Writing Business Plans/management

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Question
3.   What are the determinants of organizational climate and culture? Briefly describe how do these affect various functions of the organization. Explain with examples from the organization you have worked for or familiar with. Specifically describe the situations and main features of the organization you are referring to with respect to the concepts referred in this question.

4.   What are the factors which influence the structure of an organization and how? Explain with specific example known to you or familiar with.  Briefly describe the situation and the factors which specifically influenced the choice of organization structure. Briefly describe the organization/s, you are referring to.

please ans me with organisation name and details..

Answer
The Climate of your Organization is the State of its Health

How your employees feel about their jobs, their supervisors, their peers, top management, and many other factors affects their individual productivity, and collectively the ability of the organization to achieve its objectives.

Without a formal process, finding out about employee attitudes usually relies on the manager's instincts or the employee's own willingness to communicate upward. But managerial instinct rarely provides the kind of hard data needed for decision   making. And most employees are hesitant to communicate anything but positive information to their supervisors.

The formal process generally involves using a climate survey or questionnaire.

Organizational climate measures attempts to assess organizations in terms of dimensions that are thought to capture or describe perceptions about the climate.


1.   Structure   feelings about constraints and freedom to act and the degree of formality or informality in the working atmosphere.

2.   Responsibility   the feeling of being trusted to carry out important work.

3.   Risk   the sense of riskiness and challenge in the job and in the organization; the relative emphasis on taking calculated risks or playing it safe.

4.   Warmth   the existence of friendly and informal social groups.

5.   Support   the perceived helpfulness of managers and co workers; the emphasis (or  lack of emphasis) on mutual support.

6.   Standards   the perceived importance of implicit and explicit goals and performance standards; the emphasis on doing a good job; the challenge represented in personal and team goals.

7.   Conflict   the feeling that managers and other workers want to hear different opinions; the emphasis on getting problems out into the open rather than smoothing them over or ignoring them.

8.   Identity   the feeling that you belong to a company; that you are a valuable member of a working team.

9.autonomy   the perception of self determination with respect to work procedures, goals and priorities;

10.cohesion   the perception of togetherness or sharing within the organization setting, including the willingness of members to provide material risk;

11.trust   the perception of freedom to communicate openly with members at higher organizational levels about sensitive or personal issues, with the expectation that the integrity of such communications will not be violated;

12.resource   the perception of time demands with respect to task competition and performance standards;

13.support   the perception of the degree to which superiors tolerate members' behaviour, including willingness to let members learn from their mistakes without fear of reprisal;

14.   recognition   the perception that members' contributions to the organization are acknowledged;

15.fairness   the perception that organizational policies are non arbitrary or capri¬cious;
  
16.innovation   the perception that change and creativity are encouraged, including
  risk taking into new areas where the member has little or no  prior experience.

==========================================

The organizational climate consists of:-

 Organisational Structure-
An organization’s structure is actually a ‘snapshot’ of a work process, frozen in time so that it can be viewed. The structure enables the people’s energy to be focused towards process achievement and goal achievement. Employee must have a clear definition of not only the work structure but also the role used to organize the work. If the structure and the role is not clear, people will not know what the work process is, who is responsible for what, whom to go for help and decision, and who can Assist in solving problems that may arise.

 Organisational Culture-
Organisational culture is the pattern of beliefs, knowledge, attitudes, and customs that exists within an organisation. Organizational culture may result in part from senior management beliefs or from the beliefs of employees.
Organizational culture can be supportive or unsupportive, positive or negative. It can affect the ability or willingness of employees to adapt or perform well within the organisation.

The most effective work culture is one that supports the organizations HR strategies by aligning behaviors, processes and methods with the desired results. It is not just achieving results but the methods through which they are achieved that are critical to long-term success.

Before any HR strategy is designed there must be a clear understanding of the organisation, its current values, its structure, its people as well as its goals and vision for the future.

==========================================

ORGANIZATION  CULTURE


Organization culture  can  be  a  set  of  key values , assumptions,
understandings  and  norms that  is  shared  by  members of an
organization.

Organization  values  are fundamental beliefs that  an organization
considers  to  be  important , that are  relatively stable over time,
and  they have an  impact on  employees behaviors and  attitudes.

Organization  Norms  are  shared  standards that define what
behaviors  are  acceptable  and  desirable within organization.

Shared  assumptions  are  about  how  things  are  done
in  an  organization.

Understandings  are  coping  with internal /  external  problems
uniformly.
=================================================
LEVELS  OF  ORGANIZATION  CULTURE

LEVEL 1---VISIBLE, that can be  seen  at the surface level
-dress  codes
-office layout  [ open  office]
-symbols
-slogans
-ceremonies[ monthly / annual awards/long service/birthdays etc.
etc etc

LEVEL 2-  INVISIBLE , that can be cannot be  seen but only felt.
-stories  about people performance
-symbols [  flag, trademark, logos, etc]
-corporate mission  statements
-recruitment/selection  [ methods  used]
-fairness in treatment
-social  equality
-risk  taking in  business deals
-formality  in  approach
-discipline
-autonomy  for  departments
-responsiveness  to  communication
-empowerment  of  staff.
etc  etc.
==========================================
THE  ORGANIZATION, I   AM  REFERRING  TO

