This document discusses informal organization within companies. It describes how informal organization includes social relationships, unofficial communication channels, behavioral norms, and informal power structures. While informal organization can foster cooperation and knowledge sharing, it can also spread misinformation and allow work practices to circumvent formal safety and quality procedures. The document also notes how individuals may conform or counter-conform to informal group norms under different circumstances.

3. Informal Organisation
Social relationships and groupings.
The ‘grapevine’, ‘bush telegraph’, or informal communication which by-passes the
formal reporting channels and routes.
Behavioural norms and ways of doing things, both social and work-related, which
may circumvent formal procedures and systems. New members must ‘learn the
ropes’ and get used to ‘the way we do things here’.
Power/influence structures, irrespective of organizational authority: informal
leaders are those who are trusted and looked to for advice.

4. Benefits of
informal
organisation
Co-operation
Knowledge
sharing
Speed
Responsiveness
Employee
commitment

5. Managerial problems of informal organization
Social groupings may act collectively against organizational interest,
strengthened by collective power and information networks.
The grapevine is notoriously inaccurate and can carry morale-damaging rumours.
Can become too important in fulfilling employees’ needs.
Informal work practices may ‘cut corners’, violating safety or quality assurance
measures.

6. • compliance
• Internalisation
• Counter-conformity
Individuals may react to
group norms in a variety
of ways.
• The issue is not clear-cut
• The individual lacks support for his own attitude
• The individuals is exposed to other members of the group
Some circumference
which put strong pressure
on the individual.
• Identification
• Sanctions
Norms may be reinforced
in various ways.

8. STRATEGIC
APEX
OPERATINGCORE
MIDDLE
LINE
TOP
MANAGEMENT
Operation /
operation
process
- Mintzberg
Professor of
Management
Studies, McGill
University, Canada

9. Ensures the organization follows its missionSTRATEGICAPEX
• Direct supervision-there’s one person issue instruction
People directly involved in the process of obtaining inputs and converting them into
outputs
OPERATINGCORE
• Standardisation of skills-in which different work is coordinated by virtue of related training the workers have received
Converts the desires of the strategic apex into the work done by the operating coreMIDDLE LINE
• Standardisation of outputs-achieves coordination by specifying results of different work
Analysers, Planners, Personnel analystsTECHNOSTRUCTURE
• Standardisation of work processes-achieves coordination by specifying the work process of people carrying out interrelated tasks
Ancillary services, do not plan/standardize productionSUPPORT STAFF
• Mutual adjustment-achieves coordination by the simple process of informal communication

10. DEPARTMENTATION
FUNCTIONAL

11. FUNCTIONAL
Involves grouping together people who do similar tasks
ADVANTAGES
- Expertise is pooled thanks to the division of work into specialist areas.
- Its avoid duplication and enables economies of scale
- Its facilitates the recruitment, management and development of functional
specialists
- It suits centralised business
DISADVANTAGES
- Focuses on internal processes and inputs
- Communication problems may arise between different function
- Poor co-ordination
- Create vertical barriers to information and work flow

12. ADVANTAGES
- There is local decision-making at the point of contact
between the organisation and its customers e.t.c
- It may be cheaper to establish area factories/offices
than to service markets from one location
DISADVANTAGES
- Duplication and possible loss of economies if scale
might arise
- Inconsistency in methods/ standards may develop
across different areas

13. P
R
O
D
U
C
T
Every product is handled by separate
management team and the problems faced
in the development of a product are carried
out by single group of employees working
in that unit
ADVANTAGES
- Accountability
- Specialisation
- Co-ordination
DISADVANTAGES
- It increases the overhead costs and
managerial complexity of the organisation
- Different product divisions may fail to share
resources and customers

14. C
U
S
T
O
M
E
R
An organization
may organise its
activities on the
basis of types of
customer, or
market segment
Departmentation by
customer is commonly
associated with sales
department and selling
effort, but it might also
be used by a jobbing or
contraction firm where a
team of managers may
be given the
responsibility of liasing
with major customers

15. DIVISIONALISATION
DEFINITION : division of a
business into autonomous
regions or product businesses
, each with own revenue ,
expenditures and asset
purchase programmes , and
therefore each with its own
profit and loss responsibility
Divisional structure :
• Some activities are decentralized to
business units or regions
A subsidiary
company under
the holding
company
A strategic
business unit (SBU)
within the larger
company, with its
own objectives
Aprofit centre
or investment
centre withi a
single
company
DIVISION

16. KEY CONDITIONS
EXCESSIVE
MANAGEMENT SUPPORT
LARGE ENOUGHTO
SUPPORT
PROPER DELEGATED
AUTHORITY
‘ARM’S LENGTH’
TRANSACTION SCOPEAND CHALLENGE
POTENTIAL FOR
GROWTH

