Unit 4: Organizational design and conflict
Organizational Behaviour & Design notes · PTU syllabus (MBA 301-18)
On this page
- Unit summary
- Organisational theory
- Organisational life cycle
- Organisation–environment relationship
- Organisational design factors and dimensions
- Traditional organisational structures
- Contemporary organisational structures
- Conflict: meaning, types and sources
- Conflict management
- Learning organisations
- Power and politics in organisations
- Key terms
- Quick revision
- Important questions
Unit summary
Organisational design shapes how work, authority and information flow. This unit covers organisational theory and the organisational life cycle, the organisation–environment relationship, design factors and dimensions — complexity, formalisation and centralisation — traditional and contemporary structures, conflict management, learning organisations, and power and politics.
After this unit you can
- Explain organisational theory and the organisational life cycle
- Explain the organisation–environment relationship and design dimensions
- Compare traditional and contemporary organisational structures
- Explain conflict management, learning organisations, and power and politics
PTU syllabus topics
- Organizational theory and life cycle
- organization-environment relationship
- organizational design factors and dimensions (complexity, formalization, centralization)
- traditional and contemporary organizational structures
- conflict management
- learning organizations
- power and politics
Hierarchy
Tall, rigid
Flat, flexible
Formalisation
High: many rules
Low
Decisions
Centralised
Decentralised
Suits
Stable environments
Dynamic, innovative environments
Topic 1
Organisational theory
Organisation theory studies how organisations are structured and designed and how they relate to their environment.
- 1Classical
Weber's bureaucracy, Fayol — one best structure
- 2Neo-classical
Human relations, informal organisation
- 3Systems
Organisation as an open system of interrelated parts
- 4Contingency
Best structure depends on environment, technology, size and strategy
Topic 2
Organisational life cycle
- 1Entrepreneurial stage
Founder-led, creative, informal; crisis — need for leadership
- 2Collectivity stage
Clear goals, strong commitment; crisis — need for delegation
- 3Formalisation stage
Rules, procedures, controls; crisis — too much red tape
- 4Elaboration stage
Teams, collaboration, renewal; crisis — need for revitalisation
- Firms may then decline unless they renew through restructuring, innovation or new leadership.
Topic 3
Organisation–environment relationship
- Environmental uncertainty depends on complexity (simple or complex) and dynamism (stable or changing).
- Responses: buffering and boundary-spanning roles, differentiation and integration (Lawrence and Lorsch), mechanistic structures for stable environments and organic structures for dynamic ones (Burns and Stalker).
- Resource dependence theory: organisations manage dependence on external resources through alliances, mergers, co-optation (board seats) and lobbying.
Tasks
Rigid, specialised
Adaptable, shared
Hierarchy
Strict, centralised
Flat, decentralised
Rules
Many formal rules
Few rules
Communication
Vertical
Lateral and networked
Best for
Stable environments
Dynamic, uncertain environments
Topic 4
Organisational design factors and dimensions
Complexity
Horizontal (number of units), vertical (levels), spatial (locations)
Formalisation
Degree of written rules, procedures and job descriptions
Centralisation
Where decision-making authority lies
- Contingency factors: strategy (Chandler — "structure follows strategy"), size, technology (Woodward — unit, mass, process), environment.
Topic 5
Traditional organisational structures
Organisation structure is the framework within which managerial and operating tasks are performed — the pattern of relationships among positions.
Line
Authority flows directly from top to bottom
Line and staff
Line managers advised by staff specialists
Functional
Specialists have authority in their function
Divisional
Divisions by product or region
Matrix
Dual reporting to functional and project managers
Network and team
Flexible, outsourced, cross-functional
| Structure | Merits | Demerits |
|---|---|---|
| Line | Simple, quick decisions, clear authority, discipline | Overload on top, no specialists, rigid |
| Line and staff | Expert advice, better decisions | Line–staff conflicts, costly |
| Functional | Specialisation, efficiency | Violates unity of command, coordination problems |
| Divisional | Accountability, flexibility, product focus | Duplication of resources, costly |
| Matrix | Flexible, efficient use of experts | Dual authority confusion, power struggles |
- Span of management (control): number of subordinates a manager can supervise effectively. Narrow span → tall structure; wide span → flat structure. Graicunas' formula shows relationships grow rapidly with each added subordinate.
