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We are going to look at the theory of organization structures, its nature, and consequences.
From the preceding presentations you would have learnt that all organizations are bound
to have some kind of a structure. The structure is to an organization what the
skeleton is to the human body. It helps to give shape to the organization and if you
extend the metaphor further - if there is no structure, the organization cannot "stand"
as it were. Now, what does the expression mean that the
organization will not "stand" as it were? It will be an amorphous entity, shapeless,
and therefore it cannot work. It is one of those aspects of a situation which exists
whether you understand it or not. It is like asking, "Do you have a philosophy?" You say,
"No, I do not have a philosophy"; it is impossible. Everyone has some philosophy however right
or wrong or relevant or irrelevant or stupid or genius-like. There is no living person
who will not have a philosophy. Philosophy is the assumptions on which you base your
action; and each experience works towards that philosophy - either for it, against it,
modifying it, changing it, strengthening it - you take it as far as you can, but there
is no such thing as not having a philosophy. You may not be conscious of it. You may not
be a thinking person. You may not be aware that you have a philosophy, but you do have.
Similarly, you may not be aware of the kind of organization structure a given organization
has; but you cannot have an organization without a structure. It may be clear, it may be confused,
it may be mixed, it may be fuzzy; but structure is inherent to every organization. What we
are trying to do in the session is look at the nature of structures, how many types of
structures there can be, and we shall also be examining the consequences of structures
- what happens when organizations are there? Because, as a result of structures the work
method of an organization is determined. Its effectiveness is determined by the kind of
structure which it has. Its speed or efficiency is determined by the kind of structure it
has; and it is possible to consciously intervene in structures to alter its shape and which
is why it is the subject matter of organization management.
Remember my statement to you that it is not enough in life to understand the situation,
and of course, it is important to understand the situation. Action does not begin without
understanding; but it is just as important and probably more important to do something
about it. What good is an understanding if it does not
lead to action? Management being a field of discipline believes essentially in doing something
about the situation. If you cannot do something about the situation, get off management.
It is there that even if you decide not to do something about the situation it should
be a conscious decision. It should not be indolence, it should not be laziness, you
do not want to do something, or it cannot be a factor of lack of understanding - you
do not understand what is on, therefore, anyhow, you cannot do something.
After understanding a situation you take a position; this is not something about which
I want to do anything or indeed this is not something about which I can do anything. Once
you take that as a conscious decision, not taking an action is itself an operational
choice. We shall ensure, therefore, that you look at structures as something with which you can work with.
The objectives of the session are to help you to identify the key elements of an organization
structure. When you identify the key elements of an organization structure you understand
its components and its shape. We shall also describe various structures and their characteristics.
We shall try to understand what the difference between vertical and horizontal specialization,
and therefore, where would the control mechanisms be; because, ultimately it is all about control.
You will recall control is not a process of negation, control does not come out saying
no to people, control comes out of the process of keeping something on track, that is, if
something is slow you expedite it, if something is fast you retard it, if something needs
to be done you encourage that it be done, if something does not need to be done well
then you encourage that action not be taken. In other words, it is important to understand
that control is like a thermostat. Control processes are about keeping something on track
towards the objective.
The purpose is also to identify and understand factors favoring different structures; to
put it simply, how does a structure emerge on its own. For example, it is quite obvious,
you cannot run a class session on the structure of a parliament. There is a world of a difference
between the way a parliament shell functions and the way a class shell functions.
Let us examine it. Parliament is supposed to be representative of every citizen of this
country which is why you have a fixed number of representatives over a fixed population
and that does not vary, which is why, the more populous states have more members in
the Lok Sabha, and the less populous states have lesser numbers in the Lok Sabha. Each
citizen is supposed to have a representation. All parliamentarians are equal to each other.
Amongst themselves they select a speaker who is supposed to coordinate and keep order in
the functioning of the house. If there are 500 plus people obviously you need somebody
to keep order. A classroom situation is a different ballgame
all together, its an illustration of a different class, it is a different category. A classroom
situation is a knowledge management situation. Presumably, the purpose of attending a class
is to learn. To facilitate the learning there is an instructor, some call him a teacher.
