Organisational Context

In this topic, the word ENVIRONMENT has been rephrase in terms of business/organisation.

Environment: The surroundings or conditions in which an organisation operates.


The 3 main environmental layers of an organisation is as follows :

• Internal
• Micro (competitive)
• Macro (external)

This week's lecture stressed on the internal environment as well as the micro environment.

The internal environment within an organisation which affects them are as follows :

• Structures
• Objectives
• Cultures
• Power and Authority
• Technology
• Leadership
• Finance
• People

All these points are quite straightforward on how it affects. Additionally, lectures and classes had already clarify how most of these points affects the organisation.

An example would be "Technology", where Eric Trist established the link between social system and technical system and how it would affect communication within a company.

Micro Environment
Micheal Porter revealed that there are 5 forces which affects a micro environment of an organisation.
The five forces include :

• Threat of substitute products
• Bargaining power of suppliers
• Bargaining power of buyers (the organisation's immediate customer)
• Threat of new entrants
• Intensity of rivalry within the industry

We can use porter's 5 forces as a tool to consider the possible threats of the company, which is VERY useful. The picture I've found have given the main points that how each factors affect an organisation.

Multiple heated discussions in the lectures and classes of different organisations have led us to conclude that different organisations have different highs and lows of each aspects of the 5 forces.

Example: Threat of new entry of a coffee shop, is high, however the threat of new entry of aircraft manufacturing is lower because of the big difference of cost to set up the company.

There are also examples of how these forces have led to the downfall of an organisation.
Such as how Kodak did not see the threat of a substitute product of digital camera.

Some companies amalgamate to form new products together such as camera manufacturing with phone companies. Again, Porter's 5 forces have to be considered.



http://www.youtube.com/watch?v=uvwjip3CTMA




Porter's work on this theory is very impressive, however it has some flaws, such as:

• The model assumes relatively fixed marketing structures which hardly the case of our current generation where the markets are ever-changing.
• Technological breakthroughs  have not been may tip the scales of a business, as seen in Kodak and their digital camera rivals
• The relationship between supplies and buyers may form or break within short times

However, the forces are still useful for analytical purposes, revolving around the idea of competition, not in terms of strategic, such as amalgamation of companies. Hence, Porter's 5 forces usefulness has its limits.

Management Theory Lecture

Sure enough the great minds of the past have their own paradigm when it comes to business. Different theories will produce different results depending on what the work orientation is; it is quite specific. Choosing the right strategies and applying the theories will greatly affect the business, hence, it is quite a challenge.

Frederick Winslow TaylorInvented "Taylorism" where he minimised time, waste as well as money by timing how the job is done by each individual, putting them in positions most suited to them and ultimately, the job was done in a very efficient way.

His theory was based mostly on efficiency and productivity and believe this was the best way to get the work done. His theory on Taylorism also include that the workers took no responsibilities (the managers are the operating force) and financial rewards are the workers' main motivation.

Personal opinion : I believe that Taylorism is a great theory to adopt in a company that relies on productivity of their factories, but definitely not the "best way" to do every task. However, skilled and talented workers may be discouraged to keep their job, because it seems to me that Taylor see his workers not as employees, but see them as machines.

Max WeberHis theory revolves around bureaucracy, where large organisations need strict rules and regulations, hierarchical type of management with strict responsibilities which also stresses out the need for close supervision and disciplines and minimal employee discretion.

Personal opinion : Max Weber's theory is similar to the description of Tall Structures, which I believe works very well in large corporate organisations as it is easier to control and big corporations earn a great sum of money, chances of corruption is lowered if close supervision and disciplinary actions are well carried out.

Henry Ford"Fordism" is a term made, named after Henry Ford himself, that describes that modern economics and social system should be based on an industrialized and standardized form of mass production and maximum efficiency.

 Personal opinion : So far, I've find "Fordism" and "Taylorism" one of the most interesting theories I've encountered. I feel that emphasis is made on production and results, which is a crucial part in a company's growth. However, adopting these ideas might be inhumane and insensitive to their staffs. There are cases in China that factories revolves on how to improve productivity, and quality and standards deteriorate and their personnels are paid in a ridiculously low amount of money and the factories generate a great deal of harmful waste causing harm to whomever live near the area and ultimately, the world. To adopt "Fordism" to this extent, is ludicrous. Hence, I believe, maximum production and efficiency is not the most important.

Henri Fayol
He believed that the fundemental management principles are as follows:
-Division Of Labour
-Authority and Responsibility
-Discipline
-Fair Remuneration
-Centralisation
-Efficiency
-Harmony

Personal Opinion : In contrast of the Federick Winslow Taylor, Max Weber and Henry Ford, Mr. Fayol seems to put into account the thoughts and feelings of his workers, which is a very good thing to keep morale up. I believe this theory fits very well in stressful line of work such as law firms. Nevertheless, to keep efficiency and fairness, is not an easy task, and will affect the peace within the company. It may be easy for Henri to suggest it, but it is clear that harmony and efficiency is difficult to establish together at once

Elton MayoHe was famous for the term "The Hawthorne Effect" or, as most would call it, "The Observer Effect", which describes the form of reaction of the subjects improve or change in terms of their behaviour  (which is being experimentally measured). Subjects would know that they're being studied but not in any kind of experimental manipulation.

