Mullins L.J. Management and organisational behaviour, Seventh edition
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ities. However, adopting the systems view of organisations, we can identify principles
and prescriptions of organisation and management that apply to business organisa-
tions in general. Differences in the application and operation of these principles and
prescriptions as between one business organisation and another is largely a matter only
of degree and of emphasis.
Using this systems model the same form of analysis can be applied to all types of
organisations. Viewing organisations as systems provides a common point of reference
and enables us to take a general approach to the study of organisations, to analyse
them and to derive general principles and prescriptions.
23
An example of the open systems model applied to the environment systems division
of a major heating and ventilation company is given in Figure 4.5.
CHAPTER 4 THE NATURE OF ORGANISATIONS
125
Figure 4.5 An example of the open systems model
The structure, management and functioning of an organisation is not only determined
by internal considerations and choices, but is also strongly influenced by a range of
volatile, external, environmental factors.
The business organisation is an open system. That means that it is open to, and in
continual interaction with, the external environment of which it is part. In order to be
effective and maintain survival and growth, the organisation must respond to the
opportunities and challenges, and the risks and limitations, presented by the external
environment. Changes in the environment will affect inputs, and changes in inputs
will affect the transformation or conversion process and hence the outputs. The open
systems approach views the organisation within its total environment and emphasises
the importance of multiple channels of interaction.
The increasing rate of change in major environmental factors (technical, economic,
social and governmental) has highlighted the need to study the total organisation and
to adopt a systems approach. In addition to these major environmental factors, there is
a multiplicity of constantly changing environmental influences which affect the opera-
tion of an organisation (see Figure 4.6). In order to understand the operations of
organisations, and to improve organisational performance, it is necessary to consider
how they achieve an internal and external balance and how they are able to adapt to
changes in their environment and the demands placed upon them.
24
Consider how the operations of a large comprehensive school, for example, might
be affected by such external influences as: government proposals for reform of educa-
tion; changing population trends; the general economic climate; advances in
information technology; changing views of the role of education in society; reports
from Her Majesty’s Inspectors; representations from employers’ associations and trade
unions; parent groups; equality campaigners.
Organisational performance and effectiveness will be dependent upon the successful
management of the opportunities, challenges and risks presented by changes in the
external environment. One popular technique for analysing the general environment
is a PESTEL analysis – that is, Political, Economic, Socio-cultural, Technological,
126
PART 2 THE ORGANISATIONAL SETTING
INTERACTIONS WITH THE ENVIRONMENT
Shareholders
or providers
of finance
Suppliers
Technological
innovations
Economic
activity
Social
attitudes
Local and national
government policies
Trade unions
Customers
Culture
Other organisations
Employers’
associations
Pressure
groups
CBI
International
relations
Competitors
Climate
THE ORGANISATION
Private enterprise
or public sector
Training and
Enterprise Councils
Figure 4.6 Environmental influences on the organisation
PESTEL
analysis
Environmental and Legal influences. As an example, Lynch presents the main issues
that might be considered when undertaking a PESTEL analysis (see Figure 4.7).
25
All organisations need clear aims and objectives which will determine the nature of
inputs, the series of activities to achieve outputs and the realisation of organisational
goals. Feedback about the performance of the system, and the effects of its operation
on the environment, are measured in terms of achieving the aims and objectives.
Basic principles of organisation and management apply in any series of activities in
any organisation. For example:
■ Attention must be given to the design of a suitable structure.
CHAPTER 4 THE NATURE OF ORGANISATIONS
127
Figure 4.7 Checklist for a PESTEL analysis
Reproduced with permission from Richard Lynch, Corporate Strategy, Third edition, Financial Times Prentice Hall (2003), p.92, with
permission from Pearson Education Ltd.
THE COMPARATIVE STUDY OF ORGANISATIONS
■ The common elements of management – clarification of objectives, planning,
organising, directing and control – apply to a greater or lesser extent in all cases.
■ Essential financial, legal, personnel and administrative functions must be carried out
in all types of organisation.
These common features make possible the application of general principles of manage-
ment and organisational behaviour (including, for example, in both a prison or a
university) and the meaningful study of organisation theory.
