Organizational analysis

Organizational Analysis

An Organizational Analysis is a process by which an organization's systems, capacity, and functionality are assessed in order to increase its efficiency, performance, and output. With the use of various models and theories, an Organizational Analysis aims to understand behavioral relationships, structure, and technology.[1]

The prolifieration of complex organizations has made most human activities collective endavors.^[1]. The collectives manag e the input and output in order to create private or public good. Within the field of Organizational Analysis, "management" is typically defined as the process of utilizing numbers resources, (personnel, materials, physical plant, equipment, information, time, and money) in order to accomplish organizational goals.^[2]

An Analysis, or sometimes called restructuring, of an Organization may become neccesary when either external or internal forces have created a problem or opportunity. Some examples of pressures that may lead to the implementations of an Organizational Analysis:

- The environment shifts - Technology changes - Organizations grow - Leadership changes^[3]

Examples of Organizational Analysis Models

Rational Model

The rational model stems from the Fredrick W. Taylor's (1911) Structural Perspective. Taylor was the father of time-and-motion studies and founded an approach he called "scientific management."^[4] It was Taylor's stance that organizations should be as mechanistic and efficient as possible. These Scientific Management principals served a valuable purpose for the Ford Motor Company, where the first American, mass-produced automobiles were being created.^[5] The rational model views organizations as a mechanism that is made up of various parts that can be modified in order to create an output in the shortest amount of time and without deviation.

Natural System Model

The natural system model is in many ways the opposite of the rational model in that it focuses on the activities that may negatively impact the organization and therefore aims at maintaining an equilibrium in order to meet its goals.^[6] The Natural System model views organizations as an organic organism which is holistically interconnected. The parts of the organization are not seen as independent units but rather as a whole that can orchestrate together to prepare for inevitable change.

Sociotechnical Model

The sociotechnical model, also known as Sociotechnical Systems Sociotechnical Systems (STS), is an approach to complex organizational work design that recognizes the interaction between people and technology in workplaces. The term also refers to the interaction between society's complex infrastructures and human behavior. This model identifies the environment as a key factor that interacts with the organization. Additionally, through this model's lens, Organizations are viewed as having differentiated, yet integrated, units based on three primary factors: technology, geographic location, and time.^[7]

Cognitive Model

The cognitive model consists of three primary components: cognition, the decision-making or problem solving process, and an organizational setting.^[8] Behavior, cognitive, and other personal factors as well as environmental events, operate as interacting determinants that influence each other bidirectionally.^[9] Personal goals of the managers and staff are seen as assisting in the effort toward organizational objective attainment. Decision making processes are focused on and specialization is deemed as important to the flow of information.^[10]

Organizational Strategies and Structure

Organizations must have a clear and precise vision and mission. The purpose of the organization must be realistic in the interest of the short-term and serving the best interest of all stakeholders. Long-term strategy should also strive to meet the mission of the organization, particularly in the context of decision-making, and the long term interest of the company’s stakeholders. Having a unified strategy helps guide the organization into a unified direction rather than branching out and not having a clear vision. Employees must clearly know their role within the organization and how it supports the short-term and long-term organizational strategy.

Comparative Advantage

This is important in the context of forming an organization strategy of certain companies or businesses. In both the nonprofit and corporate context, (those who are selling goods and services), once forces affecting competition are identified, a strategist can identify the company’s strengths and weaknesses. From there, a plan of action can be taken to improve the position of the company within the industry and protect the company from any competitive forces.

See Comparative Advantage

Organizational Structure and Operations

In addition to a clear organizational strategy, there are five basic parts of an organization.

The first is strategic apex or the top management who have the ideas and the vision for the organization.

The second is the operating core, who hires the workers to do the basic work of the organization.

The third is intermediate management (or middle management). As the organization grows, these middle managers are necessary to become the liaisons between the workers and top management.

The fourth, technostructure, also known as analysts, design systems concerned with the formal planning and control of the work.

The fifth and last aspect is support staff who provide indirect services to the rest of the organization.

