Understanding the Organization


Understanding the Organization

An organization consists of a system where two or more people work together to achieve a group result. In the organization organized human activities take place. These human activities are the co-operative activities of two or more persons. The organization is the process of dividing up of these activities into various tasks to be performed and the coordination of these tasks to accomplish the activities. The structure of an organization can be defined simply as the sum total of the ways in which it divides its activities into distinct tasks and then achieves coordination among them.

An organization is a basic social unit which is generally established for the purpose of achieving the set objectives. The organization is considered to have several distinct features. These features can be (i) a common objectives or an accepted pattern of purpose, (ii) a set of shared values or common beliefs which provide individuals a sense of identification and belonging, (iii) a continuity of goal oriented interaction, (iv) a division of work purposely planned for achievement of the objectives, and (v) a system of authority or a chain of command to achieve conscious coordination of efforts for achieving the objectives. Organizations can be either informal or formal.

An informal organization can be characterized by some of the features of the formal organization, but it lacks one or more of these features. Individuals who share a common value may meet regularly to foster some objectives, and this group can become a recognizable formal organization. Some informal groups never develop the consistent characteristics of a formal organization, however, and simply remain informal.

Formal organizations almost inevitably give rise to informal organizations. Such informal groups can be regarded as spontaneous organizations which emerge since individuals are brought together in a common workplace to pursue a common goal, which makes social interaction inescapable. Informal organizations arise as a means of easing the restrictions of formal structures, as in the cooperative communication and coordination which can occur outside of the officially mandated channels of authority. Through an informal organization’s communication network, an individual can gain valuable information which supplements or clarifies formal communications. Also, informal groups help to integrate individuals into the organization and socialize them to accept their specific organizational roles. A manage must remain aware of the existence and composition of the informal groups in the organization so that their functioning affects the formal structure in the positive rather than negative ways.

Classification of organizations

Organizational conflict can be reduced and the viability of the organization can be increased if the managers of the organization understand and accept its nature and they function and shape the inter-actions in a manner which is consistent with the type of the organization. In this way, personal conflicts in the organization can be reduced. In case an individual is unable or unwilling to accept some features of the particular organization type, then it is desirable for him to shift to a different organization where the environment is to his liking.  As an example, an individual may prefer to work in an organization which does not has a highly structured, bureaucratic setting, then he must not join a public sector organization and join a private sector organization where he performs well since the business model suits his likings. The individual can gain the insight of the organizational environment which is dependent on its type. Normally organizations are classified based on (i) prime beneficiary, (ii) authority structure, and (iii) genotype characteristics

Prime beneficiary

A classification of the organizations based on the prime beneficiary has been given by Peter Blau and WR Scott. They suggested a model for the analysis of organizations. The model focuses on the question ‘who benefits form the existence of the organization’. With the application of this criterion, the organizations can be classified into the following four types.

  • Mutual benefit associations – In such organizations, members are the prime beneficiaries. A professional association is an example of such organization.
  • Business concerns – In such organizations the owners are the prime beneficiaries.
  • Service organizations – In these organizations customers are the prime beneficiaries.
  • Commonwealth organizations – In these organizations public at large is the prime beneficiaries. Fire and police departments are examples for such organizations.

In the organizations which are based on the prime beneficiaries, managers formulate goals, establish priorities, and monitor activities to determine the effectiveness of the organization in meeting the needs of the prime beneficiary. Actions which do not nurture such goals are removed and proper priorities are formulated. Since the customers are the prime beneficiaries in any organization, decisions about the scope of the offered services or similar issues are made keeping in mind the needs of the customers. In the organization, managers are to keep a balance with respect to the demands made by the prime beneficiary and the organizational customers.

Authority structure

Under this classification, the organizational environment can be classified according to the modes of the authority which are operative within the organization. Managers are to adopt leadership styles, develop procedures and methods for employees’ interaction, and determine customer interaction in a manner which is consistent with the predominant authority structure. Generally organizations tend to embody more than one pattern of authority structure. As an example, there can be lesser limits on the activities of the professional staff and greater limits on the activities of semi-skilled and unskilled workers. Amatai Etzioni has provided in his work a typology of organizations based on the authority structure. The classification resulting from his approach is given below.

  • Predominantly coercive authority structure
  • Predominantly utilitarian authority structure
  • Predominantly normative authority structure
  • Mixed authority structure such as normative-coercive or utilitarian-coercive

Genotypic characteristics

As in the case of prime beneficiary concept, the classification of organizations is based on genotypic characteristics centres on an analysis of their fundamental roots and purposes. Daniel Katz and Robert Kahn have viewed organizations as subsystems of the larger society and they carry out basic functions of the larger society. These basic functions are the focal point in this system of classification. The typology of the organizations developed by Katz and Kahn is based on genotypes which are the first order characteristics. These are the most basic functions which are carried out by the organizations in terms of society and are given below.

  • Productive and economic functions – These consist of creation of wealth or goods as in the case of industrial and business organizations.
  • Maintenance of society – It consists of the socialization and general care of people as in the case of organizations dealing with the subject of education, training, and health care etc.
  • Adaptive functions – These functions consist of the creation of knowledge as in the case of organizations involve in research and development activities.
  • Managerial and political functions – These functions consist of negotiation and coordination functions and control of resources and people.

