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Unit 1: Introduction
1.1. Organizational Behavior (OB): Definition
Nowadays, organizations are much more than means for providing goods and services. They create the settings in which most of us spend our lives. In this respect, they have profound influence on our behavior. Organizational behavior, in short, is the explanation of how people behave in organizations.
There are a few definitions given by scholars:
According to Greenberg and Baron (1997), Organizational behavior (OB) is the field that seeks knowledge of behavior in organizational settings by systematically studying individual, group and organizational process, then it applies that knowledge to make organizations work more effectively.
Stephen P. Robbins regards OB as a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. As a whole, it involves the understanding, prediction and control of human behavior and the factors, which influence the performance of people as members of an organization.
OB knowledge is based on behavioral sciences. It applies the scientific method to practical managerial problems. OB is not as advanced as some fields of science like physics and chemistry because of its relatively recent appearance. However, OB specialists not only apply their knowledge, they conduct studies to help solve specific problems. These studies rely on the use of the scientific method, as it is the central defining characteristic of modern organizational behavior. Therefore it is important to learn about behavior in organizational settings for various reasons:
Firstly, it is a way of thinking and humanistic orientation. Peoples and their attitudes, perceptions, learning capacities, feelings and goals are of major importance to the organization. Behavior is viewed as operating at individual, group and organizational level.
Secondly, it is the application of scientific studies. As the scientific method has been used in conducting research on OB, a set of principles and guidelines on what constitute good research has emerged.
Third, the field has an application orientation. It will help to improve the functioning of organizations.
Fourth, the field of OB is performance oriented. It helps to answer important questions concerning goal setting, performance enhancement, job satisfaction, and individuals and groups decision-making.
Finally, OB is multidisciplinary. It utilizes principles, models, theories, and method from other disciplines. The study of OB is not a discipline or generally accepted science with an established theoretical foundation. It is a field now, beginning to grow and develop in stature and impact.
The three basic units of analysis
OB focuses on three level of analysis: Individuals, Groups and Organizations. OB specialists look at behavior on three levels because individuals work in-groups within an organization setting.
Individual level. People enter organizations with certain characteristics that will influence their behavior at work. The more obvious of these are personal or biographical characteristics such as age; gender; marital status; personality characteristics, value and attitudes, and basic ability levels. Individual perceptions, attitudes and motives are also the concern of this level.
Group level. The behavior of people in-groups is more than the sum total of all individuals acting in their own way. People’s behavior when they are in-groups is different from their behavior when they are alone. At the group level, it describes how people communicate with each other and coordinate their activities between themselves in workgroups.
Organizational level. OB reaches its highest level of sophistication when people add formal structure to their previous knowledge of individual and group behavior. Just as groups are more than the sum of their individual members, so are organizations more than the sum of their member groups. At this level, it is to examine the organizations at a whole-- the way they are structured and operate in their environment, and the effects of their operations on the individuals and groups within them. The design of the formal organization, work processes, and jobs; the organization’s human resource policies and practices, and the internal culture all have its impact at this level.
1.2. The Functions of Managers
There is a close relation between organizational behavior and management theory and practice. Organizational behavior does not encompass the whole of management. It is more accurately described in the narrower interpretation of providing a behavioral approach to management.
In an organization, managers play a very crucial role in the success of that firm. They make decisions, allocate resources, and direct the activities of others to attain goals. A manager thus can be thought of as a system diagnoser and influencer who work with people and other resources to carry out tasks and achieve goals. This implies that the manager must understand the totality of his or her organization and then influence system components as tasks, technology, structure and people to achieve desired outputs. Additionally, managers
analysis, standard cost analysis, employee performance evaluation and quality control.
Managerial Roles
Managers perform at different hierarchical levels and require an array of skills. Henry Mintzberg studied the managerial roles by examining what managers actually do and how they spend their time. Mintzberg then concluded that managers perform ten different, highly interrelated roles, or set of behaviors attributable to their jobs. It can be grouped as concerned with interpersonal relationship, the transformation of information and decision- making.
Interpersonal roles include the three roles described as figurehead, leader and liaison , which grow out of manager’s formal authority and focus on interpersonal relationships. All managerial jobs require some duties that are symbolic or ceremonial in nature.
