*ASSIGNMENT*

Course Title:-
Principal of Management.
Course code:-
BAM-301.
Topic:-
Organizational Design.
Submitted to:
Sir Sanaullah.
Submitted by:
Syed Waqar Haider.
Roll no:
22246.
Semester:
BS Commerce 5th.
Session:
2022____26.
Date of submission:
01-12-2024
Qno#1
Describe the basic nature of organization design.
Answer:-

•Organization Design•

Organizational design is the process of aligning an organization’s structure with its goals to
improve its effectiveness and efficiency. It involves creating and implementing systems and
structures, and helping employees adapt to new ways of working. Organization design is
the overall configuration of structural components that define jobs, groupings of jobs, the
hierarchy, patterns of authority, approaches to coordination, and line-staff differentiation
into a single, unified organizational system.
Organizational design is a step-by-step methodology which identifies dysfunctional aspects
of work flow, procedures, structures and systems, realigns them to fit current business
realities/goals and then develops plans to implement the new changes. The process focuses
on improving both the technical and people side of the business.

•Methodology•

Although adaptable to the size, complexity and needs of any organization, the design
process consists of the following steps.
•Charter the design process:-
As senior leaders you come together to discuss current business results, organizational
health, environmental demands, etc. and the need to embark on such a process. You
establish a charter for the design process that includes a “case for change,” desired
outcomes, scope, allocation of resources, time deadlines, participation, communications
strategy, and other parameters that will guide the project.
•Assess the current state of the business:-
You don’t want to begin making changes until you have a good understanding of the
current organization. Using our Transformation Model, we facilitate a comprehensive
assessment of your organization to understand how it functions, its strengths and
weaknesses, and alignment to your core ideology and business strategy. The assessment
process is astounding in the clarity it brings an organization’s leaders and members, not
only regarding how the organization currently works but how the various parts are
interrelated, its overall state of health and, most importantly, what needs to be done to
make improvements.
•Design the new organization:-
The senior team (and/or others who have been invited to participate in the process), look to
the future and develop a complete set of design recommendations for the “ideal future.”
At a high level, the steps in this process include the following:
•Defining your basic organizing principle. (Will you organize primarily around functions,
processes, customer-types, technologies, geographies, etc.?)
•Streamlining core business processes—those that result in revenue and/or deliverables to
customers.
•Documenting and standardizing procedures.
•Organizing people around core processes. Identifying headcount necessary to do core
work.
•Defining tasks, functions, and skills. What are the performance metrics for each
function/team? How are they evaluated and held accountable?
•Determining facility, layout and equipment needs of various teams and departments
throughout the organization.
•Identifying support resources (finance, sales, HR, etc.), mission, staffing, etc. and where
should these should be located.
•Defining the management structure that provides strategic, coordinating and operational
support.
•Improving coordinating and development systems (hiring, training, compensation,
information-sharing, goal-setting, etc.).
At some point the design process morphs into transition planning as critical
implementation dates are set and specific, concrete action plans created to implement the
new design. And a key part of this step includes communicating progress to other members
of the organization. A communications plan is developed that educates people in what is
happening. Education brings awareness, and everyone’s inclusion brings the beginning of
commitment.
Implement the design:-
Now the task is to make the design live. People are organized into natural work groups
which receive training in the new design, team skills and start-up team building. New work
roles are learned and new relationships within and without the unit are established.
Equipment and facilities are rearranged. Reward systems, performance systems,
information sharing, decision-making and management systems are changed and adjusted.
Some of this can be accomplished quickly. Some may require more detail and be
implemented over a longer period of time.

Nature of an Organizational Structure:-

The structure of an organization should always be dynamic. A static and rigid structure
only creates difficulties and hurdles. The structure must conform to requisite changes at all
times.
The main reason for this requirement is that external environments influence all
businesses. For example, social, technological, economic and political factors play a huge
role here. As a result, the organization must be able to adapt to these changes at all times.
Furthermore, it can become necessary for an organization to hire more employees or cut
down its task force. External factors are responsible for this as well. If that happens, the
structure always must be flexible enough to mend itself.

 Development of an Organizational Structure:-

Every time an organization creates its structure, it has to consider various factors.
Since there are no fixed rules for this purpose, some common guidelines can be of
great help. Here are some considerations one always must keep in mind while
designing such structures.

1. Clear Definition of Objectives:-

Firstly, the main objectives of the organization must be absolutely clear. These
objectives determine what kind of structures are required. A standard structure can
never suit every kind of organizations.

2 . Determination of the Structure:-

After completing the steps, the organizers finally determine the overall structure. He
defines the ranks and hierarchy in which people will function. Creation of departments also
happens in this step. Consequently, managers and employees become aware of their exact
roles and responsibilities.

