Evolution of organisational theory

Are all groups organisations?

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 most efficient.

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.