The instructor is not like a speaker of a Lok Sabha. He is not elected by a class. He
has been identified through a duly constituted selection process for presumably knowing the
subject matter better and teach it in a way in which it can be learnt - that is a teacher.
He is also supposed to evaluate; therefore, you cannot equate a student in a class to
the teacher of a class. There is a hierarchy there straightaway. The teacher say, typically
in an I.I.T or in an I. I. M system, determines the syllabus. He determines the sequence,
he sets the question paper, he evaluates the scripts, and he gives marks - his judgment
on that holds. So, as I said, there is the difference of
class the teachers runs. He is supposed to enable a learning environment in the class.
In fact, the teacher is supposed to have absolute authority in a class situation. Even his all
superiors should not enter the room without his permission.
We have had occasions where somebody is taking the class and the director or the principal
wants to come in for whatever reason. He just wants to see whether there is seepage or not.
First of all, he should not disturb the class but, for some reason the class has to be disturbed
he seeks the teacher's permission - may I come.
Now, these are the two examples to show that it is the nature of the task and the nature
of the group which determines the structure of the function. We shall be looking at how
to understand factors favouring different structures. We shall be examining the organizational
structures, and will be identifying an integrated view of organizational structure because ultimately
organization structure cannot become a law unto itself. An organization structure is
an enabling situation - if it does not work it should not exist in its present form.
Obviously, if something is so critical to the functioning of a system and we have already
looked at what is a system; the proposition that then comes do we need it? Everything
begins with a need analysis and this is a very important word. Please understand - say
even behaviorally each relationship exists in the fulfillment of a need. If there is
a need and that need is not being fulfilled, the relationship will not exist. It need not
be a material need, it may be a psychological need, it may be an emotional need. Needs are
of all types or all varieties - just a need to be loved, the need to love someone; and
if that need is fulfilled elsewhere, then you change partners.
For understanding action and understanding a given process, it is very important do a
need analysis. The key concept here is - what is the need of a structure? Why must you have
a structure? Because, you see in the western mode of learning, enquiry has been made the
essence of all learning. You must keep questioning, there is nothing virtuous about it. It is
just that the whole education system has an overlay of it. A lot of Asian learning does
not emphasize enquiry in the same way. You must understand that very clearly. It is not
that it does not talk of enquiry. You heard me say it does not emphasize enquiry in the
same way. I will give you an example. In Asian learning - Chinese, Middle-Eastern, South
Asian - you name it, there is such a thing known as up the watch on, which, in a free
translation would mean a credible statement. It is not for you to question the credibility
because you may not be evolved enough to understand that logic. Yet you need to believe that logic
- but why must you believe the logic? You believe the logic because somebody so anointed
says it and that is the role of a guru. Why would it be true? Because somebody whose judgment,
whose learning, whose scholarship I trust; who means me well; and knows that I am not
so evolved tells me it is so. Let us illustrate it. Parallel lines are supposed
to be lines which do not meet. If you cut across a parallel line, the angle which the
line cutting cross the two line makes must be identical; but the knowledgeable know that
parallel lines meet and they meet in infinity. Now, if you The concept of an infinity needs
an evolved mind. If you do not understand infinity, what is the point of telling a15-year
old that parallel lines are lines which meet in infinity.
You tell him - parallel lines are lines which never meet, which, is basically a definition
open to modification. So, learning has to do with the capacity and the capability of
the student. Everything cannot be explained, not that theoretically it is impossible to
explain it; but the fellow does not have the capacity to absorb it.
It is much more expeditious to trust a thing because, somebody with very ((fireable)) credibility
and - mark my words I am not just saying anyone - somebody with the verifiable credibility,
proven antecedence, and these are important phrases - says it is so.
Now, this is typically an Asian phenomenon. In the post-industrial ethos choice is a very
important phenomenon. You are expected to exercise choices. Why must I exercise choices?
