1 3 7-Revision
1 3 7-Revision
1 3 7-Revision
Example:
To further illustrate the concepts of policies and strategies, let's consider a hypothetical
scenario in a manufacturing company:
1. Policies: The manufacturing company has a policy regarding employee safety.
The policy states that all employees must wear personal protective equipment
(PPE) while working in the production area. This policy aims to ensure the well-
being and protection of employees from potential hazards.
Characteristics of a sound plan are also emphasized in the organization's policies. For
example, the company has a policy that requires managers to develop detailed project
plans before initiating any new product development. This policy ensures that projects
are thoroughly planned, including setting clear objectives, defining tasks, allocating
resources, and establishing timelines.
2. Strategies: The manufacturing company has a growth strategy focused on
expanding its market share in the automotive industry. To achieve this, the
company has identified several key strategies:
a) Product Diversification: The company plans to introduce new product lines and
variants to cater to different customer segments within the automotive industry. This
strategy aims to increase market penetration and appeal to a broader customer base.
b) Technological Advancement: Recognizing the impact of technology on organizational
design, the company aims to invest in advanced manufacturing technologies, such as
automation and robotics. This strategy will enhance production efficiency, reduce costs,
and improve overall competitiveness.
c) Strategic Partnerships: The company plans to establish strategic partnerships with
key suppliers and distributors in the automotive sector. By collaborating with reliable
partners, the company aims to strengthen its supply chain, expand its distribution
network, and improve customer reach.
d) Market Research and Analysis: The company emphasizes the importance of market
research and analysis as part of its strategic planning. By continuously monitoring
market trends, customer preferences, and competitor activities, the company can
identify emerging opportunities and make informed strategic decisions.
These strategies are aligned with the company's long-term goal of becoming a leading
player in the automotive industry. They provide a roadmap for the company to allocate
resources, make investment decisions, and pursue growth opportunities.
In this example, policies ensure employee safety and sound planning practices, while
strategies focus on market expansion, technological advancement, strategic
partnerships, and market analysis. By combining effective policies with well-defined
strategies, the manufacturing company can enhance its performance, competitiveness,
and overall success in the industry.
Decision Making: Decision making refers to the process of selecting the best course of
action from available alternatives to achieve a desired outcome. It involves assessing
different options, evaluating their potential consequences, and making a choice based
on relevant information and analysis.
Techniques and Processes:
1. Rational Decision Making: Rational decision making is a systematic approach
that involves gathering relevant information, identifying alternatives, evaluating
their pros and cons, and selecting the most favorable option based on logical
reasoning. Examples of rational decision-making techniques include cost-benefit
analysis, decision matrices, and decision trees.
Example: A manager needs to choose between two suppliers for a crucial component.
They analyze the quality, price, and delivery time of each supplier, weigh the benefits
and drawbacks of each option, and select the supplier that offers the best overall value
for the company.
2. Intuitive Decision Making: Intuitive decision making relies on personal
judgment, instincts, and past experiences rather than extensive analysis. It
involves making quick decisions based on gut feelings or subconscious
knowledge. Intuition is often developed through years of experience and
familiarity with a specific domain.
Example: An experienced marketing executive attends a conference and encounters a
new advertising technique. Based on their years of industry experience, they have a gut
feeling that this technique will resonate well with their target audience. Without
conducting extensive research, they decide to incorporate the new technique into their
marketing campaign.
3. Decision Trees: Decision trees are graphical representations of decision-making
processes. They use branches and nodes to depict various options and potential
outcomes based on different factors or criteria. Decision trees help visualize
complex decision paths and assist in making informed choices.
Example: A restaurant owner wants to decide whether to expand their menu by adding
a new cuisine. They create a decision tree, considering factors like customer
preferences, market demand, availability of ingredients, and competition. The decision
tree helps them map out different scenarios and select the cuisine that aligns with their
business goals and market potential.
4. SWOT Analysis: SWOT analysis is a technique used to assess the internal
strengths, weaknesses, and external opportunities and threats of an organization
or a decision. It helps identify factors that may impact the decision-making
process and provides a comprehensive overview of the situation.
Example: A company is considering launching a new product line. Through a SWOT
analysis, they identify their strengths, such as a strong brand reputation, weaknesses
such as limited distribution channels, opportunities in an underserved market segment,
and threats from established competitors. This analysis helps them evaluate the
feasibility and potential success of the new product line.
These decision-making techniques and processes provide managers with structured
approaches to analyze options, consider relevant factors, and make informed decisions.
The choice of technique depends on the specific context, complexity of the decision,
available resources, and individual preferences.
