Organisational Theory and Design

Flexible · Affordable · Accessible

the people’s university

BMG 320/03 Organisational Theory and Design

Flexible · Affordable · Accessible

the people’s university

Unit 1

INTRODUCTION TO ORGANISATION

the people’s university

Flexible · Affordable · Accessible

1.1 The Evolution of Organisation Theory and Design

the people’s university

Flexible · Affordable · Accessible

A brief history lesson…

the people’s university

Flexible · Affordable · Accessible

1.1 The Evolution of Organisation Theory and Design

• As economies moved away the agriculture age to the industrial age, it required changes in how people and production were managed.

• Similarly, now as factories become fully automated, artificial intelligence replacing humans in many areas and the internet breaking down communication barriers, new ways of structuring and managing organisations are emerging

the people’s university

Flexible · Affordable · Accessible

Two organisation approach

the people’s university

Flexible · Affordable · Accessible

Organisational Changes

Some of the changes that are taking place: • More horizontal in structure • Employees are being empowered • Greater sharing of information which leads

to better decision making • Greater collaboration between companies

the people’s university

Flexible · Affordable · Accessible

1.2 Organisational Configuration: Mintzberg’s Organisational Framework

the people’s university

Flexible · Affordable · Accessible

Mintzberg’s Organisational Framework

Technical Core • The technical core includes

people who do the basic work of the organisation.

• This part actually produces the product and service outputs of the organisation.

• This is where the primary transformation from inputs to outputs takes place

Technical Support • The technical support function

helps the organisation adapt to the environment.

• Technical support is responsible for creating innovations and helping the organisation change and adapt.

the people’s university

Flexible · Affordable · Accessible

Mintzberg’s Organisational Framework

Administrative Support • The administrative support

function is responsible for the smooth operation and upkeep of the organisation.

• This includes human resource activities as well as maintenance activities such as cleaning of buildings and service and repair of machines

Management • Management is a distinct function,

responsible for directing and coordinating other parts of the organisation.

• Top management provides direction, planning, strategy, goals, and policies for the entire organisation or major divisions.

• Middle management is responsible for implementation and coordination at the departmental level. In traditional organisations, middle managers are responsible for mediating between top management and the technical core

the people’s university

Flexible · Affordable · Accessible

1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types

• In real-life organizations, the five parts are interrelated and often serve more

• than one function. For example, managers coordinate and direct parts of the organization, but they may also be involved in administrative and technical support.

• Mintzberg proposed that the five parts could fit together in five basic types of

Organization.

The five configurations are: • entrepreneurial structure • machine bureaucracy • professional bureaucracy • diversified form, and • adhocracy.

the people’s university

Flexible · Affordable · Accessible

1.3 Organisational Configuration: Mintzberg’s Five Organsationtion Types

the people’s university

Flexible · Affordable · Accessible

1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types

Entrepreneurial Structure • A new, small start-up company • It consists mainly of a top manager

and workers in the technical core • The organisation is managed and

coordinated by direct supervision from the top

• Few support staff are needed • The primary goal of the organisation is

to survive and become established in its industry

• There is little formalisation or specialisation

• Suited to a dynamic environment

Machine bureaucracy • Very large and mature

organisation • Often oriented to mass production • The narrow middle

management area reflects the tall hierarchy for control.

• This form reflects extensive formalisation and specialisation • Primary goal of efficiency • Suited to a simple, stable environment

the people’s university

Flexible · Affordable · Accessible

1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types

Professional Bureaucracy • The size and power of the

technical core, which is made up of highly skilled professionals,

• professionals make up the bulk of the organisation.

• A large administrative support staff is needed to support the professionals

• The primary goals are quality and effectiveness.

• Professional organisations typically provide services rather than tangible goods. Example – hospitals, law firms, universities

Diversified Form • Mature firms that are

extremely large and are subdivided into product or market groups

• There is a larger administrative support staff to support the divisions

• Small top management & small technical support group

• The diversified form helps to solve the problem of inflexibility experienced by a too-large

• machine bureaucracy by dividing it into smaller parts

the people’s university

Flexible · Affordable · Accessible

1.3 Organisational Configuration: Mintzberg’s Five Organsiation Types

Adhocracy • The adhocracy develops in a complex, rapidly changing

environment • The design goal is frequent innovation and meeting

continually changing needs such as aerospace and defence industries

• The main structure consists of many overlapping teams rather than a vertical hierarchy

• Adhocracies are usually young or middle-aged organisations

• Employees are engaged in the administration and support of their own teams

the people’s university

Flexible · Affordable · Accessible

Question for Disussion

Q1 Explain how Mintzberg’s five basic parts of the organization fit together to perform needed functions.

Q2 Based on what you know about the following organizations, how would you categorize them according to Mintzberg’s Five Organizational Types : • Berjaya Corporation? • Facebook? • Toyota Motor Corporation?

Q3 Do you think that a small entrepreneurial company can maintain its structure as its business grows? What are your reasons?

the people’s university

Flexible · Affordable · Accessible

End of Slide

Thank you for your attention!