Organizations and individuals

The employees who work in more bureaucratized and with more

autonomy are tend to be more intellectually flexible, open to new
experience and more self-directed than those working in different
context. (Kohn and Schooler)

Another factor is the way people look at their work i.e. Idiosyncratic
behavior.
Barley and Kunda’s,2004 research
Externalities

“Externalities” refers to the result of an economic transaction that

affect others who did not participate in the transactions.
Externalities can be positive or negative.

Positive Externalities -The non participating party receive benefit

from the transaction.

Negative Externalities- The non participating party suffer some

damage or have to pay some cost. Negative externalities are more
salient.
SOCIAL STRATIFICATION

It can be classified on the basis of Religion, Caste, Place of birth,

Ethnicity, Income group Etc.
FORMALIZATION
- Formalization means how jobs in the organization are standardized by
rules and regulations. It has two aspects..
- Job Codification- It is the extent to which job descriptions are specified
and represents the degree of work standardization.`
- Rule Observation- It is a measure of whether rules are employed or not
and indicates the degree to which job occupants are supervised in
conforming to the standards established by Job Codification.
• Organizational Consequences of Formalization

• Individual Consequences of Formalization

CENTRALIZATION

It refers about distribution of decision-making responsibility and power

within an organization.

- The extent to which one is allowed to work without undue

interference of superiors.
- Rules are often used to govern the actions of the organizational
members.
- Degree of centralization of organization is indicator of how
organization assumes about its members
*High centralization- Tight control
*Low centralization- Members can govern themselves
Relationship between complexity, formalization and
centralization

• As organization gets bigger both formalization and complexity

increases.

• As organization become more complex, they become more formalized.

• High complexity Low centralization

High Formalization
 Organisational Structure

• An organisational structure is a system that shapes the way in which activities are performed in

order to achieve a specific goal.

• It shows the way in which the information flows from one level to another level

• It basically involves task allocation, coordination and supervision.

• Example: Flow of information from top level to bottom level of an organisation while it is not as

such in decentralisation.
 Weber’s Ideal Bureaucracy

The characteristics:

• The labour force is divided and each division’s responsibilities are clearly defined to specific employees

• Hierarchy is followed wherein the decisions made at lower level are reviewed and modified by the

upper level of management

• In order to govern the decisions and promote uniformity across individual the written rules and

documents are used

• There must be a separation between personal and organisational resources

• Employees must have knowledge of the task they have been asked to do
 DIMENSIONS

COMPLEXITY FORMALISATION

CENTRALISATION
 Complexity and it’s types
Complexity is related to the number of job heads in an organisation
• Types of complexity are as follows:
1. Horizontal complexity:
It refers to the ways the work tasks performed in an organisation are divided into different divisions
basically depended on specialisation in skills and knowledge of the employees.
• Positive: Greater efficiency
• Negative: Issues related to coordination and control

2. Vertical Complexity:
It involves delegation of decision making tasks and responsibilities
• Positive: clear lines of authority, tight span of control and high operating efficiency]
• Negative: Decision making becomes slow
 Spatial complexity
• Spatial complexity encloses horizontal as well as vertical complexity

• It is depended upon the number of sites that the organisation has in

different locations

• It occurs when different type of tasks are being performed at various

locations

• There are separate establishment in different locations in order to perform

same type of task

• Positive: Expansion of organisation

• Negative: Problem of coordination and control

 Organizational structure and its various correlates

 Size of a firm can be measured by:-

1. Physical capacity
2. No. of job heads
3. Financial endowment.

 Effect of technology

• Contingency theory limitation- It could not throw light on the aspects which is
contributing to the difference in organisational arrangement.
• Types of interdependence:

1. Pooled interdependence
2. Sequential interdependence
3. Reciprocal interdependence
Pooled Sequential Reciprocal
• Different job • Uncertain types of
process are
 Two job heads are business process.
related to each
independent to each other. •The requirement of
other.
job head is as per
•Jobs occur in
context.
particular
sequence.

A B C

A B C
 • In Pooled & Sequential, no. of job heads are defined into two parts:-
1. Certain
2. Uncertain
• The two main aspects of Uncertainty are:-
1. Variability of Input
2. Knowledge of Means and ends.
Organic & Mechanistic:

Mechanistic
• Routinised
ORGANIC
• eg. Production
• Non- Routinised
• Different process of
job promotion &
appraisal. Organic
• Salaries are more
incentive based. • Project Champion
•Eg. R&D
 INNOVATION
 Administrative – According to Daft it includes changes that affect the policies,
allocations of resources and other factors associated with the social structure of the
organization.

 Exploitative – According to Benner and Tushman , those innovation which involves

which improvements in existing components and architecture which build on the
existing technological trajectory.

 Exploratory – Benner and Tushman says that shift in the technological trajectory can
be said as exploratory innovation.

 Technological – it represent the adoption of an idea that directly influences the basic
output process of the firm and often originate with technical specialist.
Bartlett & Ghoshal Model of International
Strategy
Multinational – A multinational firm treats every region to be different and thus
autonomy is given to the different units. Thus more formalisation among the
autonomous units but less centralisation in the norm.

Global 2 – A global firm treats the world as one unified market .the key product
and human resource decisions are made at head quarters communicated and
implemented consistently throughout the world.

International – An international firm falls within the two orientation both in

uncertainty and autonomy . They have medium need of information processing
and fall within two domains of global and multinational.
 Structuring of innovation
• Linkage between structure and innovation.
1. Porter low cost business strategy.
2. Daft dual core model of innovation.

• Thompson’s model

• Structuring of innovation
1. Upstream activities
2. Downstream activities

• Project champions
Keiretsu

• It is a Japanese concept, where exist a unique structural arrangement of

firm having a group of companies.
• Loss of one company can be incurred by the other profit making
companies.
Horizontal keiretsu
• It is essentially a diversified conglomerate; that is, it may have companies in
several completely unrelated industries so as to reduce the risk of loss if one
industry or other has a bad year.

• Example- Mitsubishi, Sumitomo.

Bank

Company Company Company Company

1 2 3 3
Vertical keiretsu

• The parent company integrates with its suppliers and manufacturer of parts
and distributors.
• Further divided into 1st tier and 2nd tier supplier.

• Example: Toyota and Honda