Process of decision-making
The process of decision-making involves several steps that help individuals or groups
make informed choices. Here is a typical process of decision-making:
1. Identify the Decision: The first step is to clearly identify the decision that needs to
be made. This involves understanding the problem or opportunity that requires a
decision and defining the desired outcome.
2. Gather Relevant Information: In this step, you gather all the necessary
information related to the decision. This may involve conducting research,
collecting data, seeking advice or input from experts, and considering different
perspectives.
3. Identify Alternatives: Generate a list of possible options or alternatives that could
potentially address the problem or achieve the desired outcome. It's important to
consider a range of alternatives to ensure a comprehensive evaluation.
4. Evaluate Alternatives: Assess the advantages, disadvantages, risks, and
potential outcomes of each alternative. This may involve using decision-making
techniques such as cost-benefit analysis, SWOT analysis, or other relevant
frameworks to compare and evaluate the alternatives.
5. Make a Decision: Based on the evaluation of alternatives, select the option that
appears to be the most favorable or appropriate. Consider the information,
analysis, and any relevant criteria or priorities established during the process.
6. Take Action: Once the decision is made, it's time to implement the chosen
alternative. Develop an action plan, allocate necessary resources, and
communicate the decision to those involved. Consider any potential challenges
or risks that may arise during implementation.
7. Evaluate the Decision: After the decision has been implemented, evaluate its
effectiveness and impact. Assess whether the desired outcomes are being
achieved and if any adjustments or modifications are needed.
8. Learn and Improve: Reflect on the decision-making process and outcomes to
identify lessons learned. Use this knowledge to improve future decision-making
processes and enhance decision-making skills.
It's important to note that decision-making is not always a linear process, and steps may
be revisited or adapted based on new information or changing circumstances.
Additionally, involving stakeholders, seeking input, and considering ethical
considerations are also important aspects of the decision-making process.
Staff Functions: Staff functions provide support, advice, and specialized expertise to
the line functions. They assist in improving the efficiency and effectiveness of the
organization by offering specialized knowledge and services. Staff functions do not have
direct authority over other employees but act as advisors or support staff.
Example:
1. In the same manufacturing company, the human resources (HR) department is a
staff function. The HR team provides support to the line managers by handling
recruitment, training and development, performance management, and employee
relations. They advise line managers on HR policies and practices but do not
have direct authority over production operations.
2. Accounting Department: The accounting department in an organization is a staff
function. Accountants provide financial expertise, maintain financial records,
prepare financial statements, and assist in budgeting and financial planning.
3. Legal Department: The legal department in a company is a staff function that
provides legal advice and support to the organization. They handle contracts,
compliance matters, intellectual property issues, and represent the company in
legal proceedings.
4. IT Department: The IT department is a staff function that provides technical
support, manages the organization's computer systems and networks, develops
software solutions, and ensures data security.
In summary, line functions are directly involved in core operations and have direct
authority over employees, while staff functions provide support and specialized
expertise to enhance the effectiveness of line functions. Both line and staff functions are
essential for the smooth functioning and success of an organization.
comparison of line and staff organization
Line Organization Staff Organization
Follows a hierarchical structure with a clear chain
of command Supports and assists line organization
Authority and responsibility flow directly from top
management to lower levels Provides specialized support functions
Decision-making authority is concentrated at the Offers expertise, advice, and assistance
top levels of management to line managers
Line managers have direct control over execution Staff functions do not have direct authority
and decision-making over line employees
Involved in core activities of the organization Supportive functions such as HR, finance,
(production, sales, etc.) marketing, etc.
Executes tasks and is responsible for achieving Supports and enables the overall
organizational objectives functioning of the organization
examples
1. Automation and Robotics: The implementation of automated systems and
robotics in manufacturing industries can lead to a shift from labor-intensive
production lines to more streamlined and efficient processes. This may result in a
flatter organizational structure with fewer hierarchical levels and a greater
emphasis on cross-functional teams.
2. Virtual Teams and Remote Work: Advances in communication technology have
enabled organizations to create virtual teams that collaborate and work remotely.
This allows companies to access talent from different locations, reduce costs
associated with office space, and promote a more flexible work environment. The
organizational structure may incorporate virtual teams and provide the necessary
tools for remote collaboration.
3. Digital Platforms and E-commerce: The rise of digital platforms and e-commerce
has transformed traditional business models. Organizations operating in the
digital space may have a decentralized structure, with different teams focused on
areas such as website development, online marketing, customer support, and
data analytics. These teams work collaboratively to optimize the digital presence
and customer experience.
