Unit 1

Understanding an organization
What do you think an Organisation is?
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Understanding an organization
Introduction

Organization is born when more than one person coordinates to execute a

work, such as one person passing bundles to another person who puts them in
an order.

An organization or organisation is an entity comprising multiple people, such as

an institution or an association, that has a particular purpose.
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Understanding an organization
Definitions

An organisation is a collection of people working together in a coordinated and

structured fashion to achieve one or more common goals.

Organisation is a group of people, coming together to achieve common

goals.
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Understanding an organization
Definitions

Organization is nothing but is a process of integrating and coordinating the

efforts of men and material for the accomplishment of set objectives .

Organization is the structural framework of duties and responsibilities required

of personnel in performing various functions with a view to achieve business
goals through organization.
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Understanding an organization
Formal Definitions

“
Organization is the process of identifying and grouping work to be performed,
defining and delegating responsibility and authority and establishing
relationships for the purpose of enabling people to work most effectively
together in accomplishing objectives.”
- Louis Allen
‘
The establishment of authority relationships with provision for co-ordination
between them, both vertically and horizontally in the enterprise structure.”
- Koontz and O’ Donnell,
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Understanding an organization
Characteristics of Organization

Organization is an effective and necessary instrument for the attainment of

predetermined goals. The following are main characteristics of organization.
1. Organization is an instrument used by the management for the attainment of
pre-planned objectives.
2. Management guides and directs the organization.
3. A set of rules and instrument are communicated to all connected with the
organization.
4. It prefers to a group of personnel whose positions, rights, responsibilities are
well defined and classified according to the nature of assignments.
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Understanding an organization
Nature of Organization

A set of five processes in commonly accepted as five functions of organization

which represents nature of organization, they are

1. Subdivision of main work into small groups

2. Based on principles of equality division of different activities ties
3. Selection of suitable personnel and allocation of jobs according to suitability
4. Allotments of rights and authority to those who have been assigned the job
so that may be able to accomplish their job satisfactorily
5. Determination of positions at different levels
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Understanding an organization
Importance of Organization

Any effective organization

1. Makes the management simple and efficient
2. Encourages specialization
3. Improves techniques
4. Encourages constructive thinking
5. Increase productivity and
6. Accelerates the progress
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Understanding an organization

Role of Organizations
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Understanding an organization
Organizations Role in Society
• Organizations exist to allow accomplishment of work that could not be
achieved by people alone.
• As long as the goals of an organization are appropriate, society will allow them
to exist and they can contribute to society.

Organizations and People

• Organizations are strongly influenced by the people that form part of them.
• Organizations can take in part of the personality of the people within them and
their attitudes, perceptions and behaviors affect how an organization will
operate.

Organizations Require Management

• Organizations use management to accomplish the work that is required to
achieve the goals.
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Understanding an organization

Organization Environment
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Understanding an organization
What is Organisation Environment

• The organization works within the framework provided by

various elements of society. All such elements which lie outside
the organization are as environment.

• The organization needs to properly understand the environment

for effective management.
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Understanding an organization

Organization Environment
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Understanding an organization
The Internal Environment

• Board of Directors

• Employees

• Culture
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Understanding an organization
The Internal Environment –A Board of Directors

• A board of directors is only required of organizations that are incorporated;

however, many other firms have them.
• The board of directors is elected by the stockholders and is charged with
overseeing the generalmanagement of the firm to ensure that it is being run in
a way that best serves the stockholders' interests.
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Understanding an organization
The Internal Environment - Employees

• When the organization's employees hold the same values and goals as its
management, everyone wins.
• However, when managers and employees work toward different goals
everyone suffers.
• The composition of the organization's employees is changing, and managers
must learn how to deal effectively with these changes.
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Understanding an organization
The Internal Environment - Culture

• The culture of an organization is the set of values that helps its members
understand what the organization stands for, how it does things, and what it
considers important.
• A strong organizational culture can shape the firm's overall effectiveness and
long-term success and help employees to be more productive.
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Understanding an organization
The External Environment

• The general environment is the nonspecific dimensions and forces in its

surroundings that might affect its activities.

