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  • Integration

    In the last  byte, we looked at complexity and the relationship the different differentiation. In today’s byte, we look at integration.

    Integration refers to the process of coordinating the different parts of an organization.
     
    The purpose of any integration mechanisms are designed to achieve unity among individuals and groups in various jobs, departments, and divisions in the accomplishments of organizational goals and tasks.
     
    One could understand the role of integration to be that of maintaining a equilibrium in the dynamic state of affairs – a condition in which all the parts of the organization are inter-related and balanced.
     
    We could achieve this through two broad ways:
    1. Vertical linkages
    2. Horizontal linkages
    Vertical linkages are used to integrate activities up and down the organization’s chain of command. Horizontal integration mechanisms provide the communication and coordination that is necessary for linkages across jobs and departments in the organization.

  • Complexity and Differentiation

    In the last byte, we discussed about spacial differentiation. In today’s byte, we look at the the different differentiation in combination. 

    Horizontal, Vertical and Spacial Differentiation indicates the amount of width, height and breadth an organizational structure needs. A lot of distribution on any one of these dimensions doesnt necessarily mean that it is distributed on all other dimensions as well. 
     
    As an example Imagine an university – one could find a very great horizontal differentiation, but relatively little vertical differentiation. On the other hand, consider the case of a large company like Coca-Cola: It would have a great level on all three dimensions.
     
    What one needs to remember is that the more structurally differentiated the organization is, the more complex it would be.
     
    We have used the term “complexity” a  lot. Complexity refers to the number of activities, subunits or subsystems with the organization. It has been suggested that organization’s complexity should mirror the complexity of the environment.
     
    As the complexity of an organization increases, its need for mechanisms to link and coordinate the different parts of the organization increases phenomenally. Failure to coordinate effectively could lead the orientation towards the organization goal to disappear
     
    With the need for linkage and coordination establish, we shall next move towards understanding integration.

  • Spacial Differentiation

    In the last byte, we looked at vertical differentiation. In today’s byte, we look at spacial differentiation.

    Spacial Differentiation refers to the geographic dispersion of an organizational’s office, plants and personnel. Increasing the number of locations increases the complexity of organizatgional design, but this may be necessary for organizational goal achievement or organizational protection.
     
    An implication of this suggestion would mean that organizations intending to open their branch in another company could do it by creating a subsidiary with partial ownership by the main organization while could be managed by the citizen of the country.
     
    This could also offer the organization political and legal advantages in a country because it could be identified as a local company. Distance is as important as political and legal issues in making spacial differentiation decisions.
     
    In the next byte, we continue the discussion on the various differentiations.

  • Vertical Differentiation

    In the last byte, we discussed about horizontal differentiation and specialization. In today’s byte, we look at Vertical Differentiation. 

    Vertical Differentiation is the difference in authority and responsibility in the organizational hierarchy. Two broad categories could be thought off in vertical differentiation
    1. Tall, Narrow organization
    2. Flat, Wide organization
    Tall, narrow organizations have greater vertical differentiation while flat, wide organization have lesser vertical differentiation.
     
    Two components help determine the height of the organization – the level of horizontal differentiation and the span of control.
     
    Tall structures are often characterized by closer supervision and tighter control. This also increases communication overheads as the message has to pass through multiple layers. Flat structures on the other hand have simpler communication but have reduced opportunities for promotion.
     
    The degree of vertical differentiation affects organizational effectiveness – but one would need to consider organizational size, job types, skills, employee’s personal characteristics, degrees of freedom etc when determining organizational effectiveness.
     
    Note: Span of control refers to the number of subordinates a manager can and should supervise.

  • Horizontal Differentiation

    In the last byte,
    we looked at the various orientations that differentiate different
    tasks and the various types there in. In today’s byte, we look the
    horizontal differentiation.

    Horizontal
    differentiation refers to the degree of differentiation between
    organizational subunits and is based on employee’s specialized
    knowledge, education, or training. An example of the above could be two
    university professors who teach specialized subjects in different
    academic departments are subject to horizontal differentiation.
    Horizontal differentiation increases with specialization and
    departmentalization.
     