I do not even understand; but this approach and reference to the West is not a geographical
phenomenon, it is a mindset. You can be an Asian with a Western mindset or you can be
a Western with an Asian mindset or there any number of such examples. I am not talking
of geography, I am talking of content. This emphasis continuously - it is my life, I will
choose, it is my choice - sure it is your choice. As a 6-year old you want to experiment
with fire and you want your fingers in the fire because there is nobody to guide you;
and you say it is my choice. Yes, darling go ahead, exercise your choice, learn.
If all learning was to be that way - God help all learning processes. This reflects itself
culturally where we will talk of culture, structure, and environment - all this will
come out very prominently. Here, if you serve tea you are served mix tea; you do not ask
what type of tea do you want - cinnamon, masala, Earl Grey. If you have not heard of
these types of teas do not worry, your life will not be unmade.
You pour the tea, you pour the milk, you put the sugar and if you are a good guest, you
are supposed to enjoy it and say what a great tea. You do not serve it that way in western
ethos. In fact, you give boiled water, you give a dip, you leave to the person a choice
- how long does he want a dip in the water. I love my tea so much that I usually never
have it. Now, what is the contradiction? The contradiction is very simple. I love my tea
golden in color, without milk, because I am having tea and not milk and sugar, and I want
my dip for 30 seconds. now you Who is going to oblige me? he was a so difficult doctor
you have your tea elsewhere Here, we put that dip in for a minute and
a half it turns black, and that is not the way I want my tea so I do not have my tea.
My chances of going wrong with coffee are far less than going wrong with tea. Therefore,
please realize something which I repeatedly emphasize - nothing that I say is a value
judgment. These sessions are not indoctrination sessions. These sessions are meant to open
up your mind to enable you to think, and that I have been saying from day one. Which way
you want to grow - I am sorry to put it that way - if you think I am western, it is your
choice. On the other hand, if you want to grow up
that way your [fl] wants you to grow up - well that is you. I have no problem with it, please
follow your [fl], who am I to say it is wrong. As far as I am concerned whatever you do is
right because whatever it is you will do is your problem and you will face the consequences.
If you have a coughing bout and you do not want to go to the doctor, I have a right to
say do not disturb me, but you have a right to say I love my cough, I am in love with
it, unless I cough every 5 minutes I do not feel normal about. Yes, by all means not at
my cost and not at the cost of others. Therefore, the business of choices has a business of
context. Choices are not my sweet will. no You are
a social animal and there is a context of the exercise of choices. You cannot say it
is my choice that I will paint my legs blue and come to a group session walking on my
hands. Yes, sure do that and do that in the privacy of your home not in a group situation.
Therefore, there is no such thing as an absolute choice. The same logic applies to the choices
on structures. You cannot alter all structures endlessly. Certain structures will emerge
because they are in a context, so there are limits in which intervention can be carried
on and that is the proposition I am want to sell to you.
The need of a structure therefore is the first step. Structure is necessary because it enhances
performance through resource utilization. If you do not have structures there is a you
resource leakage and resource wastage and that is why you need structures. You cannot
say that the storekeeper will also serve as your marketing manager. No, these are two
different functions of an organization, therefore, you go back to optimizing; remember the definition
of management - decision making, problem solving for resource optimization; if the resources
are being wasted it is not management. Structures are a critical input to resource
optimization and that is why you need structures. You cannot say I do not believe in structures.
I know it is very fashionable to condemn everything or anything - I do not believe in it. Sweetheart,
you do not believe it, out. Carry your belief on your sleeves and lead your life. This is
a community situation. People have to believe in something at least in leaving each other
alone to fulfill the objectives for which they are working together. Let us get this
clear. You need structures because you cannot waste resources. It is not your right to waste
resources. It monitors activities. Everyone needs to
know what the activities are about because the activities are supposed to be goal directed.
If you are a part of a group and you are not working towards the goal - may I know what
you are doing there - out. Any organization which does not have a carefully calculated
rate of attrition is bound to collapse with its own contradictions. It is like social
forestry. You do not keep planting trees for the sake of planting trees. Planting trees
has to have a purpose, has to have an objective; therefore, proper social forestry requires
carefully calculated felling of trees, carefully calculated plantation of trees, and the density
of the trees being appropriate to the environmental requirements - and that is what it takes.