While general principles and prescriptions apply to all organisations, differences in
their aims and objectives, organisational goals and environmental influences will result
in differences in the input–conversion–output process and in the series of activities
involved in this process. The nature of inputs, the throughputs, and the form of the
outputs will emphasise characteristic features of a particular organisation. These fea-
tures highlight alternative forms of structure, management, methods of operation, and
behaviour of people employed by or working in different types of organisations.
The study of organisations as open systems serves, therefore, to indicate both the
common features of organisations and the main distinguishing features between dif-
ferent types of organisations. It provides a useful framework for the comparative study
of organisations. The systems view of organisations enables managers to view their
own organisation in perspective, and to compare it in meaningful terms with other
types of organisations.
26
Whatever the type or classification of organisations, the transformation or conversion of
inputs into outputs is a common feature of all organisations. Within the organisation
(system) as a whole, each of the different transformation or conversion activities may
themselves be viewed as separate sub-systems with their own input–conversion–output
process interrelated to, and interacting with, the other sub-systems.
The analysis of an organisation could perhaps be based upon the departmental
structure as sub-systems. However, this could lead to an investigation concentrating on
blinkered, sectional interests, rather than on the need to adopt a corporate approach. It
is not just a question of whether individual departments are operating efficiently.
The important point is the interrelationships and co-ordination of sub-systems in
terms of the effectiveness of the organisation as an integrated whole.
The interrelationship and interdependence of the different parts of the system raise
the question of the identification of these sub-systems. What are the boundaries that
distinguish one sub-system from other sub-systems, and from the system as a whole?
In practice the boundaries are drawn at the discretion of the observer and sub-systems
are identified according to the area under study. These sub-systems may be identified,
therefore, in a number of different ways, although there is a degree of similarity among
the alternative models.
Socio-technical system
The work of Trist and others of the Tavistock Institute of Human Relations, in their
study of changing technology in the British coal-mines, gave rise to the idea of the
socio-technical system.
27
It was observed that new methods of work and changes in
technology disrupted the social groupings of the miners, and brought about undesir-
able changes to the psychological and sociological properties of the old method of
working. As a result, the new method of work was less efficient than it could have been
despite the introduction of new technology.
128
PART 2 THE ORGANISATIONAL SETTING
Characteristic
features of
particular
organisations
ORGANISATIONAL SUB-SYSTEMS
The researchers saw the need for a socio-technical approach in which an appropriate
social system could be developed in keeping with the new technical system. They sug-
gested that there are three sub-systems common to any organisation:
■ the technological sub-system;
■ the sub-system of formal role structure;
■ the sub-system of individual members’ feelings or sentiments.
This form of analysis is taken a stage further by Kast and Rosenzweig who see the organ-
isation as an open, socio-technical system with five major sub-systems.
28
■ Goals and values – the accomplishment of certain goals determined by the broader
system and conformity with social requirements.
■ Technical – the knowledge required for the performance of tasks, and the tech-
niques and technology involved.
■ Psychosocial – the interactions of individuals and groups, and behaviour of people
in the organisation.
■ Structure – the division and co-ordination of tasks, and formal relationships
between the technical and psychosocial sub-systems.
■ Managerial – covering the whole organisation and its relationship to the environ-
ment, setting goals, planning, structure and control.
An alternative model is suggested by Hersey and Blanchard, who identify four main
interrelated sub-systems.
29
■ Human/social – focuses on the needs and motivations of members of the organisa-
tion and styles of leadership.
■ Administrative/structural – focuses on authority and responsibility, and the struc-
ture within the organisation.
■ Informational/decision-making – focuses on key decisions and information needs
necessary to keep the organisation operational.
■ Economic/technological – focuses on the work to be undertaken and its cost-
effectiveness related to the goals of the organisation.
Another useful model is that of Leavitt who suggests the organisation consists of four
main elements – task, structure, information and control, and people – which interact
with each other and with the external environment.
30
■ Task – involves problem-solving and improving organisational performance.
■ Structure – refers to patterns of organisation, authority and responsibility, and
communications.
■ Information and control – involves techniques for controlling and processing
information, such as accounting techniques.
