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Lecture 1 - OMC
Lecture 1 - OMC
ORGANIZATIONAL MANAGEMENT
(OMC)
WEEK 3
(August 30-31, 2023)
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PART ONE
THE NATURE AND DEVELOPMENT OF ORGANIZATION
INTRODUCTION
This part deals with the development and nature of organization. We also presented the
comparative workings of the human body and the organization for us to see the
relationships of the different parts of the organized system of work. This will show us that
one part of the organization cannot function effectively without the coordination of the
other components.
Organizational management is not just putting work together. Performers in the organized
system need to be given specific tasks or duties to be performed. We have to identify and
group the work, define and delegate responsibilities and establish work relationships.
We need to know the importance of the organization and design the organizational set up
that will fit our goals and objectives according to the size and its functional relationship.
Sound organization facilitates effective management system. In this part we discussed the
effective features of organization.
We also discussed the dynamics of organizational design and its relationship with
management control and supervision. We also presented the use of technology in the
organization as the advancement of management has to do with the introduction of
modernized computers and robotics. This part also deals with the different organizational
environments that affect the workings of the organization.
The dynamics of organizational change is presented as organization change with time and
people. It is an on-going environment activity, as it has Organization to adapt to has the to
prevailing centralize or decentralize conditions as the economy grows or contract and as it is
affective by the introduction of modern technology.
We would like also to highlight the importance of organizational structure and the different
types of designs that will suit the needs of people according to its mission and vision. These
changes in organizational structure could be brought by different factors. It is up to you to
design what organizational design best fits your needs.
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Lecture 1
THE NATURE OF ORGANIZATION
OBJECTIVES
Define organization;
Know the importance of organization;
Understand the nature of organization;
Discuss the nature of organization;
Know the changing concepts of organization;
Know the importance of specialization; and
Know the importance of cooperative management.
Many people in the management sector view organization as a group of people working
together for a common goal or purpose. In this light, organization is a mechanism that
enables people to work effectively together. The evolution of life points that human beings
need to organize in order for him to live happily in this planet. As the decade generate new
concepts of organization, new needs and wants come into the human life, making
organization more complex.
During the primitive set up, human beings had minimum needs in life and living was simple.
Organizational set up followed in simple passion. Man lived with what he can gather for food
clothing and shelter. The family was simply organized to meet basic needs. Men organized
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themselves to protect their lives from aggression. Men needed to invent new weapons and
equipment to protect him and his love ones. His needs extended not only to his family but
also to the group of people he worked and associated with. Man had to develop specialized
activities and expertise to meet the needs of the tribes and the community where he lives.
DEVELOPMENTAL STAGE
Man learned that more organized efforts could bring improvement in his way of life. Man's
social spheres became larger. The need for more complex organized effort became apparent.
It is organization that motivated man to use his brain power to create new things. Man
explored the development of his natural environment with the use of his hands and natural
creativity to fashion new things to satisfy not only his basic needs but also his wants.
Organization passed a system of development. It went through a process of trial and error.
Through this process, organization developed theories that resulted in increased production
and richness beyond the imagination of man. The refinement of organizational system and
development of organized behavior modern created more goods and services to satisfy the
quest for modern living.
Organization can be compared with the components of the human body. God is the master
of the organizational system when he created man. As an intellectual being man is capable
of adapting to the condition of nature and the changing environmental system. Organization
is composed of structures that operate in harmony with one another. The same system
operates in the human body.
The brain is the center of human control as the organization has its management system or
officers that set the direction. The vital human organs are working on its specialized
functions. These supplies the nutrients needed to keep all of the body parts to function
properly. The heart supplies the necessary oxygen and keeps the body alive. It balances the
human complex structures and meets the standards of life for survival. Any abnormality
creates imbalance and a heart surgery may be necessary. The same situation could be true
to any organization. Diagnoses of any disorder would need changes in the composition of
the system before it is too late.