The  organization, I am  familiar  with  is  a
-a  large  manufacturer/ marketer of  safety products
-the products  are  used  as  [personal  protection safety] [ industrial  safety]
-the products  are  distributed through  the distributors as well as  sold directly
-the  products  are  sold  to various  industries like  mining/fireservices/defence/
as  well  as  to  various  manufacturing  companies.
-the  company employs  about  235  people.
-the  company  has  the following  functional   departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer  service
*distribution
*warehousing/  transportation
*TQM  
===============================================
COMPANY’S STRATEGY AND CULTURE
Strategy is the hard nosed  approach to business that traditionally stresses the impact of
competitive advantage on the bottom line. Culture is paying attention to organizational and people needs.
T 0 unite strategy with culture:
a. First, develop a vision of the future.
b. Nurture a culture that is motivated and dedicated to the vision.
Most organizations are either strategy-deficient or culture-deficient. Quality circles, Japanese style
management practices, continue to fail because executives have not made fundamental changes in their
attitudes and approaches. There: are three deadly attitudes that permeate the way traditional management
approaches these new methods. Generally the failure of these new practices are victim to short term
orientation, quick fix expectations and shallow thinking. Under the new age leadership approaches
leaders have begun to move away from the business school management practices where managers, set
goals, priorities and procedures. Organization, motivation and control over people are important.
Managers concentrate on analyzing situations and forming strategic plans. They respond to change
through new strategies and reorganization and implement change through new policies and procedures
with all effort directed towards achieving results.
New age leadership focuses on creative insight by asking the right questions. It orients on sensitivity,
vision, versatility, focus and patience. Managerial values have shifted over the past several years. What
has changed is the orientation towards quality, service, values, and to home and family. What has
remained constant is that we expect honesty and competence, that top management will see the climate
and our customers as our key stakeholders. People are no less committed to work - all they want is self
expression and organizational cooperation.

FOR STRATEGIC DECISIONS, THE APPROACH IS AS FOLLOWS:

THE COMPANY ANALYSES THE FOLLOWING DATABASE
AND APPLYS THE PROBELM SOLVING/ DECISION
MAKING APPROACH / FINALIZES THE PLAN.

-apply the pestel analysis with respect TO ITS BUSINESS

1.Political (incl. Legal)

-Environmental regulations and protection
[what are the government regualtions/ protection laws that must be observed ]

-Tax policies
what tax hinder the business and what taxes incentives are available]

-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]

-Contract enforcement law/Consumer protection
[does the government enforce on consumer protection ]

-Employment laws]
[ is the government encouraging skilled immigrants with temp. permits]

-Government organization / attitude
[ does the government have a very positive attitude towards this industry]

-Competition regulation
[ are there regulation for limiting competition]

-Political Stability
[ politically , does the government have a very stable government ]

-Safety regulations
[ has the government adopted some of the modern safety regulations]
=================================================================
2.Economic

-Economic growth
[ what is the economic growth rate / what are the reasons ]

-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]

-Government spending
[is government spending is significant and is it under control ]

-Unemployment policy
[what is the employment / unemployment policies of the government ]

-Taxation
[ has the taxation encouraged the industry ]

-Exchange rates
[ is there well managed exchange controls and is it helping the industry]

-Inflation rates
[ is the inflation well under control ]

-Stage of the business cycle
[ is your industry is on the growth pattern]

-Consumer confidence
[ is the consumer confidence is high/ strong and if not, why ]

==================================================
3.Social

-Income distribution
[is there balanced income distribution policy ]

-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]

-Labor / social mobility
[ what are the labor policies and is there labor mobility]

-Lifestyle changes
[ are there significant lifestyle changes taking place--more modernization/ why ]

-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]

-Education
[ what are the education policies / is it successful ]

-Fashion, hypes
[are the people becoming fashion conscious ]

-Health consciousness & welfare, feelings on safety
[ are the people becoming health consciousness]

-Living conditions
[ is the living conditions improving fast and spreading rapidly]

=========================================================
4.Technological

Government research spending
[is the government spending on research and development]

Industry focus on technological effort
[are the industries focused on using improved technology]

New inventions and development
[ are new inventions being encouraged for developments]

Rate of technology transfer
[ is the rate of technology transfer is speeding up ]

(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]

(Changes in) Internet
[ is the internet usage rapidly increasing and why]

(Changes in) Mobile Technology
[is the Mobile technology rapidly developing and is there government support]
-------------------------------------------------------------------------------------
5.External Assessment

Areas for opportunities and threats

* Markets [ what is the market situation, which is forcing the change requirements
*Customers [ how can service the customer -internal / external -better .
* Industry [ is the industry trend ]
* Competition [ is it the competitive situation
*Factors of business [ causing the change]
* Technology [ is it technology change ]
===========================================================
STEP 6

CONDUCT A ''SWOT'' ANALYSIS OF THE COMPANY'S RESOURCES.
Internal Assessment

Areas for strengths, weaknesses, and barriers to success

ORGANIZATION DIMENSIONS
*Culture [ is the working culture change ]
* Organization [ is the organization demanding change ]
* Systems [ is it the systems change ]
* Management practices [ change in managemement process]


OTHER KEY DIMENSIONS

*Cost efficiency[ is it for cost efficiency ]
* Financial performance [ is it for financial performance improvement ]
* Quality [ is it for quality performance improvement
*Service [ is it for service performance improvement
*Technology[ is it for technology performance improvement
* Market segments [ is it for sales performance improvement
* Innovation[ is it for performance improvement
*new products[ is it for new product performance improvement
*Asset condition[ is it for financial performance improvement
*productivity[ is it for financial performance improvement


=====================================================
STEP 7

NOW THE CO. KNOWS WHERE IT STANDS.
PRIORITY ISSUES

FROM THE ABOVE , DETERMINE THE CORE ISSUES
WHICH NEEDS TO SOLVED WITH YOUR INVESTMENT.