• The task environment consists of specific organizations or groups that are

likely to influence an organization.
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Understanding an organization
The External Environment - Task Environment

• Competitors are other organizations that compete for resources.

• Customers are whoever pays money to acquire an organization's product or
service.
• Suppliers are organizations that provide resources for other organizations.
• Regulators are units in the task environment that have the potential to control,
regulate, or influence an organization's policies and practices. E.g. Environmental
Protection Agency and the Department of OccupationalSafety, Health and Welfare.
• Labor includes all workers who provide the service or produce the products.
Labor is especially a concern when it is unionized.
• Owners are individuals, groups, or organizations who have a major stake in the
organization.
• Strategic allies are two or more companies that work together in joint
ventures.
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Understanding an organization
The External Environment - General Environment

• The economic dimension inflation, interest rates, unemployment, and demand.

• The technological dimension refers to the methods available for converting
resources into products or services.
• The socio-cultural dimension, customs, mores, values, and demographic
characteristics of the society in which the organization functions.
• The political-legal dimension refers to government regulation of business and
the relationship between business and government.
• The international dimension refers to the extent to which an organization is
involved in or affected by business in other countries.
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Understanding an organization

The Organizational Process

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Understanding an organization
The Organizational Process

Organizing, like planning, must be carefully worked out and applied process.
This process involves determining what work is needed to accomplish the goal,
assigning those tasks to individuals, and arranging those individuals in a
decision making framework (organizationalstructure).

The end result of the organizing process is an organization — a whole

consisting of unified parts acting in harmony to execute tasks to achieve goals,
both effectively and efficiently.
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Understanding an organization
The Organizational Process –Definition

It includes activities that establish the business goals of the organization and
develop process, product and resource assets which, when used will help
to achieve business goals.

A properly implemented organizing process should result in a work environment

where all team members are aware of their responsibilities.

If the organizing process is not conducted well, the results may yield confusion,
frustration, loss of efficiency, and limited effectiveness.
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Understanding an organization
The Organizational Process - Steps

Functional departmentation

Divisional departmentation
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Understanding an organization
The Organizational Process –Definition

1. Identification and Division of work:

The organising function begins with the division of total work into smaller units.
Each unit of total work is called a job

And an individual in the organisation is assigned one job only. The division of work
into smaller jobs leads to specialization because jobs are assigned to individuals
according to their qualifications and capabilities.

The division of work leads to systematic working.

For example, in a bank every individual is assigned a job. One cashier accepts
cash, one cashier makes payments, one person issues cheque books, one
person receives cheques, etc. With division of work into jobs the banks work
very smoothly and systematically.
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Understanding an organization
The Organizational Process –Definition

2. Grouping the Jobs and Departmentalisation:

After dividing the work in smaller jobs, related and similar jobs are grouped
together and put under one department. The departmentation or grouping of
jobs can be done by the organisation in different ways. But the most common
two ways are:
(a) Functional departmentation:
Under this method jobs related to common function are grouped under one department. For
example, all the jobs related to production are grouped under production department; jobs
related to sales are grouped under sales department and so on.

(b) Divisional departmentation:

When an organisation is producing more than one type of products then they prefer divisional
departmentation. Under this jobs related to one product are grouped under one department.
For example, if an organisation is producing cosmetics, textile and medicines then jobs related
to production, sale and marketing of cosmetics are grouped under one department, jobs
related to textile under one and so on.
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Understanding an organization
The Organizational Process –Definition

3. Delegation of Duties:
After dividing the organisation into specialised departments each individual
working in different departments is assigned a duty matching to his skill and
qualifications. The work is assigned according to the ability of individuals.
Employees are assigned duties by giving them a document called job
description. This document clearly defines the contents and responsibilities
related to the job.
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Understanding an organization
The Organizational Process –Definition

4. Assign activities and delegate authority: Span of Control

After grouping the activities in different departments the employees have to
perform the job and to perform the job every individual needs some authority.
So, in the fourth step of organising process all the individuals are assigned
some authority matching to the job they have to perform.
Managers assign the defined work activities to specific individuals. Also, they give
each individual the authority (right) to carry out the assigned tasks.
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Understanding an organization
The Organizational Process –Definition

5. Design a hierarchy of relationships. Chain of Control

With the establishment of authority, managerial hierarchy gets created (chain of
command) and principle of scalar chain follows this hierarchy. The
establishment of authority also helps in creation of managerial level.
A manager should determine the vertical (decision making) and horizontal
(coordinating) relationships of the organization as a whole. Next, using the
organizational chart, a manager should diagram the relationships.
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Understanding an organization

Mission, Vision, Strategy, Goals & Objectives

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Understanding an organization

Mission, Vision, Strategy, Goals & Objectives

What is First?
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Understanding an organization

What is First ?

Your business needs to have its

purpose (mission) defined before
you can choose its destination
(vision).
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Understanding an organization

What is First ?
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Understanding an organization
Mission, Vision, Strategy, Goals & Objectives
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Understanding an organization
Mission, Vision, Strategy, Goals & Objectives
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Understanding an organization

Your Mission creates FOCUS.

Your Vision provides DIRECTION.
Your Values define BEHAVIOUR.
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Understanding an organization
Mission Statements:

• Define the organization’

s purpose.

• Are short, clear and simple (only need to be one or two sentences).

• Capture how you serve people, animals, the environment (what ever it may
be).

• Needs to tell people how you intend to achieve your vision.

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Understanding an organization
Vision Statements

• A good vision is… • Your vision checklist:

Ø Inspiring q Does it excite you?

q Does it tell the world
Ø Focuses on serving the world about the good you
want to do?
Ø Is very ambitious q Is it bigger than you?
q Is it simple?
Ø Describes the ideal result you q Is it clear?
want to achieve q Is it about what you
can give and not about
what you’ ll get?
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Understanding an organization
A Mission statement provides focus. It should answer:
Ø What do you do?
Ø For whom?
Ø Why?

A Vision statement describes the future, as you see it. It should:

Ø Inspire
Ø Create excitement
Ø Motivate

Values describe your organizational culture. They should:

Ø Guide how you do business internally and externally.
Ø Resonate with your employees and stakeholders (clients, suppliers, etc.).
Ø Define your culture and beliefs.
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Understanding an organization

What is a vision?

“
description of something in the future”

A vision is a clear, comprehensive “ photograph”of an

organization at some point in the future.

It provides direction because it describes what the

organization needs to be like, to be successful within the
future.
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Understanding an organization
Vision Statement

A vision statement answers the question,

“What will success look like?”

The pursuit of this image of success is what motivates people to work together.
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Understanding an organization
Vision Statement

Strategic vision addresses the “where are we going”questions and explains the
course and direction chartered by management.

A strategic vision should provide a clear understanding of what the business should
look like and provide help to take strategic decisions.

Strategic intent should lead to an end.

- That end is the vision of an organization or an individual.
- It is what the firm or a person would ultimately like to become.
- Should be short and specific.
- It should be based on overall purpose of organization
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Understanding an organization
Vision Statement : Characteristics

1. It’s a blue print of the kind of business organization the management is trying
to create and the market position it would occupy.
2. It should be forward looking a provide strategic course the management will
adopt to help the company prepare the future
3. Specific and provide guidelines to managers for making decisions and allocating
resources
4. Flexible to changing environment
5. Within realm of companies hope to achieve
6. Appeal to emotions and motivate employees
7. Narrow vision, can focus effort and excite people
8. May not fit to present circumstance, but contributes to future. Shows picture of future.
9. Should be easy to explain to all stake holders and preferably short
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Understanding an organization
Vision statement : Examples

1. BSNL Vision Statement :

“
To become the largest telecom service provider in Asia.”