The human limbs are the working parts of the body. These supplies the food in order for the
other parts to function normally. The food is digested by the stomach. The needed nutrient
goes to the different parts of the body to sustain its growth and viability. Organizations on
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the other hand function in similar passion. The workers are the producers of goods and
services. The more productive the workers become, the more profit the company earns. The
organization becomes healthy. It grows bigger and becomes more complex. As long as the
organizational system is balanced properly by its management brain, it shall continue to
sustain its growth and development. Workers and producers of goods must be supplied with
the necessary motivational perks, just like the human limbs that needed the necessary
massage once in a while.
The vital organs of the body operate with a good deal of independence with the direction of
the brain. These become concerned with the interests and needs of the human body as a
whole. These devote thought to an individual organ when the organ is in abnormal
condition. The central intelligence calls on the other body parts to cure or make remedy to
the pain or disorder. The same system operates in the organization. A specialized system is
put in place to keep the organizational balance through its decentralized
departmentalization.
The body can operate in the decentralized fashion effectively because it makes two types of
decisions. The brain operates in the conscious and subconscious mind. On the other hand,
the same situation operates in the organization. The choice of the organizational decision
rests with the top management. It represents the conscious brain. The subconscious
decisions are represented by the department and division management that take care of the
routine and repetitive situation. They are guided by established standard operating policies
and procedure.
The conscious brain which is the top management never completely divorces itself from
accountability. It establishes policy directions through cooperative and participative process.
These policy directions are put into operations through the subconscious brain which are the
operating departments and divisions. In setting this direction and accountability, it sets
operation standard of performance for all people to follow. The routine job gets out of the
conscious mind. Operating people becomes accountable. When control systems and
mechanics of operation find difficulty, the conscious mind come in to find remedial
measures to contain the effects of pain. Concerted efforts of both the conscious and
subconscious minds come into play to cure the organizational defects.
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At the stage of human development, the human embryo grows and becomes capable of
greater scope and movement. As the human being begins to move on its own away from the
supervision of the conscious mind, independence of movement in decisions become
apparent. These changes brought about increased differentiation and specialization of its
parts. Each organ assumes particular specialist functions, then limits itself to a particular
type of task. Economy and efficiency are developed and the central brain system concentrate
more on developing knowledge and learning new things.
The same operates in the organization. As it matures and developed to a greater scope,
specialized departments are created. The conscious brains are the stockholders or the owner
of the company. The operating departments are the subconscious minds that handle the
day-to-day operations. With the well-organized set up of specialization, it makes possible to
move fast in a vastly complex business environment.
The greater the relationships of the vital organs of the human body, the organizational
system follow similar passion. The greater the differentiation and specialization, there exists
a greater need for its different departments for proper coordination. The locomotion
movement of the body parts needs more supply of blood and oxygen to keep the system in
place. Just as an organization moves faster, the flow of capital and resources must match the
need of operation. The needed manpower must be supplied by the personnel department.
Production schedules must be based on other available resources, such as the supply of
materials and equipment. Production output must be sold by the marketing department.
Over inventory creates imbalance in the system, as compared to high blood pressure to the
human heart. It creates stress to the conscious brain.
ORGANIZATIONAL MANAGEMENT
Organizational management is not just putting work together. People need to be given
specific tasks. Cooperative undertaking is necessary. The following aspects must be
identified:
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These parcels will be made up of closely related work that fits the established
patterns of skills, expertise, education and training of the individual players. Closely
related tasks must be grouped together. The management team has to assign specific
tasks, duties and responsibilities.
After the organizational team players are grouped according to their specific
functions, the definition of responsibility must be established. The duties and
responsibilities must be in writing to determine group and individual accountability
and responsibility. The team managers must be given general functions in the
management of their players. Individual organizational workers must be given
specific duties and responsibilities.
The job descriptions are in written form. These specify the scope of authority and
responsibility for a particular position in the organizational set-up. In delegating the
work, the team manager needs to decide what part of his tasks shall be given to his
subordinates. The manager must establish performance indicators to ensure that the
task will be carried out according to the established program goals and objectives of
the organization.