The figurehead role can be demonstrated by an example as a supervisor who attends the wedding of a subordinate’s daughter. The manager’s leadership role involves directing and coordinating the activities of subordinates. This may involve staffing (hiring, training, promoting and dismissing) and motivating subordinates. The leadership role also involves controlling, making sure that things are going according to plan. The liaison role involves managers in interpersonal relationships outside of their area of command. This role may involve contacts both inside and outside the organization. Within the organization, managers must interact with numerous other managers and other individuals. Manager also has interactions with important people outside of the organization. For example, when the sales manager has contacts with other sales executives outside.
The informational role establishes the manager as the central point for receiving and sending non-routine information. The monitor role involves examining the environment in order to gather information, changes, opportunities and problems that may affect the unit. The disseminator role involves providing important information to subordinates. In the spokesperson role , the manager represents the unit to other people. This representation may be internal when a manager makes the case of salary increases to top management. It may also be external when an executive represents the organization’s view on a particular issue of public interest to a local civic organization.
The decisional roles can be expressed in four areas as entrepreneur, disturbance handler, resource allocator, and negotiator. The purpose of the entrepreneur role is to change the unit for the better. The effective first-line supervisor is continually looking for new ideas to improve the unit’s performance. In the disturbance handler role , managers take corrective action in response to unforeseen problems. The resource allocator role places a manager in the position of deciding who will get what resources. These resources include money, people, time, and equipment. In the negotiator role , a manager must bargain with other units and individuals to obtain advantages for his/her unit.
Management Skills
A skill is an ability or proficiency in performing a particular task. Another way of
considering manager’s responsibility is to look at the skills or competencies they need to successfully achieve their goals. Robert Katz has identified three essential management skills:
Technical skill is the ability to use specific knowledge, techniques and resources in performing work. Accounting supervisors, engineering directors must have the technical skills to perform their management jobs. Technical skills are especially important at the first line management level, since daily work-related problems must be solved.
Human skill is required since managers must accomplish much of their work through other
people. There ability to work with, communicate with, and understand others is most important.
Conceptual skill is required since managers must have the mental ability to analyze and
diagnose complex situations. Decision making, for instance, requires managers to spot problems, identify alternatives that can correct them, evaluate those alternatives and select the best one. Regardless the above three skills, manager also need other skills such like analytical skills, computer skills and communication skills in performing their managerial roles.
The following simple structure of an organization is divided into three levels of management, namely, lower level, middle level and top level. In this organizational ladder one can see that managers at the top level need more of conceptual skill; and managers at the lower level need more of technical skill. The human skill may be needed at equal proportions at all levels of management.
1.3. The Characteristics of Organizational Behavior
OB Seeks to improve people’s quality of life at work – In the early part of the twentieth century, the growth of the railroads and the demand for manufacturing goods led many people from agriculture to manufacturing work. However, these peoples discovered a brutal work environment – noisy, hot and highly regimented.
According to McGregor, the style of management can be put forward as two sets of suppositions, Theory X and Theory Y. Theory X reflects the traditional view of management, it assumed people were lazy, dislike work and need direction, and will only work hard when they are being pushed. The central principle of Theory X is based on direction and control through a centralized system of organization and the exercise of authority.
The classical thought of scientific management is the root of organizational behavior. The earliest attempts to study behavior in organizations came from efficiency experts seeking to improve worker productivity. Frederick W. Taylor, who works primarily in steel mills, developed the scientific method. The objective of management is to secure the maximum prosperity of each employee. Taylor’s scientific management focused on employees as individuals. He states that the principles of management were to:
Firstly, employees be carefully selected and trained to perform their job
Secondly, he believed that increasing worker’s wages would raise their motivation and make them more productive.
After Taylor, Frank and Lillian Gilbreth built on Taylor’s ideas and developed time-and- motion studies, which classified and streamlined work.
The Human Relations Movement
Scientific management has its own limitations; it made people feel like cogs in a machine. Many employees and theorists rejected Taylorism, favoring instead an approach that focused on employees’ own views and emphasized respect of individuals. At the forefront of this orientation is Elton Mayo. Human relations rejected the economic perspective of work and focused on social factors. The Hawthorne studies began in 1927 at Western Electric’s Hawthorne Works near Chicago. Starting with scientific management, they tried to discover ways to improve employee performance. Puzzling results caused them to call in Elton Mayo to repeat the studies. Mayo discovered the concept of social systems and argued that social factors, not physical factors, are most important in improving productivity.
Classical Organization Theory
This perspective focused on the efficient structuring of overall organizations. Several theorists are identified with this theory. Among them were Henry Fayol and Max Weber_._ Henry Fayol, a French industrialist, emphasized the importance of carefully practicing efficient planning, organizing, commanding, coordinating and controlling. Fayol’s principles include, among others:
Division of labor – allow people to specialize, doing only what they do best.
