Public Administration

Lecture 5
Some Organizational Designs
 Organizational Designs
• Simple Structure
• Bureaucratic Organization
• Matrix Organization
• Network Organization
• Teams
• Boundaryless Organization
 1. The Simple Structure
• Low departmentalization

• Wide span of control

• High Centralization (one person)

• Little formalization
Fast Food Outlet

Owner-cum-manager

Sales Cook Cashier Sales Sales

Sales Sales
Person Person Person
Person Person
 2. Bureaucratic
• Specialization
• High formalization
• High departmentalization
• Narrow span of control
• Centralized authority
• Chain of Command
 2. Bureaucratic

•Every big organization tends to become

bureaucratic or at least have some
bureaucratic features like specialization
and formalization
 Bureaucratic Organization
Strengths Weaknesses
• Efficiency • Conflict among departments
• Discipline • Department goals may
override overall organizational
• Employee talk the ‘same goals
language’
• Obsession with rules
• Rules reduce managerial
discretion • Lack of innovation and out-of-
the box thinking
• Work best when tasks are
routine
Jerry Pournelle’s Iron Law of Bureaucracy
• Any bureaucratic organization will have two
kinds of people
• Those devoted to the goals of the organization
• Those dedicated to the organization itself
• The second group will gain and keep control of
the organization. It will write the rules, and
control promotions within the organization
 Iron Law of Oligarchy
First formulated by German Sociologist Robert
Michels

• All organizations, including those committed to

democratic ideals and practices, will inevitably
succumb to rule by an elite few
• ‘Kitchen Cabinet’
 3. Matrix Organization
Creates dual line of authority by combining two
forms of departmentalization
• Functional
• Product, geography, or client-based

• Two lines of authority

• Functional
• The other
Manager Manager Manager Manager
HR IT Finance Marketing

HR People IT People Finance Marketing

People People

Project Director
 Matrix Organization
Strengths
• Facilitates coordination when organization has a
multiplicity of interrelated activities

• Makes for flexibility and better communication

• Efficient allocation of specialists

 Matrix Organization
Weaknesses
• Dual line of authority begets confusion

• Employee stress

• Increases power struggle in organization as

managers hunt for best talent
 4. Team Structure
• Use of teams as central device to coordinate
work activities

• A team is a group whose individual efforts result

in a performance that’s greater than the sum of
those individual inputs
 Teams in Govt
• Special task forces to complete a particular task
or project
• Inter-Division
• FATF
• Intra Division
• Annual budget making
• International event
5. Virtual/Network/Modular Organizations
• A small, core organization that outsources major
business/operational functions

• Highly centralized with little departmentalization

• Temporary teams
5. Virtual/Network/Modular Organizations
• Examples
• Current movie-making industry
• Dell Computer: assembles computers from outsourced parts
• Nike
• Reebok
5. Virtual/Network/Modular Organizations
• Strengths
• Flexibility
• Cuts costs
• Drawback
• Management’s reduced control over key parts of its business
 6. Boundaryless Organization
• Seeks to eliminate chain of command

• Limitless span of control

• Replaces departments with empowered teams

• The term coined by GE Chairman Jack Welch

 6. Boundaryless Organization
• Removal of vertical boundaries flattens organization

• Status and rank minimized

• Cross-hierarchical teams take part in decision-

making
• Top executives, middle managers, supervisors and
operators
 6. Boundaryless Organization
• Use of 360 degree performance appraisal
• Peers, and others above and below the employee evaluate
his performance

• Functional depts replaced with cross-functional

teams
• Activities organized around processes
• Rotate people in and out of different functional areas,
turning specialists into generalists
 6. Boundaryless Organization
• More of an ideal than a reality

• Businesses fast incorporating some features of

this structure
 Question
•Discuss the importance of formalization
in enhancing or reducing performance of
civil servants
Strategic Management
 Strategic Management

•Formulating, implementing and

evaluating cross-functional decisions that
enable an organization to achieve its
objectives
 Strategic Management Process

Develop Set up Set

Mission long-term Formulate Measure &
policies Allocate
Statement objectives strategies Evaluate
and annual Resources
Performance
objectives
 Strategies & Policies

•Strategies
•Means to achieve long-term objectives

•Policies
•Means to achieve annual objectives
• Regulations, guidelines, procedures
 Corporation Govt
Long-term objectives 25% increase in $30 bn FDI in 8 years
market share over 5
years in soft drink
Strategies Market penetration, Upgrading/setting up
product SEZs; sign BITs
development
Annual objectives Minimum 5% $04 bn FDI every year
increase every year
Policies Sales promotion, Simplify business
10% salary raise for procedures, improve
performing workers energy and physical
infrastructure,
investment incentives
 Benefits of SM
• Allows an organization to be proactive
• Gives a sense of direction
• Fully informed employees
• Employee commitment
• Framework for improved coordination
• Optimizes resource allocation
• High performance
PLANNING
 PLANNING
•Reactive Planning