3. Establishment of Relationships
The design of the organization must be predicted upon the characteristics of the
stockholders, the size of the company and the business environment it will operate.
Organization is not merely the grouping of people. It must be planned in such a way
that its structure fits not only the needs of people but also the various environments
that interplay with it.
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Organization and people inextricably link with one another. There could be no
organization without people. Organization is dependent on people as they are
dependent in the organization. "No man is an island," as the saying goes.
ORGANIZATIONAL DESIGN
Organization is designed and developed for people to work in harmony with the
environment and with the other stakeholders. The design is not made to fit a single person
nor to the sole driver that holds the wheels running the organizational unit. It should not be
designed to meet individual personalities but around the objectives and goals of the
organization.
People shape the organization that fits their day-to-day activities. They mold a culture
around its vision and mission. It is the foundation of their existence. People should be put in
the work arena where their training and expertise fit for the effective delivery of the
required output. It is not a matter of placing the person to a particular job to accommodate
a commitment or to give favors. Positions must be so designed towards specific goals and
objectives.
IMPORTANCE OF ORGANIZATION
The development of a sound organization can contribute in the continuous growth and
success of the business. It is not a chart drawn and symmetrically figured out in blueprint. It
must be drawn out from the concerted efforts of specialists from the ranks of operating and
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staff managers. They must work together in designing an organization that will bring in the
desired long-term profitability.
Organizations that are productive and profitable develop a mechanism through which it
coordinates and controls the affairs of the business. It develops a strong foundation of
cooperative coordination, seeing to it that works are done according to plans and programs.
Relative to this concept, it must have logical, clear-cut and streamline systems of work to
meet present day requirements.
Sound organization facilitates effective management systems. The component parts must be
encouraged to grow and diversify. It must help develop the business as a whole.
As the organization expand its operation, work delegation to lower rank subordinates
become necessary. The definition of duties and responsibilities are reflected in the
individual job description. It will relieve the line executive of routine tasks. The
amount of responsibility and accountability must carry with it an equal authority.
4. Effective Organization Provides for the Use of New Technology and Advance
Information System
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The advancement in computers and modern technology helps develop new systems
and procedures. These new forces need the creation of new departments to handle
the intricate operations of modern technology. More advance computer aided
machines would be necessary to expand production and increase product quality.
These may result in either centralization or decentralization will be installed
depending on the kind of technology that will be installed.
Organization is people. They are pillars in its growth and prosperity. The arrangement
of jobs must be based on human specialization. Individual interest creates greater
initiative for better performance. Human performance is static. It needs proper
motivation and continuous encouragement. Managers should be alert to diagnose
the feeling of boredom, monotony and frustrations.
When the organization is properly conceived, the system will demand from its people to
participate in all its undertakings towards the multitude of support to its vision and mission.
The talents of its professionals and specialists will harvest the fruits in making a dynamic and
responsive organization.
The management has to decide what kind of structure the organization needs. First, we
need to determine the total work environment. Arrange the work according to the most
effective system that will deliver the most output and performance. The following
procedures are recommended:
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The organization exists for its vision and mission. The activities must center on its
direction to its stakeholders and clients. People in the organization must know by
heart its vision and mission to provide a concerted direction.
Grouping related work is the process of building balanced work packages. It is the
process of arranging work to form different positions and the functions around it.
Closely related work must be grouped together to deliver the most effective
performance. The organizational specialists must do the following:
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The span of control refers to the number of people a manager or supervisor can effectively
manage and supervise. While it may vary from the ability of the person, the ideal could be
established after a careful study of the difficulty of the job. In highly technical positions, the
number of people under a manager or supervisor should not be more than six (6)
subordinates. On routine jobs, some suggested as much as ten (10) to fifteen (15)
subordinates. A ratio of one (1) is to ten (10) subordinates in the organizational structure
could be an economical proportion.