2. Walt Disney vision Statement :

“Make people happy”
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Understanding an organization
Vision statement : Examples

We aim to be a globally respected and sustainable company

To be amongst the 5 most admired Information Technology Solution

Providers globally with leadership focus in delivery of products, solutions
and service s which are globally competitive.
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Understanding an organization
Vision statement : Examples

Create world class digital experiences to connect and inspire every Indian to build
a better tomorrow

Our vision is to enrich the lives of our customers. Our obsession is to win
customers for life through an exceptional experience.
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Understanding an organization
Mission : Introduction

Ø Organizations relate their existence to satisfying a particular need of the

society. They do it in terms of their mission.

Ø Mission is a statement which defines the role that an organization plays in

a socie ty.

Ø It refers to the particular need of that society for instance, its information
needs.
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Understanding an organization
Mission : Definition

“
Essential purpose of the organization, concerning particularly why it is in
existence, the nature of the business it is in, and the customers it seeks to
serve and satisfy.”

“
Purpose or reason for the organization's existence.”

“
Mission is an enduring statement of purpose that distinguishes one firm from
other similar firm.”

Different from vision by it is more focused on “

what is our business “
as compared
to the “where are we headed”or “ what we wand to become”nature of vision.
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Understanding an organization
Mission Statement

“
A mission statement is an enduring statement of purpose that distinguishes one
business from other similar firms. A mission statement identifies the scope of a
firm’s operations in product and market terms.”

The mission statement of an organization is normally short, to the point, and

contains the following elements:

Ø Provides a concise statement of why the organization exists, and what it is to

achieve;
Ø States the purpose and identity of the organization;
Ø Defines the institution's values and philosophy; and
Ø Describes how the organization will serve those
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Understanding an organization
Mission Statement

BSNLMission Statement
“
To provide world class state of art technology telecom services to its customers
on demand at competitive prices.

“To provide world class telecom infrastructure in its area of operation and to
contribute to the growth of country's economy.”
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Understanding an organization
Points to be considered while Formulating mission

1. What is the basic purpose of your organization?

2. What is unique about your organization?
3. What is in your company that will make it stand out in a crowd?
4. Who are, and who should be, your principal customers?
5. What are the basic beliefs, values and philosophicalpriorities of your firm?
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Understanding an organization
Components of mission statement

1. Product or service
2. Customers
3. Technology
4. Survival, growth & profitability
5. Company philosophy
6. Public image
7. Employees
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Understanding an organization
Components of mission statement

1) Product or service
Invariably includes mention of the product or service the company offers to
customers.

2) customers
Information in the mission statement describes the profiles of customers and the
organization it services.

3) Technology
Components of the mission statement generally refers to means of production,
operations and organizationalfunctions.
It include elements such as equipment's, materials, techniques, processes
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Understanding an organization
Components of mission statement

4) Survival, Growth and Profitability

Make a general reference to the company’
s survival and healthy functioning, which
include growth and profitability.

5) Company philosophy :
It reflects the basic believes, values, aspirations and ethical priorities of company
that guide the employee in conditioning organizationalfunction.
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Understanding an organization
Components of mission statement

6) Public image :
Elements of the company deals with how the company wishes to be viewed by
external constituencies.
To create a positive public image, the mission statement could explicitly refers to
the responsiveness of the company to concerns about the company and the
society

7) Employees:
To develop a public image a company could include concerns for recognition of
the value of employees in the statement
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Understanding an organization
Need for an explicit mission

Ø To ensure unanimity of purpose within the organization.

