Organization: Concept, Nature, Types, and Organizational Development
Concept of Organization
An organization is a group of people working interdependently to achieve a common goal. The concept of organization evolved alongside human civilization as groups collaborated to accomplish shared objectives.
Concepts Defining Organization
There are two primary concepts that define an organization:
1. Traditional/Structural/Mechanistic Concept- Views an organization as a blueprint, similar to an architect’s design for a building, where employees perform duties and exercise authority within a defined structure.
- Based on F.W. Taylor’s Scientific Management Theory, which emphasizes division of labor to increase productivity, treating humans as machines and minimizing the gap between actual and estimated costs (pre-1930s).
- Focuses on structure, with little regard for human aspects.
- Emerged from Elton Mayo’s Hawthorne Experiments, emphasizing the human aspect and viewing organizations as social units.
- An organization is a process and a social entity where individuals and groups coordinate and integrate efforts toward a common goal.
- It involves collective engagement, with shared objectives and processes.
- Organizations are creative, task-oriented, and purpose-driven.
- Unlike the traditional closed system, modern organizations are open and dynamic, continuously interacting with their environment, mobilizing human and physical resources, and leveraging technology to achieve goals.
Prerequisites of an Organization
- Meaningful participation of two or more individuals
- Human and physical resources
- Goal-oriented purpose
- Defined workplace or scope
- Processes, methods, and systems
- Structure
- Interrelated activities
- Shared objectives and collective interests
- Coordinated efforts
- Recognition and social existence
- Defined procedures, processes, and rules
- Division of work
- Leadership
Characteristics of an Organization
- Participation
- Defined and shared objectives
- Integration of resources (human, physical, financial, technological)
- Own rules, systems, and hierarchy
- Result-oriented
- Division of work and responsibilities
- Social existence and recognition
- Structured framework
- Open system (input-process-output)
Nature of an Organization
- A process
- A structure
- Goal-oriented
- Division of work and responsibilities
- Work plans
- Authority, responsibility, and relationships
- Human and physical resources
- Doctrines
- Programs
- Leadership
- Resources
- Technology
Types of Organizations
1. Based on Formality- Formal
- Informal
- Vertical
- Flat
- Pyramid
- Matrix
- Cylindrical
- Bell-shaped
- First Generation
- Second Generation
- Third Generation
- Fourth Generation
- Fifth Generation
- Local
- Provincial
- Central/National
- International
- Visible
- Virtual
- Political
- Educational
- Religious
- Administrative
- Business
- Closed
- Open
Structural Types Explained
Pyramid
- Higher levels have more authority but fewer individuals; lower levels have less authority but more individuals.
- Limited participative decision-making, with a strong chain of command.
Flat
- Democratic, with some participative decision-making.
- Two-way communication channels, but control lines are challenging to maintain.
- Controlled by technology, systems, and internal regulations.
Matrix
- Modern structure with interaction across all members (vertical, horizontal, and lateral).
- Promotes democracy and participation, fostering trust and goodwill.
- Demanded by modern management systems but faces challenges in maintaining uniform command and control.
Cylindrical
- Hybrid structure, pyramid-shaped up to a certain level, then vertical.
- Seen in Nepal during the provision of Special and Additional Secretaries.
Bell-Shaped
- Expands up to a certain level, then narrows.
- Common in constitutional bodies.
Generation-Based
- First Generation: Proprietorship organizations
- Second Generation: Hierarchical organizations
- Third Generation: Matrix organizations
- Fourth Generation: Computer-based organizations
- Fifth Generation: Network and knowledge-based organizations
Virtual organizations are technology-based, lacking a physical workplace. Open organizations continuously interact with and influence their environment.
Formal vs. Informal Organizations
| Formal Organization | Informal Organization |
|---|---|
|
|
Basis for Determining Organizational Form
- Workload and nature of work
- Span of control
- Delegation of authority
- Services to be provided to clients
- Departmental classification
- Geographical representation
- Ease of communication
- Basis for organizational formation
- Distribution of authority and responsibility
- Supervision methods
Organizational Development (OD)
Organizational Development is a strategic plan for improving an organization through long-term, systematic methods, including policy, leadership, control, and job redesign.
It involves coordinating leadership, internal and external relationships, structure, processes, and reward systems to achieve organizational goals.
Principles of OD
OD focuses on continuous improvement in three areas:
- Organizational Culture: The beliefs, values, and behaviors of employees.
- Organizational Strategies: Identifying problems, planning, implementing, embracing change, and evaluating achievements.
- Organizational Climate: The impact of diverse individuals, beliefs, and tendencies on the work environment.
Objectives of OD
- Enhance work efficiency and effectiveness
- Integrate individual efforts appropriately
- Encourage problem-solving
- Develop interpersonal relationships
- Create a positive work environment
- Enhance employee knowledge, skills, and abilities
- Minimize resistance to change
- Foster job satisfaction
- Increase motivation levels
- Actively manage conflicts
- Focus on team management
- Maintain environmental adaptability
- Emphasize systematic improvements
Characteristics of OD
- Focuses on improving work culture and processes to achieve objectives
- Plans and implements change
- Long-term and continuous process
- Supported by top management
- Utilizes all employees’ talents
- Problem-solving and learning process
- Believes in teamwork
- Centered on active research