17. ADVANTAGES AND DISADVANTAGES
ADVANTAGES
• Attention below ‘top level’
• Reduce unprofitable products and
activities
• Greater attention to efficiency , lower
costs and higher profit
• More authority to junior managers
• Reduce number of levels of management
DISADVANTAGES
• Impossible to identify completely
independent products / market
• Limited discretion can be used
• More resource problem

18. HYBRID STRUCTURE
Involve a mix of functional departmentation , ensuring specialized attention to key
functions , example of elements :
• Product organization
• Customer organization
• Territorial organization

19. THE SIMPLE STRUCTURE /
ENTREPRENEURAL STRUCTURE
• The strategic apex exerts a pull to centralize , leading to the simple structure.
• The strategic apex wishes to retain control over decision-making.
• Characteristics :-
1. Wide span of control
2. No middle line
3. Minimal hierarchy
4. No technostructure
5. Imply little formalization / standardization of behaviour

20. MATRIXAND PROJECT ORGANISATION
ADVANTAGES
• Greater flexibility of people , workflow
and decision making , tasks and structure
• Inter-disciplinary co-operation
• Motivation and employee development
• Market awareness
• Horizontal workflow
DISADVANTAGES
• Dual authority
• Conflicting demands / ambiguous roles
• Cost increases
• Slower decision-making

21. NEW ORGANISATION
FLAT
STRUCTURES
‘HORIZONTAL
STRUCTURES’‘CHUNKED’ AND
‘UNGLUED’
STRUCTURES
OUTPUT-FOCUSED
STRUCTURES
‘JOBLESS’
STRUCTURES
VIRTUAL
ORGANISATION
HOLLOW
ORGANISATION
MODULAR
ORGANISATION
BOUNDARYLESS
ORGANISATION

22. THE SHAMROCK ORGANISATION

23. SPANOF CONTROL
Number of subordinates responsible to a superior
Factors influence:
 Managers capabilities
 Nature of the manager’s workload
More non-supervisory work:
 Narrow the span of control
 Greater the delegation of authority to
subordinates

24. TALL AND FLAT ORGANISATION
TALL
FOR:
 Narrow control spans
 Small groups enable team members
to participate in decision
 Assist management training and
career planning
FLAT
FOR:
More opportunity for delegation
Relatively cheap
Speed up communication

25. DELAYERING
Reduction of number of management
levels from bottom to top
Why:
Information technology
Empowerment
Economy
fashion
OUTSOURCING AND
OFFSHORING
Outsourcing:
Contracting out of specified
operation or services to an external
vendor
Sending work to an external
organization
Offshoring:
Involve sending work overseas
To make cheaper labour in overseas
markets

26. SHARED SERVICES
APPROACH
Single services
centre to provide
support function
For delivering the
service to agreed
service levels
AIMS:
• To enable better
use of resources
(lower cost)

28. CORPORATE STRATEGIES
Definition of CORPORATE : the general direction of the whole organization
CHARACTERISTICS
SCOPEOF
ACTIVITIES
ENVIRONMENT
RESOURCES
VALUES
TIMESCALE
COMPLEXITY

29. CORPORATE STRATEGY
BUSINESS
STRATEGY
BUSINESS
STRATEGY
BUSINESS
STRATEGY
Strategic
BusinessUnit
( SBU )
SBU SBU
FUNCTIONAL STRATEGIES
R & D OPERATIONS MARKETING HRM IT / IS FINANCE
STRATEGIES INVOLVING MANY FUNCTIONS

30. BUSINESS STRATEGY
Definition of BUSINESS : how the organization or its SBUs tackle
particular markets
Definition of BUSINESS STRATEGY : how an organization
approaches a particular product market area

31. FUNCTIONAL / OPERATIONAL STRATEGIES
FUNCTIONAL AREA
PRODUCTION
FINANCE
HUMAN RESOURCES
MANAGEMENT
INFORMATION
SYSTEMS
R & D
MARKETING

32. THE ANTHONY HIERARCHY
STRATEGIC MANAGEMENT
TACTICAL MANAGEMENT
OPERATIONAL MANAGEMENT

34. CENTRALISATION
CENTRALISED ORGANISATION : one in which authority concentrated in one place
TWO ways perceptions :
• GEOGRAPHY
• AUTHORITY

35. ADVANTAGES AND DISADVANTAGES OF CENTRALISATION
PRO CENTRALISATION
• EASIER TO CO-ORDINATE
• WIDER VIEW OF PROBLEMS
• BALANCE INTERESTS OF DIFFERENT
FUNCTIONS
• HIGH QUALITY OF DECISIONS
• CHEAPER
• QUICKER CRISIS DECISIONS
• STANDARDISED ORGANISATION-WIDE
( policies , procedures , documentation )
PRO DECENTRALISATION
• AVOIDS OVERBURDENING
• IMPROVES MOTIVATION
• GREATER AWARENESS OF LOCAL
PROBLEMS
• FASTER DECISION MAKING AND
RESPONSE
• DEVELOP SKILLS
• SEPARATE SPHERES OF RESPONSIBILITY
• COMMUNICATION TECHNOLOGY