■ People – involves attitudes and interpersonal relations.
However these sub-systems are identified, it is the task of management to co-ordinate
the sub-systems, and to ensure that the activities of the organisation as a whole are
directed towards the accomplishment of its goals and objectives. We can suggest, there-
fore, five main interrelated sub-systems as a basis for the analysis of work
organisations. (See Figure 4.8.)
■ Task – the goals and objectives of the organisation. The nature of inputs and out-
puts, and the work activities to be carried out in the transformation or conversion
process.
CHAPTER 4 THE NATURE OF ORGANISATIONS
129
Interrelated
sub-systems
THE ANALYSIS OF WORK ORGANISATIONS
■ Technology – the manner in which the tasks of the organisation are carried out and
the nature of work performance. The materials, systems and procedures, and equip-
ment used in the transformation or conversion process.
■ Structure – patterns of organisation, lines of authority, formal relationships
and channels of communication among members. The division of work and co-
ordination of tasks by which the series of activities are carried out.
■ People – the nature of the members undertaking the series of activities. For ex-
ample, their attitudes, skills and attributes; needs and expectations; interpersonal
relations and patterns of behaviour; group functioning and behaviour; informal
organisation and styles of leadership.
■
Management – co-ordination of task, technology, structure and people, and policies
and procedures for the execution of work. Corporate strategy, direction of the activi-
ties of the organisation as a whole and its interactions with the external environment.
130
PART 2 THE ORGANISATIONAL SETTING
ENVIRONMENT
Series of activities
Transformation or conversion process
Interrelated sub-systems
A socio-technical approach
Task
Technology
Structure
People
Management
ENVIRONMENT
– the nature of the work activities to be carried out
– the manner in which activities are carried out
– patterns of organisation and formal relationships within which activities are
– carried out
– the nature of members undertaking the activities
– effective co-ordination of the sub-systems and direction of activities of the
organisation as a unified whole
Technology Management Structure
Task
People
Figure 4.8 Organisational sub-systems
The attention given to organisational sub-systems can be related to developments in
management thinking and organisational behaviour (discussed in Chapter 3). The
classical approach emphasised the structural and the managerial sub-systems and the
development of general principles of organisation. The human relations approach
emphasised the psychological and sociological aspects and gave attention to the
importance of people in the organisation and such factors as the social needs of in-
dividuals, motivation and group behaviour. The systems approach focuses attention on
the organisation as a whole, as a socio-technical system, and considers the interrela-
tionships between the different sub-systems and the importance of environmental
influences. The contingency approach concentrates on situational factors as determi-
nants of alternative forms of organisation and management.
We have seen that an open systems approach is an attempt to view the organisation as
a purposeful, unified whole in continual interaction with its volatile external environ-
ment. The organisation (system) is composed of a number of interrelated parts
(sub-systems). Any one part of the organisation’s activities affects other parts. Managers
cannot afford to take a narrow, blinkered view. They need to adopt a broader view of
the organisation’s activities. Managers should recognise the interrelationships between
various activities and the effects that their actions and decisions have on other activi-
ties. The above framework of five main interrelated sub-systems – task, technology,
structure, people, management – provides a useful basis for the analysis of organisa-
tional performance and effectiveness.
The manager must realise that in order to improve organisational effectiveness
attention should be focused on the total work organisation and on the interrelation-
ships between the range of variables which affect organisational performance. The
organisation is best viewed as an open system and studied in terms of the interactions
between technical and social considerations, and environmental influences. Changes
in part of the system will affect other parts and thus the whole organisation. The open
systems approach provides a perspective from which to compare and contrast dif-
ferent types of organisations and their methods of operation.
The analysis of organisational effectiveness requires an understanding of relationships
within the organisation’s structure, the interrelated sub-systems and the nature of its
external environment.
Irrespective of the identification of sub-systems, the nature and scale of the series of
activities involved in converting inputs to outputs will differ from one organisation
to another in terms of the interrelationships between technology, structure, methods
of operation, and the nature of environmental influences. ‘Contingency’ models of
organisation highlight these interrelationships and provide a further possible means
of differentiation between alternative forms of organisation and management.