If a tree is dead or about to be dead or diseased, chop it. You cannot say you cannot cut a tree
because you cannot cut a tree. Well, then, the objectives will have to tell
you - you better go out. Any organization which does not keep its membership clearly
focused on the organization is bound to come to grief. Then, how do you judge what behavior
is appropriate to the objective and what behavior is defeating to the objective. There is no
absolute judgment. There are contributing features of which structure is one. You are
assigned a rule, you are assigned a job, you are assigned a place in the organization,
and you do that little bit to keep the organization going. You do not do it - thank you, very
much. Which is why my two keywords - competency
and discipline. I know it is not fashionable to talk of discipline. I know it is fashionable
to say I wanted it that way - that is my choice. Sure, earn it. Do not do it on somebody else's
resources. I understand choices; but choices have precursor activities and choices have
consequences. Face the consequences of your choices. You cannot spill the milk and cry
that somebody else clears the mess. oh no I want to marry this person by all means,
please go ahead and face consequences - for and against. I want this job, sure go ahead
but do not come back to somebody to intervene or solve your problems. You wanted this job,
so you have to have ownership. You have to ask yourself - do I have the necessary maturity.
Now, this is one side of the story. The other side of the story is how does the system judge
whether you deserve to be there or not? You may be a total liability; you should have
not been there to begin with; and you cannot carry one person as a liability at the cost
of a collective goal. If you do that then everyone else pays for what they have not
done and that is not fair. Structures help to monitor activities is what
I am trying to tell you. It provides the system to promote accountability and coordination.
If you have an assembly line, you have to ensure that different components which are
to be pieced together at the end result of the assembly line come in at of flow, at an
appropriate point of time, in an appropriate form, and take the time required to fall in
place. If the groups are not cut properly, if the nuts do not fit, if the bolts are not
there, then you are going hold up the entire assembly line, because there is some nut there;
and that pun is entirely unintended. The way to deal with nuts is to throw them out. The
collective has no obligation to deal with ((lumpen)) characters. There is no absolute
((lumpency)), there is only a relative ((lumpency)) - what is the touchstone of that, how do you
judge it. Structures help you to judge the objectives, help you to judge because remember,
all objectives are thereby broken up into sub objectives of different structures - there
are departmental objectives, they are divisional objectives. Believe me, it is something which
you should internalize; there are even job objectives.
Why should you be there? deputy manager accounts I am entitled to ask what would happen if
that job was abolished; or if nothing was going to happen after the job was abolished
- well then, abolish the job, why invest in it. A basic point which is often missed is
- you cannot run commercial organizations on the basis of social good. These are two
discrete elements; and I want you to be absolutely clear on it because people who are not inclined
to listen to this statement favorably will be determined to misinterpret me.
Doing social good is a separate proposition from running a commercial organization. In
fact, to do social good, a commercial organization must be first successful and have profits
to find money and to do the social good. Therefore, if you start mixing the two, you are not going
to have social good and you are going to lose the commercial dimension. Any community which
does not understand this will come to grief. This is not a cultural paradigm, because the
commercial activity requires a return on investment. A social activity is meant to ameliorate the
handicaps. When you ameliorate the handicaps, your returns may or may not come. They may
come then, they become 20 years later, they may come in a very different shape. What do
I do with my investment? How do I get the money to keep it going? A study of structures
gives you clarity on what is a commercial activity and what is a social activity. These
tea should not be mixed any more than two drinks should not be mixed.
It allows flexibility to respond to various environmental inferences. It brings a social
satisfaction to its members. What is the nature and origin of structures? It emerges just
after the inception of an organization. A polite way of saying that is - it is there
right from the beginning. This - ladies and gentlemen, is not a choice. [fl] my will.
