3. Configuring an Organisation

3. Configuring an Organisation

1. Things to consider when deciding on org structure:

   • Rules, processes and tasks
     • Division and specialism of labour
       • Allocation of duties and responsibility
         • Relationships between centre, depts. and/or field offices for control purposes
           • Communication limitations
             • Configuration in terms of size, function, clients, place, knowledge & skills
               • Vertical & horizontal integration
                 • Co-ordination

2. Organisational Types:

   • Mintzberg
     • Each represents the 'pull' exerted from the org
       • from people employed within it & their motivations and aspirations
       • from the organisation itself
     • Structure should:
       • Be sympathetic to size and type of organsation
         • Be sensitive to product/service being produced
           • Have a management & leadership style that suits config/activities
             • Have appropriate amount of stystems, procedures, rules & conditions
               • Reflect most appropriate distribution of power
                 • Enable smart & quick decision making
                   • Give a sense of responsibility & achievement
   • Entrepreneurial
     • Simple, flat structure. Usually has 1/2 top managers, unstructured, informal. Predominantly found in start ups or owner-managed orgs. Successful when org is relatively small
     • Machine/Bureaucratic
       • Very formal structure, rigorous processes/systems & vertical hierarchy. Decision making centralised & often by management teams/committees. Functional teams identified, jobs clearly defined. Traditional UK pub sector.
       • Professional
         • Highly bureaucratic, decisions made by senior partners/directors (professional knowledge). Resistant to change. Typical in accountancy/law professions.
         • Divisional
           • Relies on centralised decisions made by a Head Office but has operational units remote from the centre. Usually Head Office will accommodate the support functions, with the operational units located regionally.
           • Innovative
             • Based on projects & project leaders, with employees typically moving from team to team as projects are developed & new ones begin. Respond quickly to change, relying on no of decision makers.
             • Missionary
               • Runs on value sets and common beliefs shared & controlled by members of the org. No formal hierarchy
               • Political
                 • Structure based on alliances and internal politics. No controls.
             • e.g. marketing companies
           • e.g. Scottish Fire/Police
         • e.g. accountancy/law
       • e.g. traditional public sector
     • e.g. start ups

3. Types of Culture:

   • Handy
   • Power culture
     • Concentrates power among small group or central figure whose control radiates from centre like a web. Few rules & little bureaucracy, so swift decisions can be made.
     • Role culture
       • Authorities are delegated within a highly defined structure. Hierarchical bureaucracies where power derives from personal position & rarely from an expert power. Control is by highly valued procedures, strict role descriptions & authority definitions.
       • Task culture
         • Power derived from team's expertise. Teams small & specialism valued. Usually exists within a matrix structure.
         • People culture
           • Formed when all individuals believe themselves to be superior to the org as a whole. May be successful in partnerships where each partner brings their own specialism.

4. Cultural Web:

   • Paradigm
   • Controls
   • Structure
   • Power
   • Symbols
   • Stories and myths
   • Rituals/Routine
   • Johnson

5. Centralisation vs Decentralisation

   • Centralisation: A hierarchy, 2 players with unequal power
     • Advantages:
       • Easier implementation of common policy for the organisation as a whole
       • Prevention of sub-units becoming too independent
       • Easier co-ordination
       • Improving economies of scale & reduction in overhead costs
       • Greater use of specialisation
       • Improved decision-making, which might be slower
       • Uniform & equitable treatment of clients
   • Decentralisation: Lateral relationship, 2 players with roughly equal power
     • Benefits:
       • Devolution powerful to promote/implement change
       • Managers more in control of achieving outcomes
       • Managers more familiar with corporate management issues
       • Managers more scope to determine level/type of service delivery
       • Managers can be more responsive to stakeholders
       • Opportunities for inc job satisfaction
       • Managers have opp to acquire new skills
     • Costs:
       • Loss of quality & inc inconsistency
       • Loss of purchasing power & other economies of scale
       • Duplication of tasks or functions
       • Reduction in no of people skilled in providing corp services
       • Diminution of expertise
       • Loss of corporate identity
   • Current trends:
     • From centralised management to local management of service provision
     • Direct hierarchical control to arm's length regulation
     • A smaller no of large hierarchies to more complex network of organisations
     • Being state owned & run to being characterised by a contracting out of services
     • A unified service to a splitting of roles between purchaser & provider
     • Coalition Decentralisation & Localism Bill
       • 1. Lift the burden on bureaucracy
         • 2. Empower communities to do things their way
           • 3. Increase local control of public finance
             • 4. Diversify the supply of public services
               • 5. Open up govt to public scrutiny
                 • 6. Strengthen accountability to local people
                 • Final two enable local people to take complete control over decentralisation
             • Next two provide resources & freedom of choice to sustain progress
         • First two most fundamental
           • Can't begin without them

6. Localism

   • Localism Act 2011:
     • New freedom & flexibilities for LG
       • Gives LA formal & legal ability & greater confidence to get on with the job of responding to what local people want, cuts red tape and encourages a new generation of powerful leaders, strengthening local democracy & boosting economic growth
     • New rights & powers for local communities
       • Easier for local people to take over the amenities they love & keep them local, ensures local soc ent & volunteers get a chance to change things, and enables local residents to call LA to account for management of money.
     • Reform to make planning system clearer, more democratic & more effective
       • Places significantly more influence in the hands of local people over issues, provides support & recognition to communities, reduces red tape, reinforces democratic nature of planning system-passing power to democratically accountable ministers
     • Reform to ensure that decisions about housing are taken locally
       • Enables LAs to make own decisions to adapt housing provision to local need, gives LA more control over funding of social housing, gives people who live in social housing new ways of holding landlords to account 
   • Double Devolution
     • Passing power from CG to LG, & from LG to local communities

7. Strategic Alliances

   • Rely on each party to trust the other & to believe in mutual benefit
     • Rely on leader's ability to influence, negotiate, mediate & take risks
       • Requires the leader to ensure that alliance is fit for purpose & recognise when change is needed
   • Contractual
     • Shared services/management
     • Pooled budgets
     • Licensing
     • Franchising
     • Outsourcing
     • ALEOs
   • Ownership
     • Consortia
     • Joint ventures
     • Mergers/Acquisitions
   • Loose
     • Netowrks
     • Opportunistic
   • Failure
     • Lack of synergy
     • Poor communication
     • Cultural difficulties between partners
   • Success
     • Good governance structures
     • Strong leadership & management
     • People make it happen