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Organizational Systems
@ The Organisational System provides the mechanism for
the distribution of authority & responsibility within the
Organisation .It is also related with subdividing the total
authority & responsibility among different
organisational units & positions .
 There are six organizational systems
which are as below:-
@ 1. Information System.
@ 2. Control System.
@ 3. Appraisal System.
@ 4. Motivation System.
@ 5. Development System &
@ 6. Planning System.
 1. Information System.
@ A structure subdivides the total responsibility while the
information system serves to coordinate the divided
responsibility.. If a strategy is to be effectively implemented,
responsibility
Organisational arrangements that provide the information to
managers to perform their task & relate their work to others
are necessary.
necessary. The information system, therefore, serves two
important purposes:
purposes: it enables the managers to know what they
need to grasp in order to perform their tasks & also to
coordinate their activities with others.
others.
@ A broader term ³management information system´ (MIS) is
used to denote the organisational arrangements designed to aid
managers in performing their activities.
activities.
 2. Control System.
@ Control has traditionally been considered as a major
management function.
function. While controlling, the manager
essentially deals with ³the measurement & correction of the
performance of activities of subordinates in order to make sure
that enterprise objective & plan devised to attain them are
being accomplished´.
accomplished´. In other words, control ensures that the
implementation of strategy takes place according to
predetermined plans.
plans.
 The control cycle.
@ 1. Establish standards.
@ 2. Measure performance.
@ 3. Evaluate performance
against standards.
@ 4. Determine corrective
performance.
 3. Appraisal system.
@ The achievement of organisational objectives has to be monitored
if the implementation of strategy is to take place.
place. The appraisal
system performs this critical role of evaluating managerial
performance in the light of organisational objectives.
objectives. Managerial
appraisal is an important element in the total control system.
system.
@ The use of the results of appraisal have to be guided by the true
function of measurement which is ³to increase the perceptions of
the problems limiting achievement´.
achievement´. Only a system of appraisal
that provides the strategists with an understanding of the problems
before the managers who are responsible for implementation, is an
effective system.
system. In this context management by objectives (MBO)
provides participatory method of performance & objective setting,
where managers can be involved in appraisal so that they
themselves & their superiors know what has prevented them from
achieving the desired objectives.
objectives.
 4. Motivation System.
@ The motivation system plays a positive role in inducing
strategically desired behaviour so that managers are
encouraged to work towards the achievement of organisational
objectives.. But, as yet, there is no complete understanding of
objectives
how motivation works.
works. However, it is known that incentives
play an important role in motivation.
motivation. Incentives are the means
by which individuals can be encouraged to perform better. better.
Generally, the incentives are divided into two groups : the
monetary & the non monetary incentives.
incentives. Monetary incentives
are provided in the form of money.money. Salary, bonus, profit
sharing plan, & so on, are common monetary incentives.
incentives. Non-
Non-
monetary incentives are in the form of rewards, recognition,
designation, perquisites, & so on.
on.
 5. Development System.
@ Management development is considered to be a
³process of gradual, systematic improvement in the
knowledge, skills, attitudes, & performance of those
individuals in an organisation who carry management
responsibilities´.. The strategic aim of a development
responsibilities´
system is to see that the new experience is provided in
the light of strategic tasks required for the
implementation of strategy.
strategy. The development system
has to be activated in such a manner that it prepares the
managers to perform a vital function in strategy
implementation..
implementation
 6. Planning System.
@ In an organisation, the function of formulation of strategy is a staff function
while the implementation of strategy is a line function.
function. Both these views
prevails & affects organisational policies related to the role of the planning
system..
system
@ Strategists are concerned with the mechanism of the planning system & the
way it should be changed to suit the requirements of a new or modified
strategy.. It would be natural to expect that the planning system would work
strategy
better in a centralised manner in entrepreneurial & functional structured
organisations.. In divisional organisation, the planning system could be a
organisations
decentralised one with the active involvement of SBU-SBU-level managers in the
formulation as well as implementation of strategy.
strategy. Thus, it is important to adapt
the planning system to the requirements of the strategy that is to be
implemented..
implemented
 Conclusion.
@ In this way, we can say that, Organisational system like
information, control, appraisal, motivation, development, &
planning form the core of any structure.
structure. Each of these systems
plays a significant role in strategy implementation.
implementation. There
design has to come from a consideration of the requirement of
the strategy being implemented.
implemented. In implementation, these
systems have to be changed to suit the requirements of a new
or modified strategy.
strategy.
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± Increases strategic and operational ± Increased costs incurred through
control, permitting corporate-level duplication of personnel,
executives to address strategic operations, and investment
issues ± Dysfunctional competition
± uick response to environmental among divisions may detract
changes from overall corporate
± Increased focus on products and performance
markets ± Difficulty in maintaining
± Minimizes problems associated uniform corporate image
with sharing resources across ± Overemphasis on short-term
functional areas performance
±
acilitates development of general
managers
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