MINISTERY OF EDUCATION OF THE REPUBLIC OF BELARUS
Belarus State Economic University
Understanding of the organization and its structure
Organizations being part of environment is learnt by biology, economics, sociology, philosophy and other subjects. The problem of the organization was studied before, but the independent role of the organizing start was not taken into account. Only in late XIX – early XX century theorists discovered that objects with different compositions may possess similar properties due to the ways of their organization.
A broad diversity of forms and processes of the organization lead to building various concepts. One of them was tectology, worked out by the Russian scientist A. Bogdanov who gave a general description of various processes of emerging, existence and collapse of organizations in his work published in 1913.
The term “organization” is polysemantic so it may be considered as a system, state and process. Our interest is in the organization as a system. A social organization is set up by individuals so that they can obtain a certain goal. That’s why a Russian researcher A.I. Prigozhin determines an organization as a formal group of people with one or more shared goals.
As an organization is set up to achieve a certain goal, it is considered as a means of its achieving. From this point of view, in the foreground there is an organizational goal and functions, effieciency of reserves, staff motivation etc. A social organization has its name, charter (a programme of activities), area of activities, work procedures, personnel. Its personnel may vary from a few people (an estate agency) to hundreds of thousands (transnational companies). Examples of organization as legal entity are government, corporation, non-governmental organization, armed forces, partnership, charity, cooperative, university.
There is a distinct field of academic study known as Organizational studies (or Organizational behaviour) which takes organizations as its subject, examining them with the methods of economics, sociology, political science, anthropology, and psychology. It should not be confused with the study of Industrial organization, which analyses market stuctures and natural monopolies, and is much more like microeconomics. Organizational studies studies individual and group dynamics in the organizational setting, as well as nature of organizations themselves. Whenever people interact in organizations, many factors come into play. Organizational studies attempts to understand and model these factors.
There are two mechanisms to form organizations. More often they emerge when achieving common or shared goals is considered possible only through achieving individual goals; then labour organizations such as enterprises and establishments are set up. When achieving individual goals is possible through achieving shared goals, various public organizations, or associations emerge. In turn, achieving a shared goal entails a necessity in hierarchy and governing.
A social organization is characterized by a number of social qualities, or features:
a purpose-driven nature of the organization: any organization is set up to achieve a certain purpose, to unite its members’ activities and regulate them in the name of the given purpose. In its turn, organization’s activities suggest its performing of definite functions;
hierarchical structure of the organization: its members are ranked on the hierarchical ladder according to their social statuses and roles, for instance, as leaders and subordinates. It means that a person who interacts with other members of the organization can realize his needs or interests within the limits established by his social status and norms and values of this very organization;
governance: activities of any organization must be governed. Governance is caused by division of labour, i. e. its specialization due to the function. Organizations have a vertical and horizontal structure. In the vertical structure there are two subsystems: the one governs, the other is governed. The governing system coordinates functioning of the horizontal structures through the mechanisms of regulation and control of their activities. Vertical structuring of the organization ensures achieving of the shared goals, gives efficiency and stability to its functioning.
Such approach is largely predetermined by the fact that a social organization is one of the most developed types of the social system, the elements of which are individuals and relations emerging among them, and its system-forming qualities are the goal, interaction and management.
Any organization has its structure. Organizational structure is the way in which the interrelated groups of the organization are constructed. The main concerns are effective communication and coordination.
The dominant mode of the organization in the world today is hierarchy. Hierarchy originally means “rule by priests”, and it was borrowed from the organization of hierarchical churches such as the Roman Catholic and Eastern Orthodox churches. Hierarchy is any system of relations among entities wherein the direction of activity issues from the first party to the second party, but not the other way around. In other words, it is based on the principle of collateral subordination when the upper levels are “superior” to the lower ones and control them.
An example might be a company organizational structure: the CEO is superior to the divisional managers, who are superior to their team leaders who are superior to their ordinary workers. The family, the state are other examples of hierarchy.
A hierarchical organization is a common way to structure a group of people, wherein members 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.
Hierarchy may have the configuration of a pyramid if the number of those who are superior is smaller than the number of those who are supervised. The Belarus State Economic University is a good example of a pyramid hierarchy: the rector supervises seven prorectors who supervise twelve deans of schools who in turn supervise one thousand two hundred and thirty teachers and twenty seven thousands students.
Not all organizations have this structure. The opposite extreme to the pyramid is described as “flat” or “single-level” hierarchy. Flat hierarchy is most common in smaller organizations which lack standardization of tasks, so it is best used to solve simple tasks. In smaller organizations most communication is done by face-to-face conversations. A sole proprietorship that can employ few people (for instance, in Belarus it is three employees) is an example of a company with flat hierarchy.
The opposite mode of the organization is a system of relations wherein the direction of activity is not fixed in one way, but flows back and forth between the entities involved. In other words, the parties must consent to each other’s direction of activity. An example of this is a partnership or a commune.
Hierarchy of social organization determines the most essential elements of its structure such as organizational area, organizational culture and relations of power.
