ORGANISATIONAL DESIGN

MBC-207

SUBHRANSU MOHAN BHUTIA

FMS-MBA-2019-21-022

SEC B

Q2) Factors affecting productivity of a organization are

1. Technical factors: Productivity largely depends on technology. Technical factors are

the most important ones. These include proper location, layout and size of the plant
and machinery, correct design of machines and equipment, research and
development, automation and computerization, etc. If the organization uses the latest
technology, then its productiveness will be high.
2. Production factors: Productivity is related to the production-factors. The production of
all departments should be properly planned, coordinated and controlled. The right
quality of raw-materials should be used for production. The production process
should be simplified and standardized. If everything is well it will increase the
productiveness.
3. Organizational factor: Productivity is directly proportional to the organizational
factors. A simple type of organization should be used. Authority and Responsibility of
every individual and department should be defined properly. The line and staff
relationships should also be clearly defined. So, conflicts between line and staff
should be avoided. There should be a division of labor and specialization as far as
possible. This will increase organization's productiveness.
4. Personnel factor: Productivity of organization is directly related to personnel factors.
The right individual should be selected for suitable posts. After selection, they should
be given proper training and development. They should be given better working
conditions and work-environment. They should be properly motivated; financially,
non-financially and with positive incentives. Incentive wage policies should be
introduced. Job security should also be given. Opinion or suggestions of workers
should be given importance. There should be proper transfer, promotion and other
personnel policies. All this will increase the productiveness of the organization.
 5. Finance factor: Productivity relies on the finance factors. Finance is the life-blood of
modem business. There should be a better control over both fixed capital and
working capital. There should be proper Financial Planning. Capital expenditure
should be properly controlled. Both over and underutilization of capital should be
avoided. The management should see that they get proper returns on the capital
which is invested in the business. If the finance is managed properly the
productiveness of the organization will increase.
6. Management factor: Productivity of organization rests on the management factors.
The management of organization should be scientific, professional, future-oriented,
sincere and competent. Managers should possess imagination, judgment skills and
willingness to take risks. They should make optimum use of the available resources
to get maximum output at the lowest cost. They should use the recent techniques of
production. They should develop better relations with employees and trade unions.
They should encourage the employees to give suggestions. They should provide a
good working environment, and should motivate employees to increase their output.
Efficient management is the most significant factor for increasing productiveness and
decreasing cost.
7. Government factor: Productivity depends on government factors. The management
should have a proper knowledge about the government rules and regulations. They
should also maintain good relations with the government.
8. Location factor: Productivity also depends on location factors such as Law and order
situation, infrastructure facilities, nearness to market, nearness to sources of raw-
materials, skilled workforce, etc.

Contingency factors affecting organizational effectiveness into following three variables:

Causal Variables

Causal variables are those independent variables that determine the course of
developments within an organization and the objectives achieved by an organization. These
causal variables include only those independent variables, which can be altered by
organization and its management. Causal variables include organization and management’s
policies, decisions, business and leadership strategies, skills and behavior.

Intervening Variables

Intervening variables according to Likert are those variables that reflect the internal state and
health of an organization. For example, loyalties, attitudes, motivations, performance goals
and perceptions of all the members and their collective capacity for effective interaction,
communication and decision-making.

End-Result Variables

End-Result variables are the dependent variables that reflect achievements of an

organization such as its productivity, costs, loss and earnings.

Inter-Relationship of Variables

The three variables such as causal, intervening and end-result ore interrelated. The inter-
relationship may be visualized as psychological process where stimuli or causal variables
acting upon the organism or intervening variables and creating certain responses or end-
result variables. The causal, intervening and end-result variables comprise a complex
network with many interdependent relationships. The causal variables are the key to
organizational effectiveness. Hence, to make organization effective, attempt should be made
to improve the causal variables, while other variables will be corrected or improved
automatically because of causal variables. Figure 19.1 shows the relationship among
various variables.

Q3) Organisation structure impacted by factors like:

Division of work:

Division of work leads to specialization. Every department of an organization should be given

specialized functions. This will raise the overall efficiency and quality of work of an
organization.

Departmentalization

Organizational structures differ in terms of departmentalization, which is broadly categorized

as either functional or divisional.

Organizations using functional structures group jobs based on similarity in functions. Such
structures may have departments such as marketing, manufacturing, finance, accounting,
human resources, and information technology. In these structures, each person serves a
specialized role and handles large volumes of transactions. For example, in a functional
structure, an employee in the marketing department may serve as an event planner,
planning promotional events for all the products of the company.
In organizations using divisional structures, departments represent the unique products,
services, customers, or geographic locations the company is serving. Thus each unique
product or service the company is producing will have its own department. Within each
department, functions such as marketing, manufacturing, and other roles are replicated. In
these structures, employees act like generalists as opposed to specialists. Instead of
performing specialized tasks, employees will be in charge of performing many different tasks
in the service of the product. For example, a marketing employee in a company with a
divisional structure may be in charge of planning promotions, coordinating relations with
advertising agencies, and planning and conducting marketing research, all for the particular
product line handled by his or her division.