4. Cloud Computing and Data Analytics: The adoption of cloud computing and data
analytics technologies has revolutionized data storage, analysis, and decision-
making processes. Organizations can collect, store, and analyze large volumes
of data to gain insights into customer behavior, market trends, and operational
performance. This may require the creation of specialized data analysis teams or
the integration of data-driven roles within existing departments.
5. Mobile Technology and Customer Engagement: Mobile technology has enabled
organizations to engage with customers through mobile applications, social
media platforms, and personalized experiences. Companies may establish
dedicated mobile app development teams or customer engagement teams to
manage these digital touchpoints and enhance customer satisfaction.
6. Agile Methodologies: Technology-driven organizations often adopt agile
methodologies, such as Scrum or Kanban, to enhance collaboration, adaptability,
and innovation. This can lead to the formation of cross-functional teams that work
in short, iterative cycles to deliver value and respond to changing customer
needs.
These examples demonstrate how technology influences the design of organizations by
shaping their structure, workflows, communication channels, and talent requirements.
Organizations must continuously assess and adapt their organizational design to
leverage the benefits of technology effectively.
Informal Organizations:
Informal organizations exist within formal organizations and emerge through
social interactions among employees.
They are characterized by unofficial networks, social relationships, and informal
communication channels.
Informal organizations can influence decision-making, information sharing, and
the overall culture of the workplace.
Relationships are based on personal connections, shared interests, and informal
influence.
Examples of informal organizations include employee social groups, informal
mentorship networks, and friendship-based networks within the workplace.
Examples of Informal Organizations:
1. A workplace where employees form informal social groups, such as lunch clubs
or hobby-based interest groups, that contribute to a supportive and collaborative
work environment.
2. An organization where employees build informal mentorship relationships,
seeking guidance and advice from experienced colleagues outside of their official
reporting lines.
3. A company where informal communication networks, like informal gatherings or
online communities, play a significant role in knowledge sharing and fostering
innovation among employees.
It's important to note that many organizations have elements of both mechanistic and
adaptive structures, as well as formal and informal elements. The specific organizational
design depends on various factors such as industry, size, culture, and strategic goals.
Organizations may also evolve and adapt their structures over time in response to
internal and external factors.
Formal
Mechanistic Adaptive Organizatio Informal
Aspect Structure Structure n Organization
Guided by
Decision- Centralized at the Decentralized and formal Flexible and
Making top autonomous procedures spontaneous
Tall, with multiple Flat, with fewer Clear chain Less emphasis o
Hierarchy levels hierarchical levels of command hierarchical stru
Introduction:
XYZ Retail is a well-established retail company that specializes in selling clothing and
accessories. To maintain its competitive edge in the market, XYZ Retail focuses on
effective planning and organizing strategies. This case study explores how the company
utilizes planning and organizing principles to drive its success.
Planning Process: XYZ Retail recognizes the importance of a comprehensive planning
process. The company begins by setting clear objectives, such as increasing sales by
15% within the next fiscal year. They conduct market research to identify customer
preferences, trends, and competitors' strategies. Based on this information, they
develop a strategic plan that includes product assortment, pricing strategies, and
promotional activities. The plan is reviewed regularly to ensure alignment with the
changing market dynamics.
Characteristics of a Sound Plan: XYZ Retail ensures its plans possess certain
characteristics to enhance their effectiveness. Firstly, the plans are specific, outlining
detailed actions and timelines. For example, they specify the introduction of a new
clothing line by the end of the second quarter. Secondly, the plans are measurable,
allowing the company to track progress and evaluate outcomes. They set sales targets,
inventory turnover goals, and customer satisfaction metrics. Thirdly, the plans are
flexible, allowing for adjustments based on market conditions. If a product is not
performing well, XYZ Retail modifies its plan by introducing discounts or phasing out the
product.
Management by Objectives (MBO): To ensure alignment between individual and
organizational goals, XYZ Retail implements the Management by Objectives (MBO)
approach. Each employee collaborates with their manager to set specific performance
objectives, such as achieving a certain sales target or improving customer service
ratings. Regular performance evaluations and feedback sessions are conducted to track
progress and provide support. MBO enhances employee engagement and motivation,
contributing to overall organizational success.
Policies and Strategies: XYZ Retail develops policies and strategies to guide decision-
making across the organization. For instance, they have a pricing policy that ensures
competitive pricing while maintaining profitability. They also have a strategy for supplier
management, focusing on building strong relationships and ensuring timely delivery of
products. These policies and strategies provide a framework for consistent and effective
decision-making.
Conclusion: Through effective planning and organizing, XYZ Retail has achieved
significant success in the highly competitive retail industry. By following a
comprehensive planning process, incorporating the characteristics of a sound plan,
implementing MBO, and developing relevant policies and strategies, XYZ Retail has
been able to adapt to market changes, drive growth, and meet customer demands.
