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Oleh:
Sepni Darmaningsih
041414253008
041414253001
Laili Rachmawati
041414253016
Every organization from locally owned restaurants and auto body shops to large international
firms, non profit organization and law-enforcement agencies wrestles with question about
organizational size, bureaucracy, and control. Organization size is a major contingency that
influences organization design and functioning. In this chapter we also discuss about
orgnisation life cycle, the structural characteristics at each stage and how bureaucracy in small
and big company.
The explanation:
a. Large Organization are able to get back to business more quickly following a
disaster. They are standardized, mechanistic and complex.
b. Small companies are flexible and can be responsive. They often have flat
structure and a more organic, free-flowing management style.
c. Big-company/Small-company hybrid are combines a large corporations
resources and reach with a small companys simplicity and flexibility. The
divisional structure is one way some large organizations attain a bigcompany/small-company hybrid.
Organizational Life Cycle
The concept of an organizational life cycle is a useful way to think about organizational
growth and change, which suggest that organizational are born, grow older, and eventually
die.
1. Stages of Life Cycle Development
Stages are sequential and follow a natural progression. There are four stages characterize
organizational development or organizational life cycle:
a. Entrepreneurial stage emphasize on creating a product or service and surviving in
the marketplace. the organization is informal and non-bureaucratic. Control is based
on the owners personal supervision. Growth is from a creative new product or
service.
b. Collectively stage, organizations begin to develop clear goals and direction.
Employees indentify with the mission of the organization and spend long hours
helping the organization succeed.
c. Formalization stage, involves the installation and use of rules, procedures and control
systems. Communication is less frequent and more formal, and more likely to follow
the hierarchy of authority.
d. Elaborating stage focuses upon on collaboration and teamwork. All mature
organizations must go through periods of revitalization or they will decline, as shown
in the picture below:
What Is Bureaucracy?
a. Weber`s concept of bureaucracy
-
Requirements
Bureaucracy Control
Market Control
Clan Control
1. Bureaucracy Control
Bureaucratic control is the use of rules, policies, hierarchy of authority, written
documentation, standardization, and other bureaucratic mechanisms to standardize
behavior and assess performance. The primary purpose of bureaucratic rules and
procedures is to standardize and control employee behavior. More than one type of
authoritysuch as long tradition and the leaders special charismamay exist in
organizations, but rational-legal authority is the most widely used form to govern internal
work activities and decision making, particularly in large organizations.
2. Market Control
The idea of market control originated in economic. Market control occurs when price
competition is used to evaluate the output and productivity of an organization or its major
departments and divisions. For instance, the Department of Agriculture beat out IBM and
two other private companies to win the bid. Eighteen supervisors were laid off, costs were
cut by 25 percent, and the department won the bid. Different companies compete on price
to provide the functions and services required by the hub organization. The organization
typically contracts with the company that offers the best price and value.
3. Clan Control
Organizations that use clan control have strong cultures that emphasize shared values and
trust among employees. Clan control is important when ambiguity and uncertainty are
high. Managers act primarily as mentors, role models, and agents for transmitting values.
Quantitative Reasons
Qualitative Reasons
Reduced Workforce
Fierce Competition
A cutback in size of the organization The hostile takeover by large and established
reflects a reduced total market, reduced company is for the purpose of quick termination
need of products, lack of capability to of a competitor.
deliver the product, hence the underlying
reasons implies a decline.
Reduced Market Share
The reduction in the market share of the
company implies several issues, growing
competition if the total market is indeed
growing or is stable, or contraction of
overall market due to obsolete products or
technologies.
Reduced Profit or Share Price
Lack of Customers
It happens due to unexpected decline in the niche
market, a change in consumer`s choice for a
different
product
or
simply
because
the
It provides the investors assessment of the Older organizations are very much vulnerable to
companies
operating
margin
and
economic
environment
reduces
the
&
long
period
of
stability.
The
a. Blinded Stage
The organization fails to recognize any of the internal or external changes that may
threaten its survival. Usually, causes for the decline are present but are not evident, the
leadership tends be insensitive and simply fails to make a connection between the
observed changes and a possible decline. Similarly the need for internal surveillance
cannot be ignored. It includes regular performance reviews employee satisfaction
surveys, training, skill development, and most importantly an open communication
mechanism to aid in vertical flow of information. The initial sign of decline are
usually very much visible and known to the bottom of organizational pyramid, but the
information fails to propagate upwards to its leaders.
b. Inaction Stage
The signs of deteriorating performance are clearly evident in this stage, but the
leadership still fails to take any action. The past successful approaches fail when the
current situations are very different. Finally, the aging leadership might simply lack
the knowledge and insight to comprehend the influence of the changing conditions.
c. Faulty Action Stage
The organization is clearly on its downfall and pressure to take corrective action is
very high. Due to high pressure, the decision makers tends to make quick, risky and
often fault decisions, that further accelerates the decline. Some of the prescribed cure
include introduction of new leadership, diversification of core business either through
self development or acquisitions and disinvestment in failing product lines.
d. Crisis Stage
The organization reaches a crisis stage when all prior actions have failed and it
becomes obvious that without any major change, its survival is questionable. At this
stage, the organization requires a massive structural change, a new strategy to deal
with the external environment and a new ideology to revitalize the ailing organization.
e. Dissolution Stage
The new leadership and the strategy had failed to revive the business and now their
responsibility lies in proper dissolution of the organization and its resources.
3. Downsizing Implementation
Downsizing has become a common practice in corporations. Massive downsizing has
often not achieved the intended benefits and in some cases has significantly harmed the
organization. Techniques that can help smooth the downsizing process:
a. Communicate more, not less
b. Provide assistance to displaced workers
c. Help the survivors thrive
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