Managerial authority over workers – managers should have authority over their subordinates, the right to order them to do what’s necessary for the organization.
Scalar chain of authority – line of authority should be uninterrupted.
Unity of command – employee receive directions from only one person to avoid confusion.
Subordinate initiative – subordinate should be given initiative to formulate and implement their plans.
Max Weber developed the idea of ideal bureaucracy, where consistency and fairness were the key factors. Hence his principles included:
Formal rules and regulations – written guidelines used to control employees’ behavior.
Impersonal treatment – Favoritism is to be avoided. All work relationship based on objective standards.
Division of Labor – All duties divided into specialized tasks.
Authority structure – The making of decisions is determined by one’s position in the hierarchy.
Lifelong Career Commitment – Employment is viewed as a permanent, lifelong obligation on the part of the organization and its employees.
Rationality – The organization is committed to achieve its objectives in the most efficient manner.
OB in the Modern Era
OB emerged as a field in the 1940s. OB was formal established as a field by the late 1950s. In 1959, Gordon and Howell reported on business education and recommended among other things, increased attention to the social sciences. Since then, the field of OB rapidly grew, and it borrowed heavily from other disciplines. OB is a hybrid science; it may be characterized by the fact that it draws upon several different social sciences disciplines, such as communication, political science, management science and sociology.
For example, the study of personality, learning and perception draw on psychology. There are a few new trends of OB currently:
Increased attention to cross-cultural aspects of business – today, research that considers the international importance of OB phenomena is considered as a key to understanding organizational competitiveness in a global society. Study of ethical or unethical behavior is more important than before – understanding the factors that lead people to make ethical or unethical decisions and by their willingness to engage in antisocial behaviors as cheating, stealing and acting violently. Recognition of the importance of the external environment on OB – factors such as laws, governmental regulations and international affairs affect behavior in organizations. The traditional emphasis on manufacturing has been expanded to include studies of the service and information sectors of business. There are greater work with technology and its impact.
1.5. The Behavioral Aspects of Organization
After examining some theoretical aspects of organizations, students should also examine some behavioral aspects. The behavioral aspects of organizations are numerous. The major ones, however, include: decision making, communication, leadership, motivation, and
to Chester Barnard, the first executive function is to develop and maintain a system of
communication.
It is communication which gives ‘life’ to an organizational structure and so can be called the ‘lifeblood’ of an organization conceived as an organic system. It is a thread or the via media that holds the various interdependent parts of an organization together. If it stops organizational activity ceases to exist. This has relevance not only to the internal functioning
of an organization but also to the exchanges of information it carries on with its environment. The communication system serves as the tool by which the organization is embedded in its environment. Therefore a communication system not only integrates various organizational sub-units but also in a systemic sense serves as an elaborate set of interconnected channels designed to sift and sieve and analyze information input from the environment. Subsequently, it exports processed information to the environment.
The role of communication becomes more critical as organizations grow in size, complexity and sophistication. Organizational control is exercised through the giving of information that is understood and willingly appropriated, through coordination effected through procedures, plans or direct orders, and through indoctrination. Control is not completed until a report is rendered concerning performance. A communication system which is satisfactory today may not remain so tomorrow. Consequently, there is a need for adjustment in the communication system according to the changing needs of an organization. Also the communication system of an organization is an exceedingly powerful determinant of an organization’s effectiveness. The elements of the communication include: communicator, transmission procedure, forms of the communication, recipient, and desired response.
There are four prerequisites to effective communication:
- Develop a positive attitude so that unnecessary physical and semantic barriers do not hinder a communication’s smooth flow.
- Managers must continually press/work to get informed. They need to seek out relevant information that is of interest to employees, share it and help employees feel assured and informed.
- Managers need to consciously plan for communication and they must provide for it right before initiating a course of action.
- Finally, developing trust between senders and receivers is also important in all communication.
Every act of communication influences the organization in some way. Communication helps accomplish all requirements/prerequisites of management functions so that organizations can achieve their goals and must meet their challenges.
The classical theory emphasized the task-related communication for purposes of issuing instructions to workers whereas with the emergence of human relations, the emphasis shifted to communications for purposes of meeting worker’s needs and for developing participation among equals and work associates for social purposes. The ideas, practices and
messages that help maintain or improve social skills and self-concepts among organizational
members received much attention.