Organizational area includes:
definite physical area: distribution of the members of the organization to structural units such as sections, departments, workshops etc. which are located on a certain territory;
functional area: division according to performed duties, professions, qualifications or jobs;
status area: division of employees into independent groups occupying different social positions in the organization such as leaders, subordinates, blue - and white collars etc.;
hierarchical area: a formal system of relations among members of the organization such as ways of solving production problems, applying to top managers with private issues etc.
Another element of the organizational structure is organizational culture which comprises attitudes, values, beliefs, norms and customs of an organization. It’s a non-written code of the organization as it affects its members’ behaviour. Whereas organizational structure is relatively easy to draw and describe, it is less tangible and difficult to measure. It does not mean, however, that employees do not realize this phenomenon. Instead, they do and it’s seen whether they are proud of the organization they work for or describe their jobs with negative characteristics. In both cases definite elements of culture are meant which become obvious if changes or innovations are taking place or when compared with cultures of other organizations. As a rule, organizational culture is shared by all or most members of the organization.
Researchers still argue about the nature of the phenomenon. Some consider that culture is what the organization manifests itself, others – what it has. Despite lack of a shared opinion they identify a number of its elements:
the paradigm: what the organization is about; what it does; its mission; its values;
control systems: processes in place to monitor what is going on;
organizational structures: reporting lines, hierarchies, and the way that work flows through the business;
power structures: who makes the decisions, how widely power is spread, and what power is based on?
symbols: logos and designs;
rituals and routines: management meetings, board reports etc. which may become more habitual than necessary;
stories and myths: build up about people and events, and convey a message about what is valued within the organization.
These elements may overlap. Power structures may depend on control systems which may exploit the very rituals that generate stories.
The third element of the organizational structure is power. Sociologists usually define power as an ability to impose one’s will on others, even if those others resist in some way. The imposition does not involve coercion (force or threat of force), in some ways it more closely resembles what is called “influence”.
As hierarchy is also viewed as power, it may be useful to visualize a pyramidal power structure, where those nearest the top have more power than those nearest the bottom, and there being fewer people at the top than at the bottom.
The phenomenon is traditionally observed in religion:
there is one god who commands, but cannot be commanded;
in government: the federal section controls the state section;
at work: your boss tells you what to do, and his boss tells him what to do, but you don’t tell anyone what to do until you get promoted.
Power is classified in different ways: as primary and secondary; formal and informal; delegated authority, charisma, expertise etc. Traditionally power in the organization is differentiated as formal and informal. The first one is the superior’s power as part of his official position in the organization. The second type is the leader’s informal power whereas the leader is a person who has the greatest influence on the members of the organization. He personifies the group norms, values, patterns of behaviour and supports them. An informal leader is a member of the social organization regarded by a group of people as an expert, authority or supporter of the questions the group is interested in. That’s why informal power is based on the personal qualities of the individual, his authority as a personal characteristic of the personality. Authority means people’s voluntary abeyance to one of them due to his peculiar individual qualities. At appointing a superior, the top management tries to take into account the possibility of combining both formal and informal leaders in one person.
Of interest here is authority as a type of power. In politics, authority generally refers to the ability to make laws, independent of the power to enforce them, or the ability to permit something. People obey authority out of respect, while they obey power out of fear. For example, “the congress has the authority to pass laws” versus “the police have the power to arrest law-breakers”. Authority needn’t be consistent or rational, it only needs to be accepted as a source of permission or truth.
Authority is sub-divided into three types as suggested by M. Weber:
traditional authority which simply derives from long-established habits and social structures, for instance, the right of hereditary monarchs to rule;
charismatic authority: from time to time, people make claims of heading a revolution of some kind (which is always against an established social system). When followers take such claims seriously, this is charismatic authority because religious or political authority that does not flow from tradition or law, but instead thrives on the short-lived desire of social change. The careers of Lenin, Martin Luther, Hitler, and Lech Wałęsa provide examples. Charismatic authority never lasts long even when it is successful and it inevitably gives way to either traditional or to legal-rational authority;
legal-rational authority depends for its legitimacy on formal rules which are usually written down, and often very complex. Modern societies depend on legal-rational authority.
Classifications of organizations
All social organizations can be classified by various criteria. According to their purpose they can be as economic, political, educational, medical etc. Each of them prioritizes its own purpose, for example, economic organizations strive for maximum profits, cultural ones – for achieving aesthetic goals, whereas getting maximum profits is their secondary goal, educational ones – for a contemporary level of knowledge whereas striving for profits is a secondary goal for them, too.
The given principle is also used to classify organizations into for-profit and nonprofit ones. Generally nonprofits differ from for-profits in the following areas:
nonprofits focus more on fund-raising from donors, for instance, contributions, grants etc. while for-profits – on fund-raising from investors;
although they both have boards of directors, in for-profits the board members are more highly trained and experienced than in nonprofits, where board members are often volunteers who bring strong passion for the nonprofit mission;
nonprofits focus more on volunteer management but volunteers are managed much like employees, for instance, with job descriptions, policies etc.;
as for finances, nonprofits focus on human capital whereas for-profits focus on monetary capital. Nonprofits have certain unique accounts (usually grants) that can only be spent on certain activities. However, both types of organizations carry out very similar basic bookkeeping activities;
they are different in taxes.
Social organizations can also be differentiated on the basis of a branch of their activities (industrial,