I want an organization without the structure. Brilliant! The world is not ready for you
Mister genius. You will have to take birth 970 generations later to create an organization
without structures. Now, do not ask me to calculate when 970 generations comes - that
is your problem. Not static and may changes several times - it
is not as if structures are immutable. The change may be in whole or part. Structures
are live entities. In fact bodily structures change; the chemical composition of the structure
changes. When the bones get ossified, there is no such thing as a live body. In fact,
the ossification of bones itself can cause death; there are illnesses where this happens.
Please recognize that structures are live entities. It defines job responsibilities
for each personnel. How do you run an organization without jobs being defined? In fact, it is
more - how do you run an organization without evaluating jobs? How do you run an organization
without creating a match on what the market pays for that kind of competency and what
you are paying for doing that kind of job? You cannot pay more than the market; it is
not worth it. You cannot pay less than the market; you want to retain the person. That
is the HR function which generally by techies is assumed to be blah blah blah and which
is why a lot of organizations come to grief. The mess which a bad techie will make will
be detected by the quality circle, will be detected by the quality function, and will
be detected by quality assurance. The mess which a human resources person can make will
never be subjected to a quality assurance check because those skills cannot be assessed.
Therefore, if you are not respecting the human resources function and just giving it to anyone
you want, well then be prepared to pay for the consequences; it is as simple as that.
It is not a function which can be trifled with.
The craze which goes on - you know I want to be a finance man with IT. Boy! What a career
that opens up, nobody knows but everyone wants finance specialization with I T. God bless
you! That changes because the nature of the market has changed; the organization structure
of the employers has changed. When you joined your classes your dream was finance with IT;
now they want electronics with marketing. What do you do, darling? Of course, suicide
is one option; but it cannot be the preferred option. The message is very simple - do not
pursue choices out of herd mentality. Everyone is doing it, therefore, I must be doing it;
and this is a major problem of management education.
There are ways of some fashion; and the fashion like all fashion inevitably changes. If you
have the capacity to understand the structure and the process of the employers, you know
what will work and you know what will not work; so, the ultimate nature and origin of
structures leads to a better management of what is the going word these days, in every
management teaching institution - your placement concerns.
I am not going to discuss placement; but I have an obligation to tell you how you cannot
understand the real nature of placement unless you have the capacity to understand the nature
of the organization of the employers; so as far structures are concerned.
Some of the basic structural considerations are to understand is the hierarchy: the institutional
level, the administration level, and the technical level. In each case, the hierarchy can be
different. You may have one type of institutional hierarchy and another type of administrative
hierarchy. Different levels of the organization are shown here in color to register with you
indelibly - what the difference between institutional level, administration level, and the technical
level is.
I will try to explain to you the components of an institutional level hierarchy. The institutional
level deals with development of organizational goals and outputs. It is a strategic function;
it is a policy function; it happens right at the top, which is why if you go back to
the pyramid, you will notice that this triangle is what represents institutional level strategic
thinking. It maintains the structure of the organization because those of you who may
move into the subsequent course of organization management, there is a range there; it includes
organization development, organization structure and processes, innovation, and creativity
- a whole range. It is not necessary for me to cover all that here; but it is important
for me to tell you that by definition: organization development is planned intervention from the
top. You cannot have planned intervention from the bottom. I am sorry it does not work
that way. You may want it that way. You may want to be having the capacity to fly. What
is the difference? The difference is you will never develop wings, you will have to enter
an aircraft to begin flying. So, there is there are clear cut distinctions
of responsibility at the top, responsibility at the middle level, and responsibility at
the bottom level; and you cannot confuse the two. Maintenance of the structure of an organization
is a responsibility at the institutional level - it is at the top level. The top level must
be able to ensure that the organization structure is not disturbed. Establishment of an appropriate
administration climate for subordinate managers - a self-explanatory statement. Formulation
of policies, rules and regulations - you cannot have a manager say I will formulate the rules;
oh no, it is not your right. No this is the democratic process no remember
no you are not right child no An organization can only be participatory. You can celebrate
the word democracy; you can celebrate whatever you want. It does not work that way. All organizations
will have some kind of a command and a controlled system. If it does not have a command and
a control system; it is not an organization, whatever else it maybe.