•Short-range planning

•Long-range planning

•Strategic planning
 Long-range planning

•Primarily concerns establishing goals or

performance objectives over a period of time

•Less concerned with specific steps that must

be undertaken to achieve those goals
 Strategic planning

• Systematically planning for future

• Planning process entails a series of action steps, which

guide organization’s activities in immediate future
 Difference between Strategic and Long-range
planning
• SP differs from LP is its special attention to
environment

• Organization’s objectives and the steps seen in context

of the resources and constraints presented by the
environment
 Difference between Strategic and Long-range
planning
• SP involves many individuals at many levels.

• Organizational changes effectively accomplished by

involving all those who will be affected by the change
 Need for Strategic planning in public
organizations
• Give clarity and direction to the organization

• Choose from among competing goals and activities

• Cope with expected shifts in the environment

• Bring together input of all stakeholders

 Constraints to Strategic planning in Public Sector
• Periodic changes in political leadership

• Budgetary constraints
• consultant fees, research and data analysis

• Seeking inputs from a wide array of stakeholders takes

much time

• Culture of hierarchy
 Steps in Strategic planning
• Statement of mission or objectives
• Environmental analysis
SWOT
• Assessment of strengths and weaknesses Analysis

• Analysis of organizational leaders’ values

• Development of alternative strategies
 Statement of mission or objectives
• Mission Statement
• A mission statement is used by an entity to
explain, in simple and concise terms, its
purpose(s) for being. The statement is generally
short, either a single sentence or a short
paragraph.
 Statement of mission or objectives
Microsoft
• Mission Statement
• “Microsoft’s mission is to empower every person and
every organization on the planet to achieve more.”
 Statement of mission or objectives
Amazon
• Mission Statement
• “Amazon's mission is to be Earth's most customer-
centric company.”
 Statement of mission or objectives
Ministry of Finance
• Mission Statement
• “To assist in the formulation and ensure the effective
execution of sound and equitable economic and financial
policies, that put Pakistan on the path of sustained economic
development and macro-economic stability with a view to
improving the quality of life of the people of Pakistan.”
 Statement of mission or objectives
Ministry of Finance
• Statement of Objectives
• “Achieving allocative efficiency through best budget making
practices. Strengthening Public Finance Management.
Efficient Macro-Economic and Fiscal Management,
Meaningful coordination with financial institutions.
Achieving long term debt sustainability. Optimizing
availability and utilization of foreign exchange. Maintaining
expenditures control and austerity.”
 Statement of mission or objectives
Ministry of Planning, Development & Special Initiative

•Mission Statement
•"To manage Pakistan's socio-economic
development in a strategic and
sustainable manner."
 Environment Analysis
• Legal and political considerations
• Social and cultural trends
• Economic circumstances Increase in retirement age
• Technological developments
• Where appropriate, the organization’s competitive or “market”
position.
• Each area should be examined in terms of the present
environment and how it is likely to change in the future.
 Assessment of Strengths and Weaknesses
• Financial resources (including changing patterns
of funding)
Phases of High Growth
• Human resources
• Technological preparedness
• Quality of work
Analysis of Organizational Leaders’ Values
• Values, interests, and aspirations of those who
will guide the organization into the future.

• People will respond to the same environmental

and organizational analysis in different ways
 Development of Alternative Strategies

• Draw up alternative scenarios of the future

• Best case scenario
• Worst case scenario
PLANNING IN PAKISTAN
 Institutional Set-up

• Ministry of Planning, Development and Special

Initiatives
• Planning Commission
• Chaired by PM
• DY Chairman
• Members: experts from private sector/NGOs
 Planning Commission

Mandate
• Strategic Planning
• Formulating long-term development plans and
frameworks encompassing diverse sectors
• Policy direction
• Advising govt on economic, social, and
infrastructure policies
 Planning Commission

Mandate
• Project evaluation
• Scrutinizing development projects for feasibility,
impact, and optimal resource allocation
• Monitoring and evaluation
• Tracking progress towards development goals and
ensuring efficient implementation of plans
 Types of Plans

• 5-Year Plans
• 1950-55 to 1994-99 (total 8)

• Medium-term Development Framework

• (2005-Present)

• Annual Plans
• PSDP
 Planning by Provinces

• Planning & Development Board Punjab

• Planning & Development Dept KP
• Planning & Development Dept Sindh
• Planning & Development Dept Balochistan
Example: Sustained Economic Growth
• Statement of mission or objectives
• Environmental analysis
• Assessment of strengths and weaknesses
• Analysis of organizational leaders’ values
• Development of alternative strategies