The Hawthrone Effect showed that physical condition doesn't affect productivity, and that social and human interaction would boost the output. This helped in the recognition of the importance of teamwork in an organisation, bringing a big contribution in terms of Human Relations (showing that economic and social factors influence workers' performance)

Personal opinion : Different individual react differently in stressful situations, and the observer effect will definitely add to stress. Some individual may work harder in stressful situations, but not everyone. Personally, I do not like to work in such a condition where my manager breathes down my neck, constantly criticizing my work. It may gravely damage morality of the staffs.


Eric TristHe has the notion that there is a link between social system and technical system.



In the lecture, I've also learnt that management must be aware that although technical advancement is important to the success of a business, the work force may be damaged as it damages social interactions at work.

A good example would be corporates owning cubicles and computer its individual personnels.

Personal Opinion: Technologies may affect in that way, damaging social interactions, or, optimistically speaking, make work easier. Not everybody has the time to entertain every single one of their colleague with a heavy pile of work, face to face. It depends on how technology is being used.



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These are some of the classical approaches to management, which are still widely applicable to modern times, but in different forms.

Other factors that could affect a business would be :

• Suppliers
• Rivalry of other similar organisations
• New Entrants
• Substitute products or services
  

2nd Lecture !

Here's a brief summary of what I've learned from my 2nd lecture.

Keywords : -
Span of control : Number of subordinates working under a superior or manager
Hierarchy : any system of persons or things ranked one above the other
Chain of command :  a series of administrative position in which each have direct authority over the one immediately below
Neopotism: Patronage bestowed or favouritism shown on basis of family relationship as in business and politics.
Delegation : When authority is passed down to a subordinate
Empowerment : Subordinates posseses control over their work and are able to make decisions related to the task
Line manager : a person who has responsibility for a given employee
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Tall structures is hierarchical with a long chain of command.

Common features of tall structures include the following :

• Narrow spans of control
• Rules and policies, as well as tight control
• Authority and responsibility is only given to the higher position usually (Delegation is unusual)
• Function of each position are stated clearly
• Long chains of command

It stresses on the role of the job, not the individual who works. People come and go, but the role of the job remains intact. (Job > Individual)

Weber (1864-1920) believed that tall structures could avoid high risks of corruption, unequality and nepotism as there is a strict, systematic dicipline to carry out their roles.
In tall structures, motivation may be low as there is very little need for participation in decision making,however,  the company's personnels will have a lot of opportunities for promotion, hence, a great advantage for an individual.


Flat structures are more suited to smaller organizations
Flat structure's features are as follows :

• Fewer layers as compared to tall organizational structures
• Shorter chain of command
• Wider span of control
• It encourages flexibility, delegation and empowerment
• Workers may have more than one boss

Wide span of control vs Narrow span of control
Narrow ( Advantages ) 

• Tight control
• Better coordination
• Better supervision
• Better communication
• Less delegation, leading to less stressful situation. (However, this may affect motivation)
• Managers may have more free time to do other things as they only have lesser number of people to supervise as compared to Wide span of control

Narrow ( Disadvantages )

• Subordinates may not like close supervision
• Red tape may cause delays upon urgent decisions
• Chances of overheads incurred is higher

Wide ( Advantages )

• Subordinates have the authority to delegate, thus, may also increase job satisfaction and morale
• Lower cost involved in supervision
• Decisions are made faster from the shorter chain of command
• Chances of overhead is reduced, hence more efficient
• Improved communication

Wide ( Disadvantages )

• Manager may be stressed out as he has a higher number of subordinates
• Delegation may cause stressed via increased workload
• Individual managers have less time to focus with their own personnels

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Silo Culture basically implies that different departmental staffs only work within their departments, not cooperating or communicating well with other departments of the organization, thus affecting the whole organization's overall performance.




There are different types of structures for different types of organisations. Different structures work differently with various organisations. Take Lotus for example, they use the matrix structure and they turned out to be successful. Big corporations take up tall structures such as fast food franchise, and are more centralized (decisions are usually made by managers at the top of the organisation), whereas smaller organisations usually take up flat structures.

It is certain that every structures have their own flaws, but choosing the structure that aids a company the most with lesser number of flaws is the main point. Even Google have their own version of structure, a mixture of hierarchical and flat structure, allowing wider range of flexibility,  and still being able to hold on to authority at the same time. There must be flaws in that, possibly maybe that their employees may not take their jobs seriously and good employees, having both discipline in work as well as being innovative and interactive are hard to find. However, Google has clearly made full use of their structures and manage to suppress the flaws because they are still one of the most recognized company for their success.