Category: Organizational Development ವ್ಯವಹಾರಿಕ ಉನ್ನತಿ

In the last blog, we discussed a very important concept – “span of control”. In today’s blog, we would discuss another concept called relevant to complexity – “Spatial Differentiation”

In the earlier blog when we took the example of IBM and understood the various dimensions of complexity, we mentioned that the offices of IBM are spread over a lot of geographical locations. 

In today’s blog, we take the example of KTA Associates which is a company in the field of Executive search. Their offices are as shown in the diagram below. 

They have 54 offices spread across 38 countries!

The core function of the company is in the area of HR services to corporate, but so the number of departments would be small. If we link it back to the blog where we discussed Henry Mintzberg’s model, we see that the operating core would be spread across continents but doing a similar kind of task. However given that the offices are spread across continents it would be difficult for people to really communicate with one another (the vocabulary used even in the same language would be different)

Thus, we could safely understand that the greater the spatial differentiation, the greater complexity.

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In the last blog, we began a discussion about vertical differentiation; we continue from there and begin our discussion about very closely knit topic – “span of control” in today’s blog.

Simply put, “span of control” would mean the number of subordinates that a manager can direct effectively. Now let’s take an example to see why this span of control becomes important to be considered when one is designing any organization. 

If I have a single person reporting to me, I would be able to spend good amount of time to ensure that he is able to perform the task the way I want him to. My time still remains constant in a day – say 8 hours out of which I spend around 4 hours discussing and building an individual, the remaining 4 hours I spend doing the other tasks that I need to. 

Now, Assume I add another person to the existing individual, so now I guide 2 people. The time I am able to devote to the guiding process is now shared by 2 people. It would ease out if these 2 people are doing the same kind of task, but if it is different, then the attention required would be higher. Imagine the scenario if we have more people – say 4, 10, 20!

There is a limit on the number of people we can effectively coordinate with – this is the ideal span of control. These people report directly to you.

If we have say an organization with 4096 employee and a span of control of 4 people, and another with span of control of 8 people then the 2 structures would look something like this.

Clearly, a taller structure enables closer monitoring of the subordinates by the superior, while the communication as shown the last blog would be taking a beating given the larger number or levels in the hierarchy. The case would be a reverse when we have a wider span of control – the communication would be better but the monitoring of the subordinates would take a longer time. 

It would be good to note that there is no clear answer – there is a trade off that has to be decided upon. In addition to the number of employee (size of the organization), one needs to also consider the nature of the job, and also the nature of the person in the position which would really define the “right” span of control.

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In an earlier blog, while discussing about the dimensions of “complexity” we did mention about “vertical differentiation”, in from this blog onwards we discuss the concept of vertical differentiation, but before that we would love to share this small picture with you which we received in one of the mail forwards.

In this simple example, we see there are just 6 levels of the hierarchy – 

CEO

|

Manager

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Department Head

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Floor Manager

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Supervisor

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Staff

And a simple message to trickle down. The message gets completely lost in the process and is sent across with a completely different meaning. Though this could be understood as an extreme case of miscommunication, there is definitely some distortion that happens at every level and more the levels more the distortion of information.

The more levels that exist between top management and the operative staff; greater the potential of communication distortion. More time is spent in coordinating the various personal and more difficult it gets for the top management to oversee the actions of the staff.

Thus simply put, the greater the vertical differentiation, the greater the complexity!

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In the earlier blog, we looked at the case of IBM to understand the various aspects of complexity. To understand the meaning of “Horizontal differentiation” we begin the journey today with a very common place concept we have hear of “division of labor”.

In ancient days we had specialized experts in their crafts whom in some cases called artisans, carpenters, etc. As late at the early part of 1900s we could see people who were very interested in the “art” building cars, getting along all the components of a car and building them. It wouldn’t be surprising given the varying skills that go into making a car – that it would have taken them anywhere between 3-6 months to prepare a single car! But today we have Toyota which has the capability of actually churning out a car every second!

Now this journey from one person “crafting” a car to the present day one car every second didn’t happen in a go. We would definitely deal with the variety of changes that have happened in the manufacturing processes sometime in the future, but what we would discuss today is the first step that happened in this direction – “division of labor”.

The craft of building a car was broken down into a series of activities, say designing the exterior, preparing the chassis, etc. The different activities when focused by an individual in a team would reduce the strain on individual building the complete car – therefore overcoming the physical limitations to a certain extent. Since a particular task is done by a specific person, it would enable the person develop a certain degree of specialization and expertise enabling to enhance the speed of operations. Efficiency creeps in due to this special focus. As the person spends time on a specific activity, he would work at easing his job by creating special inventions also which further enhances the efficiency in the long run!

As the division of labor increases, departments with a specific focus begin to be built! This is the birth of departmentalization.

In the next blog we would discuss a bit more on the concept of “specialization” that we discussed in here.

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In the last blog we took a simple example to understand the various variables that are used to understand the organization. Now we take a look back the dimensions of organization and understand the first dimension of “Complexity” in the context of an organization.

Let’s take for example sake a large organization – say IBM. 

We can check the website of the company at this link. It would be good to know a bit about the company and its history – instead of repeating a story; it would be good to check the story out here. One could learn specifically about the Indian Page at this Wikipedia link.

We could easily see that the company has its offices spread across various continents and countries – this link gives an idea about the extent to which the company has a presence globally.

We could also see that the company has different capabilities and caters to various different types of customers. It wouldn’t be easy to understand these unless we look at the following links and play with some of the combinations there- Services, Solutions, and Products.

Given that IBM is spread across various continents and offers a variety of services/products/solutions etc and managing the current number of employees it would need to have a large hierarchy to the CEO from a new joinee into the company.