Organizational Structure Configurations

Every organization, whether for-profit or non-profit, require an operating structure to provide stability and to promote operational efficiency. While there are many organizational structures are frequently used, structure often depends on the organization type and what serves the best purpose. Provided here are two examples of commonly used organizational structures in both the for-profit and non-profit world.

The Simple Structure

The structure itself is a large unit with a few top managers and a group of operators who do most of the basic work. (This is the classic entrepreneurial structure). This structure, while seeming oversimplified, it remains widespread and necessary for start-ups and for small businesses with few employees.

Since simple structure relies on the chief operating officer/top manager to make most executive decisions, very few if any middle managers are hired and direct supervision of the employees is conducted by the top management.

An Example of a Simple Organizational Structure

The Divisionalized Form

This is described as an integrated organization joined together by a loose administrative overlay. The core of the operation lies with the middle managers. Maintaining control lies with partial direct supervision but much of it lies with the standardization of outputs. This leaves operating details with each department and maintains necessary autonomy, leaving periodic performance evaluations to the top management. According to Michael Porter, this structure has become increasingly popular over the last few years with hospitals, unions and the government.

An Example of a Divisionalized Form

See also organizational structure

Examples: Description of Organizational Strategy

Moore, Mark. “Managing for Value: Organizational Strategy in For-Profit, Nonprofit, and Governmental Organizations.” Nonprofit and Voluntary Sector Quarterly. Supplement 2000. 29(1):183-204.

Porter, Michael. “How Competitive Forces Shape Strategy.” Harvard Business Review March-April 1979:137-145. (Reprint 79208)

Performance Management

Performance management can be defined as 'an ongoing and continuous process of communicating and clarifying job responsibilities, priorities, and performance expectations in order to ensure understanding between supervisor and employee.'^[11]

An important aspect of performance management involves designing specific measurable indicators as a means of gauging progress. Outcome indicators are not to be confused with actual outcomes, although both are pertinent to measuring progress. Outcome indicators are assigned a specific numerical measurement "that indicates progress toward achieving an outcome,"^[12] but are not the outcomes themselves.

Example of Indicators vs. Outcomes:

Performance indicators are typically quantified, with measurable descriptors like ratio, incidence, proportion, or percentage, to demonstrate progress. When establishing progress between reporting periods, an indicator may also express measurement by using words such as the change in, or the difference to describe values for particular reporting periods. By contrast, an outcome might measure the 'number of cases correctly resolved during the time period or the percentage by which the number increased this reporting period as compared to the previous period.' Thus, if a transportation system outcome indicator measures the percentage of roads in good condition, the transportation system outcome would be that roads be in acceptable and durable condition.^[13]

Performance measurement systems are often criticized for putting emphasis on indicators, at the expense of important outcome characteristics, which can lead to a misallocation of program funding resources and strategic endeavor. It is vital that indicators include a comprehensive set of outcomes that anticipate undesired ones. Examples of putting more emphasis on indicators than outcomes, include a law enforcement agency focusing solely on the number of police arrests, or a tax agency focusing solely on amount of dollars collected. Such laser focus creates a perverse incentive that might 'tempt staff to harass individual citizens [and] [businesses] to increase these values,' giving way to unintended consequences. Lastly, comprehensiveness is contingent upon measurement of resources available, as well as any existing data problems.^[14]

Challenging Outcomes to Measure:

• Prevention Programs- (How does one measure the number of incidences prevented?)
• Basic Research and long range planning activities- (Outcomes may take years to surface)
• Programs with anonymous customers- (Ex: Hotlines)
• Programs in which major outcomes apply to a very small number of events^[15]

Control Systems in the Workplace

Companies encourage independence and innovation among employees in order to remain competitive, but in an effort to avoid unnecessary risk and control failures, companies must also put in place mechanisms to monitor employee progress. Included here are four major types of control levers or systems that enable managers to reconcile employee autonomy with effective control.

1) Diagnostic Control Systems- Building and supporting clear targets

2) Belief Systems- Communicating company core values and mission

3) Boundary Systems- Specify and enforce rules of the game

4) Interactive Control Systems- Open organizational dialogue to encourage learning^[16]

Contracting-Out and Collaboration

When organizations (usually public sector) do not have the internal capacity to complete their mission contracting-out occurs. An analysis of the capacities, the contract or agreement, and the relationship between collaborating stakeholders is conducted. Analysis of contracting-out and/or collaborations can ensure goals are met successfully prior to the beginning of a partnership, and correct inefficiencies throughout the time frame of the collaboration.

