of organisational theory
An organisation is a group of individuals who have come together under the supervision
and conscious coordination of some sort of management, to form a type of system
that features a formal structure, is intended to function continuously and carries
out a variety of different tasks in order to achieve a common goal that has
been pre-established as it’s main reason for existence. To be actually classified
as an organisation, several prerequisites are required. Firstly the identifiable
goal is needed. This goal can take the form of a product or service and is what
the organisation is ultimately created to produce. The production must come
about consciously, in that everyone knows what they are aiming for and thus
strive for it. In turn, they will receive rewards of some sort for their productivity.
These rewards usually take the form of wages or salaries. If the organisation
is non profit based, social or voluntary in nature (like many charity based
groups i.e. The Salvation Army), then the rewards could simply be prestige,
social interaction or just the satisfaction of helping others. To join, individuals
must go through some sort of procedures or ceremony such as selection or interviews
to define their suitability for membership. More importantly, an organisation
is a group that makes up a legal entity which has boundaries, holds responsibilities
to others, can be liable for all sorts of damages, and thus can be taken to
court if they conduct their business in an inappropriate manner which goes against
morals, has ill effects on individuals or other organisations. Even the organisation’s
employees and members can sue if they feel they are being treated unfairly.
With this in mind, it becomes clear that not all groups are organisations. Some
groups that may seem to be like an organisation include Households, families
and social groups but can not be considered as such because they do not make
up legal entities, rarely have a reward system for their actions, have no predetermined
goals (further than for their survival and minimal conflict), nor are they formed
with the intention of producing goods or services.
Examples of 'negative entropy' and 'equifinality'.
Entropy is defined as ‘a measure of the degradation of the universe’. As a scientific
law it states that everything will disintegrate within time. Thus negative entropy
suggests growth as opposed to reduction. Negative entropy is where a organisation
can maintain itself, and quite possibly has managed to grow since it first began.
It has been suggested by ‘Robbins & Barnwell’ that an ‘open system’ of organisation
is meant to be able to maintain its structure through such things as repairs,
avoiding closure and possibly growing by importing ‘energy’ (external ideas
and products). A good example of an organisation that has experienced negative
entropy would undoubtedly be the fast food chain giant ‘McDonalds’ which has
managed to almost invade every country world wide. By using external ‘energy’
like marketing and advertising it has managed to survive when others have not.
Equifinality is a concept that states that a certain outcome can be achieved
by many different means. For example, if a person decided they wished to take
a stroll with their dog around their block, they would be faced with the choice
of walking clockwise, or anti-clock wise around it. Either will lead to the
same desired outcome. In a business sense, it would be best to discover all
the possible ways to achieve the set goals, and then distinguish the best by
considering all the factors involved with each possibility and then chose the
Determinants of organisational structure.
An organisation’s structure is the frame work whereby the final desired goal
can be achieved. It consists of managerial defined tasks that are allocated
to individual members, sets out how duties will be done based on the best available
methods (attempts to at least), reporting methods, and interaction patterns.
An organisation’s structure is said to have three major components, these include
complexity, formalisation, and centralisation. The degree of complexity is set
out right at the beginning simply by the amount of aims the business will have.
Any business with only one goal will not be as complexed as one with several.
One goal in an organisation means it will not need as much specialisation, nor
will it need a high level of management hierarchy. Formalisation is the amount
of rules an organisation will have and it’s reliance on these rules and procedures
to direct behaviour. This is usually proportional to the size of the organisation
and at times it’s standing within the community that it is based in. A small
store will not have as many rules and guidelines as would a police department
that has many more obligations. Centralisation is a way with which to considers
where the decisions making powers within a organisation will develop from. Some
organisations choose to be highly centralised, and this means that most, if
not all decisions are made from the highest level of management, and all orders
flow down to other members. If there is a problem, the highest level of management
will deal with it. In a decentralised organisation, the authority to make decisions
is more wide spread to all levels of management, and this means more interaction,
and less of a dictatorship style of management. But it should be noted that
the centralised and decentralised forms we have discussed here are extremes,
and most businesses, organisations and systems may use a variety of these forms
at different levels, and at times possibly combine portions of both. Other factors
exists which can effect organisational structures, one of these is the external
environment. Price fluctuations, economies, laws etc. etc. (all being factors
out of the organisation’s control) can effect how a business or group will perform,
and thus suitable changes will need to take place within the structure in order
for the organisation to survive.
Written By Evan Sycamnias - 22-7-99