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The Nature of Organization: Introduction: An organization consists of a group of individuals who are brought together to work for a defined purpose. The activities are coordinated at different levels, by different managers other persons authorized do so for achieving the goals of the organization. A systematic process enables people with different skills and from different backgrounds pools their resources for the achievement of defined objectives. According to Chester Barnard, " An organization is a system of consciously coordinated activities or efforts by two or more persons." Louise Allen defines organization as "the process of identifying and grouping the work to be performed, defined and delegating responsibility and authority , and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives." Likewise, Bedein and Zabmnuto have defined organizations as social entities that are goal directed, deliberately structured activity systems with permeable boundaries. According To R. Griffin "Organization is a group of people working together in structured and coordinated fashion to achieve a set of goals." A social unit of people, systematically structured and managed to meet a need or to pursue collective goals on a continuing basis. All organizations have a management structure that determines relationships between functions and positions, and subdivides and delegates roles, responsibilities, and authority to carry out defined tasks. Organizations are open systems in that they affect and are affected by the environment beyond their boundaries. Basically, an organization in its simplest form (and not necessarily a legal entity, e.g., corporation or LLC) is a person or group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from one person to tens of thousands. Characteristics of Organization Social Entities: The coming together of people and their interaction are major features of every organization. Organizations will cease to exist if are no people to run , even if other things remain together. For example, if everybody resigns from a company and no one is replaced, then it is no longer an organization, even though all the material assets of the company are not disposed of. There are also organizations such as some clubs and social associations which consist only of people without any physical assets. Accordingly it is the people and their roles which are the building blocks of organization. Goal Directed: All efforts of organizations are directed towards the achievement of a common goal. A common purpose gives the organization members a meeting point for effective performance. While the primary goal of any commercial organization is to generate financial gains of its owners, this goal is inter-related with many other goals including the goals of individual members for earning money and achieving job security. For example , a carpet manufacturing company may the commercial goal of producing and selling more carpets every year. The community where the factory is located may have a goal of preventing the pollution created by the manufacturing process. The commercial goal of producing and selling more carpets every year. The company's employees may have individual goal of earning and success. Deliberately Structured activity systems: An organization can use its resources more efficiently by systematically dividing its complex tasks into specialized jobs and categories of activities into separate departments. Sub-division of activities helps achieve efficiently in the work place. The organization is deliberately structured in such a manner so as to co-ordinate the activities of separate groups and departments for the achievement of defined objectives. Permeable(Soft) Boundary: All organizations have boundaries that separate from other organizations. These boundaries determine who and what is inside or outside the organization. Sometimes, these boundaries are vigorously protected. However , the dynamics of a changing world has made these boundaries less rigid and more permeable in terms of sharing information and technology for mutual benefit. For example, IBM joined Motorola and Apple computers in 1993 to bring out a new Power PC chip. Perpetual Existence: An organization is formed for an indefinite period. It performs its business for a long period of time. The organization may face changes in objective, management, structure, membership but it continues its existence. Types of Organization: Organization may be classified on several bases such as size: small, medium and large, ownership: public, private and joint legal form: sole trading, partnership, joint stock company, cooperative society and multinational company. Organization can be classified on the basis of their objectives;  Business Organizations: They are formed for earning profits. They are mainly concerned with producing goods and services of value to the society. Companies, partnership firms and sole trading firms are business organizations. Their prime beneficiaries are its owners.  Government Organizations: The organizations which are established by the government for the welfare and benefit of the general public are called government organizations. They can be government departments, ministries and public corporation. Their prime beneficiaries are general public.

