ORGANISATIONAL DESIGN AND

DEVELOPMENT

by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
FOR – PGPSE / CSE PARTICIPANTS
afterschool@in.com
mobile : 91+9414430763
5 DECEMBER 09 www.afterschool.tk 1
 My words.....

My purpose here is to give an introduction of

organisational design and development. I welcome your
suggestions. I also request you to help me in spreading
social entrepreneurship across the globe – for which I
need support of you people – not of any VIP. With your
help, I can spread the ideas – for which we stand....

5 DECEMBER 09 www.afterschool.tk 2
 What is organisation ?

Group of people working together for common

purpose under a well organised format and
systems
Harold Levitt (1965) said that there are 4
components that make an organisation :
1 task 2. structure 3. technology 4 (the most
important ) people
5 DECEMBER 09 www.afterschool.tk 3
 Is organisation a system ?

Yes,
system has input, process and output
system has negative entropy, dynamic
homeostatis, and permeable boundaries
organisations are like living system.
There are two types of systems – open and
close. Organisations have to be open system to
grow and survive.
5 DECEMBER 09 www.afterschool.tk 4
 What is the difference between
open and close system?
There are two types of systems – open and
close. Organisations have to be open system to
grow and survive.
There is no system of feedback in closed
system. Open systems have permeable
boundaries, they change themselves as per
feedback and they welcome outsiders. These
systems are dynamic systems. Organisations
must be open systems
5 DECEMBER 09 www.afterschool.tk 5
 What is negative entropy ?

Entropy = depreciation / decay / depletion

organisations have NEGATIVE entropy – it
means they have systems, which fight with the
decay and depreciation.
Organisations are able to survive because they
are able to recover from their decay.

5 DECEMBER 09 www.afterschool.tk 6
 What is feedback mechanism ?
Organisations received feedback from environment.
They are changing themselves with the feedback that
they receive
open system perspective says that organisations must
constantly update themselves through the feedback
process.
There are two types of feedback processes - internal
interface and exernal interface – both help the
organisation in its rejuvenation
5 DECEMBER 09 www.afterschool.tk 7
 What is 7s model of
organisation ? (McKinsey Model)
The art of Japanese Management by Richard
Pascale and Anthony and Athos talked about 7
S
then Tom Peters and Robert Waterman talked
about it in their book : In search of Excellence
in 1978. There are 7 components which are
inter-related and inter-connected in every
organisation
5 DECEMBER 09 www.afterschool.tk 8
 7S
Skill
style
staff
strategy
systems
superordinate goals (beyond one
s personal goals)
structure
5 DECEMBER 09 www.afterschool.tk 9
What are the factors that affect an
organisational design ?
Environment
technology
culture
strategy
goals
policies

5 DECEMBER 09 www.afterschool.tk 10
 What are the key findings of
Lawrence and Lorsch Study ?
In their book organisation and environment, they talked about 6
important factors relating to organisational design :
1. formal hierarchy
2. standardised processes / rules etc.
3. departmentation
4. comittees / cross functional teams
5 human relations training
6. individuals and groups

5 DECEMBER 09 www.afterschool.tk 11
 What are the classification of
organisations on the basis of
flexibility and adaptibility ?
Mechanistic v/s organic organisations
Mechanistic organisations are little bit closed
organisations, working on strick rules and
regulations giving little freedom to individuals.
Organic organisations are dynamic, flexible,
adaptive, changing and learning organisations.
They give encough freedom for creativity and
innovations
5 DECEMBER 09 www.afterschool.tk 12
 Difference between mechanistic
and organic structure ?
There are 5 factors that differentiate :
hierarchy, rules, span of control, coordination ,
division of labour.
There is strick and tall hierarchy, strict rules,
formal control system, narrow span of control,
formal coordination, and precise division of
labour in mechanistic structure (just opposite in
organic structure)
5 DECEMBER 09 www.afterschool.tk 13
 What are the dimensions of
organisational environment ?