Their commitment to planning and organizing principles has positioned them as a
leading retailer in the market.
Example:
Let's consider an example of a company called XYZ Corporation that is looking to fill a
vacant position for a marketing manager.
Recruitment: XYZ Corporation adopts various recruitment methods to attract potential
candidates:
1. Job Advertisement: They post a job advertisement on popular online job portals,
their company website, and professional social media platforms. The ad provides
information about the marketing manager position, including required
qualifications, responsibilities, and how to apply.
2. Employee Referral: XYZ Corporation encourages its current employees to refer
candidates for the marketing manager position. One of their employees refers a
former colleague who has extensive experience in marketing and meets the job
requirements.
Selection: XYZ Corporation follows a thorough selection process to choose the most
suitable candidate:
1. Application Screening: The HR department screens the received applications
and resumes. They shortlist candidates who possess the required qualifications
and experience.
2. Interviews: Shortlisted candidates are invited for interviews. The hiring manager
conducts face-to-face interviews to assess their marketing knowledge, skills, and
fit with the company culture.
3. Assessment and Test: As part of the selection process, candidates are given a
marketing case study to analyze and present their strategies. This helps evaluate
their problem-solving abilities and marketing acumen.
4. Reference Checks: The hiring team contacts the references provided by the
candidate, including their previous supervisors and colleagues, to gather insights
into their past performance and work ethic.
5. Decision Making: Based on the interview performance, case study analysis, and
reference checks, the hiring team selects the most qualified candidate who
demonstrates strong marketing skills, relevant experience, and alignment with
the company's values.
In this example, XYZ Corporation utilized job advertisements and employee referrals for
recruitment, followed by a selection process involving interviews, assessments, and
reference checks. By implementing a comprehensive recruitment and selection process,
XYZ Corporation ensures they hire a qualified and competent marketing manager who
can contribute to the company's marketing objectives and success.
Recruitment Selection
Recruitment is the process of Selection is the process of choosing the
attracting potential candidates most suitable candidate among the pool of
for a job vacancy. applicants.
It focuses on creating awareness It involves evaluating and assessing
and generating interest among candidates to determine their suitability for
job seekers. the job.
The purpose is to attract a The purpose is to identify the best-fit
diverse pool of qualified candidate who meets the job requirements
candidates. and organizational needs.
Methods used include job Methods used include interviews,
advertisements, employee assessments, tests, reference checks, and
referrals, career fairs, and online background verification.
job portals.
It is the initial stage of the hiring It comes after the recruitment stage and
process. involves a more in-depth evaluation of
candidates.
The emphasis is on reaching a The emphasis is on assessing candidate
wide audience and generating a skills, qualifications, experience, and
sufficient number of applicants. suitability for the job.
It involves creating job It involves shortlisting candidates,
descriptions, job postings, and conducting interviews, and assessing
attracting potential candidates. candidate suitability.
The goal is to create a pool of The goal is to identify the best candidate
qualified applicants for the who will perform well in the job and align
selection process. with the organization's values and culture.
1.3.2 Leading: Authority and responsibility relationships, Delegation of authority,
and decentralization
For example,
let's consider a manufacturing company that produces electronic devices. The company
implements Six Sigma methodology to minimize defects and variations in the production
processes. They start by defining the project goals, which may include reducing the
number of defective units and improving overall product quality.
Through data collection and analysis, they identify key metrics such as product failure
rates, customer complaints, and production line downtime. They discover that certain
components and assembly steps are causing defects and variations in the final
products.
Using Six Sigma tools and techniques, they analyze the root causes of these issues. It
may involve conducting experiments, analyzing historical data, and involving cross-
functional teams to identify solutions. They find that by improving the calibration process
for a critical machine and implementing additional quality checks at specific assembly
stages, they can significantly reduce defects.
Once the improvements are identified, they are implemented in the production process.
The company establishes control mechanisms to continuously monitor the process and
ensure that the improvements are sustained. Regular audits, data analysis, and ongoing
training help maintain the desired level of quality and minimize defects and variations.
By implementing Six Sigma, the manufacturing company can achieve higher product
quality, reduce waste, improve customer satisfaction, and increase overall operational
efficiency. The methodology provides a structured and systematic approach to
continuous improvement, helping organizations achieve their quality goals and drive
business success.
Case study
TEXTBOOKS
T2 George, J. and Jones, G.R. 2109. Understanding and Managing Organization Behaviour.
5thEdition,Pearson Education, India, ISBN:9788131724965.
Reference Books: