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

2. 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.

3. 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.
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.

4. 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.

5. 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

6. 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

7. 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

9. 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

10. 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.