Nevertheless, the number of people, a manager or supervisor, can handle will vary in the
type of management and organization. The following should be considered:
The span of control is also affected by the volume of decision-making responsibility. When
jobs are properly organized, the manager or supervisor is freed of minor decision making.
Under this situation, the duties and responsibilities are properly defined. It is a system which
defines and decides the what and the how. A clear and comprehensive policy statement
minimizes personal decision-making.
TECHNOLOGY IN ORGANIZATION
The introduction of modern technology greatly enhances the structure of the organization.
The links between departments and the outside clienteles reduce the number of people
handling different activities. Communications are delivered faster and decision makings are
made right away because of available data and information. Secretaries and clerks became
obsolete as more and more technical people are needed in the organizational set-up.
The presence of a specialized staff frees the manager from routine activities. It is important
that the manager has the trust and confidence in the people around him, so that he can
delegate fully and effectively the tasks of his department. The use of computer system for
storing information and data can help monitor the effective performance of his staff.
ORGANIZATIONAL ENVIRONMENT
The environment of an organization is the internal and external sector that affects its design
and performance. It is the playing field of an organizational domain. These are the
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environmental elements that the organization seeks to interact which are necessary to
accomplish its vision, mission and goals.
1. The Industry. The industry includes those organizations operating with the same
goals, purposes and products. These organizations are the same business that
provides competition. The state of the industry role in the survival of an organization.
It plays helps a significant determine the goals of the organization.
2. The Source of Materials and Other Production Inputs. The external environment
provides the material inputs either for the production of new products or for internal
use in communication. It is important that the organization maintains good
relationship with the suppliers of inputs to operate effectively.
4. The Financial Sector. Money is the name of any organization. The financial sectors are
the banks and other financial institutions. The availability of money with low interest
rates encourages organizations to grow. Organizations need outside sources of funds
to grow fast. Financial institutions control the exchange and the interest rates.
5. The Customers and Other Stakeholders. The customers buy the goods and services of
the organization. The market influences the growth and expansion of organization. It
is the determinant of the existence of an organization. Market expansion increases
the company's profitability, but if it shrinks, the company has to cut back its
operation. Stakeholder's patronage is necessary in the growth of an organization.
7. The Country’s Economic Condition. The general economic condition of the country
affects an organization’s health conditions. Unemployment reduces economic activity
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as there can be an excess supply of goods in the market. High interest rates and
inflation reduce the purchasing power of the people, while the excess production
capacity affects the organizational health conditions.
8. The Government. The political system of the country highly affects the organization.
The government regulates business operation, imposes flows conditions of inputs;
imposes taxes and passes laws. It imposes conditions on environmental safety, fair
trade practices, product subsidies, label statutes, and establishes several guidelines
for the organization to follow. Sometimes, the government provides protection to
some favored organizations.
10. The International Community. The international community provides the greatest
competition for quality goods and services and opportunities to exceed our exports
against our imports. The problem is the reverse conditions where we are having
more imports than exports. We consume more foreign products due to our value
system and our inadequacy to improve our products. We should create a balance of
trade with other countries. At present, the backbone of our economy is the export of
our own people.
The systems view the organization as an on-going activity of change. Organization changes
with the time and the conditions prevailing within the environment. People change in values
and human perspectives. In the same manner, an organization must adapt to the changing
conditions prevailing in its present conditions. There are two types of organizational
dimensions:
1. Structural Dimensions
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2. Contextual Dimensions
The dimensions provide the basis for measurement and analysis of the
characteristics of the organization and reveal significant information. The dimensions
under this category are the following:
d) Organizational Strategy refers to goals that define its purpose. This includes
the competitive techniques employed by the firm that may be different from
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other organizations. Goals are written statement of vision and mission that
set the organizational direction. These cascaded down to strategic plan of
actions and describe resource allocations and activities in dealing with
customer demands as well as define the scope of operation in dealing with
the structural and contextual dimensions.
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