STRATEGIC PROGRAMS

FROM THE ABOVE CORE ISSUES , DETERMINE YOUR
STRATEGIC PROGRAMS.

Mission STATEMENT

VISION STATEMENT

Your CORE PURPOSE

Your CORE OBJECTIVES
Your Core markets;
Your CORE strategic thrusts.

BUSINESS DEFINITION:

The arena of products, services, customers, technologies, distribution methods, and geography in which you'll compete to get results.


-===================================================
STEP 8

WHERE DOES THE CO. WANTS TO GO

THE COMPANY ARRIVES AT THE FOLLOWING
DECISIONS AT THE END OF THE SESSIONS:

1.REVENUE BUDGET.
2.GROSS PROFIT BUDGET.
3.NET PROFIT BUDGET.

4.SALES TOTAL FORECAST.
5.SALES BY PRODUCTS.

6.OPERATIONAL EXPENSES BUDGET.
7.FIXED EXPENSES BUDGET.

8.PRODUCTIVITY IMPROVEMENT %
9.PROFITABILITY INCREMENT %
10. RETURN ON INVESTMENT.
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Critical  instrumental mechanisms for changing and managing culture include

-Strategic planning and the identification of necessarily cultural requisites  
-Ensuring consistency of culture with mission, goals, strategies, structures and processes  
-Creating formal statements of organizational philosophy and values
-Establishing consistent incentives, recognition systems, and performance measurement
-Maintaining appropriate error-detection and accountability systems
-Coaching, mentoring, informal and formal training, and identifying role models  
-Embracing appropriate rites, rituals, symbols, and narratives  
-Taking advantage of the growth of subcultures
-Managing and promoting strong communities of practice .

Several requisites for organizational success that organizational culture must  now take into account:
-The organization must be proactive, not just reactive.
-The organization must influence and manage the environment, not just adapt.
-The organization must be pragmatic, not idealistic.
-The organization must be future-oriented, not predominantly present/past oriented.
-The organization must embrace diversity, not uniformity.
-The organization must be relationship-oriented, not just task-oriented.
-The organization must embrace external connectivity, as well as promote internal  integration.

These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of  internal and external organizational adaptations necessary for future success. They are not,
however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts
and symbols, as well as accompanied by a particular mission, set of goals, and strategies.

Others emphasize more specific cultural mandates, such as that the modern organizational culture
must be:  
-Team-oriented.
-Knowledge and learning oriented .
-Alliance and partnership oriented .
-Another emerging mandate is to
-Know when to emphasize and how to balance cultural maintenance and cultural
innovation.
-Managers must actively work to keep the existing organization culture relevant to the present and
future while maintaining some sense of continuity with the past.

Companies with long-term success had a limited but strong set of timeless core values that did
not prevent organizational change over time. These companies were able to preserve the core
while stimulating progress.
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THIS  ORGANIZATION’S  

1. Organizational climate is something that is sensed rather than something that is recognized cognitively.
2. Climate is a set of attributes which can be perceived about a particular organization and/or its subsystems, and that may be induced from the way the organization and/or its subsystems deal with their members and environments.
3. Organizational climate is the combined perceptions of individuals that are useful in differentiating organizations according to their procedures and practices.
4. Organizational climate is the collective view of the people within the organization as to the
nature of the environment in which they work.


Influencing the Internal Environment Through Climate
Leadership
Motivation
Communication
Decision-Making
Control Systems
Goals & Objectives


Measures of Climate
Leadership
1. How much confidence is shown in subordinates?
2. How free do they feel to talk to superiors about their job?
3. To what extent are subordinates’ ideas sought and used?

Motivation
4. Is predominant use made of fear, threats, punishment, rewards, involvement?
5.Where is responsibility felt for achieving the organization’s goals?
6. How much cooperative teamwork exists?

Communication
7. What is the direction of communication flow?
8. How is downward communication accepted?
9. How accurate is upward communication?
10. How well do superiors know the problems faced by subordinates?

Decision-Making
11. At what level are decisions made?
12. How are subordinates involved in decisions related to their work?
13. What/how does the decision-making process contribute to motivation?

Goals
14. How are organizational goals established?
15. How much covert resistance to goals is present?
Controls
16. How concentrated are review and control functions?
17. Is there an informal organization resisting the formal one?
18. What are cost, productivity, and other control data used for?


To Make the Climate Work
0 Clarity, common understanding, and congruent application by senior leaders and their staffs regarding
simply stated goals, objectives, priorities and command philosophy.
~ Understanding of the nature of organizational climate, its principal components, and its interactive
dynamics.

0 Taking actions to make the organizational climate directly support the organization’s goals, objectives,
priorities, and command philosophy.

I Embedding within the climate “the principle of rationality,” i.e.Do what seems right and sensible; and
questioning policies, procedures, and requirements that seen otherwise. Starting with the boss,
demonstrate downward the willingness to take calculated risks, with the calculations based on the principle of rationality.

I As the expected mode of leadership permeates downward, encourage, reward, and “tell stories about”
incidents of independent but disciplined actions in the absence of positive control. Follow through as this
occurs successively at lower and lower echelons and among more and more leaders.

Creating a Climate for Learning
Empowerment is what leaders can do to develop the capacity of their subordinates; creating a climate for learning.

Here are a few suggestions for developing capacity,
. Stop making decisions.
. Stop talking at staff meetings.
. Set up opportunities for coaching.
. Invite people to assume responsibility.
. Give everyone a customer (stakeholder).

Have an open house. Invite the customers (stakeholders).
. Enrich people’s jobs; demonstrate that they all have value and make a difference.
. Share the big picture.
Model the behaviors that you expect.

Contrasting Climate and Culture
CLIMATE----------------- CULTURE
Met Expectations --------Nature of Expectations
Temperature --------------Pressure
Transactual --------------Transformational
Tactical ------------------Strategic
Norms - Behavior -------Values — Beliefs


organizations  is essentially healthy, and willing, patients. They lack certain skills and may be handicapped by dysfunctional values, but these gaps ARE  remedied through careful clinical work.



a. Focus on surprises in the organization.
b. Set yourself up with a method for systematic observation and checking of what the
organization does well and not so well.
c. Locate a motivated insider. A person within the informal system that can provide
insights to which one might not be aware.
d. Reveal surprises when they happen. Attempt to explain puzzlement and hunches.
e. Jointly explore (get others involved) to find explanation.
f. Formalize hypothesis.
g. Systematically check and consolidate.
h. Push the level of assumptions. Go beyond the articulated values and get to the assumptions behind them.

As an example, we make assumptions about time. In reality, there are only three things that one can do with time.
a. Spend it.
b. Waste it.
c. Make good use of it.
But when it is over, it is gone forever. Time is a convenient target for blaming for our failures, mistakes
and for our lack of risk taking. Maybe this sounds familiar, “two weeks is certainly not enough time to
get to (open up) know to someone else, or, I’ve known, worked with, him/her so long, that I could never
tell the real truth.” It most likely has nothing to do with time, but with our reluctance to assume
responsibility and accountability for our own actions.

Another assumption that pervades our organizational culture is about truth. We should all be committed
to telling the truth, but culture tends to guide the way we choose to operate in our relationship with each
Other at work and at home. Telling the truth simply means a willingness to root out the ways we limit
Ourselves from seeing what is and to continually challenge our theories of why things are the way they
are. We always have the option of seeing the truth, no matter how blind or prejudicial we may be, if we have the courage.




Improving Organizational Communication
“communication can and does affect work adversely if not properly handled. There are graduations of degrees of these effects, ranging from a slight drag against the progress of the enterprise to the causing of errors or misunderstanding of the philosophical foundation of the main organization, and thereby make the output of the system virtually impossible,” stating further that, “one ever-present cause of faulty communication is that, language, whether oral or written, is itself faulty or imperfection when the meaning of words and sentences and equally the emotional content is ambiguous.”
Barriers and other associated problems common with organizational communication climate affect work productivity negatively especially where people and records are jointly managed together, such as the case of academic libraries. The extreme need to improve or find solutions to the highlighted problems and barriers is imperatively necessary.) recommends the under-listed improvement techniques among the operators and participants:
techniques to improve communication:
1. Sender
•   Understanding of the background and culture of the receiver.
•   Expectation of feedback
•   Formal training in oral and written communication
2. Receiver
•   Knowing and understanding the sender
•   Make the receiver's level of understanding clear to the sender.
•   Understand the language and practices of the organizational unit to improve listening and interpretation.
•   Feedback loop
3. Message
•   Clear
•   Brief
•   Simple
•   Unambiguous.
4. Medium
•   Reduce noise by using multiple channels.
5. The Organization
•   Organization Communication Audit to assess the current state of the communication system.
6. Technology
•   Electronic message system
•   Voice mail
•   Local Area Networking
•   Teleconferencing
•   Global Satellite Communication Mobile

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THE  VARIOUS  DEPARTMENTS  FUNCTION  WITHIN  THIS  CULTURE

1.MARKETING  DEPARTMENT
-Focuses  on  the  customers’ needs and  increases  the  sales/ profit

2.SALES  DEPARTMENT
-focuses on the  customer  service / relationships  and  increases  the  sales/profit.

3.PRODUCTION  MANAGEMENT  
-focuses  on  the  quality/ efficiency/ effectiveness/ productivity  and  increases  the  profit.

4.HUMAN RESOURCE  DEPARTMENT
-focuses  on  the  quality  recruitment/ skill ,
Knowledge, competence  development  and  talent  retention.
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4.   What are the factors which influence the structure of an organization and how? Explain with specific example known to you or familiar with.  Briefly describe the situation and the factors which specifically influenced the choice of organization structure. Briefly describe the organization/s, you are referring to.



Important factor to be considered for designing organization structure of modern organization
Factors Affecting Organizational Design/STRUCTURE
Although many things can affect the choice of an appropriate structure for an organization, the following five factors are the most common: size, life cycle, strategy, environment, and technology.
Organizational structure is the framework companies use to outline their authority and communication processes. The framework usually includes policies, rules and responsibilities for each individual in the organization. Several factors affect the organizational structure of a company. These factors can be internal or external. Small business owners must be responsible for creating their companies organizational structure framework. Business owners may use a management consultant or review information from the Small Business Administration before setting up their organizational structure.
Size
Size is many times the driving factor for a company’s organizational structure. Smaller or home-based businesses do not usually have a vast structure because the business owner is usually responsible for all tasks. Larger business organizations usually require a more intense framework for their organizational structure. Companies with more employees usually require more managers for supervising these individuals. Highly specialized business operations can also require a more formal organizational structure.
Life Cycle
The company’s life cycle also plays an important part in the development of an organizational structure. Business owners attempting to grow and expand their company’s operations usually develop an organizational structure to outline their company’s business mission and goals. Businesses reaching peak performance usually become more mechanical in their organizational structure. This occurs as the chain of command increases from the business owner down to frontline employees. Mature companies usually focus on developing an organizational structure to improve efficiency and profitability. These improvements may be the result of more competitors entering the economic marketplace.
Strategy
Business strategies can also be a factor in a company’s organizational structure development. High-growth companies usually have smaller organizational structures so they can react to changes in the business environment quicker than other companies. Business owners may also be reluctant to give up managerial control in business operations. Small businesses still looking to define their business strategy often delay creating an organizational structure. Business owners are usually more interested in setting business strategies rather than developing and implementing an internal business structure.
Business Environment
The external business environment can also play an important part in a company’s organizational structure. Dynamic environments with constantly changing consumer desires or behavior is often more turbulent than stable environments. Companies attempting to meet consumer demand can struggle when creating an organizational structure in a dynamic environment. More time and capital can also be spent in dynamic environments attending to create and organizational structure. This additional capital is usually a negative expense for many small businesses.

