ABDM4044 PEOPLE & ORGANISATION TUTORIAL 2 ANSWER June 4, 2010

Question 1
According to Kreitner & Kinicki 2010, Open systems refer to systems that interact with
other systems or the outside environment, whereas closed systems refer to systems having
relatively little interaction with other systems or the outside environment. For example, an
organization consumes raw materials in the production of products and emits finished goods
and pollution into the environment.

The open-system perspective views an organization as an entity that takes inputs

from the environment, transforms them, and releases them as outputs. It’s have unlimited
resources since this system interact with the environment, it can get all the resources it’s
want from the environment outside the organization. Besides that, an open system is able to
recover faster after impact.

But, an open system is easily affected by the environment. Open system is closely
interact with the outside environment, such as competitors, suppliers, distributors, and
governmental regulators. Every single action from the environment will also affect the
organization.

However, closed systems refer to systems having relatively little interaction with other
systems or the outside environment. For example, a watch is an example of a closed system
in that it is a relatively self-contained, self-maintaining unit that has little interacts or
exchange with its environment.

A closed-system perspective views organizations as relatively independent of

environmental influences. Since the closed system is self-reliant, hence it will not be affected
by the environment. But, it’s have limited resource to use and it take longer time to recover
after impact.

There is no completely closed/ open system; the difference between closed-systems

and open-systems is their degree of openness varies.

Question 2
According to Kreitner & Kinicki 2010, there are 4 ways to assess organizational
effectiveness:

Goal accomplishment – it is the most widely effectiveness criterion for organizations. Key
organizational results or output are compared with previously stated goals or objective.

Resource acquisition – this is the second criterion related to inputs rather than output. An
organization is deemed effected in this regard if it acquires necessary factors of production
such as raw materials, labor, capital, and managerial and technical expertise.

Internal process – it also refer as the “healthy system” approach. An organization is said to
be a healthy system if information flows smoothly and if employee loyalty, commitment, job
satisfaction, and trust prevail. Goals may be set for any of these internal processes.

Strategic constituencies satisfaction – organizations both depend on people and affect the
lives of people consequently, may consider the satisfaction of key interested parties to be an
important criterion of organizational effectiveness.

Contingency approach – using management tools and techniques in a situational appropriate

manner; avoiding the one-best-way mentality.
ABDM4044 PEOPLE & ORGANISATION TUTORIAL 2 ANSWER June 4, 2010

Question 3 (a)
According to Kreitner & Kinicki 2010, mechanistic model is generally synonymous
with the bureaucracy in that it has extensive departmentalization, high formalization, a limited
information network, where it is top to down/ horizontal only. There are no networks or
teams, and little participation by low-level member in decision making.

The mechanistic model works very well in the production sector, where employees
are needed to produce a certain unit daily. Another example of mechanistic model is military,
like army, navy and airforce, they obey the instruction without asking any question.

Organic model looks a lot like the boundaryless organization. It`s flat, user cross-
hierarchical and cross functional teams, has low formalization, possesses a comprehensive
information network, and involves high participation in decision making.

The organic model work best in the telecommunication and software industry.

Question 3 (b)
A flat organization is fewer levels of hierarchy and the span of control become wide.
The reason an organization getting flat is to lower the costs. A lesser hierarchical levels
organization will have lesser managers. Hence it can cut cost from remuneration for
managers. The saved costs can than used for motivational purpose, such as small token,
awards, or small bonuses.

Besides that, a flat organization also benefit from fast decision making and lesser
procedures involve. This not only saving the time and money for the organization, but make it
more flexible and efficient.

Question 3 (c)
For advantage from an employee`s perspective, matrix structures are flatter and more
responsive than other types of structures, because they permit more efficient exchange of
information. Because different people from different departments are cooperating so closely,
they are eager to share data that will help them achieve common goals.

In addition to speed and flexibility, matrix organization may result in a more efficient
use of resources than other organic structures. This occurs because high specialized
employees and equipment are shared by department.

Other benefits of matrix management include improved motivation and more adapt
managers. Improved motivation result from decision making within groups becoming more
democratic and participatory because each members brings specialized knowledge to the
table, and since employees have a direct impact on day-to-day decisions, they are more
likely to experience higher levels of motivation and commitment to the goals of the
departments to which they belong.

The major disadvantages of the matrix lie in the confusion it creates. Its propensity to
faster power struggles, and the stress it places on individuals. When dispense with unity-of-
command concept, ambiguity is significant increased, and ambiguity often leads to conflict.

Confusion and ambiguity also create the seeds of power struggles. For instance, a
functional manager may tell a subordinate one thing, and then a product/ project boss will tell
him/her something different.

Many workers becomes disturbed by the lack of a chain of command and a seeming
inability to perceive who is in charge.