2. Business Organization and Project Management
Co-author Frank Weber
2.1 Changes in Organizations
2.1.1 Organizational Theory
Companies aregoal-oriented andrelatively permanent socio-technical organizations (e.g. with communication structures, work processes), whichdifferentiate themselves into subtasks (e.g. functions, processes, hierarchies) andcoordinate them at the same time. A distinction must be made here
- Organizational structure as a formal structure that represent the system or subsystems, and
- Process organization as processes of task execution.
Organizational structures are changing very dynamically today, e.g. due a re-organization, temporary projects or agile organizational processes. In addition, every organization has informal structures and processes, e.g. through unconscious group dynamics or agreements among themselves, in order to do things more easily and quickly.
ExampleJethro’s Advice41
It happened on the next day, that Moses sat to judge the people, and the people stood around Moses from the morning to the evening. When Moses' father-in-law saw all that he did to the people, he said, ‘What is this thing that you do for the people? Why do you sit alone, and all the people stand around you from morning to evening?’ Moses said to his father-in-law, ‘Because the people come to me to inquire of God. When they have a matter, they come to me, and I judge between a man and his neighbor, and I make them know the statutes of God, and his laws.’ Moses' father-in-law said to him, ‘The thing that you do is not good. You will surely wear away, both you, and this people that is with you; for the thing is too heavy for you. You are not able to perform it yourself alone. Listen now to my voice. I will give you counsel, and God be with you. You represent the people before God, and bring the causes to God. You shall teach them the statutes and the laws, and shall show them the way in which they must walk, and the work that they must do. Moreover you shall provide out of all the people able men, such as fear God: men of truth, hating unjust gain; and place such over them, to be rulers of thousands, rulers of hundreds, rulers of fifties, and rulers of tens. Let them judge the people at all times. It shall be that every great matter they shall bring to you, but every small matter they shall judge themselves. So shall it be easier for you, and they shall share the load with you. If you will do this thing, and God commands you so, then you will be able to endure, and all of these people also will go to their place in peace.’ So, Moses listened to the voice of his father-in-law and did all that he had said. Moses chose able men out of all Israel, and made them heads over the people, rulers of thousands, rulers of hundreds, rulers of fifties, and rulers of tens. They judged the people at all times. They brought the hard causes to Moses, but every small matter they judged themselves.
Fig. 2.1: On the way to the Line Organization
Moses obviously behaved like an entrepreneur or a managing directors and often a department or a team manager or also project managers: They want to decide everything on their own. But, as organizations grow the decision-making processes also become more complex and lengthy. Theone-man management is overloaded with day-to-day operations and cannot concentrate on the important strategic tasks of corporate management. Jethro therefore gave Moses the still important advice to delegate (as we name it todaymanagement by delegation) and to introduce a hierarchical management structure.
Organizations are not only dependent on the objective corporate purpose (products, services), they are also shaped by the expectations and behavior of employees and other important stakeholders with direct influence, as well as the age and history of the organization (seechap. 1.1.2, theory ofCorporate Development).42
In addition, the industry and its markets influence the organizations and there are constitutional fr