Appunti Business Organization - EV

BUSINESS ORGANIZATION

LESSON 1

What is an organization?

Is a social organism that enables an activity system.

How can we analyze an organization as an organism?

Anatomy

Ecology Survival

Operating

Mechanism

Physiology

How can we analyze an organization as a social organism?

Anatomy

Ecology Mechanism

Physiology

The meaning of Organization

As a synonym for “company”

→ As a synonym for “one of the functional areas”

→ As a synonym for “one of the managerial activities”

→ Like a set of “organizational variables”

→ 1

The analysis and design of the organizational variables can be carried out on different levels:

macro-organizational or managerial: it is the organization of top managerial positions,

→ especially, CEO, Board members

meso – organizational or middle management: it is the organization of business sub-systems,

→ especially business units, functional areas, processes, etc.

micro-organization or executive: it is the organization of individual offices, departments,

→ laboratories, workplaces, especially at the practical level.

Organizational theories and approaches

There are numerous and multidisciplinary theories that study the organization. They began in the late

nineteenth century with the scientific management (or Taylorism).

A modern, and - at the same time – consolidated approach, which is typical of management studies, is:

CONTINGENCY MODEL.

In the past, they had great resonance with other approaches, characterized by operational orientation

and problem solving, including the following:

Taylorism Human Relations and

Motivational Theories

It formulates general

→ It emphasizes the human

→

organizational rules, considered component, the role of “groups”

universally valid and the informal organization

It advocated hierarchy and

→ It affirms the need to motivate

→

functional specialization individuals to share

It subordinates the “human”

→ organizational decisions.

component to the “technical” one 2

Taylorism:

Hierarchy order:

scalar principle

→ unitary control

→ line & staff

→ the exception principle and delegation

→ balancing authority and accountability

→

Labor specialization:

by department (marketing, production, administration, etc.)

→ specific tasks

→

Management activities:

planning, management control system, leadership, organization, employee motivation.

→

Motivational theories:

Needs in hierarchical order:

physiological

→ safety

→ belonging

→ self-esteem

→ self-realization

→

Policies/tools to satisfy needs:

factors as salary, safety and hygiene at work, etc.

→ motivational factors (recognition of results, job satisfaction, involvement, team spirit, etc.)

→

Contingency Approach:

The organzation has to be analyzed and designed in strict compliance with “contingency” variables:

external environment

→ trade and cultural associations

→ technologies

→ institutional variables

→ business strategy

→

There are no best organizational choices. There are different options: the company must be like a

tailor and adapt its organization to company needs.

Business world in the 21st century

Many organizations today have to face phenomena that were insignificant – sometimes unknown –

many years ago:

global competition and globalization of economic-financial events

→ competitive advantages based on the “differentiation” of products

→ management of the “diversity” of the labor force

→ development and change of inter-firm relations

→ tumultous development of ICT

→ absolute importance of “knowledge”

→ business ethics and social responsibilities of companies

→ process of large scale financial integration.

→ 3

A correct forma mentis in managerial topics can be summarized as follows:

1. few universally valid principles

2. on the other hand, it is necessary to apply several models/organizational principles depending

on different situations (“contingencies”)

3. based on previous models it is possible to tailor “the suit” that the company needs

4. “flexibility” logic and ability to ”change”.

Every organized human activity gives rise to two fundamental and opposing requirements: the

division of labor into various tasks to be performed and the coordination of these tasks to accomplish

the activity.

The structure of an organization can be defined simply as the sum total of the ways in which it

divides its labor into distinct tasks and then achieves coordination among them.

Five coordinating mechanism seem to explain the fundamental ways in which organizations

coordinate their work: mutual adjustment, direct supervision, standardization of work process,

standardization of outputs, and standardization of worker skills.

These should be considered the most basic elements of structure, the glue that holds organizations

together.

MUTUAL ADJUSTMENT: mutual adjustment achieves the coordination of work by the simple

→ process of informal communication. Under mutual adjustment, control of the work rests in the

hands of the doers. Because it is such a simple coordinating mechanism, mutual adjustment is

naturally used in the very simplest of organizations: for example, by two people is a canoe of a

few in a pottery studio. It is also used in the most complicates, because, as we shall see later, it

is the only one that works under extremely difficult circumstances.

DIRECT SUPERVISION: as an organization outgrows its simples state- more than five or six

→ people at work in a pottery studio, fifteen people paddling a war canoe – it tends to turn to a

second coordinating mechanism. Direct supervision achieves coordination by having one

individual take responsibility for the work of others, issuing instructions to them and

monitoring their actions. In effect, one brain coordinates several hands, as in the case of the

supervision of the pottery studio or the caller of the stroke in the war canoe.

STANDARDIZATION: work can also be coordinated without mutual adjustment or direct

→ supervision. It can be standardised: “the coordination of parts is incorporated in the program

when it is established, and the need for continuing communication is correspondingly

reduces”. Coordination is achieved on the drawing board, so to speak, before the work is

undertaken.

STANDARDIZATION OF WORK PROCESSES: Work process are standardized when the contents

→ of the work are specified, or programmed. An example that comes to mind involves the

assembly instructions provided with a child’s toy. Here, the manufacturer in effect

standardized the work process of the parent.

STANDARDIZATION OF OUTPUTS: outputs are standardized when the results of the work, for

→ example the dimensions of the product or the performance, are specified. Taxi drivers are not

told how to drive or what route to take. They are merely informed where to deliver their fares.

With output standardised, the interfaces among tasks are predetermined, as in the book

bindery which know that the ages it receives form one place will fit perfectly into the covers it

receive from another.

STANDARDIZATION OF SKILLS: skills and knowledge are standardised when the king of