Organizational size
The larger an organization becomes, the more complicated its structure. When an organization is small — such as a single retail store, a two-person consulting firm, or a restaurant — its structure can be simple.
In reality, if the organization is very small, it may not even have a formal structure. Instead of following an organizational chart or specified job functions, individuals simply perform tasks based on their likes, dislikes, ability, and/or need. Rules and guidelines are not prevalent and may exist only to provide the parameters within which organizational members can make decisions. Small organizations are very often organic systems.
As an organization grows, however, it becomes increasingly difficult to manage without more formal work assignments and some delegation of authority. Therefore, large organizations develop formal structures. Tasks are highly specialized, and detailed rules and guidelines dictate work procedures. Interorganizational communication flows primarily from superior to subordinate, and hierarchical relationships serve as the foundation for authority, responsibility, and control. The type of structure that develops will be one that provides the organization with the ability to operate effectively. That's one reason larger organizations are often mechanistic—mechanistic systems are usually designed to maximize specialization and improve efficiency.
Organization life cycle
Organizations, like humans, tend to progress through stages known as a life cycle. Like humans, most organizations go through the following four stages: birth, youth, midlife, and maturity. Each stage has characteristics that have implications for the structure of the firm.
•   Birth: In the birth state, a firm is just beginning. An organization in the birth stage does not yet have a formal structure. In a young organization, there is not much delegation of authority. The founder usually “calls the shots.”
•   Youth: In this phase, the organization is trying to grow. The emphasis in this stage is on becoming larger. The company shifts its attention from the wishes of the founder to the wishes of the customer. The organization becomes more organic in structure during this phase. It is during this phase that the formal structure is designed, and some delegation of authority occurs.
•   Midlife: This phase occurs when the organization has achieved a high level of success. An organization in midlife is larger, with a more complex and increasingly formal structure. More levels appear in the chain of command, and the founder may have difficulty remaining in control. As the organization becomes older, it may also become more mechanistic in structure.
•   Maturity: Once a firm has reached the maturity phase, it tends to become less innovative, less interested in expanding, and more interested in maintaining itself in a stable, secure environment. The emphasis is on improving efficiency and profitability. However, in an attempt to improve efficiency and profitability, the firm often tends to become less innovative. Stale products result in sales declines and reduced profitability. Organizations in this stage are slowly dying. However, maturity is not an inevitable stage. Firms experiencing the decline of maturity may institute the changes necessary to revitalize.
Although an organization may proceed sequentially through all four stages, it does not have to. An organization may skip a phase, or it may cycle back to an earlier phase. An organization may even try to change its position in the life cycle by changing its structure.
As the life-cycle concept implies, a relationship exists between an organization's size and age. As organizations age, they tend to get larger; thus, the structural changes a firm experiences as it gets larger and the changes it experiences as it progresses through the life cycle are parallel. Therefore, the older the organization and the larger the organization, the greater its need for more structure, more specialization of tasks, and more rules. As a result, the older and larger the organization becomes, the greater the likelihood that it will move from an organic structure to a mechanistic structure.
Strategy
How an organization is going to position itself in the market in terms of its product is considered its strategy. A company may decide to be always the first on the market with the newest and best product (differentiation strategy), or it may decide that it will produce a product already on the market more efficiently and more cost effectively (cost-leadership strategy). Each of these strategies requires a structure that helps the organization reach its objectives. In other words, the structure must fit the strategy.
Companies that want to be the first on the market with the newest and best product probably are organic, because organic structures permit organizations to respond quickly to changes. Companies that elect to produce the same products more efficiently and effectively will probably be mechanistic.
Environment
The environment is the world in which the organization operates, and includes conditions that influence the organization such as economic, social-cultural, legal-political, technological, and natural environment conditions. Environments are often described as either stable or dynamic.
•   In a stable environment, the customers' desires are well understood and probably will remain consistent for a relatively long time. Examples of organizations that face relatively stable environments include manufacturers of staple items such as detergent, cleaning supplies, and paper products.
•   In a dynamic environment, the customers' desires are continuously changing—the opposite of a stable environment. This condition is often thought of as turbulent. In addition, the technology that a company uses while in this environment may need to be continuously improved and updated. An example of an industry functioning in a dynamic environment is electronics. Technology changes create competitive pressures for all electronics industries, because as technology changes, so do the desires of consumers.
In general, organizations that operate in stable external environments find mechanistic structures to be advantageous. This system provides a level of efficiency that enhances the long-term performances of organizations that enjoy relatively stable operating environments. In contrast, organizations that operate in volatile and frequently changing environments are more likely to find that an organic structure provides the greatest benefits. This structure allows the organization to respond to environment change more proactively.
Technology
Advances in technology are the most frequent cause of change in organizations since they generally result in greater efficiency and lower costs for the firm. Technology is the way tasks are accomplished using tools, equipment, techniques, and human know-how.
In the early 1960s, Joan Woodward found that the right combination of structure and technology were critical to organizational success. She conducted a study of technology and structure in more than 100 English manufacturing firms, which she classified into three categories of core-manufacturing technology:
•   Small-batch production is used to manufacture a variety of custom, made-to-order goods. Each item is made somewhat differently to meet a customer's specifications. A print shop is an example of a business that uses small-batch production.
•   Mass production is used to create a large number of uniform goods in an assembly-line system. Workers are highly dependent on one another, as the product passes from stage to stage until completion. Equipment may be sophisticated, and workers often follow detailed instructions while performing simplified jobs. A company that bottles soda pop is an example of an organization that utilizes mass production.
•   Organizations using continuous-process production create goods by continuously feeding raw materials, such as liquid, solids, and gases, through a highly automated system. Such systems are equipment intensive, but can often be operated by a relatively small labor force. Classic examples are automated chemical plants and oil refineries.
small-batch and continuous processes had more flexible structures, and the best mass-production operations were more rigid structures.
Once again, organizational design depends on the type of business. The small-batch and continuous processes work well in organic structures and mass production operations work best in mechanistic structures.