The analysis should examine collaboration in three categories: capacity, the agreement, and the relationship. When analyzing the capacities of the collaborating organizations, examine the contractor’s capacity to deliver and meet contract service requirements. Explore the history of work and past successes as well as the financial standing of the contractor. The organization that is contracting out should have the ability (now and in the future) for monitoring, knowing when the contractor has fulfilled the contract, and for capacity building.

An analysis of the agreement, or contract, should look for several indicators of future success. The contract should be compatible with the mission statements of the collaborating organizations. Adequate funding for completion of the contract is necessary. Outcome definitions and measures must be clear. A realistic time line should be present with a plan in place for handling potential set-backs. An agreed upon system for feedback throughout the collaboration should be built into the agreement.

The relationship between collaborating organizations is important to consider. Alignment of collaborating organizations' cultures is a significant and often over-looked element of contracting-out. Alignment of the values, mission, communication style, and outcome measurements increase the likelihood of a successful collaboration.

Examples:

Lamm, David V. and E. Cory Yoder. “Contracting Out Government Procurement Functions: An Analysis.” January 15, 2008. Naval Postgraduate School. http://www.dtic.mil/cgi-bin/GetTRDoc?Location=U2&doc=GetTRDoc.pdf&AD=ADA476146

^[17]

1. ^ Bolman, Deal, Lee, Terrence (2003). Reframing Organizations. Josse y-Bass. pp. 5. 
2. ^ Natemeyer, McMahon, Walter, Timothy (2001). Classics of Organizational Behavior. Waveland Press Inc. pp. xv. 
3. ^ Bolman, Deal, Lee, Terrence (2003). Reframing Organizations. Jossey-Bass. pp. 83. 
4. ^ Bolman, Lee (2003). Reframing Organizations, Artistry, Choice, and Leadership. Josset-Basey. pp. 45. 
5. ^ "Organizational Analysis and Planning". Encyclopedia of Business, 2nd ed.. http://www.referenceforbusiness.com/management/Ob-Or/Organizational-Analysis-and-Planning.html. Retrieved 2011. 
6. ^ "Error: no |title= specified when using {{Cite web}}". http://www.referenceforbusiness.com/management/Ob-Or/Organizational-Analysis-and-Planning.html. 
7. ^ "Error: no |title= specified when using {{Cite web}}". http://www.referenceforbusiness.com/management/Ob-Or/Organizational-Analysis-and-Planning.html. 
8. ^ "Error: no |title= specified when using {{Cite web}}". http://www.referenceforbusiness.com/management/Ob-Or/Organizational-Analysis-and-Planning.html. 
9. ^ Wood, Robert; Bandura, Albert (July 1989). "Social Cognitive of Organizational Management". The Academy of Management Review 14 (3): 361–364. http://www.jstor.org/pss/258173. 
10. ^ "Error: no |title= specified when using {{Cite web}}". http://www.referenceforbusiness.com/management/Ob-Or/Organizational-Analysis-and-Planning.html. 
11. ^ "Program Management". Indiana University. http://www.indiana.edu/~uhrs/training/performance_management/intro.htm. Retrieved 20 September 2011. 
12. ^ Hatry, Harry P. (2006). Performance measurement : getting results (2nd ed. ed.). Washington: The Urban Institute Press. ISBN 9780877667346. 
13. ^ Hatry, Harry. Performance Measurement. 
14. ^ Hatry, Harry. Performance Measurement. 
15. ^ Hatry, Harry. Performance Measurement. 
16. ^ Masek, Christine. "Error: no |title= specified when using {{Cite web}}". http://maaw.info/ArticleSummaries/ArtSumSimons95.htm. Retrieved 22 September 2011. 
17. ^ Gray, Barbara (October 1985). "Conditions Facilitating Interorganizational Collaboration". Human Relations 38 (10): 911–936.