Organizational Theory

1) ORGANISATIONAL THEORY

Organisational theory is designed to understand the nature of the organisations. By which organizations can evaluate its overall business by putting the right structure and operate in different ways. Organisational theory also helps us understand how processes such as change and decision making can be managed. It deals with different structures and cultures such as large organizations have different structures and cultures than small ones, and the manufacturing organisations operate in a different way than those in the service sector.

(Burton & Obel, pp. 11 to 12)

2) ORGANISATIONAL DESIGN

Organization Design is a formal, guided process for integrating the people, information and technology of an organisation. It is used to match the form of the organisation as closely as possible to the purpose the organization seeks to achieve. Through the design process, organizations act to improve the probability that the collective efforts of members will be successful.

(Burton & Obel, p. 13)

3) ORGANISATIONAL STRUCTURE

Organisational structure has long been described as a mechanism through which effort is integrated through the coordination and control of activities There are many different types of structures and for years researchers and practitioners attempted to determine what type of structure was in fact the most effective. This line of inquiry has led ultimately to a contingency view of structure, that is, the most appropriate structure for a given organisation is a function of the type of environment that organisational operates within and the technology it utilizes.

4) ORGANISATIONAL CULTURE

Organisational culture is the personality of the organisation. Culture is comprised of the assumptions, values, norms and tangible signs (artefacts) of organisation members and their behaviours. Members of an organisation soon come to sense the particular culture of an organisation. Culture is one of those terms that's difficult to express distinctly, but everyone knows it when they sense it. For example, the culture of a large, for-profit corporation is quite different than that of a hospital which is quite different that that of a university. You can tell the culture of an organisation by looking at the arrangement of furniture, what they brag about, what members wear, etc. -- similar to what you can use to get a feeling about someone's personality.

(Burton & Obel, p. 104)

5) ORGANISATIONAL CHANGE

Typically, the concept of organisational change is in regard to organisation change, as opposed to smaller changes such as adding a new person, modifying a program, etc. Examples of organisation-wide change might include a change in mission, restructuring operations (e.g., restructuring to self-managed teams, layoffs, etc.), new technologies, mergers, major collaborations, "rightsising", new programs such as Total Quality Management, re-engineering, etc. Some experts refer to organisational transformation. Often this term designates a fundamental and radical reorientation in the way the organisation operates.

(Burton & Obel, p. 13)

6) RELATIONSHIPS AMONG THEM

In today's business environment, without having proper design, structure and culture a business cannot survive and also it should have the capability in changing its business environment affected by its internal and external environment. Organisational structure, design, culture and change are all interrelated with each other, especially structure, design and culture. Organisational theory is able to analyse the structure and culture of their organisations, solve the problems and utilize the process of organisational design and make adjustments that helps the organisations to achieve its goals. Organisational design influences both the structure and culture of the organisation because of increased competitive pressures and increasing use of advanced information technologies, organisational design has become one of the important priorities of the management (CBA 2004). The evolution of an organisation's structure is integrally related to the evolution of its culture and vice versa. Mechanistic structures and organic structures, for example, give rise to totally different sets of cultural values. In a tall, centralised organisation, people have relatively little personal autonomy, and desirable behaviours include being cautious, obeying superior authority, and respecting traditions. Thus, mechanistic structure is likely to give rise to a culture in which predictability and stability are desired end states. In a flat, decentralised structure, people have more freedom to choose and control their own activities, and desirable behaviours include being creative or courageous and taking risks (CBA 1997). Thus an organistic structure is likely to give rise to a culture in which innovation and flexibility are desired end states. An organisations structure can promote cultural values that foster integration and coordination. Moreover, norms, values and a common organisational language can improve the performance of individuals. For example, product team structures and matrix structures is that the reliance on face-to-face contact among functional specialists in team forces those teams to quickly develop shared values and common responses to problems. Whether a company is centralised or decentralised also leads to the development of different kinds of cultural values (BNET 2002). By decentralising the authority, an organisation can establish values that encourages and reward creativity and innovation. Conversely, in some organisations, it is important that the employees do not make decisions on their own and that their actions be open to the scrutiny of superiors. In such cases, centralisation can be used to create cultural values that reinforce obedience and accountability.. In some, organisational structure affects the cultural values that guide organisational members as perform their activities. In turn, culture improves the way structure coordinates and motivates organisational resources to help an organisation achieve its goals. The emerging role for organization design specialists-and for organizational leaders-is to attend to the dynamics of simultaneous structural and cultural change (BNET 2002). Through the design of organisational structure and culture an organisation can

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