Gradually with the systemic view gaining recognition and the role of the three most important flows - materials, energy and information being emphasized, communication became one of the main linking processes. Communications among various units of an organization which are linked together and organization, in turn, being coupled with its
environment have come to be regarded as being a ‘synergetic process’. It may be possible to draw a comparison with regard to importance, purpose, direction of and problems in communication as viewed by the classicists, neo-classicists and modernists.
The main objectives of communication can be summarized as follows:
- To establish and spread the goals of an enterprise, information flow is essential to secure shared understanding of a shared purpose. Members inside an organization need to be educated in the organization purpose.
- To develop plans for their achievement, planning has to be undertaken which is a collective exercise/enterprise where a number of specialists and specialist agencies are employed. The exercise cannot be vitalized except by resort to communication.
- To organize human and other resources in the most effective and efficient way found communication in vital. The opportunity cost of selecting a particular alternative (at the cost of a few others) should not exceed the benefit derived from it.
- To select, develop and evaluate members of the organization interaction (both formal and informal) is fundamental and also happens to be basic to any appraisal exercise.
- To lead, direct, motivate and create a climate in which people want to forward willing contribution as leadership is played/performed or made to happen by means of the medium of communication
- To control performance which involves the triple process of directing, commanding and appraising. All three are performed through the medium of communication.
The modes of communication can be seen as: formal communication and informal communication.
Formal Communication
This kind of communication takes place along the pathway prescribed by the organization and in tangible modes. The downward and upward communication between a superior and his subordinates subsist inside a formal structure. No organization can function efficiently if communications flow only downwards or only upwards. In order to avoid delays in decision-making, organizations now permit lateral or horizontal communication. Such communications are provided for in organization charts and laid down specifically therein. Thus, all communications- downward, upward or horizontal, which an organization provides for in order to achieve organizational objectives are called formal communications. They are distinctly identifiable and are desirable as they aid in fixing responsibility and ensuring accountability.
commanding compliance.
- Energizing, which involves motivating, which in turn includes injecting a sense of optimism and heightened ‘ valence’ and ‘ expectation’;
- Guiding, to ensure minimum of aberrations and smooth operation of business.
- (^) Integrating, which is explained in terms of structural-functional coordination and also the fusion process partaking inside organizations, which comprises of the twin processes of personalization and socialization. The two have to be integrated/ managed.
Endowed with these superior qualities a leader is called upon to perform functions which ordinary people could not be trusted with. A few of the functions have been enumerated as follows:
- Planning and definition of policies and procedures.
- (^) Organizing the activities of individuals forming part of an organization.
- Delegating authority and responsibility.
- Controlling the activities of participants towards the desired result.
- Supervising the work of the group.
- Giving general orders and guidelines.
- Interpreting and transmitting policies by way of directions.
- Training the key subordinates to carry out the functions specifically delegated by the executive
- Coordination of tasks and men
- Stimulating and vitalizing contributors towards ever better performance
- (^) Leaders should take the followers into confidence while supporting the objectives of the organization.
- Generating positive impulses, motives and optimism within member contributors.
- Imparting of a vision, an ideal and a principle to pursue.
- Being persuasive and democratic.
- Motivating people for taking orders.
- Creating a proper balance between friendliness, cordiality, and undue familiarity.
Motivation
The term motivation is derived from the Latin word ‘ movere ’, which means to ‘ move. ’ Motivation can be described as a complex of forces starting and keeping a person at work in an organization. Motivation can be regarded as part of wider activity and there are forces inside a person starting and maintaining activity generated by innate impulses. In simple words, motivation is “will to work.” It is possible that at times the abilities of an individual fall short of the demands of a job, but what is intriguing is that even if adequate abilities exist a person may deliberately avoid his job, show indifference, develop an apathetic attitude or even work against it. It is therefore not merely the ability to work but also the will to work that matters in an organizational situation. If a person has the will to work, he is said to be motivated.
Every person has both conscious and sub-conscious needs. Certain needs are apparent and certain others may be nebulous or hidden. To satisfy these needs a man looks for something we call “goal”. He finds himself most of the times unable to achieve this goal individually/independently. Therefore he makes his contribution towards organizational goals as long as he perceives inducements sufficient enough to meet his expectations. Organizations offer him inducements as long as they perceive his contributions as sufficient enough to deserve/demands offer him those inducements. The cause and effect relationship imparts dynamism to an organization’s functioning.
