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  • Organization Theory – 31 (International Environment in Business)

    In the last blog, we looked at the general environment view of the organization, in today’s blog we look at a larger view – the international environment and the elements that would be part of it.
    We could visualize the international organization in the following manner:
    In the fast paced global world of today, managers cannot afford to just be limited to the general environment of an organization which generally operates within a national boundary. Today’s businesses are always getting global. We have numerous companies opening up their manufacturing set up in China, and the software giant’s their offices in India. These trends come in with their own complexity. Such international context of the organization also get along with it the numerous treaties, etc that generally rule the international business environment. Let’s understand with an example:
    Consider the Earth Summit held in Rio de Janeiro in 1992, (). Managers would need to be aware of the specific ways in which these changes might affect and are already affecting their inter-organizational network and their organization. 
    As soon as an organization decides to expand its activities beyond the boundaries of its home nation, it will interact with representatives of organizations from other nations – joint venture partners, consumer groups, tariff collecting agencies, tax authorities all these will be part of the organization’s network. Even before the organization enters international market or exchanges, it would have to face competition not just with in the international market but by firms that entre the organization’s domestic markets from abroad!
    Managers would have to broaden themselves in a way that more local aspects of the inter-organizational network are taken care of. This is pretty important and we have multiple cases where organizations ignoring such local flavors have had to pay a heavy price. In essence, organizations dealing in the international environment have to – “Think global, act local”
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  • Organization Theory – 30 (General Organizational Environment and Sectors involved)

    In the last blog, we looked at the most significant factors that affect the organizational environment in the inter-organizational network view of the environment. In today’s blog let’s look at the general environment view and the factors involved in it. 
    The general environment could be looked at as – social, cultural, legal, political, economic, technological and physical. These could be depicted in the following diagram:
    Sectors in General Organizational Environment
    • Social Sector– This involve the class structure, demographics, mobility patterns life styles, and traditional social institutions like educational system, religious practices etc.
    • Cultural Sector– This includes the issues of history, traditions, expectations for behavior, and the values of the society or the society in which the organization operates.
    • Legal Sector– This include the constitution and laws of the nations in which the organization conducts his business, as well as legal practices in each of these domains.
    • Political Sector– This describes the distribution and concentration of power and the nature of the political systems in those areas of the world in which the organization operates.
    • Economic Sector – This includes numerous markets like the labor, financial, market for goods and services. This tends to have a very powerful influence on conditions in the other sectors that we discuss here
    • Technology Sector – This provides the knowledge and information in the form of scientific developments that the organization can acquire and use to produce output (goods and services).
    • Physical Sector – This covers the nature and natural resources of a nation.
    Though for the case of understanding the environment we have divided the various sectors, in reality these are interrelated. This classification assist us reduce the complexity into a manageable unit of analysis. A manager would have to take calls on which of these sectors would be the most significant and which of these would be better classified differently. It is again a call that the manager trying to analyze the industry has to take.

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  • Organization Theory – 29 (Inter-organizational Network)

    In the last blog, we began looking at the organization in association with its environment. This is interesting since, it enables us look at the organization which is so central to our business in a larger context. In today’s blog, we look at the first angle of looking at organization in context of its environment -“inter-organizational network”. 
    It should be by this time obvious to all the readers that any organization is a member of its environment and would definitely interact with other members in the environment. One could classify the other members in the environment as Regulatory Agencies (primarily the government arms which regulate the business environment as a whole), Customer, Partners, Competitors, Special interest groups, Suppliers, Labor Unions and so on. 
    We could represent these by the following diagram:
    When we as managers look at our organization with a central focus, and in some cases skip the information from its environment. A view as shown above in the diagram, an inter-organizational view could potentially impose a threat to the practicing manager! 

    1. Managers generally tend to disregard information that tends to appear as if out of the periphery of their construction of the network
    2. This approach to looking at the organization could skew the reporting by managers to most pressing and immediate concerns! Many a times affecting the long term gains!
    3. One needs to understand that, though this model gives a more balanced view of the network – it doesn’t really translate into an organizational action plan.