In reality, many organizations are structured according to a mixture of functional and

divisional forms. For example, if the company has multiple product lines, departmentalizing
by product may increase innovativeness and reduce response times. Each of these
departments may have dedicated marketing, manufacturing, and customer service
employees serving the specific product; yet, the company may also find that centralizing
some operations and retaining the functional structure makes sense and is more cost
effective for roles such as human resources management and information technology. The
same organization may also create geographic departments if it is serving different
countries.

Each type of departmentalization has its advantages. Functional structures tend to be

effective when an organization does not have a large number of products and services
requiring special attention. When a company has a diverse product line, each product will
have unique demands, deeming divisional (or product-specific) structures more useful for
promptly addressing customer demands and anticipating market changes. Functional
structures are more effective in stable environments that are slower to change. In contrast,
organizations using product divisions are more agile and can perform better in turbulent
environments. The type of employee who will succeed under each structure is also different.
Research shows that when employees work in product divisions in turbulent environments,
because activities are diverse and complex, their performance depends on their general
mental abilities.

Hierarchy:

Another important element of a company’s structure is the number of levels it has in its
hierarchy. Keeping the size of the organization constant, tall structures have several layers
of management between frontline employees and the top level, while flat structures consist
of only a few layers. In tall structures, the number of employees reporting to each manager
tends to be smaller, resulting in greater opportunities for managers to supervise and monitor
employee activities. In contrast, flat structures involve a larger number of employees
reporting to each manager. In such a structure, managers will be relatively unable to provide
close supervision, leading to greater levels of freedom of action for each employee.

Flat organizations provide greater need satisfaction for employees and greater levels of self-
actualization. At the same time, there may be some challenges associated with flat
structures. When managers supervise a large number of employees, which is more likely to
happen in flat structures, employees experience greater levels of role ambiguity—the
confusion that results from being unsure of what is expected of a worker on the job. This is
especially a disadvantage for employees who need closer guidance from their managers.
Moreover, in a flat structure, advancement opportunities will be more limited because there
are fewer management layers. Finally, while employees report that flat structures are better
at satisfying their higher-order needs such as self-actualization, they also report that tall
structures are better at satisfying security needs of employees. Because tall structures are
typical of large and well-established companies, it is possible that when working in such
organizations employees feel a greater sense of job security.

Coordination:

A lack of coordination in an organization can decrease productivity, complicate processes

and delay the completion of tasks. In order to coordinate the efforts of an entire organization,
the organization requires a systematic integration of a process that creates accountability
within the organization.

The above variables in the role of strategy in planning for organisational structure

The degree to which a company is centralized and formalized, the number of levels in the
company hierarchy, and the type of departmentalization the company uses are key elements
of a company’s structure. These elements of structure affect the degree to which the
company is effective and innovative as well as employee attitudes and behaviours at work.
These elements come together to create mechanistic and organic structures. Mechanistic
structures are rigid and bureaucratic and help companies achieve efficiency, while organic
structures are decentralized, flexible, and aid companies in achieving innovativeness.

Q4) Organisation culture:

Every organization has its unique style of working which often contributes to its culture. The
beliefs, ideologies, principles and values of an organization form its culture. The culture of
the workplace controls the way employees behave among themselves as well as with people
outside the organization.

 The culture decides the way employees interact at their workplace. A healthy culture
encourages the employees to stay motivated and loyal towards the management.
 The culture of the workplace also goes a long way in promoting healthy competition
at the workplace. Employees try their level best to perform better than their fellow
workers and earn recognition and appreciation of the superiors. It is the culture of the
workplace which actually motivates the employees to perform.
 Every organization must have set guidelines for the employees to work
accordingly. The culture of an organization represents certain predefined policies
which guide the employees and give them a sense of direction at the workplace.
Every individual is clear about his roles and responsibilities in the organization and
know how to accomplish the tasks ahead of the deadlines.
 No two organizations can have the same work culture. It is the culture of an
organization which makes it distinct from others. The work culture goes a long way in
creating the brand image of the organization. The work culture gives an identity to the
organization. In other words, an organization is known by its culture.
 The organization culture brings all the employees on a common platform. The
employees must be treated equally and no one should feel neglected or left out at the
workplace. It is essential for the employees to adjust well in the organization culture
for them to deliver their level best.
 The work culture unites the employees who are otherwise from different back
grounds, families and have varied attitudes and mentalities. The culture gives the
employees a sense of unity at the workplace.

