Friday, July 23, 2010

Management theory and IT management part 2 - Organising

The purpose of organising is to efficiently achieve objectives through the combined efforts of individuals. Organising can be done at several levels including organisational , departmental, team and project levels.

Organisation Structure refers to the way jobs are divided, grouped and coordinated within the organisation. Organisational design is the process which managers use to organise the jobs, structures, reporting lines and all other aspects needed to achieve organisational goals.

There are several factors that may drive change in the way an organisation is designed. These include, changes in the external environment such as new competitors, changes in the legal or political systems, reduction in market share and others.

The internal environment my also drive changes in an organisation. Factors such as changes in key staff members, strategic direction and even organisational culture may drive the need for organisational design changes.

Organisational structured may be designed in an mechanic or organic way.

An organisation with  mechanic design is more structured, with more levels and reporting lines. It is not suited to operate in a volatile environment with high level of change.

An organic organisational design is less structured with less reporting lines and more individual empowerment. An organisation with an organic design can operate well in  highly dynamic and volatile environments.

An organic organisation design is characterised by cross functional and cross hierarchical teams, with free flow of information, decentralisation and less formalisation.

The IT organization structure should serve the purpose of the IT department depending on its strategy. IT managers must select the most appropriate structure based on sound justification and based on explicit coverage of their needs. If the structure does not fit the purpose, problems will begin to arise in performance, roles, communications and many others.

As the Information Technology field is continuously changing and emerging, IT department managers should review the structure of their IT departments and adjust them according to any changes in
the strategy or any input that contributed in the current structure (internal and external environments).

The IT management conducts the IT organization design process at strategic and tactical levels. It aims to achieve the following objectives:
1. Alignment to new strategic directions of the organization
2. Solve problems resulting from structure inefficiencies
3. Eliminate job conflicts
4. Minimize errors and deficiency resulting from human behavior
5. Clarify uncertainty regarding the hierarchy and distribution of work and
6. Enable the ability of predicting results by minimizing the personal behavior options

The final design of the IT department needs to take into consideration the IT customers, services, functions and processes.

When all of those variables are considered the It manager can make an informed decision with regards to the organisational design.

The IT manager can implement a mechanic or an organic structure to achieve his objectives. It is also possible to combine a mechanic and organic structure within the same IT organisation.

A mixed design can take advantage of the best of both worlds. Projects that require a lot of control and centralised decision making can be organised in a mechanic, well structured way. On the other had, projects where the requirements are unclear and require flexibility, discussion and decentralised decision making can take advantage of a organic design.

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