Components of An Organization

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Components of an Organization

Edgar Schein, who was a prominent organizational psychologist, proposes four common
elements of an organization’s structure: The Common purpose Coordinated effort, Division of
labor, and the Hierarchy of authority. The manager’s perspective operations are made
successful by defining the common purpose of creating a coordinated effort across the
organization and organizing resources based on tasks and decision making. The four elements
are relatively straightforward in theory, representing a critical component of an effective
structure.

Common Purpose is an organization without a clear purpose or mission that soon begins to
drift and become disorganized. Common purpose unifies the employees or members, giving
everyone the knowledge of the organization’s direction. This ensures effectiveness in
communication across organizations (particularly large organizations with many moving parts) is
a central task for managers. Managers communicate through this purpose by educating all
employees on the general strategy, mission statement, values, and short- and long-term
objectives of the organization.This common purpose will be achieved through coordinated effort
of all individuals and groups within an organization.

Coordinating effort involves working together as a team in a way that maximizes resources.
The wide-ranging group’s diverse skill sets and personalities must be authorized in a way that
adds value. The act of coordinating organizational effort is the most important responsibility of
managers because it motivates and distributes human resources to capture value.

Division of labor, also known as work specification for greater efficiency. It involves assigning
specific parts of a broader task to different individuals within the organization based upon their
particular abilities and skills. Using this element of an organization can distribute a complex
work effort for specialists to represent. By systematically dividing complex tasks into specialized
jobs, an organization uses its human resources more efficiently.

Hierarchy of authority is essentially the chain of command. A control mechanism to validate


the right people to do exact things at the right time. There are a wide variety of organizational
structures, with more centralized authority than others. Hierarchy in decision making is a critical
factor for success. Knowing who will make decisions under what conditions, enabling the
organizations to be agile, while ambiguity of authority can often slow the decision-making
process. Authority allows the organizations to set directions and select strategies, which can
qualify a common purpose.

Each of the four elements represents a necessary component of an effective structure. Further,
Schein proposes that these elements are instrumental in defining the organization’s culture.

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