Certain organizations follow a culture where all the employees irrespective of their
designations have to step into the office on time. Such a culture encourages the
employees to be punctual which eventually benefits them in the long run. It is the
culture of the organization which makes the individuals a successful professional.

 Every employee is clear with his roles and responsibilities and strives hard to
accomplish the tasks within the desired time frame as per the set guidelines.
Implementation of policies is never a problem in organizations where people follow a
set culture. The new employees also try their level best to understand the work
culture and make the organization a better place to work.
  The work culture promotes healthy relationship amongst the employees. No one
treats work as a burden and moulds himself according to the culture.
 It is the culture of the organization which extracts the best out of each team member.
In a culture where management is very particular about the reporting system, the
employees however busy they are would send their reports by end of the day. No
one has to force anyone to work. The culture develops a habit in the individuals
which makes them successful at the workplace.

Q5) Group decision making is a type of participatory process in which multiple individuals
acting collectively, analyse problems or situations, consider and evaluate alternative courses
of action, and select from among the alternatives a solution or solutions. The number of
people involved in group decision-making varies greatly, but often ranges from two to seven.

Group decision making methods

There are many methods or procedures that can be used by groups. Each is designed to
improve the decision-making process in some way. Some of the more common group
decision-making methods are brainstorming, dialectical inquiry, nominal group technique,
and the Delphi technique.

Brainstorming.

Brainstorming involves group members verbally suggesting ideas or alternative courses of

action. The "brainstorming session" is usually relatively unstructured. The situation at hand is
described in as much detail as necessary so that group members have a complete
understanding of the issue or problem. The group leader or facilitator then solicits ideas from
all members of the group. Usually, the group leader or facilitator will record the ideas
presented on a flip chart or marker board. The "generation of alternatives" stage is clearly
differentiated from the "alternative evaluation" stage, as group members are not allowed to
evaluate suggestions until all ideas have been presented. Once the ideas of the group
members have been exhausted, the group members then begin the process of evaluating
the utility of the different suggestions presented. Brainstorming is a useful means by which to
generate alternatives, but does not offer much in the way of process for the evaluation of
alternatives or the selection of a proposed course of action.

One of the difficulties with brainstorming is that despite the prohibition against judging ideas
until all group members have had their say, some individuals are hesitant to propose ideas
because they fear the judgment or ridicule of other group members. In recent years, some
decision-making groups have utilized electronic brainstorming, which allows group members
to propose alternatives by means of e-mail or another electronic means, such as an online
posting board or discussion room. Members could conceivably offer their ideas
anonymously, which should increase the likelihood that individuals will offer unique and
creative ideas without fear of the harsh judgment of others.

Dialectical inquiry.

Dialectical inquiry is a group decision-making technique that focuses on ensuring full

consideration of alternatives. Essentially, it involves dividing the group into opposing sides,
which debate the advantages and disadvantages of proposed solutions or decisions. A
similar group decision-making method, devil's advocacy, requires that one member of the
group highlight the potential problems with a proposed decision. Both of these techniques
are designed to try and make sure that the group considers all possible ramifications of its
decision.

Nominal group technique.

The nominal group technique is a structured decision making process in which group
members are required to compose a comprehensive list of their ideas or proposed
alternatives in writing. The group members usually record their ideas privately. Once
finished, each group member is asked, in turn, to provide one item from their list until all
ideas or alternatives have been publicly recorded on a flip chart or marker board. Usually, at
this stage of the process verbal exchanges are limited to requests for clarification—no
evaluation or criticism of listed ideas is permitted. Once all proposals are listed publicly, the
group engages in a discussion of the listed alternatives, which ends in some form of ranking
or rating in order of preference. As with brainstorming, the prohibition against criticizing
proposals as they are presented is designed to overcome individuals' reluctance to share
their ideas. Empirical research conducted on group decision making offers some evidence
that the nominal group technique succeeds in generating a greater number of decision
alternatives that are of relatively high quality.

Delphi technique.

The Delphi technique is a group decision-making process that can be used by decision-
making groups when the individual members are in different physical locations. The
technique was developed at the Rand Corporation. The individuals in the Delphi "group" are
usually selected because of the specific knowledge or expertise of the problem they
possess. In the Delphi technique, each group member is asked to independently provide
ideas, input, and/or alternative solutions to the decision problem in successive stages. These
inputs may be provided in a variety of ways, such as e-mail, fax, or online in a discussion
room or electronic bulletin board. After each stage in the process, other group members ask
questions and alternatives are ranked or rated in some fashion. After an indefinite number of
rounds, the group eventually arrives at a consensus decision on the best course of action.

Advantages.