Formal and informal framework of policies and rules, within which an organization arranges its lines of authority and communications, and allocates rights and duties. Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. This structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy. An organization chart illustrates the organizational structure.
===================
PRINCIPLES  OF  ORGANIZATIONAL  DESIGN
Division of Labour
Departmentalization
Specialization
Authority and Responsibility
Line and staff authority
Authority and power
Contingency Factors
Environment and technology
Knowledge technology: task variability & problem analyzability
Spans of Control
Levels of contro
Centralization and decentralization
Contingency Factors
Knowledge technology:
task variability & problem analyzability

Basic Characteristics of Organizational Structure
•   Division of labor: dividing up the many tasks of the organization into specialized jobs
•   Hierarchy of authority: Who manages whom.
•   Span of control: Who manages whom.
•   Line vs staff positions
•   Decentralization
•   Hierarchy of Authority
•   Tall vs flat hierarchies
•   Autonomy and control
•   Communication
•   Size
•   Span of Control
•   A wide span of control: a large number of employees reporting,
•    A narrow span of control: a small number employees reporting
•   The appropriate span of control depends on the experience, knowledge and skills of the employees and the nature of the task.
•   Line vs Staff Positions
•   Line vs Staff:
–    Line positions are those in which people are involved in producing the main goods or service or make decisions relating to the production of the main business.
–   Staff positions These are positions in which people make recommendations to others but are not directly involved in the production of the good or service
•   Decentralization
•   The extent to which decision making is concentrated in a few people or dispersed through out the organization
•   Advantage: benefits associated with greater participation and moving the decision closest towards implementation
•   Disadvantage: Lack of perspective and information, lack of consensus
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EFFECTIVE   ORGANIZATIONAL    DESIGNS
Use functional structures  ,  when the organization is small, geographically centralized, and provides few goods and services.
---------------------------------------------------------------------
When the organization experiences bottlenecks in decision making and difficulties in coordination, it has outgrown its functional structure.
Use a divisional structure when the organization is relatively large, geographically dispersed, and/or produces wide range of goods/services.
Use lateral relations to offset coordination problems in functional and divisional structures.
------------------------------------------------------------------------------------------------------
When the organization needs constant coordination of its functional activities, then lateral relations do not provide sufficient integration. Consider the matrix structure.
To adopt the matrix structure effectively, the organization should modify many traditional management practices.
====================================================================================
ORGANIZATION  STRUCTURES
Functional Organizations
Reduces duplication of activities
Encourages technical expertise
-------------------------------------------------
DIVISIONAL   ORGANZATIONS
Improves decision making
Fixes accountability for performance
Increases coordination of functions
---------------------------------------------------------

MATRIX  STRUCTURES
Reinforces & broadens technical excellence
Facilitates efficient use of resources
Balances conflicting objectives of the organization
--------------------------------------------------------
LATERIAL   RELATIONS
Dotted-line supervision
Liaison roles
Temporary task forces
Permanent teams
Integrating managers
=======================================
Organization Design

Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively.
The design  approach is guided by the following core principles:
   Organization design is more than just structure – it is the integration of structure, processes, people, culture, systems and technology    
   Strategy is the starting point – organization design must be driven by, and supportive of, overall strategy
   Clarity and accountability underpin sound organization design –when good people know what to do and are held accountable, they achieve results
   Transitioning to a new organization end-state requires an integrated approach to change management
=======================================================
         Strategic Organization Design

The Need:

Senior organizational leaders are constantly facing the need to restructure their organizations.  Changes in leadership, a shift in strategy, or changing factors within an organization often create the need for reorganizing.  Organization design is one of the most potent tools available to senior managers for shaping the direction of their organizations.  It can be a key leverage point for directing attention and energy to certain critical activities in an organization.

Organizational leaders, however, often lack the tools necessary to help them in making decisions about how to structure their organizations.  Efforts at restructuring are often uneven and unsystematic.  Decisions to reorganize are often made with insufficient information and without a clear process to guide the effort.  The result is that reorganizations often fail to produce the desired effects, leading instead to further confusion or problems within the organization.

