This document discusses organizational structures and changes within organizations. It defines an organization and describes common organizational structures like hierarchical, functional, project-based, and matrix structures. It also discusses informal organizations that can form within a company. The document outlines pressures for organizational change, both internal like staff promotions or new investments, and external like changing markets or regulations. It notes barriers to change like inertia but emphasizes that change should be managed through clear communication, leadership, and consideration of people.

1. Management for Technology
The Business Environment
Lecture #4

2. ∗ Contents for 4th
lecture
∗ The organization
∗ Defining the organization
∗ Organization structure
∗ Organizational changes
The business environment

3. ∗ A group of people with defined relationships to each
other like a family, a club any movement etc.
∗ A collection of human and material resources which
are gathered together for a stated aim example an
accounting firm, a factory, a charity institute.
The organization

4. ∗ It is a system that contains one or more of the
following elements.
∗ Collection of people in a formal or in formal group.
∗ Individuals who have a set of defined tasks and
responsibilities some of which may consists of
specialization.
∗ The manners in which these tasks are relate to each
other is defined.
∗ The tasks lead to achievement of a common aim.
The organization

5. ∗ “An organization is a group of people working
together in a deliberately structured situation to
accomplish group targets.”
∗ “A group of two or more people who work together
in a consciously structured setting to achieve group
goals”.
The organization

6. ∗ Organization can be categorized in different ways they could
be,
∗ According to nature of work
∗ Telecom organization or IT organization or health
organization etc.
∗ According to product
∗ Manufacturing or service organization
∗ According to profit
∗ Profit or non-profit organization
∗ According to source of income
∗ Charity or government funded or self autonomous
• According to ownership
∗ Private or public sector organization
Types of organizations

7. ∗ Organization structure is the way the organization
allocates its resources towards meeting its strategic
aim.
∗ Organization structures
∗ Hierarchical
∗ Line
∗ Staff
∗ Project-based
∗ Functional
∗ Flexible
∗ Matrix
∗ Informal
Organizational structures

8. ∗ Hierarchical organizational structures are
most common and often considered essential
for control of large organizations.
∗ Hierarchy of authority
∗ The amount of authority and related rewards are clearly
defined for each level. Authority is related to the position in
the organization not to the individuals.
∗ Specialization of tasks
∗ Specialization applies to the people within the structure
and not to the individuals. A person who is fit for the job is
selected and jobs are not tailored to fit the person.
Hierarchical structures

9. ∗ Rules and regulations
∗ Rules are tightly enforced throughout the organization
conformity, allocation of privileges, authority is defined by
these rules.
∗ A fair system
∗ Impersonality in the application of rules to ensure that
organization functions efficiently, the system must be fair
and seen as fair.
Hierarchical structures

10. ∗ 4 layer hierarchy
A hierarchical organization
1
2a 2b
3a 3b 3c 3d
4a 4e4d 4f4c 4g4b 4h 4i 4j 4l4k

11. ∗ Strengths of hierarchical structure
∗ Efficient communication
∗ Better control
∗ Limited number of subordinates
∗ Ensures accountability at each level
∗ Effective responsibility assignment
∗ Learning opportunities for the staff
∗ Career growth orientated
Hierarchical structures

12. ∗ Weaknesses of hierarchical structures
∗ Overlapping between levels
∗ Conflict between line and staff employees
∗ Confusion about organizational rules.
Hierarchical structures

13. ∗ Each group is responsible of its specialization.
∗ Most common form or hierarchy.
∗ Enables people to specialize in their fields and learn
from each other.
∗ Closer coordination between people.
∗ Danger is that loyalty is given to functions not to
organization.
Functional hierarchy

14. Functional hierarchy
MD
Manufacturing
director
Engineering
director
Marketing
director
Manufacturing
Engineering
manager
Production
line
manger
Hardware
Design
manger
Software
Design
manager
Publicity
manager
Product
manager

15. ∗
Project hierarchy
MD
Project A
Director
Project B
Director
Manufacturing
Manager
Engineering
manager
Marketing
manager
Manufacturing
Manager
Engineering
manager
Marketing
manager

16. ∗
Geographical hierarchy
MD
Director
Europe
Director
Far East
Manufacturing
Manager
Engineering
manager
Marketing
manager
Manufacturing
Manager
Engineering
manager
Marketing
manager

17. ∗ Matrix organizations aim to capture the best
of both functional and project organization.
∗ It is also a hierarchal structure, except that
two parallel hierarchies exists.
∗ Simple matrix management consists of
functional and project lines.
∗ Individuals at lower levels tend to have two
reporting lines, one to their functional
manager and other to project manager.
Matrix organization

18. Responsibilities within matrix
organization
Project responsibilities
∗ Provide day-to-day guidance
on work to be done.
∗ Determine work priorities.
∗ Ensure funding is available
for work.
∗ Resolve conflicts between
functions.
∗ Provide customer interface.
∗ Monitor project progress.
Functional responsibilities
∗ Look after personal needs
of the individuals
∗ Develop methods to be
used in carrying out the
tasks.
∗ Look after pays and rations
of staff including personal
development.
∗ Monitoring progress of
functional contributions and
help with technical
problems.
∗ To look for new projects.