The contingency approach takes the view that there is no one best, universal form
of organisation. There are a large number of variables, or situational factors, that influ-
ence organisational performance. Contingency models can be seen as an ‘if–then’ form
of relationship. If certain situational factors exist, then certain organisational and man-
agerial variables are most appropriate. Managers can utilise these models to compare
the structure and functioning of their own organisation. Contingency models are
examined in Chapter 16.
CHAPTER 4 THE NATURE OF ORGANISATIONS
131
A broader view
of the
organisation’s
activities
CONTINGENCY MODELS OF ORGANISATION
The systems and contingency approaches have drawn attention to the importance of
technology in the structure, management and functioning of work organisations.
It is important to note that the meaning of technology is interpreted broadly to
include both:
■ the physical aspects of machines, equipment, processes and work layout (machine
technology) involved in the transformation or conversion process; and
■
the actual methods, systems and procedures involved (knowledge technology) in carrying
out the work of the organisation and transforming or converting inputs into outputs.
There is a close interrelationship between the machine side of technology and the spe-
cialist knowledge side of technology.
31
The nature of technology can, therefore, be applied to the analysis of all organ-
isations. For example, in a university the machine side of technology would include:
blackboards or whiteboards; overhead projectors; computers; televisions and video
recorders, closed circuit television; scientific and engineering equipment; library facili-
ties. The knowledge side of technology would include: lectures, seminars and tutorials;
case studies; role-playing; practical laboratory work; visiting speakers; project and
assignment work; examinations. The work processes of a university and other educa-
tional establishments give rise to the specialist study of educational technology.
32
A
university will receive inputs of students and, through the process of educational tech-
nology, ‘transform’ them and return them as outputs into the broader society.
Johnson and Scholes draw attention to technology as a means of underpinning innova-
tion in organisations. However, organisations may easily be distracted by technological
development itself rather than with concern for how technology can assist in the cre-
ation and sharing of knowledge within an organisation. It is in the exploitation of
technology that an organisation may create competitive advantage.
33
Technology and the behaviour of people
The nature of technology can influence the behaviour of people in work organisations
in many ways including, for example, the following.
■ It influences the specific design of each member’s pattern of work including the
nature and variety of activities performed, and the extent of autonomy and freedom
of action.
■ It affects the nature of social interactions – for example, the size and nature of work
groups, the extent of physical mobility and of contacts with other people. A person
working continuously on a single, isolated machine in a mass-production factory
will have very limited social interactions compared with, say, a team of receptionists
in a large conference hotel.
■ It can affect role position and the nature of rewards. People with higher levels of
specialist technical knowledge and expertise such as engineers or systems analysts
tend to receive higher status and pay than machine operators on an assembly line.
■ It can impose time dimensions on workers and may require set times for attending
to operations and a set pace of work – for example, the mechanical pacing of work
on a mass-production assembly line.
■ It can result in distinguishing features of appearance – for example, the requirement
to wear a standard uniform or protective clothing, compared with a personal choice
of smart clothes.
34
The nature of technology and organisations is discussed fully in Chapter 17.
Technology is also a potential source of tension and stress and affects motivation and
132
PART 2 THE ORGANISATIONAL SETTING
THE INFLUENCE OF TECHNOLOGY
job satisfaction: this is discussed in Chapter 18. The systems approach should serve to
remind managers that activities managed on the basis of technical efficiency alone
are unlikely to lead to optimum improvements in organisational performance. It
is important to maintain the balance of the socio-technical system. Changes to the
work organisation as a result of new developments in technology must take account of
human and social factors as well as technical and economic factors.
The importance of the effective management of technical change has been highlighted
by recent and continuing developments in information technology. Although the term
‘information technology’ originated in the computer industry, it extends beyond com-
puting to include telecommunications and office equipment. Advances in technical
knowledge, the search for improved economic effi-
ciency and government support for information
technology have all prompted a growing movement
towards more automated procedures of work.
