ORGANIZATION DIAGNOSIS:

Understanding the Theory

What is the core element of performance parameters?

DIAGNOSING
IS THE PROCESS OF ASSESSING THE
FUNCTIONING OF THE: ORGANIZATION, GROUPS, JOBS OR
INDIVIDUALS
DISCOVERING:
. THE SOURCES OF PROBLEMS
. AREAS OF IMPROVEMENTS
REPRESENTS A ROAD MAP FOR DISCOVERING CURRENT
FUNCTIONING
TO PROVIDE THE INFORMATION NECESSARY TO DESIGN CHANGE
PLANNING AND INTERVENTION

THE CHANGE ACTION SEQUENCE

DIAGNOSIS

DESIGN AND
IMPLEMENTATION
OF INTERVENTION

ALTERNATIVE
INTERVENTION

IMPLEMENTATION

EVALUATION

INSTITUTIONALIZATION

What is an organization?
a consciously coordinated social entity
with a relatively identifiable boundary
functions on a relatively continuous
basis
to achieve common goals

ORGANIZATIONAL EFFECTIVENESS

What is effectiveness? Is it different from

efficiency?
What does it mean effectiveness is a necessary
condition for survival? Can an organization die?
What are parameter used to explain organization
effectiveness?

FOUR APPROACHES TO ORGANIZATION

EFFECTIVENESS
APPROACH

DEFINITION
An organization is effective to the extent
that it .

WHEN USEFUL
The approach is preferred
when .

GOAL ATTAINMENT

Accomplishes its stated goals

Goals are clear, time bound, and

measurable

SYSTEM

It acquires needed resources

A clear connection exists

between inputs and outputs

STRATEGIC
CONSTITUENCIES

All strategic constituencies are at least

minimally satisfied

Constituencies have powerful

influence on the organization, and
the organization must repond to
their demands

COMPETING
VALUES

The emphasis of the organization in the four

major areas (i.e. return on investment, market
share, new-product innovation, job security)
matches constituent preferences

The organization is unclear about

its own emphases, or changes in
criteria over time are of interest

A FOUR MODEL OF EFFECTIVENESS VALUES

HUMANRELATIONS
MODEL

Ends: Skilled
Work force

Means:
Cohesive
Work force

OPEN SYSTEM
MODEL

Means:
Flexibility
FLEXIBILITY

PEOPLE

Ends: acquisition
Of resources

ORGANIZATION

Ends: Productivity
and efficiency

Means: Availability
Of information
Ends:
Stability

INTERNALPROCESS MODEL

CONTROL

Means:
Planning

RATIONALGOAL
MODEL

EIGHT CRITERIA OF EFFECTIVENESS

EFFECTIVENESS

DEFINITION

FLEXIBILITY

ABLE TO ADJUST WELL TO SHIFTS IN EXTERNAL CONDITIONS AND

DEMANDS

ACQUISITION OF RESOURCES

ABLE TO INCREASE EXTERNAL SUPPORT AND EXPAND SIZE OF WORK

FORCE

PLANNING

GOALS ARE CLEAR AND WELL UNDERSTOOD

PRODUCTIVITY AND
EFFICIENCY

VOLUME OF OUTPUT IS HIGH; RATIO OF OUTPUT TO INPUT IS HIGH

AVAILABILITY OF
INFORMATION

CHANNELS OF COMMUNICATION FACILITATE INFORMING PEOPLE

ABOUT THINGS THAT AFFECT THEIR WORK

STABILITY

SENSE OF ORDER, CONTINUITY, AND SMOOTH FUNCTIONING OF

OPERATIONS

COHESIVE WORK FORCE

EMPLOYEES TRUST, RESPECT, AND WORK WELL WITH EACH OTHER

SKILLED WORK FORCE

EMPLOYEES HAVE THE TRAINING, SILLS, AND CAPACITY TO DO THEIR

WORK PROPERLY

CRITERIA OF ORGANIZATION EFFECTIVENESS

CRITERIA
FLEXIBILITY
ACQUISITION OF
RESOURCES
PLANNING
PRODUCTIVITY AND
EFFICIENCY
AVAILABILITY OF
INFORMATION
STABILITY
COHESIVE WORK FORCE
SKILLED WORK FORCE

DEFINITION
ABLE TO ADJUST WELL TO SHIFTS IN EXTERNAL CONDITIONS
AND DEMANDS
ABLE TO INCREASE EXTERNAL SUPPORT AND EXPAND SIZE OF
WORK FORCE
GOALS ARE CLEAR AND WELL UNDERSTOOD
VOLUME OF OUTPUT IS HIGH, RATIO OF OUTPUT TO INPUT IS
HIGH
CHANNELS OF COMMUNICATION FACILITATE INFORMING
PEOPLE ABOUT THINGS THAT AFFECT THEIR WORK
SENSE OF ORDER, CONTINUITY, AND SMOOTH FUNCTIONING OF
OPERATIONS
EMPLOYEES TRUST, RESPECT, AND WORK WELL WITH EACH
OTHER
EMPLOYEES HAVE THE TRAINING, SKILLS, AND CAPACITY TO DO
THEIR WORK PROPERLY

Effectiveness Criteria
(Gross; in GIBSON, ET. AL., 1973)
Acquiring resources
Efficiency
Production of outputs
Providing administrative and technical
functions
Invest
Establishing ethical code of conduct
Satisfying the needs of all members of the
organization

Integrative Concepts in Understanding Organizational Effectiveness

Strategies
Organizational

Maintenance
-Affirmation of the mission
-Operational adjustment
-Commitment of people

Adaptiveness
-Continuous
experimentation and
learning
-Facilitative leadership
-Movement into new
markets
-Innovative alliance

Parameters
-Efficiency
-Effectiveness

EFFECTIVENESS CRITERIA VS. TIME

Short term

Middle term

Long term

Maintenance:
- Production
- Efficiency
- Satisfaction

Adaptation:
- Investment
- Development

Survival

The Process of Developing Organizational Effectiveness

TIME
SHORT-RUN

INTERMEDIATERUN

LONG-RUN

ADAPTATION PROCESS

Maintenance

Adaptiveness
INVENTING

Organization

THE FUTURE
Maintenance

Adaptiveness

CHANGING SITUATION
PARAMETER OF THE PROCESS
Effectiveness
Efficiency
ENVIRONMENT

The Metaphors:
Sapu Lidi metaphor
Biological metaphor:
Organization is a biological being
Organization as a system:
System is a set of interrelated and interdependent
parts arranged in manner that produces a unified
whole within the constraint of a larger system or
environment.

Life Cycle Perspective

Pattern of predictable stages through which organization proceeds:

1.
2.
3.
4.

5.

Entrepreneurial stage

Formation stage
Infancy

Clarification of missions
Commitment to goals

Stabilization
Roles are defined

Diversifies its product and service

Growth opportunities are searched
Decentralization

Collective stage

Formalization-and-control stage
Elaboration-of-structure stage

Decline stage

Maturity

ec

lin
e

ro
wt
h

at
Form

i on

1. Entrepreneurial
stage:
Ambiguous
goals
High
creativity

2. Collectivity
Stage:
Informal
communicati
on and
structure
High
commitment

3. Formalizationand-control
stage:

4. Elaboration-ofstructure stage:

Formaliza

More complex
structure

tion of rules

Decentralization

Stable
structure

Diversified
markets

Emphasis of

5. Decline stage:
High
employee
turnover
Increased
conflict
centralization

ENVIRONMENT

System

Inputs

Transformation
Process

Output

Characteristics of an Open System:

1.
2.
3.
4.
5.
6.
7.
8.

Environment awareness:
Interdependency with its environment
Feedback mechanism:
Continually receive information from the environment
Cyclical character
Negative entropy-capability to: repair it self, maintain its
structure, import more energy to live and grow
Steady state
Constancy of the process
Movement toward growth and expansion
Balance of maintenance and adaptive activities
Equifinality:
There are thousand ways to go to Rome

Goals and Values

Subsystem
Culture
Philosophy
Overall goals
Group goals
Individual
goals

Psychosocial
Subsystem
Human resources
Attitudes
Perceptions
Motivation
Group dynamics
Leadership
Communication
Interpersonal
Relations

Managerial Subsystem
Goal setting
Planning
Assembling resources
Organizing
Implementing
Controlling

Technical
Subsystem
Knowledge
Techniques
Facilities
Equipment

Structural
Subsystem
Tasks
Workflow
Workgroups
Authority
Information flow
Procedures
Rules

The Organization as a System

Transformation Process
Informal
Organization

Inputs
Environment
Resources
History

Strategy Task

Formal
Organizational
Arrangements

Individual

Feedback

Outputs
Organizational
Group
Individual

Manager

BUREAUCRACY

MATRIX

Department Head

Department Head

Manager

Manager

Manager

Supervisor Supervisor Supervisor Supervisor

Manager

Manager

Manager

Manager

Supervisor Supervisor Supervisor Supervisor

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Worker

Traditional Bureaucratic Structure (A) and Matrix Structure (B)

ORGANIZATIONAL LEVEL OF
DIAGNOSIS:
DIAGNOSING FACTORS THAT CAN AFFECT
PERFORMANCE
INPUT:
GENERAL ENVIRONMENT:
DEGREE OF UNCERTAINTY AND RISKS
INDUSTRY STRUCTURE:
SUPPLIES
BUYERS
THREATS: NEW PRODUCTS, NEW
COMERS
RIVALRY

ORGANIZATIONAL LEVEL OF
DIAGNOSIS
TRANSFORMATION PROCESSES

STRATEGY:
THE WAY ORGANIZATION USES ITS RESOURCES TO GAIN
AND SUSTAIN A COMPETITIVE ADVANTAGE
FACTORS:
MISSION: LONG-TERM PURPOSE
GOAL : EXPLICIT DIRECTIONS, PRIORITY, TARGET OF
ACHIEVEMENT
POLICIES: PROCEDURES, RULES, METHODS TO CONVERT
PLAN INTO ACTION

ORGANIZATIONAL LEVEL OF
DIAGNOSIS
DESIGN:
THE WAY AN ORGANIZATION CONVERTS
INPUT INTO OUTPUT
FACTORS:
PRODUCTION METHOD
WORK FLOW
EQUIPMENT

ORGANIZATIONAL LEVEL OF
DIAGNOSIS
STRUCTURE: THE FLOW OF TASKS THAT ARE:
(1) INTERDEDENDENT; AND
(2) DIFFERENT
FACTORS:
DIVISION
INTEGRATION

ORGANIZATIONAL LEVEL OF
DIAGNOSIS
OUTPUT

EVALUATION MECHANISM TO PARTS OR

OVERALL PERFORMANCE

ORGANIZATIONAL PERFORMANCE (FINANCIAL, NONFINANCIAL)

PRODUCTIVITY (PRODUCT VS. WASTE)
STAKEHOLDER SATISFACTION (MARKET SHARE, STOCK PRICE,
EMPLOYEES SATISFACTION)
ALIGNMENT: STRATEGIC ORIENTATION VS. INPUT. DESIGN VS.
HUMAN RESOURCES: PROCUREMENT, SELECTION,
DEVELOPMENT, APPRAISAL, REWARD
CULTURE: BASIC ASSUMPTION, VALUES, & NORMS SHARED BY
ORGANIZATIONAL MEMBERS

STRATEGY

Organization Level Diagnosis

Inputs

Design Components

Outputs

Technology

General
Environment
Strategy

Organization
Effectiveness

Structure
Culture

Industry
Structure

HR Systems

Measurement
system

e.g.
performance,
Productivity,
Stakeholder
satisfaction

Group Level Diagnosis

Inputs

Design Components

Outputs

Goal Clarity

Organization
Design

Task
Structure

Team Functioning

Team
Effectiveness
e.g.
QWL,
performance

Group
Composition

Group
Norm

Individual Level Diagnosis

Inputs

Design Components
Skill Variety

Organization
Desig
Group
Design

Outputs

Individual
Effectiveness
Task
Identity

Task
Significance

Personal
Characteristics

Autonomy

Feedback about
Results

e.g.
Job satisfaction,
Performance
Absenteeism,
Personal
Development

Job Characteristics Model

1.
2.
3.
4.
5.

JOBS CAN BE DESCRIBED IN TERM OF FIVE

CHARACTERISTICS:
Skill variety: variety of skills to carry out the tasks
Task identity: completing the whole piece of work
from the beginning to end
Task significance: job has an important impact on
the lives of other people
Autonomy: individual is allowed to make decision
about the way the work will be carried out
Feedback: information received about
performance effectiveness from the work itself

Job Characteristics
Model
Core Job Dimensions

Psychological States

Work Outcomes

Skill Variety

Meaningful Work

High Motivation

Task Identity

Responsibility
for Outcome

High Quality of Work

Task Significance
Autonomy
Feedback

High Satisfaction
Knowledge
of Results

Low Absenteeism
and Turnover

SUMMARY OF DIAGNOSTIC PROCESS

TENTATIVE PROBLEM
AREAS IDENTIFIED

COLLECT
DATA

MORE DATA
NEEDED NOW

DATA FEEDBACK

MORE DATA
NEEDED NOW?

NO CHANGE
AT PRESENT

PROBLEM AREAS
IDENTIFIED

CLIENT TARGET
MOTIVATED TO WORK
ON PROBLEM

DIAGNOSIS, WORK
ON PROBLEM
CAUSES. RESULT
IS CHANGE

PERFORMANCE GAP

DESIRED
PERFORMANCE

PERFORMANCE
GAP

ACTUAL
PERFORMANCE

TAXONOMY OF PERFORMANCE
Changing
the
system
Maintaining
the
System

Invent
Improve

Troubleshoot
Operate

Understand

To produce a new method, process, device, or system

from study or experimentation
To advance in existing method, process,
device, or system to a better state or quality

To locate and eliminate sources of trouble

In an existing method, process, device,
or system
To run or control the functioning of a
method, process, device, or system
To comprehend the language,
sounds, form, or symbols of an
existing method, process, device,
or system

DIAGNOSING PERFORMANCE
Scan existing
data in
context of
performance
variables.

ARTICULATING THE INITIAL PURPOSE.

Determine
initial
indicators of
performance
problem.

Determine
type of
performance
issue.

Determine
targeted
level(s) of
performance
.

Articulate
purpose of
performance
diagnosis.

Mission/
Goal
System
Design
Capacity
Motivatio
n
Identify
Expertis
outputs of
e

performance
levels.
Things
Events

Person
Event
External
Conditions

Present Prob.
Improvement
Future
Requirement

Organization
Process
Individual

Issue
Type
Level(s)

Classify
according to
performance
levels and
taxonomy.
Underst
and
Operate
Troubles
hoot
Improve
Invent

Assessing Performance Variables.

Collect
additional data
on
performance
variables.
Key
Question
Matrix

Specifying Performance
Select
appropriate
measurable
units of
performance.
Time
Quantity
Quality

Profile missing
or flawed
variables
required for
desired
performance.
Mission/Goal
System
Design
Capacity
Motivation
Measures.
Expertise

confirm units of
performance.

Mgt. approval
Existing Meas.
System

Determining Performance Needs.

Confirm
Specify needs
classification
in terms of
of
performance
performance
levels and
levels and
taxonomy.
taxonomy.
Key
Question
Matrix

Perf
Gap

Constructing a Performance Improvement Proposal.

Draft
proposal,
including
performance
diagnosis.
Perf. Gap
Perf. Diagnosis
Recommended
Interventions

Forecast
performance
benefits.

Perf. Value
Cost
Benefit

Submit
proposal for
approval.

With Line Mgt.

To Upper Mgt.

IMPROVEMENT PROPOSAL
ANALYZE
PERFORMANCE
required for goal
attainment.
Organization

Process
Individual

ANALYZE
EXPERTISE
required for work
performance.

Personal
Improvement
Proposal

Job Description
Task Inventory
Task Analysis

ORGANIZATIONAL DIAGNOSIS
QUESTIONNAIRE
(ODQ)
IS A SURVEY-FEEDBACK INSTRUMENT
TO COLLECT DATA ON ORGANIZATIONAL
FUNCTIONING
MEASURES THE PERCEPTIONS OF PERSONS IN ORGANIZATION OR
WORK UNIT TO DETERMINE AREAS OF ACTIVITY THAT WOULD
BENEFIT FROM AN OD EFFORT
WEISBORDS SIX-BOX MODEL IS THE BASIS FOR THE ODQ
MEASURES SEVEN VARIABLES: PURPOSES, STRUCTURE,
RELATIONSHIPS, REWARDS, LEADERSHIP, HELPFUL MECHANISMS,
AND ATTITUDE TOWARD CHANGE (MEASURE READINESS TO
CHANGE)
ANALYZES RELATIONSHIP AMONG VARIABLES THAT INFLUENCE
HOW AN ORGANIZATION IS MANAGED

PURPOSE
What business
are we in?
RELATIONSHIP
How do we manage
conflict among people?
With technologies?

STRUCTURE
How do we divide up
the work?

LEADERSHIP
Does someone
keep the boxes
in balance?

HELPFUL MECHANISM
Have we adequate
coordinating technologies?

REWARD
Do all needed tasks
have incentive?

ENVIRONMENT
The Seven-Box Model

PROFIL ADO
environment
PURPOSES:
WHAT BUSINESS ARE WE IN?
SCORE: ___

ATTITUDE
TOWARD CHANGE:
SCORE: ____

STRUCTURE:
HOW DO WE DIVIDE UP THE WORK?
SCORE: ____

LEDERSHIP:
DOES SOMEONE
KEEPS THE BOXES
IN BALANCE?
SCORE: ___

RELATIONSHIPS:
HOW DO WE
MANAGE CONFLICT
AMONG PEOPLE?
WITH TECHNOLOGY?
SCORE: ____

REWARDS:
DO ALL NEEDED TASKS
HAVE INCENTIVES?
SCORE: ___

HELPFUL MECHANISM:
HAVE WE ADEQUATE
COORDINATING TECHNOLOGY?
SCORE: ___

ENVIRONMENT

INTERPRETASI ADO
PETUNJUK:
1.
PINDAHKAN ANGKA-ANGKA YANG SUDAH ANDA LINGKARI PADA LEMBAR INI
2.
JUMLAHKAN ANGKA-ANGKA ITU DAN ISIKAN PADA KOLOM TOTAL
3.
BAGILAH JUMLAH TOTAL ITU DENGAN 5, DAN ISIKAN PADA KOLOM RATA-RATA
4.
PINDAHKAN NILAI RATA-RATA PADA MASING-MASING KOTAK PADA GAMBAR LINGKARAN YANG
TERSEDIA. ANGKA-ANGKA INI AKAN DAPAT DIGUNAKAN UNTUK MEMBANDINGKAN SKOR-SKOR
PADA TUJUH AREA YANG DIUKUR
TUJUAN
1. ___
8. ___
15. __
22. __
29. __
TOTAL __
RATA2 __

STRUKTUR
2. ___
9. ___
16. __
23. __
30. __
TOTAL __
RATA2 __

REWARD
5. ___
12. __
19. __
26. __
33. __
TOTAL ___
RATA2 ___

MEKANISME PEMBANTU
6. ___
13. __
20. __
27. __
34. __
TOTAL ___
RATA2 ___

KEPEMIMPINAN
3. ___
10. __
17. __
24. __
31. __
TOTAL __
RATA2 __

HUBUNGAN
4. ___
11. __
18. __
25. __
32. __
TOTAL __
RATA2 __

SIKAP TERHADAP PERUBAHAN

7. ___
14. __
21. __
28. __
35. __
TOTAL ___
RATA2 ___

INTERPRETATION AND DIAGNOSIS OF

ODQ
THE SIMPLEST DIAGNOSIS WOULD BE TO ASSESS THE
AMOUNT OF VARIANCE FOR EACH OF THE SEVEN
VARIABLES IN RELATION TO THE NEUTRAL POINT (A
SCORE OF 4)
SCORE ABOVE 4 WOULD INDICATE A PROBLEM WITH
ORGANIZATIONAL FUNCTIONING
THE CLOSER THE SCORE IS TO 7, THE MORE SEVERE THE
PROBLEM WOULD BE
SCORES BELOW 4 INDICATE THE LACK OF A PROBLEM
THE SCORE OF EACH OF THE 35 ITEMS CAN BE
INTERPRETED TO PRODUCE MORE EXACT INFORMATION
ON PROBLEMATIC AREAS. THUS DIAGNOSIS WOULD BE
MORE PRECISE. FOR EXAMPLE, THE AVERAGE SCORE ON
ITEM 8 IS 6.4. THIS WOULD INDICATE NOT ONLY A
PROBLEM IN ORGANIZATIONAL PURPOSE, BUT A MORE
SPECIFIC PROBLEM, THAT IS A GAP BETWEEN
ORGANIZATIONAL AND INDIVIDUAL GOALS
APPROPRIATE DIAGNOSIS MUST ADDRESS THE
RELATIONSHIPS BETWEEN BOXES TO DETERMINE THE
INTERCONNECTEDNESS OF PROBLEMS

ANGKET DIAGNOSIS
ORGANISASI
JAWABLAHLAH SELURUH PERNYATAAN DALAM ANGKET INI DENGAN JUJUR. UNTUK SETIAP
PETUNJUK:

PERNYATAAN, LINGKARILAH JAWABAN YANG PALING SESUAI DENGAN PEMAHAMAN ANDA.

1 SANGAT SETUJU
2 SETUJU
3 AGAK SETUJU
4 NETRAL
5 AGAK TIDAK SETUJU
6 TIDAK SETUJU
7 SANGAT TIDAK SETUJU
1. TUJUAN DARI ORGANISASI INI SANGATLAH JELAS
2. PEMBAGIAN KERJA DALAM ORGANISASI INI SANGATLAH FLEKSIBEL
3. ATASAN SAYA SELALU MEMBANTU USAHA SAYA UNTUK BEKERJA DENGAN BAIK
4. HUBUNGAN SAYA DENGAN ATASAN SAYA CUKUP HARMONIS
5. PEKERJAAN SAYA SAAT INI MEMBERIKAN PELUANG YANG CUKUP UNTUK TUMBUH DAN
BERKEMBANG SEBAGAI MANUSIA
6. PANDANGAN DAN PETUNJUK ATASAN SERINGKALI SANGAT MEMBANTU PEKERJAAN SAYA DAN
KELOMPOK KERJA SAYA
7. ORGANISASI INI TIDAK PERNAH BERUSAHA MENGHINDARI PROSES PERUBAHAN
8. SECARA PRIBADI SAYA SETUJU DENGAN RUMUSAN TUJUAN DARI UNIT KERJA SAYA
9. PEMBAGIAN KERJA DALAM ORGANISASI INI SANGATLAH KONDUSIF DAN SESUAI DENGAN
PENCAPAIAN TUJUAN KERJA
10. NORMA-NORMA KEPEMIMPINAN ORGANISASI INI MAMPU MENOPANG PERKEMBANGAN ORGANISASI
11. BILA SAYA MEMPUNYAI MASALAH DALAM PEKERJAAN, SAYA SELALU DAPAT MEMBICARAKANNYA
DENGAN SESEORANG DI TEMPAT KERJA

ADO ..
12. PADA UMUMNYA GAJI DAN TUNJANGAN YANG DITERIMA CUKUP BERSIFAT ADIL
13. SAYA MEMPUNYAI INFORMASI YANG CUKUP UNTUK MAMPU BEKERJA DENGAN BAIK
14. ORGANISASI INI CUKUP BAIK MENSOSIALISASIKAN ATURAN-ATURAN SERTA KEBIJAKAN-KEBIJAKAN
BARUNYA
15. SAYA MENGERTI TUJUAN DARI ORGANISASI INI
16. CARA-CARA PEMBAGIAN KERJA YANG DILAKUKAN CUKUP MUDAH UNTUK DIMENGERTI
17. PROSES KEPEMIMPINAN DALAM ORGANISASI INI MEMBUAT ORGANISASI MAMPU MENCAPAI TUJUANNYA
18. HUBUNGAN SAYA DENGAN ANGGOTA KELOMPOK KERJA CUKUP ERAT DAN PROFESIONAL
19. BAGI SAYA, KESEMPATAN UNTUK DIPROMOSIKAN RASANYA CUKUP TERBUKA
20. ORGANISASI INI MEMPUNYAI MEKANISME YANG CUKUP TEPAT UNTUK MEMPERSATUKAN SETIAP UPAYA
KERJA PARA PEKERJANYA
21. ORGANISASI INI SANGAT MENYUKAI PERUBAHAN
22. PRIORITAS-PRIORITAS YANG DITETAPKAN OLEH ORGANISASI INI MUDAH DIFAHAMI PARA PEKERJANYA
23. STRUKTUR UNIT KERJA SAYA CUKUP BAIK PENGATURANNYA
24. SAYA BISA MEMAHAMI UPAYA ATASAN SAYA UNTUK MEMBANTU DAN MEMBERIKAN PETUNJUK DALAM
MENINGKATKAN KEMAMPUAN KERJA SAYA
25. SAYA CUKUP MEMPUNYAI DUKUNGAN DARI TEMAN KERJA SAYA UNTUK MENGERJAKAN PEKERJAAN
DENGAN SEBAIK-BAIKNYA
26. GAJI YANG SAYA TERIMA CUKUP SESUAI DENGAN PEKERJAAN YANG SAYA KERJAKAN
27. BILA UNIT KERJA SAYA MEMERLUKAN BANTUAN, UNIT KERJA LAIN SELALU SIAP MEMBANTU
28. KADANG-KADANG SAYA SENANG MELAKUKAN PERUBAHAN-PERUBAHAN KECIL DALAM PEKERJAAN
SAYA
29. SAYA TIDAK SELALU MEMBUTUHKAN MASUKAN DALAM MENENTUKAN TUJUAN UNIT KERJA SAYA
30. PEMBAGIAN KERJA DALAM ORGANISASI INI CUKUP MEMBANTU UPAYA ORGANISASI DALAM MENCAPAI
TUJUANNYA
31. SAYA MAMPU MEMAHAMI UPAYA-UPAYA ATASAN SAYA UNTUK MEMPENGARUHI SAYA DAN TEMANTEMAN KERJA YANG LAIN
32. KONFLIK YANG TERJADI UMUMNYA DAPAT DISELESAIKAN DENGAN BAIK
33. INSENTIF SELALU DIKAITKAN DENGAN DAPAT DISELESAIKANNYA TUGAS-TUGAS DENGAN BAIK
34. UPAYA PERENCANAAN DAN PENGENDALIAN YANG DILAKUKAN SANGAT MEMBANTU PROSES
PERTUMBUHAN DAN PERKEMBANGAN ORGANISASI INI
35. ORGANISASI INI MEMPUNYAI KEMAMPUAN UNTUK BERUBAH

LEMBAR JAWABAN ADO

1.
2.
3.
4.
5.

1
1
1
1
1

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2
2
2
2

3
3
3
3
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6.
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8.
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10.

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3

4
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4

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7

11.
12.
13.
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15.

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1
1
1
1

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2
2
2
2

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3
3
3

4
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4
4
4

5
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7
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7
7
7

16.
17.
18.
19.
20.

1
1
1
1
1

2
2
2
2
2

3
3
3
3
3

4
4
4
4
4

5
5
5
5
5

6
6
6
6
6

7
7
7
7
7

21.
22.
23.
24.
25.

1
1
1
1
1

2
2
2
2
2

3
3
3
3
3

4
4
4
4
4

5
5
5
5
5

6
6
6
6
6

7
7
7
7
7

26.
27.
28.
29.
30.

1
1
1
1
1

2
2
2
2
2

3
3
3
3
3

4
4
4
4
4

5
5
5
5
5

6
6
6
6
6

7
7
7
7
7

31.
32.
33.
34.
35.

1
1
1
1
1

2
2
2
2
2

3
3
3
3
3

4
4
4
4
4

5
5
5
5
5

6
6
6
6
6

7
7
7
7
7

McKinsey 7-S Framework Model of

Organizational Diagnosis
The 7-S framework of McKinsey is a
Value Based Management (VBM)
model that describes how one can
holistically and effectively organize a
company. Together these factors
determine the way in which a
corporation operates.

Shared Value
The interconnecting center of
McKinsey's model is: Shared Values.
What does the organization stands for
and what it believes in. Central beliefs
and attitudes.

MCKINSEYS 7S FRAMEWORK

THE HARD Ss
Strategy: the direction and scope of the company over
the long term.
Structure: the basic organization of the company, its
departments, reporting lines, areas of expertise and
responsibility (and how they inter-relate).
Systems: formal and informal procedures that govern
everyday activity, covering everything from management
information systems, through to the systems at the point
of contact with the customer (retail systems, call center
systems, online systems, etc).

THE SOFT Ss
Skills: the capabilities and competencies that exist within
the company. What it does best.
Shared values: the values and beliefs of the company.
Ultimately they guide employees towards 'valued' behavior.
Staff: the company's people resources and how the are
developed, trained and motivated.
Style: the leadership approach of top management and
the company's overall operating approach.

Developing a Balanced
Score Card as an
Organizational Diagnosis
Model

When you can measure what you are

speaking about, and express it in
numbers, you know something about it;
but when you cannot measure it, when
you cannot express it in numbers, your
knowledge is of a meager and
unsatisfactory kind.
William Thompson (Lord Kelvin), 1824-1907

What is a Balanced Score Card?

1) A measurement system
2) A strategic management
system
3) A communication tool

BSC as a Strategic Management

System
Translates strategy into:
Objectives
Measures
Targets
Initiatives

Translating with the BSC

Desired state
Differentiating activities
What must be done
well to implement
strategies
How strategic
success is
measured

Mission

Vision
Strategy/Goals
Objectives
In each perspective

Measures
In each perspective

BSC as a Measurement System

Translates mission, vision and strategy
through objectives and measures
Provides a framework to describe the key
elements in the achievement of the strategy
Measures four perspectives
- Customer Relations
- Financial
- Internal Service Process
- Learning, Innovation and Growth

BALANCE SCORE CARD: LINKS

MEASUREMENT WITH PERFORMANCE
FOUR BASIC QUESTIONS
How do shareholders perceive us? (financial
perspective) contribution to profitability
How do customers see us? (customer perspective)
creating value to customer
What must we excel at? (internal perspective)
internal process to meet customers expectations
Can we continue to improve and create value?
(innovation and learning perspective) abiliity to
introduce new product values

BSC as a Measurement System

Financial
Customer
Relations

Vision and Internal Service

Strategy
Process

Learning,
Innovation and
Growth

Financial Perspective
What financial steps are necessary to ensure
the execution of our strategy/goals?
Are the programs/ departments goals,
implementation, and execution contributing to
the bottom line?
Are we meeting operational and financial
targets?
Dimensions of Quality:
Efficiency

Internal Service Process

Perspective
What critical processes must we excel at to
satisfy our customers/stakeholders?
What must be done internally to meet
patient/customer expectations?
Dimension of Quality:
Effectiveness
Appropriateness
Safety

Customer Relations
Perspective
Who are our target customers?
How do our patients/customers see us?
How do patients/customers rate our
performance?
Dimension of Quality:
Accessibility
Acceptability
Continuity

Learning, Innovation and Growth

Perspective
How can we continue to improve?
What capabilities and tools do our
employees need to execute our
strategy/goals?
Dimension of Quality:
Competence
Participation

BALANCE SCORE CARD: LINKS MEASUREMENT WITH

PERFORMANCE
How do we look
to shareholders?
FINANCIAL PERSPECTIVE
How do customer
see us?

GOAL

MEASURE

What must
we excel at?

CUSTOMER PERSPECTIVE
GOAL

MEASURE

Can we continue
to improve and
create value?
INNOVATION AND LEARNING
PERSPECTIVE
GOAL MEASURE

INTERNAL BUSINESS
PERSPECTIVE
GOAL

MEASURE

STREAM ANALYSIS
Diagnosing
Organizational Change

What is Stream
Analysis?
A facilitated method to understand organizational
issues and help prioritize and develop integrated
responses to those issues (Jerry Porras, Stanford
University)
A systematic and systemic approach for identifying
and separating core problems from symptoms
An approach to identify organizational drivers for
cross-cutting issues in organization system or subsystems

The System

Organizational Components

Purpose

Relationships

Work Settings

Organizational Outcomes

Stream Organizational Model

PLANNING AND MANAGING CHANGE

SCHEIN (1969):
WHEN ONE ENTERS A HUMAN SYSTEM TO CONDUCT A
DIAGNOSIS, AN INTERVENTION IN FACT IS BEING MADE

ARGYRIS (1970):
TO INTERVENE IS TO ENTER INTO AN ONGOING SYSTEM OF
RELATIONSHIPS, TO COME BETWEEN OR AMONG PERSONS,
GROUPS, OR OBJECTS FOR THE PURPOSE OF HELPING THEM. THERE
IS AN IMPORTANT IMPLICIT ASUMPTION IN THE DEFINITION
THAT SHOULD BE MADE EXPLICIT:THE SYSTEM EXISTS
INDEPENDENTLY OF THE INTERVENORS.
SO: INTERVENTION OR PLANNING AND IMPLEMENTING CHANGE
IS SOME EVENT OR PLANNED SEQUENCE OF EVENTS THAT
OCCURS AS A RESULT OF DIAGNOSIS AND FEEDBACK

The Evolution of Organization Theory

POINTS OF

1900-1930

1930-1960

1960-1975

1975-

Perspective

Rational

Social

Rational

Social

Theme

Mechanical and
efficiency

People and
human relations

Contingency
designs

Power and politics

Theoretical
Classification

Type 1:
universal
principles

Type 2:
recognition of
social nature and
human relation

Type 3:
contingency
approach

Type 4:
focuses on
political nature of
organization

Theorists

Taylor
Fayol
Weber
Ralph Davis

Mayo
Barnard
McGregor
Bennis

Simon
Katz and Kahn
Woodward et al
The Aston Group

March and Simon

Pfeffer

Type 1 Theorists
Frederick Taylor and Scientific Management: simple
structure will maximize organization efficiency
Henry Fayol and Principles of Organization: 14
principles of organization management (e.g. Division of
work, unity of command, centralization, etc.)
Max Weber and Bureaucracy: bureaucracy as an ideal
type of efficient structure
Ralf Davis and rational Planning: contingency of
structure to organizations objectives

Model of Bureaucracy
Max Weber (1947)
Division

of Labor

Division of labor leads to specialization and specialization promotes ex

Impersonal

Orientation

Decisions based on facts, not feelings or biases.

Hierarchy

of Authority - Systems of superiors and subordinates

Hierarchy promotes discipline, compliance and coordination.

Rules

and Regulations
Formalization ensures stability and uniformity of behavior.

Career

Orientation
Career orientation-promotion according to seniority, achievement, o
Efficiency
Bureaucracy maximizes rational decision-making and administrative

Type 2 Theorists
Elton Mayo and the Hawthorne Studies: group works,
attitude, and human relationship play significant roles in
structuring an organization
Chester Barnard and Cooperative System: the role of
informal organization, managers as communication
facilitators to stimulate subordinates high level of
efforts
Douglas McGregor and Theory X Theory Y
Warren Bennis and the Death of Bureaucracy: flexible
adhocracies as the ideal organizational form

Type 3 Theorists
Herbert Simon and Principle Backlash: studying of
conditions under which Type 1 and Type 2 principles
were applicable
Katz and Kahns Environmental Perspective:
organization needs to adapt to its changing
environmental demands
Joan Woodward, Charles Perrow, and James Thomson
and The Case of Technology: type of technology
determines appropriate structure
Aston Group and Organization Size: different
organization size will determine the organization design

Type 4 Theorists
March and Simons Cognitive Limits to Rationality: the
presence of conflicting goals will limit the function of
managers rationality in making decisions
Jeffrey Pfeffer and Organizations as political Arenas:
organizations are coalitions composed of varying
groups and individuals with different demands.
Organization design represents the result of power
struggles by these diverse coalitions

Organization Structure
Organizations are structured to capture & direct
systems of flows and to define inter-relationships
among different parts (Mintzberg, 1993).
Five parts of organization:

Operating Core
Strategic Apex
Middle Line
Technostructure
Support staff

FIVE BASIC ELEMENTS IN DESIGNING

ORGANIZATION
OPERATING CORE: employees who perform the basic
work related to the production of products and services
STRATEGIC APEX: top-level managers who are
charged with the overall responsibility for the organization
MIDDLE LINE: managers who connect the operating
core to strategic apex
TECHNOSTRUCTURE: analysts who have the
responsibility for affecting certain forms of standardization
in organization
SUPPORT STAFF: people who fill the staff units, who
provide indirect support services for the organization

FIVE BASIC PARTS OF

THE ORGANIZATION (1)

Strategic Apex
People who charged with overall responsibility:
chief executive officer, executive committee

Charged with ensuring the organization:

serve its mission in an effective way
serve the needs of those who control or otherwise have
power over the organization

Duties:
Direct supervision mechanism of coordination, allocate

resources, issue work orders, authorize majors decisions,

resolve conflits, design & staff the organization, monitor
employee performance, motive & reward employees

(STRATEGIC APEX)

The management of organizations boundary

relations with its environment
Informing influential people in the environment about the
organizations activities
Developing high level contacts for the organization
Negotiating major agreements with outside parties
Serving as figureheads
Carrying out ceremonial duties

The development of the organizations strategy

mediating force between the organization and its environment

Middle Line
Senior managers to the first line supervisors who
have direct authority over the operators
Tasks:
Collects feedback information on the performance of his own
unit, often aggregating information in the process
Following up distubances in the unit
Proposes for changes; decisions requiring authorization
Flowing down resources that he must allocate in his unit,
rules & plans that he must elaborate & projects that he must
inplement; boundary conditions to manage
Maintain liaison contacts with other managers, analysts,
supports staffers and outsiders whose work is interdependent
with; concerned with formulating the strategy for his unit

Technostructure
The analysts:
Serve the organization by affecting the work of others
Concerned with adaptation; changing the organization to
meet environmental change; control; stabilizing &
standardizing patterns of activitivy in the organization
3 types of control analysts:
Work study analysts: standardize work processes
Planning & control analysts: standardize outputs (long range
planners, quality control engineers, production schedulers &
accountants)
Personnels analysts: standardize skills (trainers &recruiters)

Support Staff
Exits to provide suppport to the organization
outside its operating work flow
Many support units are self contained: mini
organizations
Support units can be found at various level of the hierarchy:
Top level: Public relations, legal counsel
Middle level: Industrial relations, pricing and R&D
Lower level: Standardized work, cafetaria, mailroom, reception,
payroll

FIVE BASIC PARTS OF

THE ORGANIZATION

Organization Design
Process by which managers select aspects of
structure and culture so that an organization can
control the activities necessary to achieve its
goals
Basic dilemma
How much should managers divide and what should
managers use to coordinate?

Five Designs of Organizational

Structure
Simple Structure
Machine Bureaucracy
Professional Bureacracy
Divisionalized Form
Adhocracy

Ways to Effect Coordination

Direct supervision
One person gives direct orders to others

Standardization of work processes

One person designs the general work procedures of others to ensure that
these are all coordinated.

Standardization of output
One person specifies the general outputs of the work of another.

Standardization of skills
A person is trained in a certain way so that he or she coordinates automatically
with others.

Mutual adjustment
Two or more people communicate informally among themselves to coordinate
their work.

Control or Coordinating MechanismsMintzberg

Coordinating mechanisms are the fundamental means organizations
use to monitor and control work. These mechanisms are the
glue that hold the organization together.
Mutual adjustment of people through informal communication
Direct supervision by a hierarchical superior
Standardization of:
work processes by specifying contents of work
outputs by specifying desired results
Skills by specifying training to do the job

Typical configurations
Configuration

Key part

Coordinating mechanism

Simple structure

Strategic apex

Direct supervision

Machine (full)
bureaucracy
Professional
bureaucracy
Divisionalized
form
Adhocracy

Techno-structure

Standardisation of work
processes

Operating core

Standardisation of skills

Middle line

Standardisation of
outputs

Support staff

Mutual adjustment

Organization Typologies

Organization Typology
Simple Structure:
Based on direct supervison, pull to centralize
The strategic apex

Machine Bureaucracy:
Based on standardization of work processes, pull to standardize
Tehnostructure, design of the standards is raison detre/"reason
for being"

Professional Bureaucracy:
Based on standardization of skills, pull to professionalize
The operating core seek to minimize the influence of the
administrators, managers

Organization Typology
Divisionalized Form:
Based on standardization of outputs
Middle line (seek autonomy) but must achieve in different way, by
drawing power down from the strategic apex
Pull to balkanize/division of smaller units: split into market based
unit, control own decision

Adhocracy:
Based on mutual adjustment
The support staff gains the most influence in the organization
Members are autonomous for decision making, based on their
expertise

Structure and Design

CHARACTERIS
TICS OF
STRUCTURE
COMPONENT
SPECIALIZATION

SIMPLE
STRUCTURE

LOW

MACHINE
BUREAUCRACY

PROFESSION
AL
BUREAUCRA
CY

HIGH FUNCTIONAL

HIGH SOCIAL

Specialization based on division

of labor

Specialization based on
individual skills

DIVISIONAL
STRUCTURE

ADHOCRA
CY

HIGH FUNCTIONAL

HIGH SOCIAL

FORMALIZATION

LOW

HIGH

LOW

HIGH WITHIN
DIVISION

LOW

CENTRALIZATION

HIGH

HIGH

LOW

LIMITED
DECENTRALIZATION

LOW

GENERAL
STRUCTURAL
CLASSIFICATION

ORGANIC

MECHANISTIC

MECHANISTIC

MECHANISTIC

ORGANIC

EVIRONMENT

SIMPLE AND
DYNAMIC

SIMPLE AND STABLE

COMPLEX AND
STABLE

SIMPLE AND
STABLE

COMPLEX
AND
DYNAMIC

SIZE OF
ORGANIZATION

SMALL

LARGE

LARGE

LARGE

LARGE

The dimensions and the

configurations together
Adhocracy
Mutual adjustment
Support staff
Great Britain: low on PD and

Simple structure
Direct supervision
Strategic apex
China: high on PD, low on uncertainty

uncertainty avoidance

avoidance

Professional bureaucracy
Standardisation of skills
Operating core
Germany: low on PD, high on

Full bureaucracy
Standardisation of work
processes
Technostructure
France: high on PD, high on

uncertainty avoidance

uncertainty avoidance

Process Orientations

SIMPLE STRUCTURE

MACHINE BUREAUCRACY

MACHINE BUREAUCRACY
An Example of ORGANIGRAM

PROFESSIONAL BUREAUCRACY

PROFESSIONAL BUREAUCRACY

PROFESSIONAL BUREAUCRACY

DIVISIONALIZED FORM

DIVISIONALIZED FORM

ADHOCRACY

ADHOCRACY

CHAPTER 4: DIMENSIONS OF ORGANIZATION

STRUCTURE
COMPLEXITY: the degree of differentiation that exists
within an organization (horizontal, vertical, spatial)
FORMALIZATION: the degree to which jobs within the
organization are standardized (high-low, verbal-written)
CENTRALIZATION: the degree to which decision
making is concentrated at a single point in the
organization or the dispersion of authority to make
decisions within the organization (centralizeddecentralized)

COMPLEXITY

HORIZONTAL DIFFERENTIATION:
the degree of differentiation between units based on the orientation of members, the nature of the
tasks they perform, and their education and training. Include in this definition are:

SPECIALIZATION
FUNCTIONAL OR DIVISION OF LABOR (jobs are
broken down into simple and repetitive tasks)
SOCIAL (hiring professionals who hold skills that
cannot be routinized)
DEPARTEMENTALIZATION (creating groups of specialists
based on: numbers, functions, product or service, client
served, geography, work process)

COMPLEXITY

VERTICAL DIFFERENTIATION: the depth in the

structure, the number of hierarchical levels
(many layers-tall, few levels-flat) in the
organization. Include in this definition:

SPAN OF CONTROL (defines the number

subordinates that a manager can
direct effectively)

of

COMPLEXITY

SPATIAL DIFFERENTIATION:
the degree to which the location of an
organizations offices, plants, and personnel
are dispersed geographically

FORMALIZATION

Is the degree to which jobs within the

organization are standardized. High
formalization means the job incumbent has
minimum amount of discretion over what is to be
done
Is directed to ease coordination by creating:
simplicity, uniformity, consistency

FORMALIZATION TECNIQUES

EMPLOYEE SELECTION:

to screen in the right people and screen out the

undesirable
ROLE REQUIREMENTS: define the expectation on how the role incumbent is
supposed to behave
RULES, PROCEDURES, AND POLICIES:
Rules:
explicit statements that tell employee what she
ought or ought not to do
Procedure:
a series of interrelated sequential steps that
employee ought to follow to accomplish her job tasks
Policy:
guidelines that set constraints on decisions that
employee makes
TRAINING:
to instill employees preferred work behavior and attitude
RITUALS:
developed to stigmatized an employee that she is loyal and
can be trusted

CENTRALIZATION
Is the degree to which the formal authority to make
discretionary choices is concentrated in an individual,
unit or level (usually high in the organization hierarchy),
thus permitting employee (usually low in the
organization level) minimum input into her work
It is needed to respond to the need of: speedy actions,
detailed input into decision, motivation to participate,
efficiency and effectiveness of the decision made.
Point to ponder: how do you explain the relationship
among CENTRALIZATION, COMPLEXITY, AND
FORMALIZATION?

DETERMINANTS OF ORGANIZATION STRUCTURE

STRATEGY
ORGANIZATION SIZE
TECHNOLOGY
ENVIRONMENT
POWER-CONTROL

Ch. 5: Organization Strategy

What is organization strategy?
Basically it considers means and ends in structuring organization cycles.

The determination of basic long-term goals and objectives

The adoption of courses of action
The allocation of resources necessary for carrying organization goals

Two strategy modes:

Planning modes:
strategy is a plan or explicit set of guidelines developed in advance
Structured and systematic pre-set ways to achieve goals

Evolutionary mode:
Strategy is not necessarily well-thought-out and systematic
Strategy evolves over time as a pattern in a stream of significant decisions

Strategic Dimensions
Four dimensions and their structural implications:
Innovation: to what degree does an organization introduce major
new products or services?
Market differentiation: to what degree does an organization
strive to create customer loyalty by uniquely meeting a particular
need?
Breadth: to what degree does an organization need to cater
variety of customers, their geographic range, and the number of
products
Cost control: to what degree does an organization tightly control
costs, refrain from unnecessary innovation or marketing
expenses, and cut prices?

Thesis: strategy vs. structure

Four theoretical perspectives:
Chandlers strategy-structure thesis
Miles & Snows contemporary strategy-structure
theory
Porters competitve strategy
Millers integrative framework

The Strategy Imperative:

ENVIRONMENTAL
FACTORS
AND
ORGANIZATIONAL
CAPABILITIES

STRATEGY

STRUCTURE

Chandlers (1960) strategy-structure

thesis :
A Harvard historian: Alfred Chandler
Studied the relationship between organization
strategy and its structure
Structure is a product of time (organization growth
and ambition develop over time) and product
diversification.
Efficient structure for an organization with a single
product strategy is one that is simple: high
centralization, low formalization, and low complexity

Chandlers thesis (1960) :

TIME
PRODUCT
DIVERSIFICATION
STRATEGY

STRUCTURE

t+1

SINGLE PRODUCT

t+2
DIVERSIFIED PRODUCT

LOW

SIMPLE

HIGH
FUNCTIONAL

DIVISIONAL

Miles & Snows (1978) contemporary

strategy-structure theory
Based on the rate of change of products and markets, there are
four types of strategy:
1.

Defender limited products, narrow market segment

2.

Prospectors finding and exploiting new-product and

market opportunities

3.

Analyzers move into new products or new markets

4.

Reactors inconsistent and unstable pattern

Miles & Snows (1978) strategic typology

STRATEGY

GOALS

ENVIRONMENT

STRUCTURAL CHARACTERISTICS

DEFENDER

STABILITY
AND
EFFICIENCY

STABLE

TIGHT CONTROL
EXTENSIVE DIVISION OF LABOR
HIGH DEGREE OF FORMALIZATION
CENTRALIZED

ANALYZER

STABILITY
AND
FLEXIBILITY

CHANGING

MODERATELY CENTRALIZED CONTROL

TIGHT CONTROL OVER CURRENT ACTIVITIES
LOOSER CONTROL FOR NEW UNDERTAKINGS

PROSPECTOR

FLEXIBILITY

DYNAMIC

LOOSE STRUCTURE
LOW DIVISION OF LABOR
LOW DEGREE OF FORMALIZATION
DECENTRALIZED

ENVIRONMENT STRATEGY CONTINUUM

LITTLE CHANGE
AND
UNCERTAINTY
DEFENDER

RAPID CHANGE
AND
HIGH UNCERTAINTY
REACTOR

ANALYZER

PROSPECTOR

PORTERS (1980) COMPETITIVE STRATEGIES

FROM HARVARD GRADUATE SCHOOL OF BUSINESS

NO ORGANIZATION CAN SUCCESSFULLY PERFORM AT AN
ABOVE-AVERAGE LEVEL BY TRYING TO BE ALL THINGS TO
ALL PEOPLE
MANAGEMENT MUST SELECT A STRATEGY THAT WILL GIVE
ITS ORGANIZATION A COMPETITIVE ADVANTAGE
THE CHOSEN STRATEGY SHOULD UNDERLINE
ORGANIZATIONS STRENGTHS AND COMPETITORS
WEAKNESSES
THE ORGANIZATION SHOULD PUT ITS STRENGTH WHERE
THE COMPETITOR ISNT
THREE STRATEGIES: COST LEADERSHIP, DIFFERENTIATION,
AND FOCUS

PORTERS (1980) THREE COMPETITIVE STRATEGIES:

(1) COST-LEADERSHIP STRATEGY
IT IS CHOSEN IF AN ORGANIZATION SETS OUT TO BE THE
LOW-COST PRODUCER:
1.

the organization is a cost leader

2.

The products or services offered must be comparable to

those offered by its competitors

3.

Cost advantage should be achieved by efficiency of its:

operations, labor costs, access to raw materials, etc.

ORGANIZATION AND ITS ENVIRONMENT: GENERAL

VS SPECIFIC

LEGAL
SYSTEM

PUBLIC
PRESSURECUSTOMERS
GROUPS
SUPPLIERS

TRADE
ASSOCIATION

THE
ORGANIZATION

STAKEHOLDERS

SOCIAL
MILIEU

LABOR
UNION

POLITICS

COMPETITOR

GOVERNMENT

ECOLOGY

MAJOR ENVIRONMENT CHANGES

TECHNOLOGY:
GLOBAL TECH
SOCIAL:
ENVIRONMENT MOVEMENT
ECONOMICS:
HIGH OIL PRICE
POLITICAL:
STRATEGIC ALLIANCES

CONTRIBUTORS
BURNS & STALKER: STABLE VS. CHANGING
ENVIRONMENT
EMERY AND TRIST: LOW VS. HIGH
UNCERTAINTY
LAWRENCE & LORSCH: LOW VS. HIGH
COMPETITIVE

BURNS AND STALKER: STABLE VS. CHANGING

ENVIRONMENT
CHARACTERISIC

MECHANISTIC

ORGANIC

TASK DEFINITION

RIGID

FLEXIBLE

COMMUNICATION

VERTICAL

LATERAL

FORMALIZATION

HIGH

LOW

AUTHORITY

EXPERTISE

CENTRALIZED

DIVERSE

INFLUENCE
CONTROL

EMERY & TRIST: LOW VS. HIGH UNCERTAINTY

ENVIRONMENT

CHARACTERISTICS

PLACID-RANDOMIZED

RELATIVELY UNCHANGING ENV.

UNCERTAINTY IS LOW
DEMANDS DISTRIBUTED RANDOMLY

PLACID-CLUSTERED

CHANGE HAPPENS SLOWLY

UNCERTAINTY IS LITTLE BIT HIGHER
DEMANDS ARE CLUSTERED, LINKED TO ONE
ANOTHER - UNIFIED

DISTURBED-REACTIVE

ENVIRONMENT IS MORE COMPLEX

COMPETITION INCREASED AS MANY ORG.
DEVELOP SIMILAR ACTIVITIES

TURBULENT-FIELD

THE MOST DYNAMIC ENVIRONMENT

HIGHEST IN UNCERTAINTY LEVEL
CHANGE IS DRAMATIC, UNPREDICTABLE

LAWRENCE & LORSCH: LOW VS. HIGH COMPETITIVE

ENVIRONMENTS

STUDY: PLASTIC, FOOD, AND CONTAINER INDUSTRIES

PLASTIC INDUSTRIES: HIGHLY COMPETITIVE, LIFE CYCLE OF ITS
PRODUCT IS SHORT, WITH RAPID NEW PRODUCT AND PROCESS
DEVELOPMENT, INNOVATION IS HIGH, LEVEL OF UNCERTAINTY IS
HIGH, CLARITY OF INFORMATION FROM ITS ENVIRONMENT IS LOW
THE MORE THE ENVIRONMENT IS COMPETITIVE, UNCERTAIN, AND
TURBULENTLY CHANGING, THE MORE THE NEEDS OF THE
ORGANIZATION TO DO DIFFERENTITATION AND INTEGRATION

ENVIRONMENT AND RESOURCES AVAILABILITY

STABLE
ABUNDANT
COMPLEX

SIMPLE

SCARCE
DYNAMIC

Chapter 9: Power-Control
THOSE IN POWER SELECTING A
STRUCTURE THAT WILL, TO THE MAXIMUM
DEGREE POSSIBLE, MAINTAIN AND
ENHANCE THEIR CONTROL

John Childs (1972) Strategic Choice Argument: the

significant discretionary latitude of managers for making
choices
Autonomy of decision makers will affect the choice of
organization structure. The size, environment, technology, and
strategy explain only 50% - 60% of the variability in structure.
Organizational effectiveness is not an optimum point of
achievement. It is the managers discretion in selecting the most
satisfactory, and yet achievable, effectiveness.
Organizations have the power, exercised by their managers, to
control their hostile environment.
Perceptions and evaluations of events are important intervening
link between environments and the actions of organizations

Decision Discretion in the Power-control Model:

ORGANIC

MECHANISTIC

DECISION
DISCRETION

Chapter 10
ORGANIZATIONAL DESIGN OPTIONS

Designing Organization
CONSTRUCTING, DEVELOPING,
CONFIGURATING, AND ESTABLISHING AN
ORGANIZATION STRUCTURE IN ORDER TO
ENHANCE ORGANIZATION CAPABILITIES IN
ACHIEVING ITS GOALS.
IT REFERS TO THE CREATION OF MEANS AND
PLANS TO FACILITATE THE ATTAINMENT OF
ORGANIZATION GOALS

Chapter 11
BUREAUCRACY:ORGANIZATIONAL
DESIGN OPTION

BUREAUCRATIC DESIGN: ITS CHARACTERISTICS

DIVISION OF LABOR: job is broken down into simple, routine, and

well defined tasks.
WELL-DEFINED AUTHORITY HIERARCHY: top-level managers
should supervise and control the lower ones.
HIGH FORMALIZATION : formal rules and procedures to ensure
uniformity behaviors
IMPERSONAL NATURE: individual involvement, personalities and
personal preferences cannot interfere the job to be done.
EMPLOYMENT DECISIONS BASED ON MERIT: selection
decision and promotion are based on technical expertise,
competence, and performance.
CAREER TRACKS FOR EMPLOYEES: based on tenure, loyalty,
and high commitment.
DISTINCT SEPARATION OF MEMBERS ORGANIZATIONAL
AND PERSONAL LIVES: rational-impersonal conduct of
organizations activities must be maintained.

POSITIVE QUALITIES OF
BUREAUCRACY
CREATION OF STABILITY OVERTIME
EMPLOYEES WILL BE GUARANTEED TO BE
TREATED FAIRLY AND OBJECTIVELY
FAVORITISM WILL BE DIMINISHED
REDUCE UMBIGUITY, INCREASE UNIFORMITY
OR STANDARDIZATION OF PROCEDURE
HIERARCHY OF AUTHORITY MAKES LINE OF
AUTHORITY CLEAR

NEGATIVE QUALITIES OF
BUREAUCRACY

CONFORMITY, RELIABILTY, AND PREDICTABILITY WILL LEAD TO

INFLEXIBILITY (MERTON)
RULES AND REGULATIONS BECOME ENDS RATHER THAN MEANS
(MERTON, SELZNICK)
RULES AND REGULATIONS DEFINE MINIMUM LEVELS OF PERFORMANCE.
THEY ENCOURAGE APATHY TO PERFORM ABOVE MINIMUM (GOULDNER)
BUREAUPATHIC BEHAVIOR EMERGED. DECISION MAKERS USE RULES
AND REGULATION TO PROTECT THEMSELVES FROM MAKING ERRORS.
THEY HIDE BEHIND RULES. dont blame me. I was just following the rules
(THOMSON).
EMPLOYEE ALIENATION AS A RESULT OF HIGH SPECIALIZATION
CONCENTRATION OF POWER IN HIGH-RANK HIERARCHY

ANOTHER SIDE OF BUREAUCRACY

IT WORKS! And ITS STILL POPULAR!
EFFECTIVE IN MANAGING LARGE SIZE
ORGANIZATION
NATURAL SELECTION IN TERM OF ONLY THE
BEST WILL SURVIVE FAVORS BUREAUCRACY
THE PROFESSIONAL BUREAUCRACY HAS
EMERGED.
IT IS GOOD IN MAINTAINING CONTROL,
ESPECIALLY WITHIN TURBULENT ENVIRONMENT

Chapter 12
ADHOCRACY: AN ORGANIC
ORGANIZATIONAL DESIGN

ADHOCRACY
AN ORGANIC TYPE OF ORGANIZATION DESIGN.
IS A RAPIDLY CHANGING, ADAPTIVE, USUALLY
TEMPORARY SYSTEM ORGANIZED AROUND
PROBLEMS TO BE SOLVED BY GROUPS WITH
DIVERSE PROFESSIONAL SKILLS.
AN EXCELLENT VEHICLE FOR RESPONDING TO
CHANGE, FACILITATING INNOVATION, AND
COORDINATING DIVERSE SPECIALISTS.

ADHOCRATIC DESIGNS

MATRIX
THEORY Z
COLLATERAL FORM
NETWORK
TASK FORCE
COMMITTEE DESIGN
COLLEGIAL FORM

THE MATRIX DESIGN

IS A STRUCTURAL DESIGN THAT ASSIGNS SPECIALISTS FROM SPECIFIC

FUNCTIONAL DEPARTMENTS TO WORK ON ONE OR MORE
INTERDICIPLINARY TEAMS, WHICH ARE LED BY PROJECT LEADERS.
IT HAS A DUAL CHAIN OF COMMAND: (1) NORMAL VERTICAL
HIERARCHY WITHIN FUNCTIONAL DEPARTMENT; (2) THE PROJECT
MANAGER
IT HAS A DUAL FOCUS: FUNCTION AND PRODUCT
THREE CONDITIONS THAT FAVOR MATRIX:
(1) ENVIRONMENTAL PRESSURES FROM TWO OR MORE CRITICAL
SECTORS: (2) INTERDEPENDENCE BETWEEN DEPARTMENTS; (3)
ECONOMIES OF SCALE IN THE USE OF INTERNAL RESOURCES
TWO TYPES OF MATRIX DESIGN: (1) PERMANENT; (2) TEMPORARY

THE MATRIX: ITS ADVANTAGES

ITS ABILITY TO FACILITATE COORDINATION WHEN
THE ORGANIZATION HAS COMPLEX AND
INTERDEPENDENT ACTIVITIES
IT FACILITATES THE EFFICIENT ALLOCATION OF
SPECIALISTS
IT CREATES: (1) INCREASED ABILITY TO DEVELOP
RAPID RESPONSES TO CHANGING ENVIRONMENTS;
(2) INCREASED MOTIVATION BY PROVIDING
DEMOCRATIC WORK CULTURE

THEORY Z (WILLIAM OUCHI)

THEORY A

THEORY J

THEORY Z

SHOR-TERM EMPLOYMENT

LIFE-TIME EMPLOYMENT

LONG-TERM EMPLOYMENT

SPECIALIZEPATHD CAREER

NON SPECIALIZED CAREER

PATH

MODERATELY SPECIALIZED
CAREER PATH

INDIVIDUAL DECISION MAKING

CONSENSUAL DECISION
MAKING

CONSENSUAL DECISION
MAKING

INDIVIDUAL RESPONSIBILITY

COLLECTIVE RESPONSIBILITY

INDIVIDUAL RESPONSIBILITY

FREQUENT APPRAISAL

INFREQUENT APPRAISAL

INFREQUENT APPRAISAL

EXPLICIT, FORMALIZED
APPRAISAL

IMPLICIT, INFORMAL APPRAISAL

IMPLICIT, INFORMAL APPRAISAL

WITH EXPLICIT, FORMALIZED
MEASURES

RAPID PROMOTION

SLOW PROMOTION

SLOW PROMOTION

SEGEMENTED CONCERN FOR

PEOPLE

COMPREHENSIVE CONCERN
FOR PEOPLE

COMPREHENSIVE CONCERN
FOR PEOPLE

COLLATERAL FORM
THE USE OF ENTREPRENEURSHIP WITHIN A
LARGE BUREAUCRACY
(=INTRAPRENEURING)
A LOOSELY STRUCTURED ORGANIC DESIGN
THAT COEXIST WITH A BUREUCRACY
TYPICALLY CONSIST OF SMALL TEAMS THAT
ARE GIVEN THE INDEPENDENCE AND
RESOURCES TO FUNCTION FULLY

THE NETWORK STRUCTURE

A SMALL CENTRAL ORGANIZATION THAT RELIES ON
OTHER ORGANIZATIONS TO PERFORM MANUFACTURING,
DISTRIBUTION, MARKETING, OR OTHER CRUCIAL
BUSINESS FUNCTIONS ON A CONTRACT BASIS
EXAMPLE: AMAZON.COM
COLLATERAL FORM
NETWORK
COMMITTEE DESIGN
COLLEGIAL FORM

THE NETWORK STRUCTURE

A SMALL CENTRAL ORGANIZATION THAT
RELIES ON OTHER ORGANIZATIONS TO
PERFORM MANUFACTURING,
DISTRIBUTION, MARKETING, OR OTHER
CRUCIAL BUSINESS FUNCTIONS ON A
CONTRACT BASIS
EXAMPLE: AMAZON.COM

THE TASK FORCE STRUCTURE

A TEMPORARY STRUCTURE FORMED TO
ACCOMPLISH A SPECIFIC, WELL-DEFINED
AND COMPLEX TASK THAT INVOLVES A
NUMBER OF ORGANIZATIONAL SUBUNITS
EXAMPLE: RIGHTSIZING TASK FORCE OF
AN OIL COMPANY

THE COMMITTEE FORM STRUCTURE

A TEMPORARY STRUCTURE FORMED TO

ACCOMPLISH A SPECIFIC, WELL-DEFINED AND
COMPLEX TASK THAT INVOLVES
REPRESENTATIVES FROM SUBUNITS WITHIN THE
ORGANIZATION
TYPES: (1) TEMPORARY (=TASK FORCE);
(2) PERMANENT

THE COLLEGIAL FORM

CONSIST OF HIGHLY PROFESSIONALS IN
MANY FIELDS
FULL DEMOCRACY IN DECISION MAKING
DECENTRALIZED, WITH VERY MINIMUM
GUIDELINE TO WORK
EXAMPLE: LAB WORKS IN UNIVERSITY

TOMORROW ORGANIZATIONS
(PETER DRUCKER & TOM PETERS)

FLAT, LESS HIERARCHICAL, MORE DECENTRALIZED

FLEXIBLE, LOW IN FORMALIZATION, MORE ADHOCRATIC
WILL WORK ACROSS ORGANIZATION BOUNDARIES
RISKS AND UNCERTAINTIES BECOME PART OF
STRATEGIC ORGANIZATION CHALLENGES
WILL LIKE LARGE SYMPHONY ORCHESTRAS, CONSIST OF
SPECIALISTS AND PROFESSIONAL IN DIFFERENT FIELDS
BECOME INFORMATION-BASED