The Process:

Strategic Organization Design is a four-phase participative process intended to provide senior leaders with a systematic, step-by-step method for examining the structure of their organizations.  The four-phases are as follows:

  Preliminary Analysis
   Strategic Design
   Operational Design
   Implementation

The preliminary analysis involves the collection of information necessary for making design decisions.  Structured interviews are conducted focusing on the strategy of the organization, the key tasks being performed and current strengths and weaknesses of the organization.  Operational design involves the structuring of supervisory roles, information flows, and jobs within the context of the strategic design decisions.  Implementation involves managing the transition from the current design to a new design.

==========================================
Strategic Organization Design

The key restructuring decisions are made during the strategic design phase.  This phase involves six steps:

Step 1. Identify design criteria.
Step 2. Generate grouping alternatives.
Step 3. Evaluate grouping alternatives against the criteria.
Step 4. Generate linking mechanisms.
Step 5. Conduct an impact analysis.
Step 6. Select a new design.

The goal of the strategic design phase is to develop grouping and linking combinations that best support the strategy and basic work of the organization.  Before any design decisions are made, the management group identifies design criteria - statements about what the new design will need to be able to do.  These statements are reflections of the organization's strategy, its basic tasks, and the current strengths and weaknesses identified during the preliminary analysis.

Next, several different grouping alternatives are developed by the group and assessed against the design criteria.  Linking or coordinating mechanisms such as liaison roles, integrator departments, etc. are then generated for each of the possible grouping alternatives.  This step depends on the need for information exchange between groups in a particular design.  Finally, an impact analysis is conducted to determine the effect that the new design will have on the organization.  At this point a final design can be selected using the information and ideas generated during each step.  Often the final design is a hybrid of several alternatives considered during the process.

Who Should Be Involved?

This process is highly participative, involving each member of senior leadership staff of an organization, i.e. a Vice President and each of his or her direct reports.  The process draws heavily on the knowledge of the organization that each senior staff member has, and its success depends on the sharing of their ideas, concerns, and work-related needs.  To complete the process usually requires one to two days time for each member of the senior staff.

The process is not only for those groups who have an immediate need to restructure.  Leadership groups who only want to modify their organization slightly, or who simply want to reexamine their current structure may also benefit from using this process.  The process can help managers to solidify their strategy and ensure that their structure is consistent with it.


Strategic Organization Design Process Outline

Objective:    To provide a systematic participative process to help leaders structure their organizations in a way which helps accomplish the overall business strategy as well as the day-to-day work.
Phase I: Preliminary Analysis
         Conduct structured interviews to:
          Identify strengths and weaknesses of the existing organization
          Clarify issues related to business strategy and organizational design

Phase II: Strategic Organization Design
  Design Criteria:  Review information from the preliminary analysis and
    generate criteria for a new design
 Grouping:  Generate several design options and evaluate against criteria
- Grouping By Output – Product, Service, or Project
- Grouping By Activity – Function, Work Process, Knowledge or Skill
- Grouping By Customer – Market Segment, Customer Need, Or Geography
  Linking: Identify information flow requirements, select ways to
    facilitate the flow of information to meet the requirements, and
    evaluate against the criteria
  Impact Analysis: Analyze each option to determine feasibility given the
    existing leadership skills, power relationships, and work environment.

Phase III: Operational Design
  Carry out the operational homework necessary to put organization design
    decisions in place
  Design work charters, reporting relationships, information flows, etc.

Phase IV: Implementation
 Develop a strategy for implementing the new design
 Assess the potential resistance to the new organization
 Determine the best way to manage the transition from the old
    organization to the new one.
==============================================
The  organisation I  am  referring to

The  organization, I am  familiar  with  is  a
-a  large  manufacturer/ marketer of  safety products
-the products  are  used  as  [personal  protection safety] [ industrial  safety]
-the products  are  distributed through  the distributors as well as  sold directly
-the  products  are  sold  to various  industries like  mining/fireservices/defence/
as  well  as  to  various  manufacturing  companies.
-the  company employs  about  235  people.
-the  company  has  the following  functional   departments
*marketing
*manufacturing
*sales
*finance/ administration
*human resource
*customer  service
*distribution
*warehousing/  transportation
*TQM  
WE  CONSIDER  THE  FOLLOWING  FACTORS  WHEN  CONSIDERING  THE  RE-STRUCTURING  THE  ORGANIZATION
--MATRIX   STRUCTURE

1.Political (incl. Legal)   

-Environmental regulations and protection
[what  are  the  government regualtions/ protection laws  that  must be  observed ]

-Tax policies
what tax  hinder the business and what  taxes  incentives  are available]

-International trade regulations and restrictions
[ does  the  government    encourage  exports / with  high tariffs  on  imports]

-Contract enforcement law/Consumer protection
[does  the  government  enforce  on  consumer  protection ]

-Employment laws]
[ is the  government    encouraging  skilled  immigrants  with  temp. permits]

-Government organization / attitude
[ does  the  government  have  a   very  positive  attitude  towards  this   industry]

-Competition regulation
[ are  there   regulation  for  limiting  competition]

-Political Stability
[ politically ,  does the   government    have   a  very   stable  government ]

-Safety regulations
[ has  the  government      adopted  some  of  the  modern  safety regulations]
=================================================================
2.Economic     

-Economic growth
[  what  is  the economic growth rate  /  what  are  the  reasons ]