There are 2 main dimensions :

1. level of complexity in the environment
2. level of dynamism / flexibility / changes /
turbulance in the environment

5 DECEMBER 09 www.afterschool.tk 14
 What is the relation between
strategy and organisational design
?
Design must match strategy.
We have 3 types of strategies :
1. cost leadership – it is useful in highly turbulant and dynamic &
complex environment
2. focus : it is useful in stable environment with identified set of
markets, which are differentiable
3. differentiation : it is useful in dynamic environment, but in less
complex business conditions

5 DECEMBER 09 www.afterschool.tk 15
 What are the factors that
contribute to organisational
effectiveness ?

There are many factors that contribute to effectiveness :

quality of management
long term vision
inovations
corporate culture
financial soundness

5 DECEMBER 09 www.afterschool.tk 16
 Difference between effectiveness
and efficiency ?

Ability to achive goals is called effectiveness

ability to generate higher level of input -output
ratio gives efficiency
efficiency gives you more output
effectiveness enables you to do the right things

5 DECEMBER 09 www.afterschool.tk 17
 What is line structure ?

Line means those in authority

line denotes responsibility
line denotes accountability
staff on the other hand denotes advisory role
both line and staff must work in close
coordination (there is a possibility of conflict
between line and staff)
5 DECEMBER 09 www.afterschool.tk 18
 What is the difference between
project and matrix organisation ?
Project organisation is for achieving a specific objective in a given
time framework
here people are grouped together for a specific project and thus there
is a separate organisation structure for project. It disbands with the
completion of project
Matrix organisation combines functional and project structure. Each
person remains part of functional organisation also and works in
project also. There is a dual authority system in matrix (row and
column)

5 DECEMBER 09 www.afterschool.tk 19
 What is virtual organisation
structure ?
Virtual structure means a structure which is
based on internet
people are spread out all over the world and
they work in a loosely connected structural
format.
Virtual structure symbolises modern structures,
where people are able to connect without
having physical proximity
5 DECEMBER 09 www.afterschool.tk 20
 What is inverted pyramid ?

Organisations are denoted by pyramidical organisational

structures. In these pyramids, CEO and general managers are
at the top and workers are at the bottom.
Inverted pyramid is just opposite of these pyramids. Here
CEO is at the bottom. At the top we have our customers and
our workers Who give suggestions, which percolate down to
CEO, who try to implement them. It is just another approach
to look at organisations.

5 DECEMBER 09 www.afterschool.tk 21
 What is flat v/s horizontal
organisations ?
Flat organisation : it is the organisation without
hierarchy. It is based on the concept of equality
of people. There are no bosses here. People
work in collegial work environment and there
is an egalitarian work culture
Horizontal organisation = it is similar to flat
organisation but opposite of vertical /
pyramidical organisational structure
5 DECEMBER 09 www.afterschool.tk 22
 What is formal v/s informal
structure ?
Formal structure represents rules and
regulations
Informal organisation evolves out of the needs
of people. It represents friendship /
collaboration / support of people. Informal
organisations are truly the people organisation.
For ideal functioning, there should not be
much gap between formal and informal
5 DECEMBER 09
organisation.
www.afterschool.tk 23
 What is the difference between
centralisation and decentralisation
?
Centralisation = where decision making is
undertaken by people at the top level. There is
little freedom across the organisation
decentralisation = here we have plenty of
freedom and autonomy to people and there is a
lot of scope for people to be creative and try
out their innovative approaches. Decision
making is spread out at the field level itself.
5 DECEMBER 09 www.afterschool.tk 24
 What is the difference between
product and divisional structure ?
Product structure is one where organisation is
divided on the basis of products. Divisional
structure is similar to product structure. Here
we use criteria like geography, product,
customer etc. To divide the organisation in
different divisions. Railways in India is divided
in divisional organisation structure (on the
basis of geographic factors).
5 DECEMBER 09 www.afterschool.tk 25
 What is boundary less
organisation ?

When organisations extend themselves beyond

their boundaries, they are called boundary-less
organisations. They enbed their suppliers and
customers in their own network. They are
flexible, adaptive and just like amoeba. They
change their shape and embrace others in their
network very fast.

5 DECEMBER 09 www.afterschool.tk 26
What are the different approaches
to design organisation ?

1. beurocratic
2. contingency
3. behavioural model

5 DECEMBER 09 www.afterschool.tk 27
 . beurocratic approach

Rules, systems, procedure and hierarchy are

most important factors

5 DECEMBER 09 www.afterschool.tk 28
 Contingency approach

Design depends on situation

factors like technology, environment, size etc.
Play imprortant role as decision variables

5 DECEMBER 09 www.afterschool.tk 29
 Behavioural approach

Informal and formal relations between people

becomes important and organisation is
designed on the basis of human relations
here basic approach is to develop teams and
build superstructure on teams

5 DECEMBER 09 www.afterschool.tk 30
 Growth / stages in the growth of
organisation

Organisation passes through different stages :.

birth
growth
matuity
decline
design depends on the stage of organisation
5 DECEMBER 09 www.afterschool.tk 31
What are the classifications given
by Mintzberg (1979 in teh book :
the structuring of organisations )

There are 5 types :

1. simple structure 2. machine bureaucracy 3.
professional bureaucracy 4. divisional form 5 .
adhocracy

5 DECEMBER 09 www.afterschool.tk 32
 What are the differentiating
factors as per Mintzberg ?

Factors like : formalisation, centralisation,

technology, environment, lateral
communication, coordination etc.