19. ∗ Strengths
∗ Suitable for use in situations needing multiple
simultaneous management capabilities.
∗ Different needs of the project can be fulfilled.
∗ Engineers can switch from project to functional
responsibilities, learning and skills can be obtained in
both departments.
∗ Dual career opportunities.
∗ Multiple communication channel ensures multiple
capture of information.
∗ Overlapping responsibilities provide flexibility and faster
response to change.
Matrix organization
strengths and weaknesses

20. ∗ Due to dual management system require more
than one manger.
∗ Conflict between managers can arise.
∗ All managers wish to have total control over staff.
∗ Everyone wants to have the best people for their
job.
∗ Due to double staff, expenses are also double.
∗ Sometimes confusion can arise between two
managers about responsibilities and authorities.
Matrix organization
strengths and weaknesses

21. ∗ Organization that exists within the a company.
∗ Informal organization can occur at all levels and
usually grow in the organization due to following
reasons
∗ The failure of organization to provide leadership.
∗ The employees do not feel that they are getting
sufficient recognition and development in their work.
∗ The official communication channels are ineffective
and the employees gain more from unofficial
channels.
Informal organization

22. ∗ These are organization within the organization.
∗ They can be very powerful and beneficial if they
are made to work in the interest of formal
organization.
∗ Managers often look these organization with
suspicion and try to break them up.
∗ The ways should be sought to make use of the
informal organizations.
Informal Organization

23. ∗ Formal organization structure & Informal organization structures
Informal organization
director
Manager A Manager B Manager C Manager D
Manager CDirector
Manager A Manager B Manager D

24. ∗ Thanks to recent change in global environment,
the multi national enterprises have changed the
way in which they organize to tackle world-wide
markets.
∗ Traditional MNE’s were structured on strict
pyramid.
∗ World headquarters were based in the country of
origin, and it also housed the largest
manufacturing plant, R&D center and senior staff.
∗ Commands were issued from headquarter to all
the subs dries around the world.
Global Organizations

25. ∗ The conventional global organization
Global organizations
World HQ
Region 1 HQ Region 2 HQ Region 3 HQ
Country
1HQ
Country
2 HQ
Country
3 HQ
Country
5 HQ
Country
4 HQ
Country
6 HQ

26. ∗ Due to rapid change in market conditions the
MNE’s realized that to succeed, they need to pay
attention to the local environment.
∗ Employee culture, consumer, behavior, political
considerations all these things cannot be
exported from the home country.
∗ It is not possible to gauge local conditions from
by operating at distance.
∗ New corporate head quarters are now much
smaller and may be anywhere in the world not
necessarily in the country of origin.
Global organizations

27. ∗ Headquarters are spread in major activities and R&D,
manufacturing and other related activities are done
simultaneously in many parts of the world.
∗ The locations for major plants, R&D center and other
decision are made based on the economic, business
and political considerations.
∗ Customer needs are met world wide.
∗ Skills are used where they are most available and
cheapest.
∗ Global alliances and joint partnerships are made.
Global organizations

28. The modern global organization
Region 1
HQ
Country 1
HQ
Country 2
HQ
Region 2
HQ
Joint venture
1 HQ
Region 3HQ
World HQ
Country 2
operations
Joint venture
2 HQ
Country 3
operations

29. ∗ The company’s key managers and head quarter staff
are mixture of several nationalities.
∗ The organization operates on cosmopolitan
management structure and keep the best
management talent form many countries.
∗ MNE’s have the problem of maintaining its identity,
have to think globally but act locally.
∗ Foreign investment within the country is as
important as its exports.
∗ Companies are also attracted by side benefits such
as access to large market, well trained labour force,
good infrastructure.
Global organizations

30. ∗ Engineers and technologist create change.
∗ Engineering profession requires from them to
explore new methods and techniques.
∗ This results in change, an organization must
continually change to survive.
∗ Change should be seen as opportunities of
growth and development.
∗ There are many pressures on organizations to
change, some of these are internal and some are
external.
Organizational change

31. ∗ New investments in plants or products, require new
organization or different skills.
∗ Staff developing and being promoted, needs
organization change to accommodate them or to fill
there previous posts.
∗ Career moves within the organization creates
opportunities.
∗ Leavers and new joiners.
Internal Pressures

32. ∗ Changing markets, entry in new markets or
withdrawals from old existing markets.
∗ Changing customer requirements.
∗ Changing legislation and regulatory conditions in
countries where organization operates.
∗ Economic considerations, availability of capital, level
of taxes etc.
∗ Supplier changes, price fluctuations.
∗ Competitive pressures.
∗ Technology changes
∗ Takeovers and mergers between the companies.
External pressures for change

33. ∗ The inertia within the organization, (that’s the way
we do things around here).
∗ Employees feel threatened by the change, specially if
the change is enforced without prior consultation.
∗ Uncertainty about the future roles.
∗ These barriers can be overcome by suitable training
and consultation.
Barriers to change

34. ∗ Change cannot be implemented by wild man
technique.
∗ There are several rules that should be followed to
implement change.
∗ Setting the vision.
∗ Leadership at he top level must implement the change
on it self first.
∗ Communicating the change. Aims and reasons of
change, new opportunities for the employees.
Managing change

35. ∗ Feedback and comment form all the employees
must be encouraged.
∗ Policies must be flexible, good suggestions must
be implemented.
∗ Uncertainty and insecurity are the biggest
barriers to change these elements must be
eliminated from the minds of employees.
∗ People considerations should be the top priority.
Managing change