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  • Organization Theory – 28

    In the earlier blog, we concluded our discussion about the various dimensions of organization structure. In our pursuit of understanding organization, it would be important to understand the concept of environment. We begin this journey of understanding the concept of environment from this blog and continue this over the next few blogs.
    Simply put, environment could be defined as something that exists outside the boundaries of an organization! 
    The following picture shows this understanding that we have!
    Surely, this definition looks vague and needs some more thought. We could better understand it when we look at it from 3 different angles
    • Inter-organizational network
    • General Environment
    • International/Global Environment
    Over the next few blogs, we will look at these and understand them better.
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  • Organization Theory – 27 (Centralization, Complexity and Formalization)

    In the earlier blog, we learnt about
    the importance of centralization and decentralization in the context
    of an organization. In today’s blog, we would discuss the relation between
    the three dimensions of organization structure – centralization, complexity
    and formalization.     
    Centralization and Complexity: When
    decisions are decentralized, there would be a lot of overhead in terms
    of coordination to ensure that the organization is in the intended direction
    towards achieving the goal. This also has an implication in terms of
    the professional training that needs to be imparted to the employees
    – this is visible highly in a small shop where the owner of the shop
    would make most of the decisions while the support staff would have
    very little decisions to make!      
    Centralization and Formalization:
    To begin with it would definitely help to understand that if we simply
    look only at the relation between these 2 terms it would be really hard
    to find a relation between centralization and formalization. It would
    become clear if we look at the kind of employees the organization has.      
    When the employee is rather unskilled
    it would be mandatory to have lot of procedures, rules and regulation
    if in such a scenario, if there is a centralized decision making or
    decentralized decision making it would only depend on the scenario in
    question.     
    If the employee is a professional,
    it would mandate that the decision making being delegated to the employee
    would act as a motivator.  It also means that the employee would
    need to enjoy a lower formalization to really act on his work!
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  • Organization Theory – 26 (Sales rep, Law suit and centralization)

    In the last blog, we looked at the decision making process, and understood the concept of centralization using the process. It would be interesting to discuss where  centralization and decentralization are going to play an important role – this is exactly what we are looking at in this blog.
    In the current context, there is usually information at the click of a button. If anything, we have an information overload! Managers or any decision maker needs to make sense out of this huge information repository. 
    Let us now take 2 different situations 
    1. A sales representative on a sales visit negotiating with a customer
    2. A law suite on an organization

    How should the decision making be placed in these situations?
    In the first case, a quick on the spot decision is the best response to this scenario. Taking time to go back to the sale person’s  manager and then making the decision on price could mean loosing the customer! In such a situation it is obvious that the decision has to be decentralized.
    In the second case, when a law suit is filed against the organization. The response the organization has to give and the way it reacts in every one of its activities mean that the situation has be controlled. This mandates a single point decision making instead of a denaturalized decision making process!
    In many a situation, it is pretty interesting to note that having a decentralized decision making process would also result in a means to motivate the organization.
    It has to be noted that there is no one right choice for an organization! It is extremely situational choice that the organization needs to take.
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  • Organization Theory – 25 (Decision Making Process)


    In the last blog, we asked question related to centralization and concluded with a more comprehensive definition of centralization. In today’s blog, we look at centralization more as a decision making process and understand it better – this in fact answers the question of “degree of centralization”.

    We defined management to be synonymous to decision making early in our blog series. We could look at the process of decision making as represented in the diagram below (more relevant to a larger organization):

    This picture is adapted from the T.T Paterson’s Management Theory Book 

    As shown in the diagram, a decision making process begins with a situation, where a decision needs to be taken. The necessary relevant information is got in relating to the situation, depending on what can be done to influence the situation, this information is interpreted and various advices regarding what is to be done is provided. Finally a choice is made out of these advices which define what is intended to be done. This is then authorized to an individual who would then execute the choice into action.

    It is the decision choice that establishes what the decision maker desires or intends to have done. If the decision making has all the different stages shown in the above figure done by the decision maker, it would be highly centralized! If the decision maker comes at the stage of making a choice alone, then it is what we could assume to be highly decentralized decision making.