5 DECEMBER 09 www.afterschool.tk 33
Description of different designs :
1. simple structure - useful for small
organisations 2. machine bureaucracy – strict
rules, formal systems 3. professional
bureaucracy – useful for large corporations,
based on merits 4. divisional form – very large
and multi product / multi geographic
organisations 5 . adhocracy - like a matrix
structure – for high technology complex work
systems
5 DECEMBER 09 www.afterschool.tk 34
 How to do restructuring ?

There are many factors in restructuring :

1. factors like technology
2. customer relationship
3. financial compulsions (non profit units may
be branched out)
4. innovation / new product launch
5 DECEMBER 09 www.afterschool.tk 35
 How do companies restructure ?

1. set up parallel structures

2. acquiring a runing business / takeover /
merger / acquisition
3. branch off
4. committee set up / matrix / groups for
innovations / etc.
5 DECEMBER 09 www.afterschool.tk 36
 How to transform culture ?

Restructuring requires cultural transformation

also – how -
rotation of people, team building workshops ,
task forces, committees, learning organisations,
informal communication, training and
development, collective decisions about vision
etc.
5 DECEMBER 09 www.afterschool.tk 37
5 DECEMBER 09 www.afterschool.tk 38
Can we really forecast demand ?

Demand is dependent on many factors like

market trend, competition, business
environment We cant predict exact demand.
But using statistical tools, we can estimate
demand, which can help us in production
planning.

5 DECEMBER 09 www.afterschool.tk 39
What are the methods for demand
forecasting ?
Delphi
Nominal group technique
opinion poll
Moving average method
Trend analysis
Time series analysis

5 DECEMBER 09 www.afterschool.tk 40
 What is DELPHI ?
Here we invite different experts and take their opinion
and they finally try to find an average of their ideas.
We again intimate the experts about the average
opinion, and give them an opportunity to revise their
forecast.
Delphi is useful when you want to have an overall
subjective assessment about complex business
environment. All the experts are distant and they dont
know each other, therefore each one tries to give the
best possible estimate
5 DECEMBER 09 www.afterschool.tk 41
 What is Nominal Group
Technique?

It is similar to Delphi, but here we ask experts

to sit together and explain their perspective to
others so that others can also give their
opinion.
People frame their estimates individually, but
thereafter they give justification for their
opinion.
5 DECEMBER 09 www.afterschool.tk 42
 What is opinion poll method ?

Here we collect information about the issue

from people using opinion poll. We may take
interview, we may collect data using
questionnaire, or we may organise meeting /
conference to find opinion of people.
Variants of opinion poll are : focus group
discussion – which is used in marketing to
know about consumer opinions
5 DECEMBER 09 www.afterschool.tk 43
 Intuition method

This is traditional method

intuition = personal opinion on the basis of
one's experience
intuition is not just a hunch. It is based on
experience, and past understanding.
We can take our decision on the basis of
intuition, if we have considerable experience in
that sector
5 DECEMBER 09 www.afterschool.tk 44
What is moving average method ?

Here we take moving average of either 3 days

or 5 days or 7 days and try to forecast using
this moving average. We may also use
smoothing to remove exceptional fluctuations
Moving average is a case where data can be
used to forecast on the basis of past trend

5 DECEMBER 09 www.afterschool.tk 45
 Example of moving average :
Period data 3 year
moving average
2001 300
2002 400 400
2003 500 434
2004 400 500
2005 600 600
2006 800 700
2007 700
5 DECEMBER 09 www.afterschool.tk 46
 What is smoothing ?

Here we use the past data to smooth the data.

Here we use the past data to predict the future

5 DECEMBER 09 www.afterschool.tk 47
Time series or stockastic models

Stockastic means where we are using time as

an independent variable and predict demand
using this variable.

