Summary Organizational Structure: H3-4
Organizational Structure (EBP670C05)
Rijksuniversiteit Groningen
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Organizational Structure: Summary Week 37
Team 2: Puck Otten, Wilmar van Ingen, Friedrich Segebarth and Daniël Lutjens
Chapter 3
Every organization needs to be effective in order to compete on the market. Per definition organizational effectiveness is the degree to which an organization attains its short- and long-term goals, the selection of which reflects strategic constituencies, the self- interest of the evaluator and the life stage of the organization.
There are four approaches to measure how effective an organization really is.
- The goal-attainment approach
In a deliberate, rational and goal seeking organization its effectiveness is judged by its achievement of end goals, e. to extent market share. These goals must be widely known, of great importance, manageable, time limited and generally agreed to. Furthermore, the goals are clearly identified by key decision makers in order to make the goals operative. This approach brings along several problems. For example: Organizations have long-term and short-term goals. On which should the approach be applied in order to measure the effectiveness?
- The systems approach
In an organization made of interrelated subparts, which depend on each other, its effectiveness is evaluated by its ability to acquire inputs, process the inputs, channel the outputs and maintain stability and balance. More or less it focuses on means necessary for the continued survival of the organization. Shortcomings of this approach are the measurement and the issue of whether means really matter. For example: how can the community goodwill of an organization be measured?
- Strategic-costituencies approach
An organization’s effectiveness is determined by how succesfull it satisfies the demands of those constituencies in its environment from wich it requires support for its continued existence.
Strategic-constituencies: those who can threaten the organization’s survival.
These approaches are assumed to exist within an environment where demands are placed on the organisation by various important groups, or costituencies. The effectiveness of these organisations depends on how succesfull the organisation has been in satisfying those constituencies.
That’s why these oginisations become a ‘politcal arena’ vested interest compete for controle over resources. This often causes conflicts.
Organizational Structure: Summary Week 37
Team 2: Puck Otten, Wilmar van Ingen, Friedrich Segebarth and Daniël Lutjens
- Stakeholder approach
These approaches do not only recognize the importance of strategic constituencies but also those who may not have the political power that strategic constituencies have who influence the existence of the organization or even its direction.
Problems: 1. Identifying the strategic constituencies can be difficult 2. What are truly Strategic consituencies and what are not 3. How do you correctly identify the expectations of the constituencies 4. It’s not always true that survival is the organizations basic goal
- The balanced scorecard approach: The balanced scorecard seeks to balance the various demands on the organisation with its capabilities. It attempts to view performance in several areas simultaneously and identify not just results but also how the results where achieved. This can be achieved by promoting a framework (usefull to managers to asses effetives)
Within an organisation the performance measures are inter-related.
Chapter 4
To describe and compare the structures of organizations we can utilize certain tools. These tools are as follows:
First of all we can look at the complexity of an organization. Complexity can be defined as the degree of horizontal, vertical and spatial differentiation in an organization. Horizontal differentiation is the degree of differentiation between employees who work at the same level in an organization. Vertical differentiation is the number of structural layers between the highest positioned division of an organization and the lowest positioned division. Spatial differentiation is the extent to which the different subsections of an organization are spread geographically.
Secondly we can take the amount of formalization in account when describing and comparing organizations. Formalization is the amount of standardization for the jobs and procedures in an organization. Formalization can be achieved using rules, procedures and policies, strict selection, matching future employees to the role requirements, socialization, training and rituals.
The last tool is centralization: ‘the degree to which decision making is concentrated in a single point (this can be a single person, a unit or a level)’. Decentralization may reduce the probability of information overload, as well as giving managers the chance to develop good judgment. Centralization however is more efficient.
Bringing theory into practice, we can now introduce a classification framework in which five basic organizational structures can be identified. We call each of these basic structures a configuration.
Summary Organizational Structure: H3-4
Vak: Organizational Structure (EBP670C05)
Universiteit: Rijksuniversiteit Groningen