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  • Organization Theory – 24

    Continuing from our last blog on centralization where begun questioning the common understanding of centralization, we discuss a few more questions here and finally define centralization.
    A couple of blogs earlier, we had discussed and defined the concept of procedures/policies etc? It would be interesting to relate these with centralization and ask the question – “Can policies override decentralization?” Generally, the decision making at the first level of workers is directed by a policy which provides a guideline towards making decisions. So given that these policies is it real decentralization?
    As we defined centralization we said it would stand for “concentration at a single point” – does this single point mean – a single person, or a unit, or a level? For the operational employees it wouldn’t matter at what level the decision is being made – is it one level above them of some 5 levels above them! 
    Will having an information processing system closely monitor the decentralization amount to centralization of control?
    If the operational level workers are able to control information does this result in decentralization if the process is actually centralized decision making?
    Taking all these into considerations, we can now define centralization as – “the degree to which the formal authority to make discretionary choices is concentrated in an individual, unit or level (usually high in the organization), thus permitting employees lower in the organization minimum input into the work.”
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  • Organization Theory 23

    In the last blog, we looked at the video of assembly line production of the T-model of ford and attempted understanding the relation between formalization and complexity. In today’s blog we begin our discussion about centralization – another dimension of the organizational structure, but we shall approach this discussion on centralization slightly differently given the issues we have to discuss.
    It is common knowledge that in a centralixed decision making process, the decisions are concentrated at a single point in an organization – Right? and this could easily be followed by an undersanding that high concentration implies high centralization and vice-versa. Given this simplicity in understanding the concept as a whole, it would be more comprehensive if we talk about the issues that arise in such a simple understanding of centralization!
    Lets take for example (an assumption in this case if not real):
    Your role say is at a Television channel and you are incharge of identifying the successful and unsuccessful prime time programs. Your boss generally take along you into many meeting that only he would otherwise attend alone. The boss rarely takes any major decision with out your inputs. 
    If you look at the scenario above, clearly your role doesnt give you any formal authority to takse such decisions, but informally you are affecting the decisions being made. This arises an interesting question in understanding centralization – “Should we observer the formal authroity or the informal one?”
    To get an answer to the question, lets continue understanding other challenges that the way we defined centralization has and then attempt a more comprehensive one.
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  • ಸಾಂಸ್ಥಿಕ ಸಿದ್ಧಾಂತ – ೭

    ಈ ಹಿಂದಿನ ಅಂಕಣದಲ್ಲಿ ನಾವು ವ್ಯವಹಾರ ಸಂಸ್ಥೆಯ ವಿವಿಧ ಆಯಾಮಗಳ ಬಗ್ಗೆ ಚರ್ಚಿಸುವೆವು ಎಂದು ಹೇಳಿದ್ದೆವು. ಇಂದಿನ ಅಂಕಣದಲ್ಲಿ ನಾವು ಕೆಲವೊಂದು ವಿಚಾರಗಳ (variables) ಬಗ್ಗೆ ಅರಿಯುವ ಮೂಲಕ ಆಯಾಮಗಳನ್ನು ಅರಿಯಲು ಮುಂದುವರಿಯೋಣ.
     