5 DECEMBER 09 www.afterschool.tk 48
 What is a trend ?

There are 4 components of trend :

1. secular trend
2. cyclical fluctuation
3. seasonal fluctuation
4. random / irregular variations

5 DECEMBER 09 www.afterschool.tk 49
 What is secular trend

It is overall trend that continues for a long

period of time. It is having long time
perspective

5 DECEMBER 09 www.afterschool.tk 50
 What is cyclical fluctuation?

It represents fluctuations due to economic

cycles like boom, recession etc. These
fluctuations last for a few years

5 DECEMBER 09 www.afterschool.tk 51
 What is seasonal variation ?

It is due to seasonal components like summer,

winter, monsoon, or some other such factors
which have impact for a few months

5 DECEMBER 09 www.afterschool.tk 52
 What is random variation?

These are beyong prediction

they happen by chance

5 DECEMBER 09 www.afterschool.tk 53
 Causal / econometrics models

These models use cause -effect relationship to

predict demand.
In these models, we try to estimate demand
using an econometric models – here we try

5 DECEMBER 09 www.afterschool.tk 54
 What are the types of trends and
cycles ?
1. linear trend = there is constant rate of
change (it is a straight line)
2. parabolic trend = a varying rate of change
3. exponential / logarithmic trend = a constant
% rateof change
4 S shape : slow initial growth, then fast
growth and then again slow growth – showing
S shape
5 DECEMBER 09 www.afterschool.tk 55
 What is autocorrelation ?

Correlation of a variable with itself (with a time lag)

is called auto (self) – correlation
this can be used to identify the impact of seasonality.
If Auto-correlation is zero, it denotes that data are
random. If data has seasonality, there will be
autocorrelation – which can be identified.
We have to remove the component of autocorrelation
to identify the trend line

5 DECEMBER 09 www.afterschool.tk 56
 Box Jenkins Model

This model was developed in 1976. It can help

you in demand forecasting. It uses two types of
methods :
1 AR (auto regressive model )
2. moving average method

5 DECEMBER 09 www.afterschool.tk 57
 contd...

Data in a series are of two types :

1. stationary (fixed around mean)
2. non-stationary (data are not fixed around
mean).
Box Jenkins model convert non-stationary
trend into stationary trend, thus prediction is
possible.
5 DECEMBER 09 www.afterschool.tk 58
 Download these ...
http://www.scribd.com/doc/14629844/Statistics
http://www.scribd.com/doc/7131975/BUSINESS-ST
http://www.scribd.com/doc/7378714/13-August-Sta
http://www.scribd.com/doc/6584095/5-August-Stati
http://www.scribd.com/doc/23393630/STATISTICS
http://www.scribd.com/doc/7378715/13-August-Sta
http://www.scribd.com/doc/23393630/STATISTICS

5 DECEMBER 09 www.afterschool.tk 59
 Download these...

http://www.scribd.com/doc/6681092/4-August-Stati
http://www.scribd.com/doc/23393621/STATISTICS
http://www.scribd.com/doc/26361286/Theoretical-D
http://www.scribd.com/doc/25295635/Basic-Statisti
http://www.scribd.com/doc/7131920/BUSINESS-ST
http://www.scribd.com/doc/14705384/21-June-Rese

5 DECEMBER 09 www.afterschool.tk 60
 Download more resources

http://www.esnips.com/web/onlinespeeches

5 DECEMBER 09 www.afterschool.tk 61
http://www.esnips.com/doc/a4161e7a-6859-4583-b3
http://www.esnips.com/doc/292f3066-dfff-4507-9ef
http://www.esnips.com/doc/61098141-2b35-4dd2-8
http://www.esnips.com/doc/6335a093-fa8b-4829-91
http://www.esnips.com/doc/17998a15-f26a-4de7-b8
http://www.esnips.com/doc/816ec880-c1d5-436c-b5
http://www.esnips.com/doc/026362a7-efe4-42ef-afe
http://www.esnips.com/doc/ebceaf38-3af0-4b62-bd4
5 DECEMBER 09 www.afterschool.tk 62
 Download links ....

http://www.esnips.com/doc/1ca22536-6475-4fa4-bb
http://www.esnips.com/doc/3e7518ef-dc30-4309-af0
http://www.esnips.com/doc/f5f8334d-7642-4154-9b
http://www.esnips.com/doc/caf3db9b-7739-4f37-86
http://www.esnips.com/doc/ebceaf38-3af0-4b62-bd4
http://www.esnips.com/doc/3aab1a3a-43f3-49a8-b8

5 DECEMBER 09 www.afterschool.tk 63
 Download links...

http://www.esnips.com/doc/8f6897b7-0bab-4e53-85
http://www.esnips.com/doc/23aac52e-3ecf-4d89-8b
http://www.esnips.com/doc/48840095-2865-4eb1-88
http://www.esnips.com/doc/67a0ff61-c31f-43a0-994
http://www.esnips.com/doc/f6d85f1b-881b-4e93-83

