PUBLIC ADMINISTRATION

Lecturer:
ORGANIZATIONAL THEORY Emmanuel Sefa
Aboagye
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 COURSE OBJECTIVES
At the end of this lecture, students should be able to:
1. Explain clearly the meaning of organizational theory.
2. Identify the different stakeholders of an organization
and what they expect from the organization.
3. Appreciate the need for organizational charts in an
organization.
4. Understand the meaning of organizational culture and
its characteristics

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 OUTLINE OF PRESENTATION
Definition of an organization
Meaning of theory
Organizational theory
Importance of organizations
Organizational structure/chart
Organizational culture
Organic vs Mechanistic organization
Lecture summary
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 WHAT IS AN ORGANIZATION?
Social entities that are goal-directed
Designed as deliberately structured and
coordinated activity systems
Linked to the external environment
Includes large multinational corporations, family
owned businesses, government departments and
agencies as well as nonprofit organizations
(Daft, 2004).
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 WHAT IS THEORY?
A theory is a set of assumptions, propositions, or accepted
facts that attempts to provide a plausible or rational
explanation of cause-and-effect (causal) relationships among
a group of observed phenomenon.
Theories are mental models of the perceived reality.
http://www.businessdictionary.com

Theory is “a plan or scheme existing in the mind only, but

based on principles and verifiable by experiment or
observation”
(Funk & Wagnalls, 1302) 5
 ORGANIZATIONAL THEORY
A proposition or set of propositions that
attempts to explain or predict how groups and
individuals behave in differing organizational
arrangements.
Organization theory helps us explain what
happened in the past, as well as what may
happen in the future, so that we can manage
organizations more effectively.
Organization theory is concerned with the big
picture of the organization and its major
departments
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 IMPORTANCE OF ORGANIZATIONS
Organizations are a means to an end
Produce goods and services efficiently
Facilitate innovation
Adapt to and influence a changing environment
Create value for owners, customers, and employees
Accommodate ongoing challenges of diversity, ethics,
and the motivation and coordination of employees

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THE IMPORTANCE OF ORGANIZATIONS

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.
PERFORMANCE AND
EFFECTIVENESS OUTCOMES
Efficiency – amount of resources used to achieve the
organization’s goals
Do the things right
Effectiveness – the degree to which an organization
achieves its goals
Do the right things
Stakeholder Approach – balancing the needs of groups
in and outside of the organization that has a stake in the
organization’s performance
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 ORGANIZATIONAL CHART
An organizational chart depicts the structure of
an organization.
The organization chart is a diagram showing
graphically the relation of one official to another,
or others, of a company.
It is also used to show the relation of one
department to another, or others, or of one
function of an organization to another, or others.
This chart is valuable in that it enables one to
visualize a complete organization, by means of
the picture it presents. 10
 ORGANIZATIONAL CHART
A company's organizational chart typically illustrates
relations between people within an organization.
Such relations might include managers to sub-workers,
directors to managing directors, chief executive officer to
various departments, and so forth.

When an organization’s chart grows too large it can be

split into smaller charts for separate departments within the
organization.

The different types of organization charts include:

Hierarchical, Matrix, Flat (also known as Horizontal) chart
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 HIERARCHICAL ORGANIZATION
A hierarchical organization is an organizational structure where
every entity in the organization, except one, is subordinate to a
single other entity.

This arrangement is a form of a hierarchy. In an organization, the

hierarchy usually consists of a singular/group of power at the top
with subsequent levels of power beneath them.

This is the dominant mode of organization among large

organizations; most corporations, governments, and organized
religions are hierarchical organizations with different levels of
management, power or authority. 12
 HIERARCHICAL ORGANIZATION
For example, the broad, top-level overview of the general
organization of the Catholic Church consists of the Pope, then
the Cardinals, then the Archbishops, and so on.

Members of hierarchical organizational structures chiefly

communicate with their immediate superior and with their
immediate subordinates.

Structuring organizations in this way is useful partly because

it can reduce the communication overhead by limiting
information flow; this is also its major limitation 13
HIERARCHICAL ORGANIZATIONAL CHART

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 MATRIX ORGANIZATION
It is a type of organizational structure in which people with similar
skills are pooled for work assignments, resulting in more than one
manager (sometimes referred to as solid line and dotted line
reports, in reference to traditional business organization charts).

