The economy consists of the actions of various business entities. Informal and formal organizations form the basis of the economic system. They may have a different structure, diverse goals and objectives, but their main purpose is to carry out production and business activities.
Organization concept
Representations of the organization are formed at the intersection of disciplines such as economics and management. It is understood as a certain process during which some system is created and managed, and a combination of certain interactions of various systems and groups in the course of joint work, and the unification of people to implement any tasks. Three historically established varieties of organizations are traditionally distinguished: community, corporation, and association. Depending on the principle of internal structure, there are informal and formal organizations. But in any case, they represent groups of people united by common goals and objectives. The main feature of the organization is the presence of several people who work together in pursuit of achieving a socially significant, common goal. Organizations are distinguished by complexity of structure and a large number of varieties.
Organization Structure
The complexity of studying organizations is that they are distinguished by an extremely diverse structure. It is a complex, interconnected system of elements with different functions and structure. The structure of the organization is subordinate to the internal logic of production processes, it reflects the functional specifics of the enterprise and is designed to contribute to the most effective solution of economic and economic problems.
Traditionally, the structure of the organization is considered as a control element. The organizational structure in management is determined by the tasks and types of activities of the company, the economic factor affects it - a rational organizational structure allows you to reduce costs. Also, the organizational structure is formed under the influence of factors such as the form of organization of management, the degree of centralization of individual functional units, the principles of division of labor, the external environment, ways of employee relations, management strategy.
The structure of the organization contributes to the effectiveness and efficiency of making critical production and management decisions. The organizational structure must be flexible but stable in order to increase the company's competitiveness in the market.
Types of organization structures
There are several approaches to the study of the structure of an organization. In the technical aspect, the structure of the organization is a system of material objects and processes that act as the basis for the implementation of all processes. The technical structure provides the basis for functional relationships between personnel, affects the content and nature of labor, determines the type of personal and working relationships between employees and affects the social structure of the organization.
The social structure of the organization covers interpersonal and intergroup interactions and extends to goals, values, power. The social structure is formed under the influence of several factors: the leadership potential, its ability to build strategy and relationships, credibility, professionalism, the moral and psychological climate in the team, the creative and professional potential of employees, their initiative, ability and desire to look for innovative ways to solve production problems.
The third component of the organization’s structure is sociotechnical; this structure consists of spatial methods for uniting employees within their workplaces and ensuring their interconnections.
The organizational structure of the company in management is usually divided into hierarchical and adhocratic. In turn, hierarchical structures are divided into linear, functional, linear-functional, divisional and others. And organic are divided into matrix, design and brigade.
Hierarchical structures are a familiar type of organization; they evolved gradually during the evolution of management. Linear organizational structure is simple and typical for enterprises with a simple production cycle. In such organizations, all cycles are combined under the leadership of a leader, who, in turn, is subordinate to higher managers. The head of the department assumes all responsibility for the work of his department. The advantage of such a structure is the visible effectiveness of each unit and its manager, a well-functioning system of mutual subordination and distribution of functions, and clear areas of responsibility for the leaders of each link. The disadvantages of such organizational structures are the complexity of the overall strategic management of units, each of which solves its own problems, but is poorly involved in the implementation of strategic plans, poor flexibility and response to external and internal changes, a high degree of dependence of the results on the professionalism of managers. Functional organizational structures differ from linear ones in the principle of separation of units; it is created on the basis of the tasks being solved. In such organizations, cross-management by the same executor often arises, which greatly complicates management. Linear and functional structures are methods of managing organizations that are a thing of the past, since they do not meet modern management requirements.
Linear-functional structure combines the two previous types, in this case, linear managers rely on the activities of functional units. Such structures are convenient for the same type of production processes with a staff of not more than 3,000 people. A more modern type of such a structure is the line-head organization, in which a headquarters is created for each type of activity, helping the manager to solve the main problems. Divisional structures are characteristic of large companies with a complex production cycle. A division is a separate production unit led by a leader who is fully responsible for the work of his team. Divisions can be allocated according to the regional principle (this is an understandable branch system) or by product. Hierarchical organizational structures have stability, but a low degree of flexibility under the influence of a changing environment. Often in such structures there is a duration of decision-making, bureaucratic barriers.
Organic structures are designed to remove the shortcomings of the hierarchy, they are created for specific situations and quickly respond to all changes, adaptability - these are their main difference and advantage. The team structure is characterized by horizontal involvement of employees in working groups. The advantage of such structures is the effective use of the potential of employees, the speed of decision-making, but there are also difficulties that lie in the difficulty of coordinating all teams and achieving strategic goals. Similarly, there is a project structure in which a working group is selected to perform a specific task. The matrix or program-target structure consists of two types of elements: functional services and projects or programs. They have dual subordination, and this is a drawback of such organizations. But the advantage is management efficiency, profitability, high productivity, the interaction of current tasks with the development strategy.
Also, the structure of the organization is divided into formal and informal. A formal one is the structure that is enshrined in some documents, an informal structure is a spontaneous relationship between employees and their division into groups within the team. The main informal structure is social relations. Informal groups arise spontaneously, when the need arises, therefore they have a mobile and adaptive structure. Depending on the situation, the distribution of powers and functions in such groups can easily change.
Goals and objectives of the organization
Informal and formal organizations are created in the name of specific goals, and they determine the type and structure of the company. It is well known that the organization is distinguished by the presence of complex and diverse goals, these include:
- Strategic goals. Setting global, long-term goals of the company is an important part of top management. Such goals include the company's position in the market, its image, important production and commercial indicators in a growth perspective.