Group decision-making, ideally, takes advantage of the diverse strengths and expertise of its
members. By tapping the unique qualities of group members, it is possible that the group
can generate a greater number of alternatives that are of higher quality than the individual. If
a greater number of higher quality alternatives are generated, then it is likely that the group
will eventually reach a superior problem solution than the individual.

Group decision-making may also lead to a greater collective understanding of the eventual
course of action chosen, since it is possible that many affected by the decision
implementation actually had input into the decision. This may promote a sense of
"ownership" of the decision, which is likely to contribute to a greater acceptance of the
course of action selected and greater commitment on the part of the affected individuals to
make the course of action successful.

Disadvantages.

There are many potential disadvantages to group decision-making. Groups are generally
slower to arrive at decisions than individuals, so sometimes it is difficult to utilize them in
situations where decisions must be made very quickly. One of the most often cited problems
is groupthink. Groupthink occurs when individuals in a group feel pressure to conform to
what seems to be the dominant view in the group. Dissenting views of the majority opinion
are suppressed and alternative courses of action are not fully explored.

Individuals can influence the group’s decision making behaviour for example:

One individual in the group has more power or exerts more influence than others and
discourages those with differing opinions from speaking up to ensure that only their own
ideas are implemented. If members of the group are not really contributing their ideas and
perspectives, however, then the group is not getting the benefits of group decision-making.
Sometimes individual brings unique information or knowledge to the group, as well as
different perspectives on the problem, and further more different individuals with different
perspective bring a lot of thoughts that may be out of the box on the table. Individuals within
a working group come to the discussion with different types of information, and this unshared
information needs to be presented. For instance, in a meeting of a design team for a new
building, the architects, the engineers, and the customer representatives will have different
and potentially incompatible information. Thus leaders of working groups must be aware of
this problem and work hard to foster open climates that encourages information sharing and
discussion.

Sec A

Q1

a) Span of control refers to number of subordinates under the manager’s direct control.
It is basically the layers of management within the organisation. Smaller span – fewer
employees supervised by a manager – creates a tall vertical organizational structure
and Larger span – greater number of employees supervised creates a flat
organizational structure.
Span of Control has changed with change in the organisational structure as greater
the span the organisational structure is horizontal and vice versa.
Example- a manager with five direct reports has a span of control of five. To many or
to few direct reports is a good way to view how efficient an organization is as long as
it looked at in the context of the company’s organizational

b) Outsourcing is the business practice of hiring a party outside a company to perform

services and create goods that traditionally were performed in-house by the
company's own employees and staff. Outsourcing is a practice usually undertaken by
companies as a cost-cutting measure.
Though outsourcing poses potential security threat, yet organization still consider it
because
Companies use outsourcing to cut labor costs, including salaries for its personnel,
overhead, equipment, and technology.
Outsourcing is also used by companies to dial down and focus on the core aspects of
the business, spinning off the less critical operations to outside organizations.
This leads to, a number of changes in the organizational structure, mission and
vision.
Outsourcing helps:
To make the organization more profitable and integrated
To achieve efficiency and effectiveness
 To reduce unwanted and overwhelming expenses
To implement new technologies
To open to new markets on a global scale
To meet the customers’ demands in a quicker and smoother way
To be more competitive and achieve the market advantage
To raise from the crisis or survive a currently adverse economic climate
To move in an entirely new direction and enhance the share-holder value.

c) A shift in the business culture of an organization resulting from a change in the

underlying strategy and processes that the organization has used in the past. A
transformational change is designed to be organization-wide and is enacted over a
period of time.
Transformational change in technology brings upgrade to the technology used in the
organisation which help the organisation to gain a upper hand
External Environment: It constitutes the external factors or situations that influence
the organizational performance like the worldwide economy, politica/government
factors and the legislations.
Mission and Strategy: Mission is the reason for existence of the organization and
strategy constitutes the road map of action and how the organization achieves its
goals/purpose over a period of time. A written mission statement guides the
employees in their pursuit of organizational excellence.
Leadership: Leaders provide direction and guidance to the employees for behaving
and performing in expected ways.
Organizational Culture: Culture of an organization influence the behaviour of the
employees and the way the employees do things.

d) Role of intuition in the process of decision making:-

Time management and efficiency: To manage time and efficiency of the strategies at the
workplace, intuition also plays a crucial role in strategic decision-making process. In the
condition of failure of any strategy, intuition supports to the adoption of effective actions and
strategy for solving the problem. Accuracy, security and transferring: Intuition and analysis
are viable part of strategic decision making process in the form of developing accuracy,
security and transferring the data from one level to other level of management. It develops
thinking and morality among the employees of the firm that helps the strategist to take
appropriate and effective strategic decisions.