5 DECEMBER 09 www.afterschool.tk 64
 Download links...

http://www.slideshare.net/tkjainbkn/reasoning
http://www.slideshare.net/tkjainbkn/reasoning-2814
http://www.scribd.com/doc/28677498/

5 DECEMBER 09 www.afterschool.tk 65
 Download links....
http://www.scribd.com/doc/28617263/Syllabus-of-M
http://www.scribd.com/doc/28617157/Vedic-Mathe
http://www.scribd.com/doc/28616660/English-Impr
http://www.scribd.com/doc/28531795/Mock-Paper-
http://www.scribd.com/doc/23610071/Reasoning
http://www.scribd.com/doc/14675645/10-July-Reas
http://www.scribd.com/doc/23393680/REASONING
http://www.scribd.com/doc/6583303/Reasoning-Aft
5 DECEMBER 09 www.afterschool.tk 66
 Download links for material in english

http://www.authorstream.com/presentation/tkjainbkn
http://www.docstoc.com/docs/3921499/ENGLISH-%
http://www.slideshare.net/tkjainbkn/english-error-sp
http://www.scribd.com/doc/19641980/Error-Spottin
http://www.scribd.com/doc/11629005/English-Error
http://www.scribd.com/doc/14660441/English-After
http://www.scribd.com/doc/6583519/English-Afters
http://www.scribd.com/doc/6583520/English-Afters
5 DECEMBER 09 www.afterschool.tk 67
 Download links for material on
English

http://www.scribd.com/doc/6583315/English-Impro
http://www.scribd.com/doc/6583518/English-20-Ma
http://www.scribd.com/doc/28531795/Mock-Paper-

5 DECEMBER 09 www.afterschool.tk 68
 Links

http://www.scribd.com/doc/14647398/English-Impr
http://www.scribd.com/doc/14660508/General-Know
http://www.scribd.com/doc/19628963/Mathematics
http://www.scribd.com/doc/19492878/Direct-and-In

5 DECEMBER 09 www.afterschool.tk 69
 Be

Quicker
faster
more accurate

5 DECEMBER 09 www.afterschool.tk 70
 ADDITIONAL LINKS
http://www.scribd.com/doc/11692763/Advanced-M
http://www.scribd.com/doc/23407929/Advanced-M
http://www.scribd.com/doc/11625819/Basic-Mathem
http://www.scribd.com/doc/23407954/mathematics-
http://www.scribd.com/doc/23407934/Advanced-M
http://www.scribd.com/doc/6583520/English-Afters
http://www.scribd.com/doc/23300964/Advanced-M
http://www.scribd.com/doc/23407945/MATHEMAT
5 DECEMBER 09 www.afterschool.tk 71
http://www.scribd.com/doc/6583303/Reasoning-Aft

5 DECEMBER 09 www.afterschool.tk 72
http://www.scribd.com/doc/23393680/REASONING
http://www.scribd.com/doc/23393719/reasonning-44
http://www.scribd.com/doc/6583347/DI-and-Reason
http://www.scribd.com/doc/23407636/10-July-reaso
http://www.scribd.com/doc/6583273/Reasoning-Qu
http://www.scribd.com/doc/23393476/10-July-reaso
http://www.scribd.com/doc/23393716/REASONING
http://www.scribd.com/doc/14705025/17-Reasoning
http://www.scribd.com/doc/23393478/10-July-reaso
5 DECEMBER 09 www.afterschool.tk 73
 Free download useful material ...

http://www.scribd.com/doc/23393316/general-know
http://www.scribd.com/doc/23609752/Group-Discus
http://www.scribd.com/doc/6583547/General-Know

5 DECEMBER 09 www.afterschool.tk 74
 THANKS....
GIVE YOUR SUGGESTIONS AND JOIN
AFTERSCHOOOL NETWORK / START
AFTERSCHOOOL SOCIAL
ENTREPRENEURSHIP NETWORK IN
YOUR CITY / CONDUCT WORKSHOP ON
SOCIAL ENTREPRENEURSHIP IN YOUR
COLLEGE / SCHOOL / CITY
AFTERSCHOOOL@IN.COM
JOIN OUR NETWORK TO PROMOTE
SOCIAL ENTREPRENEURSHIP
5 DECEMBER 09 www.afterschool.tk 75