Ø To provide a basis for motivating the use of the organizations resources.
Ø To develop a basis, or standard, for allocating organizationalresources.
Ø To establish a general tone or organization climate.
Ø To serve as a focal point for those who can identify with the organization's
purpose and direction.
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Understanding an organization
Idea Mission Statement
Customers
Be the most loved brand by continuously raising the bar in delivering
simple, delightful experience and meaningful innovations, through
new age technologies

Team
Be an inspirational, agile and exciting organization that challenges status
quo, and champions a diverse team that has a winning attitude and
thrives on delivering customer excellence

Share Holders Be the most valued company through smart leadership committed to
delivering sustainable growth, while adhering to the highest
standards of government and compliance

Community Be the most respected company by leveraging technology and

purposeful innovation to catalyze social prosperity, digital literacy
and inclusivity
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Understanding an organization

Strategy
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Understanding an organization
Strategy : Introduction

Strategy arrived from Greek word stratēgia, or strategos means "art of troop
leader; office of general, command, generalship“.

Strategy is a high level plan to achieve one or more goals under conditions of
uncertainty.

Strategy is important because the resources available to achieve these goals are
usually limited. Strategy generally involves setting goals, determining actions to
achieve the goals, and mobilizing resources to execute the actions.

A strategy describes how the ends (goals) will be achieved by the means
(resources).
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Understanding an organization
Strategy : Definition

A plan of action designed to achieve a long-term or overall aim

“
A general direction set for the company and its various components to achieve a
desired state in the future. Strategy results from the detailed strategic planning
process” .

Strategy is a well defined roadmap of an organization. It defines the overall

mission, vision and direction of an organization. The objective of a strategy is to
maximize an organization’ s strengths and to minimize the strengths of the
competitors.
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Understanding an organization
Features of Strategy

1. Strategy is Significant because it is not possible to foresee the future. Without

a perfect foresight, the firms must be ready to deal with the uncertain events
which constitute the business environment.
2. Strategy deals with long term developments rather than routine operations,
i.e. it deals with probability of innovations or new products, new methods of
productions, or new markets to be developed in future.
3. Strategy is created to take into account the probable behavior of
customers and competitors. Strategies dealing with employees will predict the
employee behavior.
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Understanding an organization
Types of Strategy

1. Corporate level strategy: This level answers the foundational question of what
you want to achieve. Is it growth, stability, or retrenchment?

2. Business unit level strategy: This level focuses on how you’ re going to
compete. Will it be through customer intimacy, product or service leadership,
or lowest total cost? What’
s the differentiation based on?

3. Market level strategy: This strategy level focuses on how you’ re going to
grow. Will it be through market penetration, market development, product or
service development, or diversification?
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Understanding an organization

Goals and Objectives

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Understanding an organization
Goals

A goal is a desired future state that an organization tries to achieve .

Goals specify in particular what must be done if an organization is to attain

mission or vision.

Goals make mission more prominent and concrete.

Goals co-ordinate and integrate various functional and departmental areas in an

organization.
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Understanding an organization
Features of Goals

1. These are precise and measurable.

2. These look after critical and significant issues.
3. These are realistic and challenging.
4. These must be achieved within a specific time frame.
5. These include both financial as well as non-financial components.
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Understanding an organization
Objectives

Objectives are defined as goals that organization wants to achieve over a period of
time.

These are the foundation of planning.

Policies are developed in an organization so as to achieve these objectives.

Formulation of objectives is the task of top level management.

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Understanding an organization
Features of Objectives

1. These are not single for an organization, but multiple .

2. Objectives should be both short-term as well as long-term.
3. Objectives must respond and react to changes in environment, i.e., they must
be flexible .
4. These must be feasible, realistic and operational.
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Understanding an organization
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Understanding an organization

Jobs and Task

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Understanding an organization
Job and Task

A“
Job”often means a set of processes.

A“task”may mean a process, a thread, a process or thread, or, distinctly, a unit of

work done by a process or thread.

Job usually refers to the entire group of responsibilities entailed by a position in an

organization.

The word task usually refers to one of those assigned responsibilities

The job is formed of tasks and a task is part of a job.

Thank you