 Service organizations: Service organizations are voluntary organizations which are formed for promoting social welfare activities in the country. They are non-profit social organizations such as public schools, hospitals, social welfare agency etc. The prime beneficiaries are the clients who come in the direct contact with the organization.  Professional Organizations: These organizations are formed by a group of people to protect their professional right. The prime beneficiaries are their members. The basic purpose of these organizations is to protect the interest and professional right to their members. Nepal Teachers' Association, Labour Unions, Nepal Bar Association etc. are the examples of such organizations.  Religious Organizations: The organizations which are formed to satisfy the spiritual need of the people come under these categories such Nepal Boudh Sang, Vishwa Hindu Parisad, Nepal Church Society etc.  Political Organizations: The organizations are formed to render services to upliftment of the society. They seek to elect a member of their group to public offices of the country such as parliament, district committee, village development committee , Municipality etc.  International Organizations: These organizations work in two or more than two countries. The member countries are the beneficiaries of such organizations. The main objective of these organizations is to uplift the common interest of the member countries. Examples: WTO, UNO, UNDP, SAARC etc. Organizational Goals Goals are desired outcomes for individuals, groups, or entire organizations. Plans are documents that outline how goals are going to be met and that typically describe resource allocations, schedules, and other necessary actions to accomplish the goals. Goals are also called objectives and we use the term interchangeably. They guide all management decisions and form the criterion against which actual work being done is measured. That's why they are often called the foundations of planning .And we need know the desired target or outcome before we can establish plans for reaching it. Types of Goals: At first glance, it might appear that organizations have a single objective- for business firm, the goal is to make a profit; for non profit organizations, the goal is to meet the needs of some constituent group(s). In reality , all organizations have multiple goals . For instance, businesses also want to increase market share and keep employees motivated about working for the organization. No single goal can be used to evaluate whether an organization is successful or not. If manager emphasis such as profit, other goals have to be met to achieve long term success. Using a single goal such as profit making can result unethical practices because managers and employees will ignore other important parts of their jobs in order to look good on that one measure. considering this fact , goals can be classified as  Strategic goals and financial goals Financial goals are related to the financial performance of the organization while strategic goals are related to the areas of an organization's performance.  Stated goals and real goals Another way to describe goals is in terms of whether they're real or stated. Stated goals mean official statements of what an organization says, and what it wants its stakeholders to behave, its goals are. However, stated goals- which can be found in an organization's charter, annual report, public relations announcements, or in public statements made by managers are often conflicting and excessively influenced by what society believes organizations should do. Some example of stated goals : Nike's goal is 'to bring inspiration and innovation to every athlete." Deutcsche bank's goal is ' to be the leading global provider of financial solutions for demanding clients creating exceptional value for our shareholders and people.' These types of goals are actually vague and more likely to represent management public relation skills than being meaningful guides what the organization is actually trying to accomplish. When we talk about real goals, they are the goals that an organization actually pursuits-observes what organizational members are doing. Actions define priorities. for example colleges that proclaim the goal of limiting class size; facilitating close student-faculty relations and involving the students in the learning process and then put them into lecture class of 300 or more are pretty common.  Strategic goals , Tactical goals and Operational Goals Goals can also be classified how the three levels of goals within an organization form a hierarchy of goals, with lowerlevel goals forming a mean-end chain with the next level of goals. Strategic goals are broadly defined targets or future end results set by top management. Tactical goals are the targets or future end results usually set by middle management for specific departments or units. Operational goals are those targets or future end results set by lower manager.  Short term, Mid Term and Long Term Goals Short term: Time binding of less than a year Mid Term Goals: To be achieve in more than a year to five year Long Term Goals: To be achieved in the long run usually more than five year Purposes of Goals 1. Performance can be improved. 2. Expectations can be improved. 3. The Controlling function can be facilitated so that progress can be assessed and corrective action taken. 4. Meeting goals can increase motivation. 5. It eases planning and decision making process.