The basic characteristics of the phenomenon of motivation are:
- An internal need which energizes and activates human behavior.
- Drive , which is explained as the inner force that propels behavior in a specific direction.
- Goals are the incentives or pay-offs that reinforce private satisfaction, which in turn reinforce the perpetuation of needs.
Need gives rise to a drive to achieve the set goal. Therefore, motivation can be defined as “the need or desire within an individual that drives him/her towards goal- directed action.” Need satisfaction is imminent if human beings are to be happy and healthy entities. An organization’s ‘health’ in turn will be contingent on the overall well-being of the people constituting it.
In case needs are not satisfied, behavioral problems such as frustration, aggression and indifference may crop up which may be difficult to settle/negotiate then after. According to Heresy and Blanchard, other forms of frustrated behavior are rationalization, regression, fixation and resignation. Rationalization is making excuses; regression , taking resort to childish behavior, which is unbecoming of a mature personality; fixation , constant repetition of useless behavior, which may be a habitual and incurable tendency and resignation , apathy or indifference. In case of fixation, punishment may be a dangerous management tool in that it might make the subject even more obstinate and difficult to correct. Hence a sound motivation policy on the part of the management is the only recourse, both as a preventive and a corrective tool.
Heresy and Blanchard have brought out the difference between what they term goal- directed activity and goal activity. The former in essence is motivated behavior directed at reaching a goal. The latter implies engaging in the goal itself for instance, in case of hunger, food is the goal, search for food, goal directed activity, and eating, the goal activity itself. Another important distinction relates to their effect on the strength of the need. In goal- directed activity, the potency or strength of the need increases as one furthers efforts towards it, unless a person feels dejected and gives up on it following repeated failures. Once goal activity begins, the strength of the need diminishes in proportion to the satisfaction derived there from.
Conflict
An organization is a continuing system of differentiated and coordinated human activities utilizing and transforming and welding together a specific set of human, material, capital, ideational and natural resources into a unique problem solving whole, whose function is to satisfy particular human needs in interaction with other systems of human activities and resources in its particular environment. Organization theorists however agree on a few uniform characteristics of an organization. These uniform characteristics are:
- Purposeful, complex human collectivities;
- Characterized by secondary (or impersonal) relationships; with
- Specialized and limited goals and
- Sustained cooperative activity;
- Dependent upon exchanges with their environment;
- As integrated within a larger social system;
- As providing services and products to their environment.
To organize, however, is to accumulate (both structurally and functionally). Again, one organizes towards some end and organizing is a means to the end. In the event of un- attainment of the objective, the act of organizing is proven inadequate and the organization itself is rendered redundant. Hence, the survival of an organization is contingent on the fulfillment of its objectives, which ultimately is the justification for its existence.
In management/administrative thought organization is understood as the framework to carry out or achieve certain desired objectives. Organization arises out of associations. Aristotle stated a vital truth when he said that man essentially is a gregarious being. He seeks to associate and bring to fruition his desires and ambitions. At the same time, he is endowed with a consciousness that is inherently limited (restricted potentialities). It constrains him from realizing any of his aims in isolation. Hence explained, is the need to come together in an “assisting act”. Effective management holds a group together and maintains the balance between individual and group.
What will result by way of management of organized effort will be formal organization. It will be a deliberately designed structure with clearly stated authority relationships. Relationships will be systematically structured in a hierarchical fashion, imparting a sense of direction from top down to the bottom.
Organization is both an act of division and collection. Work is divided and assigned to specialized units. It is also aggregated by means of organization. Organizing thus is:
.1 a deliberate act, .2 a feature of civilization, and marks an advancement of public life. In the act of
organizing are involved: purpose , people and resources, and administration.
Organizing has to be efficient activity. Only when it is efficient , is it going to be effective. The yardsticks of efficiency are identified as:
- (^) Economy of operations, which will entail procedural simplicity and adequate (according to preset norms) quantum of output.
- Goal accomplishment (implying meeting of targets).
Effectiveness is equal to efficiency plus a few externalities procured thereby. An organization is said to be effective if its impact on the environment (both internal and external) is positive. In other words, an organization has to be a meaningfully contributing agency in order to qualify for the status of an effective entity.
Yardsticks of effectiveness thus are identified as: high morale of participants, positive externalities, and meeting of long term as well as short term goals.
Organization can be conceived purely in terms of:
- A mechanistic construct or
- A social system (the human relations school) if both formal and informal aspects are taken into account
- As an agent of change if taken as an instrument of realizing change.