Similarly, there are administrative levels; they are middle level managers. Here, policies,
rules and regulations are interpreted. Stress is given on planning, organizing, and controlling;
therefore, if anyone of you has learnt the definition of management - that planning,
organizing, and controlling is management. You are going to get stuck at the middle level
and good luck to you. Now, of course, you can argue your hard heart
out. I am not there to convince you. Adult education does not believe in favors. Adult
education can only be important to the people who are willing to learn. If you are not willing
to learn you cannot be a party to adult education; pedagogy is very different from andragogy.
People who think that adult learning and they want to know what is going to be your pedagogy.
My answer is very simple - you know it is going to be pediatrics to cure a case of geriatrics.
Now, for those of you do not know the word, geriatrics is the science of old age. Are
you sure you want to treat elements of age with the techniques of child cure? It does
not work anymore, that is you cannot have pedagogy for adult learning; but everyone
wants to know what is your pedagogy. My answer invariably is - sorry, I do not have any
pedagogy. You do not have any pedagogy? No, I do not have any pedagogy because I deal
with adult learning. Then, how do you teach? I said I teach by learning of andragogy. What
is that word? You cannot teach English as a part of management;
you cannot teach Hindi or Tamil as a part of management. You have to be equipped linguistically
and have your communication in place to start learning the subject matter. It is my understanding
that you cannot practice management without felicity of communication. Any number of researchers
is which have established that management requires management action. Management job
at any level is more than 30 percent of its time spending on just communication.
Now, of course, if you are smart alec with statistics, you will say this is blah blah
blah and you can say whatever you want. The reality does not change; go back to reality
TV. There make a killing. I do not know the what are the fashionable was big boss small
boss middle level boss Everything is around on the screen, it may not be around very much
longer; but reality TV is at least here to stay for few years. Then, they may get sick
of it like people get sick of everything; but management will always deal with reality
and that is what I am trying to explain. Reality TV may go away but management will remain
- what I have said right at the beginning the art of the possible.
It is the making of a practitioner and that cannot be repeated often enough. At the administrative
level, they would be interpreting rules and regulations. Stress, as I said, is on planning,
organizing, and control. Technical levels are the lower level managers. If you are good
with the keyboard - I am sorry to say I hope no hearts will break after my having made
the statement - if that is all you good at all your be are good at that is being a techie;
there is nothing wrong with it and it is very important to be a techie. The trouble, however,
is that it does not give you the swagger which a managing director will have or which a board
level member would have. What is the difference between a techie and a managing director?
A techie is always solving somebody else's problems, while a managing director also solves
other people's problems, but the only thing is he does it at a very different level.
It is not a command; it is not press or enter - these are absolutely important because
you cannot work with a computer unless you know the commands. Anybody who has worked
with the computer knows how important a system manager is or a systems administrator is.
If you do not have a good systems administrator, your monitor causes all types of junks and
jolts No matter how good you are as a systems administrator, you are at the bottom of the
pyramid. These are things which will come out more
clearly to you if you have some work experience. If you do not have work experience it is difficult
to appreciate. watch of This Here, rules and regulations are implemented, the products
are produced - that is the technical level - very important. For a status bound society,
for a society which believes in status, nobody wants to take orders and everyone wants to
give orders. How can everyone give orders? One of the fallacies of leadership is: to
have good leaders, you need good followers.
You cannot be a good leader with no followers. If everyone becomes a leader, you have a bit
of problem, don't you? The organizational process deals with three aspects: communication,
coordination, and control. Organization structure facilitates all these three.
What is communication? Communication is the vehicle through which decisions taken at various
levels are transmitted to other levels. Please note this is one aspect of communication.
There are other aspects of communication: through communication you convey a problem,
through communication you exchange possible solutions, through communication you evaluate
the alternatives, through communication you select the preferred alternative, and through
communication of course you convey the decision. Therefore, subsequent PPT elements here draw
your attention to the fact that it involves information flow across the structure. Remember,
we are not having a session on communication; we are having a session on structure. ((What
are is such)) to be conveyed is communication flows through structures - that is the point.