For example, all engineers may be in one engineering

department and report to an engineering manager, but these same
engineers may be assigned to different projects and report to a
different engineering manager or a project manager while working
on that project.

Therefore, each engineer may have to work under several

managers to get his or her job done.
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MATRIX ORGANIZATIONAL CHART

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 FLAT/HORIZONTAL ORGANIZATION
A flat organization (also known as horizontal organization
or delayering) is an organization that has an organizational
structure with few or no levels of middle management
between staff and executives.

The idea is that well-trained workers will be more

productive when they are more directly involved in the
decision making process, rather than closely supervised by
many layers of management.

This structure is generally possible only in smaller

organizations or individual units within larger organizations.
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FLAT/HORIZONTAL ORGANIZATIONAL CHART

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 CLASS DISCUSSION/ASSIGNMENT

Why is there a need to have an organizational chart

in the administration of an organization?

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MAJOR STAKEHOLDER GROUPS
AND WHAT THEY EXPECT

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 ORGANIZATIONAL CULTURE
Organizational culture is a system of shared assumptions, values, and
beliefs, which governs how people behave in organizations.
These shared values have a strong influence on the people in the
organization and dictate how they dress, act, and perform their jobs.
Every organization develops and maintains a unique culture, which
provides guidelines and boundaries for the behavior of the members
of the organization.
Organizational culture is composed of seven characteristics that
range in priority from high to low.
Every organization has a distinct value for each of these
characteristics, which, when combined, defines the organization's unique
culture.
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 CHARACTERISTICS OF ORGANIZATIONAL CULTURE
The seven characteristics of organizational culture are:
1. Innovation (Risk Orientation) - Companies with cultures that place a
high value on innovation encourage their employees to take risks and
innovate in the performance of their jobs. Companies with cultures that
place a low value on innovation expect their employees to do their jobs
the same way that they have been trained to do them, without looking
for ways to improve their performance.

2. Attention to Detail (Precision Orientation) - This characteristic of

organizational culture dictates the degree to which employees are
expected to be accurate in their work. A culture that places a high value
on attention to detail expects their employees to perform their work with
precision. A culture that places a low value on this characteristic does
not.
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CHARACTERISTICS OF ORGANIZATIONAL CULTURE
3. Emphasis on Outcome (Achievement Orientation) - Companies that focus on results,
but not on how the results are achieved, place a high emphasis on this value of
organizational culture. A company that instructs its sales force to do whatever it takes
to get sales orders has a culture that places a high value on the emphasis on outcome
characteristic.
4. Emphasis on People (Fairness Orientation) - Companies that place a high value on
this characteristic of organizational culture place a great deal of importance on how
their decisions will affect the people in their organizations. For these companies, it is
important to treat their employees with respect and dignity.

5. Teamwork (Collaboration Orientation) - Companies that organize work activities

around teams instead of individuals place a high value on this characteristic of
organizational culture. People who work for these types of companies tend to have a
positive relationship with their coworkers and managers.

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 CHARACTERISTICS OF ORGANIZATIONAL CULTURE
Aggressiveness (Competitive Orientation) - This
6.
characteristic of organizational culture dictates whether group
members are expected to be assertive or easygoing when
dealing with companies they compete with in the marketplace.
Companies with an aggressive culture place a high value on
competitiveness and outperforming the competitors at all
costs.
7. Stability (Rule Orientation) - A company whose culture
places a high value on stability are rule-oriented, predictable,
and bureaucratic in nature. These types of companies typically
provide consistent and predictable levels of output and
operate best in non-changing market conditions.
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 ORGANIC VS. MECHANISTIC ORGANIZATION
Mechanistic – characterized by machine-like standard rules
and procedures with clear authority
Organic – design of organization is looser, free-flowing, and
adaptive

The classification depends upon factors such as:

Structure
Tasks/Roles
System Formality
Communication
Hierarchy versus Collaboration
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ORGANIC AND MECHANISTIC DESIGNS

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 LECTURE SUMMARY
In this lecture we have learnt that:
1. Organization theory is concerned with the big picture of
the organization and its major departments.
2. Organizations are a means to an end. They exist to serve
the needs of their stakeholders.
3. An organizational chart depicts the structure of an
organization. It is is a diagram showing graphically the
relation of one official to another, or others, of a company.
4. Organizational culture is a system of shared assumptions,
values, and beliefs, which governs how people behave in
organizations. 27