MANAGEMENT AND

ORGANISATIONAL
BEHAVIOUR

3:
Introducing
Organisations
LAST TIME – FIND ON
TEAMS/MOODLE
• MODULE OVERVIEW/INTRODUCTION/HANDBOOK
• OB THEORY HELPS US UNDERSTAND MANAGEMENT
• DIFFERENT APPROACHES OVER TIME – TAYLORISM ETC
• FRAMEWORK FOR COMPARISONS
• HELPS US ANALYSE AND IDENTIFY PROBLEMS
• HELPS MANAGERS CHOOSE APPROPRIATE SOLUTIONS
• THEORIES COME AND GO – CLASSICS ENDURE
• GIVE US A A WAY OF LOOKING AT SOMETHING
• BECAUSE WE WANT MANAGERS AND ORGANISATIONS
TO BE MORE SUCCESSFUL
PRE-WORK DISCUSSION

THE HOTEL SEASON 2 EPISODE 1

WHAT WERE YOUR INITIAL PERCEPTIONS OF

MARK THE GENERAL MANAGER?
 TODAY’S OBJECTIVES

1. To explain what an
organisation
is and how it is designed

2. To distinguish between the

different types

3. To look further at the ‘open

systems’ model

4. To explain the ‘informal

organisation’

5. To consider the future shape of

organisations
ORGANISATIONS
WHY DO ORGANISATIONS EXIST?

 Organisations are mechanisms

through which many people combine
their efforts and work together to
accomplish more than any one person
could alone
 ORGANISATIONS
ARE…

‘…social constructs created by groups in society to

achieve specific purposes by means of planned and
co-ordinated activities.
These activities involve using human resources to act
in association with other inanimate resources in
order to achieve the aims of the organisation.’

Farnham and Horton

Figure 3.1 Common factors in organisations
 FORMAL ORGANISATIONS: SCHEIN

 ‘the planned co-ordination of the activities of a number of

people for the achievement of some common, explicit
purpose or goal, through the division of labour and
function, and through a hierarchy of authority &
responsibility.’

• Deliberately planned and created

• Concerned with the co-ordination of activities
• Hierarchically structured with stated objectives
• Based on principles such as specification of tasks and
authority/responsibility.
 INSIDE AN ORGANISATION

• Two ‘broad’ components:

– operating component
(workers)

– administrative component
(managers)
 ACTIVITY 1: WHAT DO THEY ALL DO?

Figure 3.3 Five basic components of an organisation

 ANSWER

• Operational Core
Carrying out daily tasks e.g. a teacher teaching
• Operational Support
Indirect daily tasks e.g. Stores, maintenance
• Organisational Support
Whole organisation services e.g. HR, catering, office
• Top management
Broad objectives/policy, Strategy, Overview,
External relations e.g. Chief Executive
• Middle management
Co-ordination, integration, links other layers
e.g. Department or functional Head
SOME WAYS OF CLASSIFYING ORGANISATIONS

• Public/Private/Not-for-Profit

• Formal/Informal

• Product/Service
PRIVATE AND Private enterprise Public sector
PUBLIC SECTOR
• Owned and financed by • Created by
ORGANISATION individuals, partners or government and
shareholders financed through
S accountable to their taxation, accountable
owners or members. to the electorate.

• Main aim is of a
commercial nature such
• Do not generally have
as profit, return on
profit as their goal but
capital employed,
have a political or
market standing or sales
levels. welfare purpose.
 SEVEN ASPECTS OF THE PUBLIC SECTOR

Figure 3.1 Seven aspects of the public sector

Source: From Smart, P. and Inazawa, K. Human resource management in the public sector, Kwansei Gakuin University Press (2011), p. 21. Reproduced with
permission.
 NOT-FOR-PROFIT ORGANISATIONS

• Charities • NHS hospitals

• Private societies • UK universities
• Religious • Government departments
organisations • Local authorities

‘The old distinctions between private public and not-for-profit sectors have
been blurred as charities have taken on an ever-increasing role in the
delivery of services. Tough competition for funds and growing public
scrutiny have led many charities to adopt practices once more commonly
associated with the commercial sector’.

Arnott
 PRODUCTION AND SERVICE ORGANISATIONS

Production
Service Organisations
Organisations

• Concerned with
• Concerned with tangible intangible services.
goods. • Services cannot be
• Goods can be stored for stored.
future use. • Services are consumed
• Goods remain with the at the moment of
customer. delivery.
 WAYS OF CLASSIFYING ORGANISATIONS

• Public/Private/Not-for-Profit
• Formal/Informal
• Product/Service
• By major purpose
 CLASSIFICATION BY MAJOR PURPOSE

• Economic/Business • Political
• Protective • Educational
• Social/Associative • Protective/Military
• Public service • Voluntary/Charity
• Religious

Examples?
Many organisations are ‘multi-purpose’, with more than
one goal
Often possible to identify a single main goal.
 SOCIAL ENTERPRISE ORGANISATIONS

• Set up in response to
social or environmental
concerns

• Bring together aspects

of both the private and
public sectors
 SOCIAL ENTERPRISE MODEL

Companies with a different purpose

• Triple bottom line:
 social, environmental and financial
• Main purpose: social Concerned with the community in
general not shareholder value or
• Create social value specific public interest

• Surplus not profit

• Reinvested Not charities but promote well being
of society
• Big Issue, Fifteen, Cafe Direct
 • Whatever the differences between
organisations common factors include:

COMMON • People
FEATURES OF • Objectives
ORGANISATIONS • Structure.

And the integrating factor of ?????