3 . Revision of the Structure:-

 Once the structure starts functioning, it can show up problems and shortcomings. For
example, the marketing and sales departments often perform similar functions.
Consequently, this can show up difficulties in the clear demarcation of work between them.
The organizers must always try to find such problems and resolve them. This the reason
why organizational structures must be flexible and not rigid.

Qno#2
Identify and explain two basic universal perspectives on organization design.
Answer:-

*Organization Design*

Organization Design is a formal, guided process for integrating the people, information and
technology of an organization. It is used to match the form of the organization as closely as
possible to the purpose(s) the organization seeks to achieve.
Universal Perspectives:-

“The Bureaucratic Model”

Max Weber, a German sociologist, conceptualized the idea of bureaucracy. A bureaucracy
is a form of organizational structure in which people can be held fully accountable for their
actions because they are required to act in accordance with well-specified and agreed-upon
rules and standard operating procedures. Basic Elements of the Bureaucratic Structure
are:
 Formal rules and behavior bounded by rules
 Uniformity of operations continuity despite changes in personnel
 Functional division of labor based on functional specialization
 Rational allocation of tasks
 Impersonal orientation
 Membership constitutes a career
 Promotion based on technical competence
 Limited discretion of officers
 Specific sphere of competence
 Legally based tenure
 Employment based on merit-no ascribed status
 Qualifications tested
 Proscribed authority-legally defined

. *Features of Bureaucratic Organization*

Following are the different features of bureaucratic organization:
 A well-defined chain of command exists.
 The high level of Division of Labor and Specialization.
 It follows Rationality, Objectively, and Continuity theory.
 The relationship between the members of the association is formal and impersonal.
And it’s focused not on personalities, but roles.
 The rules and regulations are well defined and employee duties and privileges are
indicated.
 Such ideals range from the bottom of the organization to all and must be strictly
observed.
 Professional credentials are used for selection and promotion.
 Relevance is granted only to bureaucratic or legal authority.

*Criticism of Bureaucratic Organization*

 Max Weber’s Hierarchical Management Approach still has several fault lines and
has attracted criticism for that.
 The focus is only on rules and laws.
 Owing to the formalities and regulations of the Hierarchical Organisation, there
would be needless gaps in decision-making.
 Owing to so much formality and laws, organization and communication were
hindered.
 Bureaucracy requires a lot of paperwork and has an extensive level of authority,
resulting in a lot of time, effort, and resources being wasted. Not optimal for
effectiveness.
 A hierarchical approach is not ideal for business organizations because of its
unnecessary formality. For government agencies, the bureaucratic model might be
appropriate.
 The professional skills of the personnel for promotion and transfers are given too
much significance. The dedication and commitment of the worker are not
considered.
*The Behavioral Model*

This model has evolved from the Human Relations School of management thought.
In this model the performance of an organization is believed to depend on human
beings, their behavior ,characteristics and their mutual relationships emerging from
work patterns and organizational settings. The important factors which play
significant roles are needs, motivations, attitudes, values, leadership, group
behavior, perceptions, communications, responsibility and authority relationship,
 etc. In other words, the behavioral models of organization design reflect the social
and psychological implications of organizational life. The most popular behavioral
models of organization design the socio-technical systems theory and Likert’s
System 4 Organization.

*Contingency Approach*
The contingency approach to organizational design tailors organizational structure to the
sources of uncertainty facing an organization. The structure is designed to respond to
various contingencies- things that might happen and therefore must be planned.
According to Contingency Theory, the structure of an organization depends on the
circumstances at any given time. The key contingency variables
Addressed in the literature include:
•Strategy
•Ability to adapt to the environment
•Technology and
•Size

Advantages:-
 Behavior and working of a system can easily be understood without any effort.
 Results are more accurate by using this model.
 This model requires less cost for development as cost of resources can be minimal.
 It focuses on behavior of a system rather than theories.

Disadvantages:-
 This model does not have any theory, so trainee is not able to fully understand basic
principle and major concept of modeling.
 This modeling cannot be fully automated.
 Sometimes, it’s not easy to understand overall result.
 Does not achieve maximum productivity due to some technical issues or any errors.

-:Examples of Behavioral Modeling:-

Once you are a customer of a company, they generally want you to be

consistent or increasing your interaction and purchases. This is also true of
credit card providers. A credit card company may notice, for example, that a
cardholder has shifted from making purchases at discount stores to high-end
stores over the last six months. By itself, this may indicate that the cardholder
has seen an increase in income, or it could mean that the cardholder is
spending more than they can afford. To narrow down the options and create a
more accurate risk profile, the card company will also look at other data
points, such as whether the cardholder is only paying the minimum payment
or if the cardholder has made late payments. Late payments may be an
indicator that the cardholder is at a greater risk of insolvency.
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