ORGANIZATIONAL THEORY, DESIGN AND DEVELOPMENT UNIT I ORGANIZATION & ITS ENVIRONMENT

Meaning : an organized group of people, structured and managed with a particular purpose, to meet a need or to pursue collective goals such as a business or government department. Definition: According to Gary Johns, "Organizations are social inventions for accomplishing goals through group efforts". Need For Existence 1) To Increase Specialization and Division of Labor Specialization refers to the particular grouping of activities performed by an individual Specialization can be achieved in one of the following two ways: Functional Specialization Social Specialization Functional Specialization: jobs are broken-down into simple and repetitive tasks Also known as division of labor creates high substitutability among employees and facilitates their easy replacement by management.

Social Specialization: If individuals are specialized, rather than their work professionals who hold skills that cannot be readily routinized Eg: civil engineers, nuclear physicists, and registered nurses. Increase in specialization creates complexity Division of labor: important in organization on following two grounds highly sophisticated and complex jobs Limitations of knowledge Efficiency. http://study.com/academy/lesson/division-of-work-in-management-definition-lesson-quiz.html To Use Large-Scale Technology Advantage of Economies of Scale & Scope gained Eco of scale is long run – advantage in cost Eco of scope – learning by doing, and cost advantage Both can be achieved - organization can design an automated production line to produce several different types of products simultaneously.

To Manage External Environment: Not only PESTEL resources to develop specialists for complex environment create more value for the organizations To Economize on Transaction Costs cost incurred in making-an economic exchange Search and information: Finding products and appropriate suppliers. Bargaining and decision-making: Negotiating and establishing the agreement. Policing and enforcement: Ensuring the other person conforms Organizations act as 'trust boundaries - extend boundaries to customers & supplier To Exert Power and Control Power is defined as the capacity to influence Capacity may be evoked or remain dormant Influence may turn out successful or unsuccessful Successful influence is control These five factors explain why often more value can be created when people work together, coordinating their actions in an organized setting, than they work alone. Over a time stability created by an organization provides a setting in where org & its members can increase their skills and capabilities, and the ability of the organization to create value increases by leaps and bounds. Behavioral control refers to facts that show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. http://changingminds.org/explanations/trust/transaction_cost.htm

Organizational Effectiveness : extent to which an organization achieves its goals with the given resources and means. The level of output an organization achieves with its limited resources determines its efficiency, and the extent to which it is successful in doing what it set out to do determine its effectiveness. Eg: ROI 10% next yr. According to Price, "Organizational effectiveness is the degree of achievement of multiple goals". Conclusion can’t be made on just one or a few measures Understanding the level of organizational effectiveness is important check-in to see -internal procedures are meeting an initial vision Idea about of the company's strengths to investors, employees etc.. highlights areas of ineffectiveness that can be the focus of improvements

Creation of Value : Value creation takes place at three stages input, conversion, and output. Inputs - HR, info and knowledge, raw materials, money and capital. Conversion - Use of HR and tech to transform input to output Output -finished goods and services to Eg: McDonalds

MEASURING ORGANISATIONAL EFFECTIVENESS Goals to be set to measure effectiveness 1.External resource approach A method managers use to evaluate how effectively an organization manages and controls Its external environment • Suppliers • Customers • Competitors • government 2.Internal systems approach A method that allows managers to evaluate how effectively an organization functions and operates • Structure • culture • Flexibility • Co-ordination • Motivation 3.Technical approach A method managers use to evaluate how efficiently an organization can convert some fixed amount of organizational resources into finished goods and services • Technical effectiveness is measured in terms of productivity and efficiency (output: input) • Process • technology EXTERNAL RESOURCE APPROACH INTERNAL SYSTEMS APPROACH TECHNICAL APPROACH

HR policies- key elements in providing workplace structure and guidelines for the most effective use of human capital. essential HR responsibilities design policies that serve the interests of the company and its employees The implications for HR policies mean utilizing human capital the right way can result in employee engagement, job satisfaction, and most importantly, an impressive bottom line. Recruitment & Selection Employment specialists – frame policies first opportunity to demonstrate its commitment to equal opportunity Fundamental to creating a recruitment and selection policy essential to building a productive workforce HR Implications

Training and Development training for skills improvement, professional development and leadership training important for demonstrating company interest in employees' developmental needs preparing existing leadership for taking on more responsible and higher-level positions company benefits - enhances existing workplace skills - higher productivity Workplace Safety Safety managers guidelines for operating complex machinery to handling incidents of workplace violence. strict guidance for workplace safety states that the company has a vested interested in its human capital. Performance Management key elements in driving organizational success establish a platform for recognizing employee contributions Absence of effective and consistent policies - experience low productivity and job satisfaction, along with high turnover rates.