It has specific direction and it involves time. Communication is successful when the
fullest understanding amongst the persons communicating with each other is achieved,
so communication is a two way process. It also has problems of attitude, ideas, and
opinions. You do not understand too well if you are convinced that you know it all so,
receptivity is very important for communication.
What is the advantage of coordination? Coordination refers to the measurement of interdependencies
in work situation. Please remember everyone is interdependent on everyone else. There
is no such thing as a self-sufficient job description. For each description, kindly
note: there will be receivables and there will be deliverables. Your job is between
the receivables and the deliverables. Your job is a specific throughput process where
you add value to what you have received and with that value addition you pass it on to
somebody else to fulfill their job. In small organizations, coordination is handled
by the managers who are supposed to organize the resources. Coordination need not necessarily
be the role of one single individual at a higher level in an organization. Large organizations
need personal methods of coordination and impersonal methods of coordination - both
are needed for proper coordination.
Personal needs of coordination involve: dialogue, discussion, innovation, creativity, and learning,
both within and across units. The units will be defined by the structures. There is direct
contact between and amongst organizational members, but for it to be a legitimate coordination,
it must follow the structures. You cannot just start coordinating because you feel there
is a need to coordinate. Has anyone assigned to you the task?
Assignment to committees to improve coordination across departments is also known. One of the
instruments of management has often been the task force. Then, there is control. Control
refers to the ability of influencing the behavior of other organizational members; therefore,
a set of mechanisms to keep action or outputs within the specified limits.
Then comes the all-important function of management - setting standards. There is no such thing
as a standard for all times. The standards have continuously to be raised. Standards
have continuously to be upscaled and upgraded; the reason being that there is no such thing
as static standards. If you are not moving the standards up, the performance itself will
begin declining; so, what is not realized by many people is that standards themselves
are a dynamic concept. You have to keep constantly raising the bar.
Measuring of results against standards is the only way you can judge. Then, you have
to take corrective action. You cannot take the attitude - let it be. No, you are not
on a nightingale mission; you are not a priest listening to a confessional; you are not a
counselor; you are not a doting mother - let it be the child will learn. Yes, of course,
the child will learn but not at the collection of the group. The child better learn and then
come back. Sounds absolutely heartless but, believe me, it is absolutely essential. Any
organization which does not do this pays in a way in which only that organization can
talk about. You cannot be sparing about standards - be
they performance, be they products, be they processes, and believe me be they of the purity
of structures. If the structure is not fulfilling its task, disband it. In extreme cases, it
may be more worthwhile closing an organization then letting it will run in a sick manner;
so, corrective actions are a must. Then, comes the business of the shape of the
structure of the organization. Obviously, one has to understand that structures have
a vertical dimension which is top to bottom, and therefore, obviously bottom to top - a
longitudinal function. I will be telling you soon about a lateral specialization or a horizontal
specialization.
The vertical specialization underscores: hierarchy, distribution of formal authority, creation
of hierarchy of authority, work positions arrangement, and account. It is affected by:
the kind of environment, its size, technology, and goals - all these four elements impact
vertical specialization. Horizontal specialization talks of the division of labor that establishes
a specific work unit of groups. It is also referred to as experimentation. Specialization
leads to departmentalization. Pure forms of departments are: by functions, divisions,
matrix, or by legal sanction.
There are different forms of organization. I am going to talk about the functional organization
and then will have to pick it up later. The functional organization has a division of
labor by function. In other words, you can have a marketing function, you can have a
production function, and you have a finance function. Difficulty arises - why function
does not understand the production function or the production function does not understand
the marketing function; therefore, vertical specialization has problems.
Division of labor on the basis of specialization of knowledge also causes problems. All the
workers must have specific skills and actions. If they do not have skills and if they are
not good for action, they should not be there. These are widely used in an organization.
I shall be shortly talking to you about the divisional structure of an organization.