     ಈ variables ಗಳನ್ನು ಅನೇಕ ವಿಧಗಳಲ್ಲಿ ವಿವಿಧ ವ್ಯಾಖ್ಯಾನಕಾರರು ವ್ಯಾಖ್ಯಾನ ಮಾಡಿರುವರು.ನಾವು ಸಾಮಾನ್ಯವಾಗಿ ಬಳಕೆಯಲ್ಲಿರುವ ವ್ಯಾಖ್ಯಾನವನ್ನುಬಳಸೋಣ.
    Administrative Component: ಒಟ್ಟು ಉದ್ಯೋಗಿಗಳ ಸಂಖ್ಯೆಯಲ್ಲಿ ಲೈನ್ ಸೂಪರ್ ವೈಸರ್, ಮ್ಯಾನೇಜರ್, ಸ್ಟಾಫ್ ವ್ಯಕ್ತಿಗಳು ಇರುವ ಸಂಖ್ಯೆ.
    Autonomy: ಕೆಲವೊಂದು ಬಹಳ ಪ್ರಾಮುಖ್ಯವಾದ ನಿರ್ಧಾರಗಳನ್ನು ತೆಗೆದುಕೊಳ್ಳಲು ಕಂಪನಿಯ ಉನ್ನತ ಮ್ಯಾನೇಜ್ಮೆಂಟ್ ತಲುಪಬೇಕಾದ ಅಧಿಕಾರಿ/ಗಳು.
    Centralization: ನಿರ್ಧಾರ ತೆಗೆದುಕೊಳ್ಳುವ ಪಾಲ್ಗೊಳ್ಳುವ ವ್ಯಕ್ತಿಗಳ ಕೆಲಸಗಳ ಒಂದು ಭಾಗ ಮತ್ತು ಪಾಲ್ಗೊಳ್ಳುವ ಕ್ಷೇತ್ರಗಳ ಸಂಖ್ಯೆ, ಅಥವಾ ಅಧಿಕಾರ ವ್ಯವಸ್ಥೆಯ ಏಕತ್ರತೆ, ಅಥವಾ ಪ್ರಮುಖ ಮತ್ತು ವಿಶೇಷವಾದ ರೀತಿ ನಿಯಮಾವಳಿಗಳನ್ನು ರೂಪಿಸಲು ನಿರ್ಧಾರ ತೆಗೆದು ಕೊಳ್ಳುವ ಕೇಂದ್ರ ಬಿಂದು, ಅಧಿಕಾರದ ವಿವಿಧ ಸ್ತರಗಳಲ್ಲಿ ಮಾಹಿತಿ ವಿನಿಮಯ ಮಾಡಿಕೊಳ್ಳುವ ಮಟ್ಟ, ಮತ್ತು ದೀರ್ಘ ಕಾಲಿನ ಯೋಜನೆಗಳನ್ನು ರೂಪಿಸುವಲ್ಲಿ ಪಾಲ್ಗೊಳ್ಳುವ ಮಟ್ಟ.
    Complexity: ಉದ್ಯೋಗಿಗಳ ವಿಶೇಷತೆಗಳ, ಔದ್ಯೋಗಿಕ ಚಟುವಟಿಕೆಗಳ ಮತ್ತು ಔದ್ಯೋಗಿಕ ತರಬೇತಿಗಳ ಸಂಖ್ಯೆ.
    Delegation of authority: ನಿರ್ಧಿಷ್ಟವಾದ ಮ್ಯಾನೇಜ್ಮೆಂಟ್ ನಿರ್ಧಾರಗಳನ್ನು ಚೀಫ್ ಎಕ್ಸಿಕುಟಿವ್ ಅಧಿಕಾರಿ ನೀಡಿದ್ದು ಮತ್ತು ಅವರಿಗೆ ಇರುವ ಒಟ್ಟು ನಿರ್ಧಾರ ಮಾಡಲು ಅಧಿಕಾರವಿರುವ ನಿರ್ಧಾರಗಳ ಸಂಖ್ಯೆ.
    Differentiation: ಕಂಪನಿಯಲ್ಲಿರುವ ವಿವಿಧ ವಿಶೇಷತೆಗಳನ್ನು ಹೊಂದಿದ ವಿಭಾಗಗಳು ಅಥವಾ ವಿವಿಧ ಡಿಪಾರ್ಟ್ಮೆಂಟ್ ಗಳ ಮ್ಯಾನೇಜರ್ ಗಳ ನಡುವೆ ಇರುವ ಯೋಚನಾ ಲಹರಿಯ ಮತ್ತು ಭಾವನೆಗಳ ಭೇದ.
    Formalization: ಒಬ್ಬ ಉದ್ಯೋಗಿಯ ಕಾರ್ಯದ ಹೊಣೆಗಾರಿಕೆಯನ್ನು ಔಪಚಾರಿಕ ದಾಖಲೆಯಲ್ಲಿ ಬರೆಯುವ ಗರಿಷ್ಟ ಮಟ್ಟ.