Organizations can be classified based on their characters into four broad categories:
- Social organizations, like educational institutions
- Industrial or/and commercial concerns
- Service organizations like NGOs, institutions for charity etc.
- Maintenance organizations, entrusted chiefly with regulatory activities
Some of the leading definitions of the term organization (as defined by different authors) are given below:
Organization can be thought of as a complex relationship among human and physical resources and work, cemented together into a network of systems. Organization is the form of every human association for the attainment of a common purpose.
Organization is the structure and process by which a cooperative group of human beings allocated its tasks among its members, identifies relationship and integrates its activities towards common objectives. Organization can be described as the product of all the forces that mould the actions of an enterprise and produce the final result.
Organization can also be seen as the framework of duties and responsibilities through which an undertaking works. The term organization describes the process of dividing up of the activities which are necessary to any purpose and arranging them in groups which are
in structure (command, control etc.) and functions (multiplicity).
Work towards a purpose: Cooperative endeavor is directed towards accomplishing a preset, mutually agreed purpose.
Set pattern of behavior: Hierarchy structures behavior within an organization. Limits of positional authority at each level are clearly stipulated. The domain within which decisions are to be taken at each level and the mode of exercise of authority (influence, persuasion etc.) are determined by hierarchy.
Continuing system: There is no fluidity or spasmodic appearance associated with a modern organization. It does not occur in flashes. It comes into being or rather is brought into being (by the legislature) and sustains over a period of time. It is deliberately annihilated following a deliberate decision to the effect. So an organization is a continuing consistent system which modifies/ adjusts but does not eclipse.
Differentiation: Task specialization and hierarchical levels lead to differentiation. There is task differentiation, and status differentiation accompanies task differentiation.
Co-ordination: Coherence is the watchword for smooth functioning of any enterprise. It has rightly been recognized as the first principle of management by James Mooney.
Conscious Rationality: Organizing is also an academic venture. Hence it has been explained as “Co-operative rational action. Conscious rationality thus forms the basis of an organization.
Import – conversion – Export: It states the mechanism by means of which an organization relates to its environment. In the process it gets conditioned by, and also conditions the environment it so exists within.
Interaction with the environment: The organism (organization) is related to its substratum (environment). Obviously then there is organics between them.
4.. Types of Organization
We can distinguish between two basic types of organization: Formal Vs Informal.
Formal Organization
Organizations are deliberately planned, designed and sanctioned by a competent authority. A formal organization is, as it, appears in an organization chart. There is nothing tacit or hidden about a formal construct and i) it entails division of work, ii) a formally ordered hierarchy defines relationships and establishes behavior pattern within an organization, iii) a coordination system holds it together. The characteristics of formal organization could be
described as follows:
(1) They are endowed with a legal status. Most organizations are created as corporate persons. (2) (^) They work by dividing (first) and collecting (subsequently) work. A superior- subordinate relationship is weaved into a system of task differentiation. (3) There is primacy of structure. Any study, oriented towards formal organizations thus is charged with a mechanistic approach. (4) They are performance based, which is adjudged/ adduced by looking at the input – conversion – output process. (5) Rules and regulations determine the mode of conduct within an organization.
The functions of formal organization can be summarized as follows:
(1) (^) Primarily, a formal organization facilitates determination of goals towards which the formal and informal set-ups subsequently work. (2) It determines division of work and lays down the nature and scope of various component units. (3) What job and how much of it is done at what level is set by the formal organization. (4) Work ethic of formal organizations is impersonality.
The formal organizational structure is a network and a framework of officially established relationships between divisions (horizontal level) and various management levels (vertical). This structure is an outcome of the organizing process and is clearly represented by the organization chart. Formal organizational structures are more than just boxes on a chart. They establish lines of authority and areas of responsibility for asking and carrying out decisions. And they set the routes along which information flows, both down and up the chain of command. The formal organizational structure is visualized using an organization chart. An organizational chart identifies several characteristics of the organization, including:
- Levels of management – describe the successive hierarchies (layers) of reporting relationship.
- Division of labor – Describes how the total work is divided among different responsibility centers/units of the organization and its staff,
- Reporting relationship – Describes how superior-subordinate relationships are defined through task assignments and authority delegation,
The organizational chart is a graphic representation of how the organization should function. It describes a system of formal lines of authority , responsibility, communication and chain of command that must be maintained. Why is the organizational chart necessary? There are several reasons for the chart to exist including the following. The formal organizational chart:
