Developing People and Organisations

Jim Stewart, Pat Rogers, Jim Stewart, Pat Rogers

• Publisher: CIPD - Kogan Page
• Year: 2012
• ISBN:
  9781843983316
• Edition: 1
• Topic: Business
• Subtopic: Organisational Development
• Index: Business

Developing People and Organisations introduces and explores concepts relevant to the learning outcomes for the optional units in CIPD's Level 5 Intermediate qualifications in human resource development (HRD) and organisational design and development. It provides a practical and accessible exposition of key theories informing the professional practice of HRD so students can explain and analyse the organisational context of HRD practice and describe, compare and critically evaluate a range of theories and approaches. Written and edited by CIPD-accredited experts in the field and mapped to CIPD's HR Profession Map, Developing People and Organisations covers key topics such as organisation design and development, developing coaching and mentoring in organisations, meeting OD needs and developments in HRD. It includes reflective activities, annotated further reading, a glossary and case studies to encourage the application of theory to a practical working environment. Online supporting resources include an instructor's manual, additional case studies, multiple-choice questions and annotated web links.

CHAPTER 1

Organisational Design

Gary Connor, Michael McFadden and Ian McLean

CHAPTER CONTENTS

•Introduction

•What are organisations?

•The evolution of organisation design theory

•Common forms of organisation structure

•Factors influencing organisation design

•Organisational culture

•Other internal organisational factors

•Organisation design models and tools

•The role of HR in organisation design

•Summary

KEY LEARNING OUTCOMES

By the end of this chapter, you will be able to:

•Understand the historical and theoretical basis of organisation design and the relationship between organisational elements and the business strategy.

•Understand the key factors to be considered in the design of organisations and the implications for the management and development of people and resources.

INTRODUCTION

Organisation design is not simply about mapping out an organisational structure, but also about how the organisation is aligned with all other aspects, functions, processes and strategies within the business. When looking at organisation design, the context within which the business exists must be taken into consideration.

The chapter begins by discussing what an organisation actually is before looking at how organisation designs have evolved over time. The chapter then considers various forms of design, factors that influence design, and a range of tools and models you can use to understand how organisation design fits together. The chapter concludes by investigating what role HRM plays within organisation design.

Throughout the chapter there are questions and case studies. We strongly urge you to take time out to try to answer the questions. Only by doing so can you fully understand the complexity and relevance of organisation design.

WHAT ARE ORGANISATIONS?

Whether we are aware of it or not, we have at some stage in our lives belonged to at least one organisation. We also can quite easily identify organisations. These organisations can be international (e.g. the World Bank), national (e.g. Parliament and the National Health Service), or local (e.g. a local charity). But what exactly is an organisation? Most of us would consider it to be composed of a number of people, but would we say it also consists of the buildings that the group of people use?

Naturally there are many definitions. McNamara (2012) suggests that ‘in its simplest form’ an organisation is ‘a person or group of people intentionally organised to accomplish an overall, common goal or set of goals’. Note that this definition accepts that a single person can be an organisation and that the critical factor is that there are intentionally established goals.Katz (1966, p18) also recognises the goal-oriented aspect of organisations but suggests that an organisation comprises ‘a group of people who work interdependently toward some purpose’. There is no room for a single individual here; individuals are grouped together working with each other. Huczynski and Buchanan (2007, p6) introduce another condition to the definition: one of control. For Huczynski and Buchanan, organisations are ‘a social arrangement for achieving controlled performance in pursuit of collective goals’. So we have a group of individuals working together to achieve a particular goal, and the engagement of the individuals is not indiscriminate but co-ordinated in a controlled manner. The engagement then has structure; it has design.

A further consideration in defining an organisation is that it usually does not exist in isolation but engages with an external environment. Even a small community organisation often has money placed in a bank; the use of a room as a venue to meet; and possibly interaction with other community groups. The relation with the environment is central in Daft’s definition of an organisation. He states that ‘an organisation cannot exist without interacting with customers, suppliers, competitors, and other elements of the external environment’ (Daft 2007, p11).

We can thus arrive at a working definition to assist us in understanding what an organisation is. We can say that organisations ‘are (1) social entities that (2) are goal-directed, (3) are designed as deliberately structured and co-ordinated activities systems, and (4) are linked to the external environment’ (Daft 2007, p10).

REFLECTIVE ACTIVITY

1Is the family unit an organisation? If so, what objective does it have, and how does it engage with the environment?

2Identify two organisations to which you have belonged. Do they have all four features identified by Daft above?

3Can you think of two organisations which have not been ‘deliberately structured’ or which do not have ‘co-ordinated activities systems’?

THE EVOLUTION OF ORGANISATION DESIGN THEORY

WEBER’S BUREAUCRACY

We saw in the previous section that organisations are deliberately structured and have design. A particular design of an organisation might be described as bureaucratic – that is to say, it has bureaucracy. What do we mean by this, and how does it relate to organisation design? Our understanding of bureaucracy generally comes to us through the work of the German sociologist Max Weber (1864–1920), who uses the term in relation to his discussion of authority. Weber explores why it is that we obey other people and suggests three types of authority: traditional, charismatic and legal-rational.

It is the legal-rational authority that applies to bureaucracy. This type of authority depends not on tradition, as in the case of monarchy, or on the charismatic qualities of a person. The reason we tend to obey this authority is because it has been defined, structured and limited by certain rules designed to achieve specific goals. Thus, within a company managers ought to be obeyed because they occupy the ‘office’ of a manager, and there are restrictions to the extent of their authority, which has been rationally determined. This would be a different situation from, for example, a young child who obeys the parents purely because they are the parents and because parents are traditionally obeyed.

Legal-rational authority tends to co-exist within certain types of organisations referred to by Weber as having ‘bureaucratic administration’. What he means by this is that organisations develop robust processes, structure and rules for workers to follow. It is these features that, when they are put together in an organisation, we refer to as bureaucracy. Weber then goes on to say that organisations adopting the ‘bureaucratic administration’ type are ‘superior to any other form in precision, in stability, in the stringency of its discipline, and in its reliability’ (Weber 1947, p337). Moreover, he suggests that the capturing of technological knowledge is the ‘source’ of the bureaucratic administration. In other words, following industrialisation, developing organisations increased the number of managerial workers who were responsible for capturing, measuring and evaluating work practices. This new knowledge needed to be formulated in a structured way so that organisational processes could be followed, measured and understood. This in turn facilitated an element of control, which in Weber’s view contributes to the efficiency of the organisation. Thus for Weber the most effective design for an organisation is one where its structure is bureaucratic. It is this structure that allows greater control of the organisation and in turn leads to greater efficiencies.

TAYLOR AND SCIENTIFIC MANAGEMENT

Frederick Taylor (1856–1915) had considerable personal experience of manufacturing organisations ...