    Integration: ಒಂದೆಡೆಗೆ ಕೇಂದ್ರವಾದ ಶ್ರಮವನ್ನು ಹೊಂದಲು ಅಥವಾ ಯೋಜನೆ ಅಥವಾ ಒಮ್ಮತದ ಅಭಿಪ್ರಾಯ ಹೇಳಲು  ಡಿಪಾರ್ಟ್ಮೆಂಟ್ ಗಳ ನಡುವೆ ಇರುವ ಒಟ್ಟುಗೂಡಿ ಸಾಮರಸ್ಯದಿಂದ ಕೆಲಸ ಮಾಡುವ ಗುಣಮಟ್ಟ. 
    Professionalism: ಉದ್ಯೋಗಿಗಳು ಒಂದು ವೃತ್ತಿಪರ ಸಂಸ್ಥೆಯನ್ನು ಮಾನದಂಡವಾಗಿ ಎಷ್ಟು ಉಪಯೋಗಿಸಿಕೊಂಡು, ಸಾರ್ವಜನಿಕರಿಗೆ ಸೇವೆಯನ್ನು ನೀಡಬೇಕೆಂದು, ಸ್ವ ಶಿಷ್ಟಾಚಾರ ಪಾಲಿಸಬೇಕೆಂದು, ತತ್ಪರತೆ ಯನ್ನು ಒಂದು ಕಾರ್ಯದಲ್ಲಿ ಹೊಂದಿರಬೇಕೆಂದು ನಂಬಿರುವರೋ ಅದು.
    Span of Control: ಪ್ರತ್ಯೇಕವಾಗಿ ಒಬ್ಬೊಬ್ಬ ಮ್ಯಾನೇಜರ್ ಹೊಂದಬಹುದಾದ ಮತ್ತು ಅಧಿಕಾರ ಚಲಾಯಿಸಬಹುದಾದ ಅವನ/ಳ ಕೆಳಗಿನ ಉದ್ಯೋಗಿಗಳು.
    Specialization:  ಔದ್ಯೋಗಿಕ ವಿಶೇಷತೆಗಳ ಸಂಖ್ಯೆ ಮತ್ತು ಅವುಗಳನ್ನು ತರಬೇತಿ ನೀಡಲು ಬೇಕಾಗುವ ಸಮಯ ಮತ್ತು ಗಹನತೆ ಅಥವಾ ಒಂದು ಉದ್ಯೋಗದ ವಿಶ್ಲೇಷಣೆಯಲ್ಲಿ ಒಂದು ಔದ್ಯೋಗಿಕ ವಿಶೇಷತೆಯ ಅಗತ್ಯತೆಯನ್ನು ಹೇಳಿರುವ ಆಳ.
    Standardization: ಒಂದು ಕೆಲಸದಲ್ಲಿ ಸಹಿಸಬಹುದಾದ variables ಗಳ ಮಿತಿಗಳು.
    Vertical Span: ಸಂಸ್ಥೆಯ ಕೆಳಗಿನ ಹಂತದಿಂದ ಮೇಲಿನ ಹಂತದ ವರೆಗೆ ವಿವಿಧ ಸ್ಥರಗಳಲ್ಲಿರುವ ಅಧಿಕಾರದ ಹಂತಗಳು.
    ಇವುಗಳನ್ನು ನೋಡಿದಾಗ ಸಹಜವಾಗಿ ಇದೊಂದು ಬ್ರಹ್ಮ ವಿದ್ಯೆಯೆಂದು ಅನ್ನಿಸಿರಬಹುದು. ಆದರೆ ಉದ್ಯಮಗಳಲ್ಲಿನ   ಅನುಭವ ಮತ್ತು ಸ್ವಲ್ಪ ವಿವರಣೆಯ ಮೂಲಕ ಇದನ್ನು ಸರಿಯಾಗಿ ಅರ್ಥ ಮಾಡಿಕೊಳ್ಳಬಹುದು. ಇದೆ ಪ್ರಯತ್ನವನ್ನು ನಾವು ಮುಂದಿನ ಅಂಕಣಗಳಲ್ಲಿ ಆಯಾಮಗಳ ಬಗ್ಗೆ ವಿವರಿಸುವ ಮೊದಲು ಮುಂದುವರಿಸುವೆವು.ಆದರೆ ಹೆಚ್ಚಿನ ಕಡೆಗಳಲ್ಲಿ ಎರಡು ಅಂಶಗಳನ್ನು ನಾವು ಒಟ್ಟು ಸೇರಿಸಿ ಮುಖ್ಯಾಂಶವನ್ನು ಗಮನಿಸಬೇಕು. 
    ಆಂಗ್ಲ ಅಂಕಣ:
    http://somanagement.blogspot.com/2011/09/organization-theory-7.html