantive modification to some
part of the organization. Thus change can involve virtually
any aspect of an organization: work schedules, bases for
departmentalization, span of management, machinery,
organization design, people themselves etc
Change in an organization may have effects extending beyond
the actual area where the change is implemented. It is also not
uncommon for multiple organizations change activities to be
going on simultaneously.

Forces for change

The basic reason for change is that something relevant
to the organization either has changed or is going to
change. Thus the accommodation (change) must be
made. Forces for change may be external