Characteristics of well-designed/effective goals Goals are not all created equal. Some goals are better at stating desired outcomes than others. What makes a well-designed goal? A well-designed goal should consist the following things.  Specific: An organization should state the goals clearly. They should not be vague which is difficult to understand by the employees. For example increase in production is not specific but 50% percent increase in production from the previous year is specific.  Measurable: It's much easier to determine whether goals have met or not if they are measureable. For instance, one of the goals is 'to produce high quality product.' What exactly does it mean? Because we can define quality in a number of ways. Here the goal should clearly state how to measure quality. Therefore goals should be quantifiable.  Acceptable and communicated to all : The goals should be acceptable and agreed upon by all the members of the organization. Well designed goals should be communicated to all the members who need to know the goals.  Challenging but Attainable (Realistic): An effective goals should be challenging but attainable. They should be achievable. They should not be imaginary. Goals that are too easy to accomplish are no motivating. They can not be goals which are not attainable with exceptional effort.  Time Bound : An effective goal should also be clear as to a time frame. The goals should be set for a definite time period. If the goal is not time bound , then we will not know when the goal is going to be met.  Written down: Effective goals should be written down. Although actually writing down goals may see too timeconsuming, the process of writing goals forces people to think them through. In addition , the written goals become visible and tangible evidence of the importance of working toward something. Goal Formation Process: 1. Environmental Scanning The first stage of goal formation is to scan the environment. I Environmental scanning is the process of gathering information about events and their relationships within an organization's internal and external environments. The basic purpose of environmental scanning is to help management determine the future direction of the organization. Internal as well as external environment should be analyzed. Getting Information from the environment has two primary strategic role - in objective setting and in strategy formulation. As managers scan the environment, they interpret environmental influence in the light of their own perceptions, expectations, and values. Without proper analysis if goals are set, then they can't be accomplished. The most widely used system of analyzing environment is SWOT analysis. 2. Formation of overall goals This is the second stage of the goal formation process. In this stage , mission and strategic goals of an organization are defined. The top level management involves in setting the overall goals of the organization. In this stage, the management should fix the financial, product-mix goal, and functional goal. 3. Formation of specific goals This is the last stage of goal formation. After setting the overall goals, the specific goals for division, units, sub units department , branches should be made. This is done to fulfill the overall goals of the organizations. Middle level managers and lower level mangers involve in formulating the specific goals. This type of goal is short term goal and set for a day , a week and month and so on. Goal Formation Approaches: GOAL-SETTING APPROACHES When choosing goals and objectives, there are several approaches an organization can take. Three common approaches are; the top-down approach, the bottom-up approach, Interactive Approach and the Management by objectives. Top-Down Approach: In the top-down approach, goal setting begins at the top of the organization. This approach focuses on coordinating goal setting, incentives, and feedback. Studies suggest that approximately 50 percent of large organizations currently use or have used top down approach. First, upper level managers (such as the CEO and other executives) establish the organizational mission and then determine strategic goals. The strategic goals determine the tactical goals and objectives as they are passed down to the next level of management. The tactical goals in each department dictate the operational goals and objectives to individual employees. On the lowest level, the supervisor and employee agree upon performance objectives, as well as how goal attainment will be measured. This gives the supervisor a chance to address employee concerns or potential obstacles to goal achievement. When the next evaluation occurs, the supervisor and subordinate meet to assess to what extent performance objectives have been met. The top-down approach has several advantages. It helps guarantee that the goals and objectives of the organization are directly tied to and support the mission statement. It increases the likelihood that ambitious goals set by upper-level managers will trickle down to lower levels of the organization; thus, ambitious goals will be set for everyone in the organization. However, the top-down approach has several disadvantages. Oftentimes, members of upper-level management are so far removed from the day-to-day activities of the employees that the goals may be overly ambitious and unrealistic. Goals set at the top of the organization do not change as quickly with the organization, so they are not as flexible as goals set at the bottom of the organization. Finally, the top-down approach does not always involve employee participation in the goal-setting process. Thus, employees may not have a sense of ownership.