    Specialization
    refers to the particular grouping of activities performed by an
    individual. The degree of specialization or the division of labor in the
    organization gives an indication of how much training is needed, what
    the scope of jobs, what individual characteristics are needed for job
    holders etc
     
    It
    is interesting to note that as specialization in a subject increases, a
    specialized vocabulary also develops eg. “OB” would mean organizational
    behavior to the professors of management and possibly “obstetrics” to
    the professors in medicine.
     
    The
    more specialized the jobs within an organization the more departments
    are differentiated within that organization (i.e. greater the
    departmentalization). Departmentalization can be by function, product,
    service, client, geography, process, or some combination of these.

  • Running Lean – Ash Maurya

    The lean-start up movement has taken pace all over the word for its ability to focus attention on getting to build a functioning business at the expense of least resources. Numerous people have talked about the Lean Start up movement for quite some time – Ash Maurya seems to have given the closest to reality description of what the practical application of the lean means would come up to be.


    For all those who have read Eric Ries – Lean Start up; and felt there is still a lot that they felt required explanation of – this book is definitely the go to book. It isn’t a very hard read and given that Ash takes through his case study of CloudFire – it is definitely engaging and easy to relate.

     A quick read and am sure very easy to relate if you are looking for answers in your entrepreneurial pursuit. – Go get this book and get though the initial working business model.

    However, I still find the approach of lean requires you to work on the boundaries of your rationality constantly to keep a track of what new customer segments would work out best for you – even the story of CloudFire towards the end indicates that while the method is well illustrated the pivot to a new opportunity required one to find its existence and then work on the same! 

    That said, lean start up is still a  good approach to start your venture and grow with a systematic learning focus.

  • Dimensions of Differentiation

    In the last byte, we looked at the role an organization chart plays in designing organization structure. In today’s byte, we look at differentiation in greater detail.
     
    As mentioned earlier, differentiation is the process of deciding how to divide the work in an organization. It ensures that all essential organizational tasks are assigned to one or more jobs and that the tasks receive the attention they need.
     
    There are 4 dimensions of differentiation that have to be considered in designing organization:
    1. Manager’s goal orientation
    2. Time Orientation
    3. Interpersonal Orientation
    4. Formality of structure
    Differentiation could be further classified into three different forms:
    • Horizontal
    • Vertical
    • Spatial

  • The Organizational Chart

    In the last byte, we looked at the definition of differentiation and integration and its relation to the organizational design and structure. In today’s byte, we continue the discussion further on organizational structure – specifically a brief on organizational chart.
     
    As mentioned earlier, organizational chart is a visible representation of the organization’s stucture and its underlying components. Most organizations have a series of organizational charts showing reporting relationships throughout the system. Some of the components represented in an organizational structure are:

    • Formal likes of authority and reponsibility
    • Formal systems of communication, coordination and integartions.
    Through the first point listed above, the organizational structure designates reporting relationships in the way jobs and departments are grouped.
     
    The second point mentioned above summarizes the fact that, organizational structure designates the expected patterns of formal interaction among employees.

  • Differentiation and Integration:Definition

    In the last byte, we began our discussion on the larger concept of organizational design and structure. In today’s byte, we define the concepts of differentiation and integration.

    Definitions:
    • Differentiation is the process of deciding how to divide the work in an organization
    • Integration is the process of coordinating the different parts of an organization
    Differentiation is the design process of breaking the organizational goal into tasks and integration is the design process of linking the tasks together to forma a structure that supports goal accomplishments.
     
    These two processes are really the key to designing the organization successfully. Organization structure helps prevent chaos through an orderly set of reporting relationships and communication challenges.
     
    An understanding of the key design processes and organizational structure helps an individual understand the larger working environment and may prevent confusion in the organization.This organizational structure and the underlying components are represented through an organizational chart.

  • Organizational Design & Structure

    In the last byte, we looked at the managerial implications of the discussion on work/task design. In today’s byte, we begin our discussion on Organization Design.

    Organization design refers to the process of constructing and adjusting an organization’s structure to achieve its goals.
     
    The starting point of this design process is the organization’s goals – these goals are then broken down into tasks as the basis for jobs. These jobs are grouped into departments [Recollect the earlier discussion on the business functions here] and these departments are linked into forming the organizational structure.

    Going ahead we shall discuss about:
    1. Design Processes of Differentiation and Integration
    2. Design dimensions of an organizational structure
    3. Structural Configurations of organizations
    4. Size, technology, environment, strategy and goal – their inter relations
    5. Forces shaping today’s organization