• Management.
 THE NATURE OF ORGANISATIONS

Figure 3.2 The nature of organisations

 ACTIVITY 2

• What’s the main • Corrective

purpose of a • Protective
prison? • Penal
• Educational
WAYS OF CLASSIFYING ORGANISATIONS

• Public/Private/Not-for-Profit
• Formal/Informal
• Product/Service
• By major purpose
• By prime beneficiary
SO WHO BENEFITS FROM THE
ORGANISATION?
• Businesses – owners
Issue: maximising efficiency and profits

• Service organisations – client group

Issue: conflict – service v admin procedures

• Mutual-benefit associations – the membership

Issue: participation & democratic control

• Commonweal organisations – public at large

Issue: public Blau & Scott

(1966)
accountability
WAYS OF CLASSIFYING ORGANISATIONS

• Public/Private/Not-for-Profit
• Formal/Informal
• Product/Service
• By major purpose
• By prime beneficiary
• By primary activity
CLASSIFICATION BY PRIMARY ACTIVITY
The ‘first order’ function of the organisation
determines the classification:
• Productive or Economic
– Concerned with wealth creation, public service
• Maintenance
– Concerned with socialisation of people
• Adaptive
– Concerned with research and the pursuit of knowledge,
theory testing
• Managerial or political
– Concerned with social order, control
Katz & Khan (1978)
...THEN BY SECONDARY ACTIVITY

Object or People
Are they moulding
organisations?

People process or
If people, do people change?
they:
WAYS OF CLASSIFYING ORGANISATIONS

• By legal status/ownership:
Public/Private/Not-for-Profit
• Formal/Informal
• Product/Service
• By major purpose
• By prime beneficiary
• By primary activity
 AUTHORITY IN ORGANISATIONS (WEBER)
• Traditional organisations
– Authority derived from custom and tradition
– The ‘right to rule’
e.g. Pope/King

• Charismatic organisations
– Authority derived from belief in the personal qualities of the leader
e.g. Churchill, Jobs, Branson?

• Bureaucratic organisations
– Authority derives from the acceptance of rules
– ‘Legal-rational’ authority based on position
e.g. Army, Govt ministers, Vice Chancellor
 SEES THE
ORGANISATION AS A
Open Systems ‘SYSTEM’
Approach

Inputs

Outputs

Open: connected to and

interactive with the
environment
HOW AN ORGANISATION OPERATES AS AN
OPEN SYSTEM

© 2011 John Wiley & Sons Ltd.

www.wileyeurope.com/college/french
 THE OPEN SYSTEMS MODEL OF
ORGANISATIONS

Figure 3.4 The open systems model of organisations

 THE HOTEL AS AN OPEN SYSTEM

Figure 1.7 The hotel as an open system

 THE OPEN SYSTEMS MODEL –
INPUTS

Figure 3.5 An example of the open systems model (Continued)

 THE OPEN SYSTEMS
MODEL – TRANSFORMATION PROCESS

Figure 3.5 An example of the open systems model (Continued)

 THE OPEN SYSTEMS MODEL –
OUTPUTS

Figure 3.5 An example of the open systems model (Continued)

 THE OPEN SYSTEMS MODEL –
ORGANISATIONAL GOALS

Figure 3.5 An example of the open systems model (Continued)

 THE OPEN SYSTEMS
MODEL – MEASURES OF ACHIEVEMENT

Figure 3.5 An example of the open systems model (Continued)

Figure 3.6 Environmental influences on the organisation
 HOSPITALITY EXTERNAL ENVIRONMENTAL
INFLUENCES

Figure 1.8 External environmental influences

Figure 2.1 Contextual influences on organisations Rollinson (2008)
Figure 3.7 Checklist for a PESTEL analysis
Source: Lynch, R. Corporate Strategy, fourth edition, Financial Times Prentice Hall (2006), p. 84. Reprinted by permission of Pearson Education Ltd.
CONTINGENCY APPROACH TO ORGANISING

– Adopts an if–then approach.

– A number of situational factors

influence organisational performance.

– If certain situational factors exist, then

certain organisational and managerial
variables are most appropriate.
 THE FORMAL AND INFORMAL ORGANISATION

Figure 3.9 Formal and informal organisation

Source: Lysons, K., ‘Organisational analysis’, supplement to Manager, The British Journal of Administrative Management, no. 18, March/April (1997).
Reproduced with permission of The Institute of Administrative Management
THE INFORMAL ORGANISATION

• Social groups/cliques
• Informal/unwritten rules: ‘how we do things
around here’
• Informal communication: the ‘grapevine
• faster but often less accurate
• Co-exists with formal structure
• Can be beneficial and negative
• Managerially challenging
PEOPLE AND
ORGANISATIONS HAVE A
RELATIONSHIP
‘People modify the working of the formal organisation, but their
behaviour is also influenced by it. It may make demands on them,
which they find an undue strain so that they seek ways of modifying
these pressures.

The method of work organisation can determine how people relate

to one another, which may affect both their productivity and their
morale.

Managers, therefore, need to be conscious of the ways in which

methods of work organisation may influence people’s attitudes and
actions.’

Stewart
ORGANISATIONS OF THE FUTURE
‘The essence of organisations has shifted and will
continue to shift from focusing on structure to
capability.
Capability represents what the organisation is able
to do and how it does it rather than the more
visible picture of who reports to whom and which
rules govern work….
Organisations will operate in the future to identify
and nurture a handful of critical capabilities.’

Ulric
h
Figure 2.4 Areas of social responsibility for organisations Rollinson (2008)
 TODAY’S OBJECTIVES

1. To explain what an
organisation is and how it is
designed
2. To distinguish between the
different types
3. To look further at the
‘open systems’ model
4. To explain the ‘informal
organisation’
5. To consider the future shape
of organisations