In the above discussion we can classify the dimensions into 3 classes

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In the last blog, we defined a lot of terms. In today’s blog we take a hypothetical situation and try to understand this better.

ABC Pvt Ltd is a company founded by Amit and his friend Bala. The company was set up just a few months back, and both Amit and Bala are heading the company and intend to take it great heights. The basic work of the company is into manufacturing mixer grinders. They have set up a factory in Peenya Industrial area and have currently employed 4 people, all are from have an electrical diploma and one of them is the supervisor who has prior work experience. Amit works on getting new business for the company while Bala manages the day to day operations of the company. Both Bala and Amit spend around 2 hrs a day catching up on the activities of the day and taking very important decisions relating to the direction of the company.

Let us now sit back and look at the story in a bit more detail.

The number of people in the organization is 6 (including the 2 founders). The hierarchy is pretty low since there is one supervisor, to whom 3 workers report and the other aspects are taken care by the Founders. We could look at the hierarchy pictorially as follows

(A + B)

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Supervisor

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(w + w + w)

Thus we see that this simple structure enables the founders to have a very close look at the day to day operations. Since the supervisor reports directly to the founders, who take the decision about the organization there is almost negligible delay in making decisions. There are certain operational decisions which the supervisor himself can take. From this we clearly understand that the organization is having a simple structure with sufficient autonomy given to the supervisor – which also indicates that there is delegation of the activity by the founder. The nature of the work suggests that there is little difference in the activity of the workers. To enhance the speed, formalization is done away with and the flexibility is high.

Thus we see that even a simple organization like ABC Pvt Ltd could be used to understand the various variables. Now it would be an interesting part to look at your own company and make an estimate of these things!

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In the last blog, we mentioned that we would begin defining the various dimensions of a business. In today’s blog we begin this journey by defining some variable that are to be understood to really grasp the definition of detentions.

These variables are defined differently by different theorists, but what we define here is what is generally held meaning of these variables:

Administrative Component: The number of line supervisors, managers, and staff personnel relative to the total number of employees

Autonomy: The extent to which top management has to refer to certain typical decisions to a higher level of authority

Centralization: The proportion of jobs whose occupants participate in decision making and the number of areas in which they participate, or concentration of power arrangements, or an index reflecting the locus of decision making with respect do major and specific policies, the degree of information sharing between levels, and the degree of participation in long term planning

Complexity: The number of occupational specialties, the professional activity, and the professional training of employees.

Delegation of authority: The ratio of the number of specific management decisions the chief executive has delegated to the number he or she has the authority to make

Differentiation: The number of specialty functions represented in a firm or the difference in cognitive and emotional orientation amongst managers in different departments

Formalization: The extent to which am employee’s role is defined by formal documentation

Integration: The quality of the state of collaboration that exists among departments that are required to achieve unity of efforts or plan or feedback used for coordination between organizational units

Professionalism: The degree to which the employees use a professional organization as a major reference, belief in service to the public, belief in self-regulation, dedication to one’s field and autonomy.

Span of Control: The number of subordinates that an individual manager can and should supervise.

Specialization: The number of occupational specialties and the length of the training required by each or the degree to which highly specialized requirements are spelled out in formal job description for various functions

Standardization: The range of variables that is tolerated within the rules defining the jobs

Vertical Span: The number of levels in the authority hierarchy from the bottom to the top.

At this point it is pretty clear that most of the terms sound like a jargon, but it’s only through an experience of the industry and some explanation that these could be understood better. We shall make this attempt in the next few blogs before we jump to understanding the dimensions, but in many cases we would mix the 2 and highlight the point to be noted.

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In the last blog, we looked at organization and its 5 components briefly. In today’s blog we get the element of variation across organization and discuss them briefly. 

It is quite intuitive that not every organization uses all the parts; some are simple while some could be visualized as having a complex interrelation between the components. 

It is to be understood that the central purpose of any organizational structure is coordination of the work that is to be achieved. We could classify organization into 5 groups based on the coordination focus of these organizations, they are:

To understand these types of organization, we need to understand some very essential terms used in organizational design; these are also considered dimensions of organization structure. These are:

We shall deal about these in the next few blogs.

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http://somanagement.blogspot.com/2011/10/blog-post_1362.html

In the last blog, we looked at a pictorial representation of the organization as an open system. In today’s blog we look at various key sub-systems that function in an organization pictorially represented. 

We take the reference of this picture from an article by one of the leading management thinkers of our age – Henry Mintzberg. We can find the link here

An analysis of organizations of varying sizes, industries, domains, highlight 5 major components that exist in all organizations – but these vary from organization to organization. These are:

In the next few blog we look at how these 5 components change across different organizations.

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http://somanagement.blogspot.com/2011/10/blog-post_11.html

In the earlier blog, we began looking at an organization as a system and mentioned that we would continue the discussion in today’s blog.

We could pictorially represent an open system in the following diagram.

The diagram illustrates that, the organization takes inputs like – people, raw material, physical resources, finance etc and through a transformation process (indicated by the motor – motor transforms say electricity into mechanical motion) create outputs as the products and services that it provides to its clients. However, these are not the only output! And is not always positive. It could be in the form of employee satisfaction, pollution and several such secondary outputs.

We could also look at the mechanism shown in the diagram by understanding them as subsystems. The transformation process itself could consist of several sub process like, production, maintenance, management, adaptation etc. In addition to these, there is also the subsystem of boundary spanning. The Boundary spanning system looks after the exchange of information with the external environment. This subsystem plays a very critical role in exploring opportunities and might be the very source of survival for organizations starting off!

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