Organizations may have one or all of these functions. The charter, articles of incorporation, and the statement of purpose which are the official documents of the organizations are normally used for classification of the organization according to this typology. In genotype characteristics, the goal statements are derived and priorities are set in terms of primary function. Managers can monitor organizational change when the actual function performed differs from the stated function. Managers are required to make decisions in case there are conflicts.

Bureaucracy and organizational life

Bureaucracy is such a common aspect of organizational life which is frequently trated as syonymous with formal organization. The study of bureaucracy in its pure form was the work of structuralists in management history. The work of Max Weber is central to this aspect since it has presented the main characteristics of bureaucracy in its pure form. Weber regarded the bureaucratic form as an ideal type and described the theoretically perfect organization. In effect, he codified the main features of formal organizations  in which rational decision making and administrative efficiency are maximized. He did not include the dysfunctional facets or the anomalies which generally occur when any characteristics are exaggerated, as in the popular equation of bureaucracy with ‘red tape’. From the work of Weber and others, the following composite set of characteristics or descriptive statements (Fig 1) can be derived concerning the formal or bureaucratic organization.

  • Organization size – Bureaucratic organizations generally have large scale of operations, large number of customers, high volume of work, and wide geographical dispersion.
  • Division of work – Bureaucratic organization usually has systematic division of work with clear limits and boundaries of work of different departments.
  • Specialization – Specialization in the bureaucratic organization is needed due to the division of the work. Each department pursues its goals without any conflict because of clear boundaries of work. Areas of specialization match with for meeting the requirements of official jurisdictional areas. Specific area of competence of the each workman is needed the competence includes technical qualification and expertize in the work involved.
  • Official jurisdictional areas – These areas are fixed by rules, laws, or administrative regulations. Each department is to carry out specific official functions.
  • Rational legal authority – There is formal authority attached to the official position. This formal authority is rationally delegated in a stable manner. There are clear rules delineating the use of authority. There is depersonalization of office with emphasis on the position and not on the person holding the position.
  • Principle of hierarchy – There is a firmly methodical system of supervision and subordination. Each of the lower position or office is under the control and supervision of a higher position or office. There is a systematic checking and reinforcing of compliance.
  • Rules – Rules provide continuity of operations. They promote stability, regardless of changing of the personnel. They routinize the work. They also generate the ‘red tape’.
  • Impersonality – There is impersonal orientation by the officials. The stress is always on the rules and the regulations. There is total disregard of personal considerations in customers and employees. The judgments are rational and free of personal feeling. There is social distance among successive levels of hierarchy. This social distance is also from customers.
  • The bureaucrat – The bureaucrat is the official having the career which is integrated with the system of promotion for rewarding the loyalty and service. The official needs special training because of specialization, division of work, or the technical rules and regulations. The official is compensated by salaries which is not dependent on the payments to the organization by the organizational customers. The system of bureaucracy separates manager from the owner.
  • The department (office, administrative unit or the bureau) – There is formulation and recording of all administrative acts, decisions and rules. The work is carried out with a systematic interpretation of norms and enforcement of rules. There are written documents and the department is with equipment and support staff employed for the maintenance of the records. The office management is based on expertize and specialized training. The physical property, equipment, and supplies are clearly separated from personal belongings and domicile of the office holder.

Fig 1 Characteristics of a formal or bureaucratic organization

The above ten characteristics are interwoven, each flowing from the others. As an example, the increase in the organizational size necessitates the division of work which in turn nurtures specialization. However, the dreams of the managers of an organization are always that they should not be bogged down in formalities so that they can give the needed output to the organizational customers. One can see many features of the bureaucracy. These features include specialization and division of work, procedures for uniformity, some form of authority structure and a variety of rules in a private organization which has grown and become big. The wisest approach in an organization is to involve taking the best features of formal bureaucracy and making particular efforts to avoid the negative elements such as impersonality. Organizational models based on the family centred approach or the team approach tends to offset the impersonalization normally associated with the large organizations.

Consequences of organizational form

Every organization has its own specific environment in which the managers work. The specific functions of the managers are shaped and modified by the organizational form, structure, and authority climate. Some specific consequences concern the following organizational characteristics.

  • Size – The higher is the number of layers in the hierarchy, the greater is the limitations on managers’ freedom in decision making. Their decisions may be subject to review at several levels, and more decisions can be imposed from these higher levels.
  • Organizational climate –The degree to which customers, employees, and other managers participate in planning and decision making processes is determined in the organization by the authority climate. Managers may have to adjust their management or leadership style if it is inconsistent with the organization’s authority structure. The basis of motivation may vary. For example, in the highly normative setting, members willingly participate while in the coercive organization, the basis of motivation tends to rest on the avoidance of punishment.
  • Degree of bureaucracy – A highly bureaucratic organization can be associated with great predictability in routine practices. These organizations are less innovative and have more resistance to change. Efforts to offset distortion caused by layering in communication can constitute a large portion of the activities of a manager in a highly bureaucratic organization.
  • Phase in the life cycle – The openness to innovation and the vigorous, aggressive undertaking through goal expansion and multiplication which characterizes some stages of the life cycle can permit the manager to undertake a variety of activities that are precluded by concerns for organizational survival in other phases of the life cycle.

For these reasons, managers need to assess the organizational setting and their own roles. The major concepts of the customer network, organizational life cycle, and analysis of organizational goals are some of the tools for such assessments. The active use of these tools fosters in the managers awareness of the overall organizational dynamics which shapes the managerial practice, worker interaction, and services to the customers.