The impact of information technology demands
new patterns of work organisation, especially in rela-
tion to administrative procedures. Information
technology affects the nature of individual jobs and
the formation and structure of work groups. There is
a movement away from large-scale, centralised
organisation to smaller working units. Processes of
communication are increasingly linked to computer
systems with the rapid transmission of information
and immediate access to other national or interna-
tional offices. Improvements in telecommunications
mean, for example, that support staff need no longer
be located within the main ‘production’ unit.
Modern methods of communication may reduce the
need for head office clerical jobs.
Changes wrought by information technology
relate to the nature of the management task itself.
Information technology bears heavily on the deci-
sion-making processes of the organisation and
increasingly forms an essential part of management
information and corporate strategy.
35,36
The growth of information technology means that individuals may work more on their
own, from their personal work stations or even from their own homes, or work more
with machines than with other people. One person may be capable of carrying out a
wider range of activities. There are changes in the nature of supervision and in the tra-
ditional hierarchical structure of jobs and responsibilities. Computer-based
information and decision support systems provide an additional dimension of struc-
tural design. They affect choices such as division of work, individual tasks and
responsibilities. The introduction of information technology undoubtedly transforms,
significantly, the nature of work and employment conditions for staff. Developments
in the technical systems of communications such as international telephone connec-
tions and the increasing use of faxes, mobile telephones and email have generated a
working climate in which there is a greater expectation of the immediacy of receipt
and response, and have added to the dangers of information overload.
CHAPTER 4 THE NATURE OF ORGANISATIONS
133
Fingerprint scanning can be used as a technological
method of identification
INFORMATION TECHNOLOGY
The nature and
conditions of
work
Photo: James King-Holmes/Science Photo Library
According to Law, the manager of the future, especially in larger organisations, will
be someone who is a ‘personal area network’ wherever they may be, always connected
to the Internet. Managers will be using personal digital assistants (PDAs) – handheld
mobile devices that can access the Internet and act as a basic personal organiser by set-
ting up a diary. However, if too many people are working remotely too often there is a
risk of alienation and there is also the potential problem of pressures on staff who are
permanently contactable.
37
It is important to remind ourselves that advances in technical knowledge tend to
develop at a faster rate than, and in isolation from, considerations of human and social
consequences. This means that staff may become resentful, suspicious and defensive.
People’s cognitive limitations, and their uncertainties and fears, may result in a reluc-
tance to accept change.
The psychological and social implications of technical change, such as information
technology and increased automation, must not be underestimated. New ideas and
innovations should not be seen by members of staff as threats. The manager has to bal-
ance the need for adaptability in meeting opportunities presented by new technology
with an atmosphere of stability and concern for the interests of staff. The manner in
which technical change is introduced into the organisation will influence people’s atti-
tudes to work, the behaviour of individuals and groups, and their level of performance.
Continued technical change is inevitable and likely to develop at an even greater
rate. Managers must be responsive to such change. Information technology and
automation create a demanding challenge. The systems nature of organisations empha-
sises the interrelationships among the major variables or sub-systems of the
organisation. The implementation and management of technological change needs to
be related to its effect on the task, the structure and the people.
38
It will be necessary for managers and supervisors to develop more agile skills in organi-
sation. This calls for the effective management of human resources and a style of
managerial behaviour which helps to minimise the problems of technical change.
As an example, Lane et al. draw attention to the impact of information communica-
tions technology (ICT) on organisations and that this major technological change has
brought about dramatic changes in worker behaviour and requirements. Organisations
need to undergo a significant cultural change in order to invest in the training of ICT
skills and to give attention to the concept of the learning organisation.
39
(The management of conflict and organisational change is discussed further in
Chapter 22. The learning organisation is discussed in Chapter 23.)
Whatever the type or nature of an organisation or its formal structure, an informal
organisation will always be present. The informal organisation arises from the interac-
tion of people working in the organisation, their psychological and social needs, and
the development of groups with their own relationships and norms of behaviour, irre-
spective of those defined within the formal structure.
■ The informal organisation is flexible and loosely structured.
■ Relationships may be left undefined.
■ Membership is spontaneous and with varying degrees of involvement.
134
PART 2 THE ORGANISATIONAL SETTING
MANAGING TECHNICAL CHANGE
The need for
skills training
THE INFORMAL ORGANISATION