- Tactical goals. The path to global goals is always through short-term goals. This type of goals includes current and operational tasks, which necessarily fit into the overall strategic direction of development.
- Economic goals. Any organization sets itself commercial goals for profit, they must be expressed in digital value: in the amount and time of achievement.
- Production goals. Company development is impossible without modernization and production improvement. Equipment purchase, technology development, search for new areas of implementation - all this fits into the production strategy.
- Social goals. Creating favorable working conditions, creating a corporate culture, influencing society and culture - all this is also an important part of the organization.
The goal of formal organization is usually enshrined in the charter and is ideological and motivational in nature, it should be associated with the mission of the company. The goals of informal groups are usually not fixed in writing and appear in the form of shared values and interests. The organization builds all goals in order of importance and, relying on them, formulates a strategy and tactics of work.
Characteristics and signs of the organization
Despite the significant differences between organizations, they are united by the characteristics inherent in any of them. The most important characteristic of an organization is the existence of a goal that is close to all its participants.
An important characteristic of a formal organization is its legal status and isolation. The organization must have an officially fixed form of management, which ensures its special status. Separation also manifests itself in the isolation of production and managerial internal processes that create the boundary between the organization and the outside world. The next sign of organization is the indispensable availability of resources: human, financial, material, state organizations can have power as a resource. The organization has such a characteristic as self-regulation, it has its own area of responsibility and makes major decisions independently. But at the same time, it remains dependent on the external environment, which affects its activities. An important sign is the presence of organizational culture, which exists in the form of corporate norms, traditions, rituals, myths.
Signs of formal organizations
In addition to common features, the characteristic of a formal organization has its own distinctive features. The first of these signs is the availability of a set of documents regulating its activities: instructions, statutes, laws, decrees, prescribe it a certain procedure in different situations. Thus, its activities were initially formalized. The formal structure of an organization includes informal groups, but its formal components always remain dominant. Thus, formal organization is always wider and more informal.
Signs of informal organizations
The unique characteristics of informal organizations distinguish it from its antipode. These signs include:
- The presence of public control. Informal organizations are under the vigilant control of their members and the external environment in order to identify approved and disapproved behavior. Certain behavioral patterns are prescribed to members of informal groups; for deviating from the norms and rules of a group member, they will be criticized or even expelled from the group.
- Obstruction of change. Another sign of informal groups is internal resistance to change, the group seeks self-preservation and considers change as a threat to its existence.
- The presence of informal leaders. The most important characteristic of such groups is the presence of informal leaders. The group leader is a structural element of such organizations, certain rights and obligations are delegated to him, and he has the trust and recognition of the group members.
Types of organizations
In addition to the existence of formal and informal organizations, other types are also possible. They can be classified by industry: trade, manufacturing, intermediary, service, etc. According to the legal status of the organization can be divided into commercial and non-profit. By the volume of production, small, medium and large organizations can be distinguished. The main classifications relate mainly to formal organizations, but some species may exist in the informal group.
The internal environment of the organization
An important attribute of an organization is its internal environment. It traditionally includes goals, objectives, organizational structure, human resources and technology. The internal environment is a moving structure, as it is highly dependent on the situation. The formal organization system consists of groups created by the management, in their activities they are guided by the norms and rules set forth in the documents. In this aspect, the internal environment is usually spoken of as an element of the organization’s corporate culture. The formal group may be subject to change, but their manager is the initiator. Informal groups are also an element of the internal environment, but their activities are less predetermined and regulated. An important role is played by communication, sympathy and relationships, what is called the psychological climate of the working group.
Formal and informal groups in the structure of the organization
The complex structure of organizations, especially large ones, involves the allocation within small working groups to solve various problems. They can be formal and informal. The role of formal groups is to solve production and business problems as directed by management. Such groups are created at the time of any work, for example, to create a project. Their activities are regulated by documents, for example, orders that distribute authority and set tasks. But in large companies, informal organizations are always spontaneously created. Examples of such associations can be found in any enterprise. They develop spontaneously on the basis of personal sympathies and interests. They also play an important role in the organization, as they unite the team, form and maintain the climate in the organization, and contribute to improving the corporate culture.
Concept and role of group leader
Informal and formal organizations rely on leaders in their functioning. The concept of a leader implies that this person has special psychological characteristics and qualities. A leader is a person with the trust of a group, he must have authority. If in formal groups there is an officially appointed leader who is not a leader, then in informal groups there is always a leader who is promoted to this role due to his personal qualities. The leader of the groups unites people and motivates them to take any actions, he does not need to exert pressure on them, because employees voluntarily delegated authority to him. Modern management recommends managing leadership based on their power resource in groups.
Formal organization management
Formal organization management is based on traditional management functions: planning, organization, control, motivation and coordination. In such organizations, the division of labor is decisive, which gives each employee a place in the production chain.Government organizations, for example, work on the basis of job descriptions, which very clearly prescribe the amount of work, authority, rights and duties of various employees. In such groups, the role of management is extremely high, since the performers do not have to make decisions, they are not supposed to do this according to the instructions. A formal group needs a leader who is authorized to take responsibility. The management of a formal organization is determined by its structure, goals, field of activity, and fototra of internal and external environment.
Informal Group Management
An informal social organization implies a certain freedom, it does not characterize the hierarchy of power, the main thing here is social ties and relations. Management of such a group is carried out immediately in several directions, horizontally, from bottom to top and top to bottom. Formal leaders can manage an informal organization, but most often the reins of government are given to informal leaders endowed with authority from the group. In such organizations, one cannot use the usual managerial tools in the form of instructions and orders; more often, management is carried out using psychological methods of influence and influence. Management of an informal group depends on cohesion and group size, status and composition.