Bottom-up Approach: The bottom-up approach begins at the lower levels of the organization. Individuals at the bottom of the organization's chart set the goals and objectives for members directly above. Operational goals and objectives determine the tactical objectives, which in turn determine the strategic goals and objectives. Finally, the organizational mission is defined according to the guidelines set by the employees. Goals determined by bottom-up goal setting are likely to be more realistic than those set at the top of the organization. They are more flexible and reflect the current situation of the organization. Finally, goals created by all levels of the organization, and by all types of employees, are more likely to encourage employee commitment. There are disadvantages to bottom-up goal setting. Goals and objectives formulated by bottom-up goal setting are not always in line with the organization's mission. Often, organizations that use a bottom-up approach lack clear direction and focus. There is no hierarchical alignment with the goals of the organization. Another disadvantage of this type of goal setting is that the goals created by employees are not always challenging and ambitious. Studies have shown that challenging (yet realistic) goals are more motivational than those that are not. Interactive Approach: The third approach to goal setting is Interactive Approach. It is a process by which employees at different levels of the organization participate in developing goals and objectives. Top levels of the organization begin by developing a mission statement. Managers at different levels and departments of the organization then come together and determine the strategic goals. Next, discussions regarding the tactical goals and objectives are decided upon by including lower-level managers and supervisors. Finally, individuals contribute to the process by defining their own operational goals and objectives. This approach to goal setting involves the consensus of many different levels of management and frontline employees. Interactive goal setting involves discussion and cooperation among management and employees. The interactive approach enjoys the same advantages as bottom-up goal setting without many of the disadvantages. Goals are more realistic and current than in the top-down approach. Because it involves cooperation at all levels, employees feel valued and important. Their commitment to the organization, as well as the goals, is increased. Input from upper management helps to ensure that the goals are challenging and ambitious, which increases motivation. There are, however, a few disadvantages to the interactive approach. It is very time consuming because of the cooperation and consensus involved. It is also difficult to manage and maintain. If managers do not stay actively involved, it can quickly turn into a top-down or bottom-up approach with the disadvantages of each. Management by objective (MBO) is a process through which specific goals are set collaboratively for the organization as a whole and every unit and individual within it; the goals then are used as a basic for planning, managing organizational activities, and assessing and rewarding contributions. In Management by objectives (MBO) specific performance goals are jointly determined by employees and their managers, progress toward accomplishing these goals is periodically reviewed, and rewards are allocated on the basis of this progress. 1) MBO was first described by Peter Drucker and consists of four elements: i) Goal specificity ii) Participative decision making iii) Explicit time period iv) Performance feedback 2) MBO makes objectives operational through the process by which they cascade down through the organization. Although there is considerable variation across organizations, MBO processes typically include six steps. 1. Organizational goals are developed based on organizational missions. 2. Specific goals are established for departments, subunits, and individuals. a. In the top-down process, upper-level managers, conferring with their immediate managerial subordinates, formulate specific objectives for their areas of responsibility. These in turn enter into the formulation of objectives for the next level down, and so forth. b. In the bottom-up process, operational goals are proposed by lower-level managers on the basis of what they think they can achieve. These in turn are developed into tactical and finally strategic plans. 3. Action plans are formulated, describing what is to be done, how, when, where, and by whom in order to achieve a particular goals. 4. Individuals are given the responsibility of reaching their objectives and that goals will ultimately be met. 5. Performance is appraised at the end of the goal-setting cycle, typically at one-year intervals. Praise, recognition, and rewards should be given for effective performance. 6. Review results and whether goals are being met. The strengths of MBO are that it 1. Aids coordination of goals and plans. 2. Helps clarify priorities and expectations. 3. Facilitates vertical and horizontal communications. 4. Fosters employee motivation. The weaknesses of MBO are that it 1. Tends to falter without strong, continual commitment from top management. 2. Necessitates considerable training of managers. 3. Can be misused as a punitive device. 4. May cause overemphasis of quantitative goals. The spirit of MBO is tremendous. In practice however, MBO has been successful only about 20 to 25 percent of the time, primarily because of lack of support from top management and poor goal-setting and communication skills.