-Interest rates & monetary policies
[ are  the  interest  rates    under control /  is there   a  sound  monetary  policies]

-Government spending
[is  government  spending  is  significant   and  is it   under control ]

-Unemployment policy
[what  is  the  employment / unemployment  policies  of the government ]

-Taxation
[  has  the  taxation    encouraged  the  industry ]

-Exchange rates
[ is   there  well  managed   exchange  controls  and  is it  helping  the  industry]

-Inflation rates
[ is  the  inflation  well   under  control ]

-Stage of the business cycle
[ is  your    industry  is  on  the   growth  pattern]

-Consumer confidence
[ is  the  consumer  confidence   is   high/ strong and  if  not, why ]

==================================================
3.Social  

-Income distribution
[is there   balanced   income  distribution   policy ]

-Demographics, Population growth rates, Age distribution
[ what  is   population   growth  and  why ]

-Labor / social mobility
[ what   are the  labor  policies  and  is  there  labor  mobility]

-Lifestyle changes
[ are  there  significant  lifestyle   changes     taking  place--more  modernization/ why  ]

-Work/career and leisure attitudes
[ are  the  population      career  minded  and  are  seeking  better  lifestyle]

-Education
[ what  are  the  education  policies /  is  it  successful ]

-Fashion, hypes
[are  the   people    becoming  fashion  conscious ]

-Health consciousness & welfare, feelings on safety
[ are  the  people     becoming  health  consciousness]

-Living conditions
[ is the  living  conditions   improving  fast  and  spreading  rapidly]

=========================================================
4.Technological  

Government research spending
[is  the  government    spending  on research  and  development]

Industry focus on technological effort
[are  the   industries    focused  on  using  improved  technology]

New inventions and development
[ are  new  inventions     being   encouraged  for  developments]

Rate of technology transfer
[ is  the  rate  of  technology  transfer  is  speeding  up ]

(Changes in) Information Technology
[ is  the   information  technology    rapidly  moving  and  is  there  government  support]

(Changes in) Internet
[ is the   internet  usage    rapidly  increasing   and  why]

(Changes in) Mobile Technology
[is  the   Mobile   technology    rapidly developing  and  is there  government  support]
-------------------------------------------------------------------------------------
5.External Assessment---

Areas for opportunities and threats

* Markets [ what  is  the market  situation, which is forcing the change requirements
*Customers [ how can service the customer -internal / external -better .          
* Industry  [ is  the  industry  trend ]
* Competition [ is  it the  competitive situation      
*Factors of  business [ causing  the change]
* Technology [ is  it  technology  change ]
===========================================================
STEP  6

CONDUCT  A   ''SWOT''   ANALYSIS  OF   THE   COMPANY'S  RESOURCES.
Internal Assessment

Areas  for strengths, weaknesses, and barriers to success

ORGANIZATION DIMENSIONS
*Culture  [ is the  working  culture  change ]
* Organization [  is the  organization  demanding  change ]
* Systems  [ is it  the  systems change ]
* Management practices  [ change in  managemement process]


OTHER KEY DIMENSIONS

*Cost efficiency[  is it for  cost efficiency ]
* Financial  performance  [ is  it for  financial  performance improvement ]
* Quality [ is  it for  quality  performance improvement
*Service [ is  it for  service   performance improvement
*Technology[ is  it for  technology   performance improvement
* Market segments [ is  it for  sales  performance improvement
* Innovation[ is  it for    performance improvement
*new products[ is  it for new product   performance improvement
*Asset condition[ is  it for  financial  performance improvement
*productivity[ is  it for  financial  performance improvement


=====================================================


THE  MAJOR   FACTORS  WHICH  BROUGHT  IN
CHANGE  IN THIS  ORGANIZATION.

1.INTRODUCING THE  MATRIX  STRUCTURE.

-as  the  product  range  increased  significantly,
with  the  appointment  of  more  product  managers.
The  matrix  structure  helped  the  company  to
focus  more  on  the  customers  and  improve
the sales/service.
-------------------------------------------------------------
2.COMPETITIVE  FORCES

-as  the competition  increased, the  company
changed  the  distribution  system. It  went
from  direct  selling to  distributors  selling.
This  helped  the  company  to  sustain
a  growth  of   20%  over   5  years.
-------------------------------------------------------------
3.SUPPLIES  CONSTRAINT

-as  the local / internal  manufacturing
became expensive, we  closed  the manufacturing
and  shifted   the  factory  to  china.
THIS  HELPED  THE  COMPANY  TO
PROVIDE   CHEAP  SUPPLIES
AND INCREASED  THE  MARKET SHARE.
----------------------------------------------------------------
4.ORGANIZATION  LEARNING.

-as  the  products  were  technical,  we  decided
to orient  everyone  in  the  organization with
sound  knowledge  of  products /  applications.
WE  USED  THE  FOLLOWING

-intranet.
-class  training/ demonstration.
-video  conferencing with  foreign specialists.
-video  demos.
--------------------------------------------------------------------
5. NEW   ACQUISITION.

-the  company  acquired  a small  specialist product
company.
THIS  BROUGHT  A  CHANGE  IN THE
ORGANIZATION.
-------------------------------------------------------------
6. CUSTOMER  SERVICE

-as  the  company  introduced more  technical
products, the  customer  service  requirements
changed simulaneity -technical/ deiviery/ after sales/
and  training.
-----------------------------------------------------------------

ALL  THESE  INTRODUCTIONS  BROUGHT
MAJOR  CHANGES  IN  THE  COMPANY

-process/ procedures/practices.
#############################################  

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