Topic 6
Contemporary organisational structures
Team structure
Whole organisation built around teams
Network (virtual) organisation
Small core outsources major functions
Boundaryless organisation
Removes vertical, horizontal and external barriers (Jack Welch at GE)
Learning organisation
Structured to learn and adapt continuously
Holacracy and agile squads
Self-organising roles and circles
Hybrid and remote work structures
Distributed teams linked digitally
Topic 7
Conflict: meaning, types and sources
Conflict is a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something the first party cares about.
- Functional conflict supports goals and improves performance; dysfunctional conflict hinders it.
- Types: task, relationship and process conflict; intrapersonal, interpersonal, intragroup and intergroup conflict.
- Sources: communication problems, structure (goal incompatibility, scarce resources, unclear authority) and personal variables (values, personality).
Topic 8
Conflict management
- 1Potential opposition
Communication, structure, personal variables
- 2Cognition and personalisation
Conflict is perceived and felt
- 3Intentions
How to handle it
- 4Behaviour
Conflict becomes visible
- 5Outcomes
Functional or dysfunctional
- Competing
- Assertive, uncooperative — win-lose
- Collaborating
- Assertive and cooperative — win-win
- Avoiding
- Unassertive, uncooperative — withdraw
- Accommodating
- Cooperative, unassertive — give in
- Compromising
- Middle ground — each gives up something
Topic 9
Learning organisations
A learning organisation (Peter Senge, The Fifth Discipline, 1990) continuously expands its capacity to create its future.
Personal mastery
Continual personal growth
Mental models
Surfacing and testing assumptions
Shared vision
Common picture of the future
Team learning
Dialogue and collective thinking
Systems thinking
Seeing wholes and interrelationships — the fifth discipline
- Single-loop vs double-loop learning (Argyris): correcting errors within existing rules vs questioning the rules themselves.
Topic 10
Power and politics in organisations
- Power: capacity to influence the behaviour of others.
Formal power
Legitimate, reward, coercive
Personal power
Expert, referent
Information power
Control over information
Resource dependence
Control of scarce resources
- Organisational politics: activities not required by one's formal role that influence the distribution of advantages — coalitions, impression management, networking, blaming others.
- Causes: scarce resources, ambiguous goals, unclear performance criteria, organisational change.
- Managing politics: transparent decisions, clear goals, fair appraisal, open communication.
Key terms
- Organisational life cycle
- Stages of birth, growth, maturity and renewal or decline
- Organic structure
- Flexible, decentralised design for dynamic environments
- Formalisation
- Extent of written rules and procedures
- Boundaryless organisation
- Design removing internal and external barriers
- Learning organisation
- Organisation skilled at learning and adapting continuously
Quick revision
- Theory: classical → neo-classical → systems → contingency.
- Life cycle: entrepreneurial, collectivity, formalisation, elaboration.
- Environment: complexity and dynamism; mechanistic vs organic; resource dependence.
- Dimensions: complexity, formalisation, centralisation; traditional and contemporary structures.
- Conflict management (Thomas–Kilmann); Senge's disciplines; power bases and politics.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is organisation theory?
- Q2.Name the stages of the organisational life cycle.
- Q3.Distinguish mechanistic and organic structures.
- Q4.What is formalisation?
- Q5.What is a boundaryless organisation?
- Q6.List Senge's five disciplines.
Long-answer questions
- Q1.Explain organisational theory and the organisational life cycle.
- Q2.Discuss the relationship between the organisation and its environment.
- Q3.Compare traditional and contemporary organisational structures.
- Q4.Explain the features of a learning organisation and the role of power and politics.
Stuck on this unit?
Message SBS on WhatsApp for help with Organizational Behaviour & Design, or to ask about studying MBA at Synetic.