Goal setting has some potential pitfalls 1. Setting difficult goals increases the risk that they will not be reached. 2. High goals may increase the stress levels of organizational members. 3. Failure to meet high goals may undermine the self-confidence of organizational members. 4. Non goal areas may be ignored. 5. Setting goals may encourage excessive shot-range thinking. 6. Inappropriate goals may lead to dishonesty and cheating. Problems of Goal Formulation y Inappropriate goals Setting goals will be inappropriate as it raises costs, it becomes too difficult to turn into reality and it focuses only on quantifiable achievement. Some goal can be converted into reality like employee's level of satisfaction. y Improper reward system A proper relation should be maintained between goals and reward system. Every goal should be appropriate reward system to motivate employees for their full participation. When reward system is incompatible to goals, people will be de-motivated to work for achieving the goals. y Environmental constraints Setting and achieving goals are most affected by internal and external environment. The external environment is out fo the control of the management. There they become the environmental constraints which directly or indirectly impacts on the goals. Even environmental dynamics are changing. The managers may set the goals based on the current environment and on its prediction but during the course of achieving the targets the environment may not be supportive .Thus set goals can not be achieved. y Reluctance on the part of managers to formulate goals In some organizations mangers themselves will be reluctant to set the goals due to the lack of confidence. Setting the goals means taking more risks which may not good for the mangers personally especially to those who are not competent. If there is a strong culture of punishment , then and there the managers will not be interested to set the goals y Resistance to change: Achieving the set goals is an team effort which requires lots of changes in working culture and innovative works. In organization there may be the people working who resist to change. Even for some mangers , they may need to know and apply new methods and technologies. They may feel difficulty to work with new concepts. This is why they don t sets the goals. y Resource constraints: Lack of sufficient resources may also create a barrier in goal formation of the organization. Strong competition , time limit and government barrier may hinder in goal setting. Methods to overcome the problems in goal formulation Sharing: Share the consequences of goal achievement and business results in the past with all managers so that they don't feel excluded from the 'main stream' of the organizational business. Meetings: Arrange meetings among managers and convey them the importance of goal formulation so as to make them think not excluded in the goal formulation process. Participation: Involve people in the goal formulation process Collect Opinion: collect views, comments and suggestions from different employees working at different people. Listen: Listen carefully to what the participants are saying regarding the new list of the goals. Ideas: Brainstorm ideas on the pros and cons of the goals Revisit: Revise goals when there are reasonable suggestions for improvement Integrate: Integrate goals with the reward system Goal Succession: Before defining goal succession, we need to try to answer the following questions: What next if the desired goal is achieved? or if not achieved? We should conceive a new goal. This comes under goal succession process. Goal succession is an advance thinking or planning of the next goal after achieving or not achieving the desired goals. After achieving or denying traditional goals , the organization identifies new objective which is simply called goal succession. In simpler form, goal succession is the act of intentional review and modification of existing goals. For example if the goal is to provide train candidates then next goal will be to place them the trained candidates. Reasons for goal succession y Traditional goals are achieved: When pre-demined goals are met, the managers need to think about new goals. y Traditional goals are not achievable: Some times the pre-defined goals may be difficult to achieve due to internal or external environment. In such situation the managers need to succeed the traditional with new goals y Shift in the organization priority: The organization needs to be run in dynamic environment. The environment keeps on changing. The organization may find the better opportunity in other fields or areas, their priority may change .In such situation pre-set goals are succeeded by new one.

Goal Displacement: Goal displacement is the act of unintentional change in the original goal into a new goal. For the existence of the organization, original goals are displaced and new goals (operation, tactical and strategic goals) are set. According to Blau:"Goal displacement can be understood as a shift in the goal structure of an organization by changing the weights within the structure as well as the adoption of completely new goals." Goal displacement becomes particularly necessary when the survival of the organization becomes more important than the original goal it has set. In goal displacement exiting resources are diverted from original goals to achieve new goals. For instance, many cinema halls in Nepal have been converted into party palaces and go-downs due to lack of audiences as movies are nowadays are easily available through cable TV and in CDs/DVDs. The top management has to displace the original goals only considering its impact . Therefore he/she should gather adequate information from the environment from the environment. Otherwise, it many invite many problems. Reasons for Goal Displacement: y Internal pressure to change: When there is an internal pressure to increase the employee's salary , a company's goal to minimize operation costs will be displaced. To cover up such increment, a company may think to cut down the number of employees. y Pressure from external forces: When a company decides to add non-vegetarian foods in a vegetarian restaurant where many non-vegetarian customers visit, it is a kind of external pressure for goal displacement. y Failure to achieve goal: When a watch producing company faces severe market competition and suffers loss, it may decided produce children toys. y Taking strategic benefits: When the company with an expansion goal can not expand its business , it may decide to merge with another expanding company to take advantage from eh given market. y Changing environment: Goal displacement acts as an organization's chaging agent. In a fast changing environment of an organization goal displacement helps to create true balance of power, secure support to stabilize business activity.

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