WHAT IS AN

ORGANISATION?
Definitions & Types
 WHAT & WHERE ARE THEY?
 Organisations touch all aspects of
our lives from birth to death through
careers and lives that we lead
 Definition: organisaions are social
entities, are goal directed, are
designed as deliberately structured
and coordinated activity systems and
are linked to external environment
 DEFINITION
 Not just a building or a set of policies &
procedures
 Are made up of people and their
relationships with each other to
perform certain functions to attain
some goals
 Recent Trends: more importance to
people, empowerment, deliberate
structure and coordinate resources to
achieve results
 DEFINITION
 Work structured into departments- yet in
most organisations there is a conscious
striving for horizontal coordination
 More teams of employees from different
functions to work on projects- inter-
departmental boundaries kept flexible and
diffuse as response to changes in the
environment
 Even cooperation with competitors
 A QUOTE
 “Nature( read work & business
realities) is not as neatly divided into
disciplines as Universities( read
organisations) are”- Stafford Beer in
his book on Operations Research
 Organisation Structures are less
abstract today and more bending
down to the realities
 TYPES OF ORGANISATIONS
 Manufacturing automobiles, white
goods, computer hardware
 Providing services like legal advice,
banking, medical services, computer
software
 Profit and nonprofit organisations-
the latter like the Salvation Army,
World Wildlife Fund, Save the
Children Foundation etc.
 NON PROFIT ORGANISTIONS
Some Dynamics
 Financial resources typically come from
Government, grants and donations
 Non Profit Organisation managers
operating on low funds try to run low cost
operations at higher efficiency
 Without a conventional “bottom line” they
often struggle with what constitutes
organisational effectiveness- the goal are
often “intangible”
 NON PROFIT ORGANISATIONS
Some Dynamics
 Too many clients and stakeholders, having
to attract not just customers but
volunteers and donors
 Many international and national non profit
having greater clout are seen as
unwelcome competition by the local non
profit organisations
 Issues of multiple stakeholders and
attndant conflicts apply as much to a
Corporation like Xerox as to a non profit
organisation like Make-a-Wish
 IMPORTANCE OF
ORGANISATIONS
 Organisations are human inventions to prevent
entropy- which in the thermodynamic branch of
physics is seen as the universal propensity on the part
of orderly arrangements degenerating into disorder
 Northrop-Grumman Newport News builds Nimitz class
nuclear powered aircraft carriers- complex job
involving 47000 tons of precision-welded steel, more
than a million distinct parts, 900 miles of wiring and
cabling, about 40 million skilled worker hours and
17800 employees
 IMPORTANCE OF
ORGANISATIONS
 Bring together resources to achieve desired goals and
directions
 Produce goods & services efficiently
 Facilitate innovation
 Use modern manufacturing and Information Technology
 Adapt to and influence the environment
 Create value for owners, customers & employees
 Accommodating the challenges of diversity, ethics.
Motivation etc.
 If they do not do the above they become just
bureaucracies
 OPEN SYSTEMS
A closed system is autonomous, enclosed, sealed
off from the outside world
 Early management concepts like scientific
management, centralised leadership, industrial
engineering were closed system concepts
 Environment was taken for granted and the myth
was that organisational effectiveness could result
from internal design
 Environment was seen as stable and not
challenging
 OPEN SYSTEMS
 An open system must interact with
the environment to survive
 Consumes resources and exports
resources
 Internal efficiency is one of the issues
 It must find and obtain resources,
dispose of outputs, interpret and act on
the environment
 OPEN SYSTEMS
 Itmust interact with the environmental
disturbances and uncertainty and
ideally thrive on them
 A human being, the Planet Earth, a
metropolis, an industrial organisation
are open systems
 Xerox became indifferent to the
environment so did the three
automakers of the US
 OPEN SYSTEMS
 Any organisation is an open system – those
which are closed are merely pretending
like the proverbial Ostrich
 Inputs in an open system play a boundary
spanning roe so do the outputs and in
between is the conversion, transformation
process where the basic value is added
 These subsystems adapt and manage
 ORGANISATINAL
CONFIGURATION
 Technical Core- the transformation
process
 Technical Support- helps the organisation
in adapting-engineers and researchers
scan the environment for problems,
opportunities and technological
developments- departments like
technology, R&D, Market Research etc.
 ORGANISATINAL
CONFIGURATION
 Administrative Support- responsible forv smooth
operation and upkeep of the organisation like
HRD, OD, Cafeteria, the maintenance staff
 Management provides direction and guidance with
the Top providing strategies, goals, policies and
directions and the middle for implementation and
coordination with the heads of the technical core-
interpreting the top to the bottom and vice versa
 In real life these functions overlap and they often
do the work of each other
 STRUCTURAL DIMENSIONS
 Formalisation through documentation- a
university and a big corporation will have
elaborate documentation whereas a small
family owned organisation may have very
little
 Specialization- when thee is extensive
specialisation each employee does a very
narrow range of tasks
 STRUCTURAL DIMENSIONS
 Centralisationvs. decentralisation
 Professionalism consists of a lot of
education, long periods of training- the
average number of years in education
in medical profession is twenty years
and ten in construction companies
 Personnel Ratios- proportion of a
employees in a classification to the the
total number
 CONTEXTUAL DIMENSIONS
 Size – no of employees, the total sales,
total assets
 Organisational Technology- tools,
techniques an actions used to
transform inputs into outputs- flexible
manufacturing, advanced IT systems,
a college classroom are all examples
 Environment- all elements outside the
organisational boundaries
 CONTEXTUAL DIMENSIONS
 Organisational Goals & Strategies- they are
enduring statements of organisational intent-
goals and stratregies determine allocation of
resources and goals and the scope of operations,
relationships with employees, customers and
competitors
 Culture – the underlying values, beliefs,
understandings etc.- the glue which unites and
the commitment which it mobilises