Organizational Management Basics
– understand what an organization is
– learn the importance of organizational culture
– identify the type of organizational culture that your company embodies
Organizing is a systematic process of structuring, integrating, coordinating task goals, and activities to resources in order to attain objectives.
Organizing typically follows planning and reflects how the organisation tries to accomplish the strategic plan. It involves the assignment of tasks, the grouping of tasks into departments, and the assignment of authority and allocation of resources across the organization. Organizing is important because it follows from strategy in that strategy defines what to do and organizing defines how to do it.
Authority is the formal right of a person to make decisions, to issue orders, and to allocate resources in order to achieve goals.
Authority is vested in organizational position, accepted by the subordinate, and flows down the vertical hierarchy.
Responsibility is the subordinate’s duty to perform the assigned task, which is the flipside of the authority coin.
Accountability brings both authority and responsibility together and requires the subordinates to report and justify task outcomes to superiors in the chain of command.
Delegation is a transfer of authority and responsibility from a superior to subordinate, but accountability still rests with the superior.
– formal practices: pay levels, structure of the hierarchy, job descriptions, and other written policies;
– informal practices: behavioral norms, unwritten rules that have been developed over time and are considered valid;
– the organizational stories employees tell to explain “how things are done around here”
– rituals: Christmas parties and retirement dinners
– humor: jokes about work and fellow employees
– jargon: the special language of organizational initiates
– physical arrangements: interior decor, dress norms, and architecture
One typology that has received a lot of research attention is the organizational culture profile (OCP), in which culture is represented by seven distinct values:1- innovative
Why is organizational culture relevant?
It is important to know the culture of an organization in order to understand how it functions and how best to implement policies and change.
What makes an organizational culture the way it is?
We mentioned the informal and formal practices, office design, etc., but where do they come from? Some key elements that influence organizational culture include:
– History (long established, new, product of mergers and acquisitions)
– Ownership (entrepreneurial, partnership, institution, state, many small shareholders, family, co-operative)
– Operating Environment (global, national, regional, local)
– Mission (profit, charity, growth, loss leader, quality, mutuality)
– People (graduates, manual workers, multi-national, accountants, actuaries, salesmen)
– Management Style (paternal, hire and fire, benevolent, despotic, sharing, controlling)
Other important elements: Decision making, power, hierarchy, information flow, etc.
Power Culture [Zeus]
This is also known as Club Culture. There are some organizations where the power remains in the hands of only a few people, usually around one dominant figure. They are the most important people at the workplace and the major decision makers. These individuals further delegate responsibilities to other employees.
In such a culture, the subordinates have no option but to strictly follow their superior’s instructions. The employees do not have the liberty to express their views or share their ideas on an open forum and have to follow what their superior says.
This is often symbolized by a spider web, as power flows along the lines from the center.
Role Culture [Apollo]
Role culture is a culture where every employee is delegated roles and responsibilities according to his/her specialisation, educational qualification and interest to extract the best out of him/her. In such a culture, employees decide what they can do best and willingly accept the challenge. Every individual is accountable for something or the other and has to take ownership of the work assigned to him. Power comes with responsibility in such a work culture.
This culture can be symbolised by a Greek temple, because it is based on functions and is a very common type where communication flows up (in varying degrees) but never or seldom across (bureaucracy).
Task Culture [Athena]
Organizations where teams are formed to achieve targets or solve critical problems follow the task culture. In such organizations, individuals with common interests and specializations come together to form a team. There are generally four to five members in each team. Every team member has to contribute equally and accomplish tasks in the most innovative way.
This culture can be symbolised by a net, as power flows up, across and down in a matrix structure. Jobs are project or task oriented and very flexible with no structure.
Person Culture [Dionysus]
There are certain organizations where the employees feel that they are more important than their organization and are more concerned with their own self. The organization in such a culture takes a back seat and eventually suffers. Employees just come to the office for the sake of money and are never fully committed. They are seldom loyal towards the management and never decide in favor of the organization.
This culture can be symbolized by a cluster or constellation, as individuals are important. Such an organization is rare and difficult to manage. Some partnerships are like this and professors within academia also fit this profile if interested in their own interests.
We started this lesson by defining an organization and some general characteristics. We then addressed the cultural aspect of organizations and ended with the different types of cultures.