Or Agn is a Ti Om
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1 Chapter One Chapter One Organizations and Organizations and Organization Theory Organization Theory
Transcript of Or Agn is a Ti Om
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Chapter OneChapter One
Organizations andOrganizations and
Organization TheoryOrganization Theory
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Organization Theory in ActionOrganization Theory in Action
TopicsTopics
Current ChallengesCurrent Challenges– GlobalizationGlobalization– Ethics and Social Responsibility Ethics and Social Responsibility – Speed of ResponsivenessSpeed of Responsiveness– The Digital WorkplaceThe Digital Workplace– DiversityDiversity
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What is an Organization?What is an Organization?
DefinitionDefinitionTypes of OrganizationsTypes of OrganizationsImportance of OrganizationsImportance of Organizations– Bring together resources to achieve desired Bring together resources to achieve desired
goals and outcomesgoals and outcomes– Produce goods and services efficientlyProduce goods and services efficiently– Facilitate innovationFacilitate innovation– Use modern manufacturing and information Use modern manufacturing and information
technologiestechnologies
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Importance of OrganizationsImportance of Organizations
Importance of Organizations (cont’d)Importance of Organizations (cont’d)– Adapt to and influence a changing Adapt to and influence a changing
environmentenvironment– Create value for owners, customers and Create value for owners, customers and
employeesemployees– Accommodate ongoing challenges of Accommodate ongoing challenges of
diversity, ethics, and the motivation and diversity, ethics, and the motivation and coordination of employeescoordination of employees
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Perspectives on OrganizationsPerspectives on Organizations
Open SystemsOpen SystemsOrganizational ConfigurationOrganizational Configuration– Technical CoreTechnical Core– Technical SupportTechnical Support– Administrative SupportAdministrative Support– Top ManagementTop Management– Middle ManagementMiddle Management
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Transformation
Process
An Open SystemAn Open System and Its Subsystems and Its Subsystems
Environment
Raw MaterialsPeopleInformation resourcesFinancial resources
Input
SubsystemsBoundarySpanning
Production,Maintenance,Adaptation, Management
BoundarySpanning
Products andServices
Output
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Dimensions of Organization DesignDimensions of Organization Design
Structural DimensionsStructural Dimensions
Contextual DimensionsContextual Dimensions
Performance and Effectiveness OutcomesPerformance and Effectiveness Outcomes
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Five Basic Parts of an Five Basic Parts of an OrganizationOrganization
TopManagement
TechnicalSupport
Technical Core
AdministrativeSupport
MiddleManagement
Source: Based on Henry Mintzberg, The Structuring of Organizations (Englewood Cliffs, N. J.: Prentice-Hall, 1979) 215-297; and Henry Mintzberg, “Organization Design: Fashion or Fit?” Harvard Business Review 59 (Jan. – Feb. 1981): 103-116.
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Organization Chart Illustrating the Hierarchy of Authorityfor a Community Job Training Program
Board of Directors
Assistant Executive Directorfor Human Services
ExecutiveCommittee
ExecutiveDirector
AdvisoryCommittee
DirectorEconomic Dev.
Assistant Executive Directorfor Community Service
DirectorReg. Planning
DirectorHousing
DirectorCriminal Justice
DirectorFinance
DirectorAAA
DirectorCETA
Secretary
LeadCounsel
LeadCounsel
Asst. DirectorFinance
RecordsClerk Secretary Adm. Asst Payroll Clerk Secretary MIS Specialist Staff Clerk Adm. Asst.
AlcoholCoord.
PublicInfo
Coord.
Account.
ContractFiscal
Manager
CETACouns.Devs.
Title II D&VI&VII
CETAPlanner
HousingCoord.
CETACouns.Devs.
Title IIABC
CETAIntake
&Orient
CETACouns.Devs.Youth
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ProgramSpec.AAA
ProgramPlannerAAA
Level 1
Level 2
Level 3
Level 4
Level 5
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Goals and Strategy
Environment Size
Culture TechnologyStructure
1. Formalization2. Specialization3. Hierarchy of Authority4. Centralization5. Professionalism6. Personnel Ratios
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Characteristics of Three Characteristics of Three OrganizationsOrganizations
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50
100
W.L. Gore &Associates
Wal-Mart State ArtsAgency
Formalization
Specialization
Centralization
Configuration(%nonworkflowpersonnel)
TECHNOLOGY Manufacturing Retailing Government Service
SIZE (#employees) 6,000 250,000 35
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The Evolution of Organization The Evolution of Organization Theory and DesignTheory and Design
Historical PerspectivesHistorical Perspectives
Contemporary Organization DesignContemporary Organization Design
Effective Performance versus the Learning Effective Performance versus the Learning OrganizationOrganization
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Two Organization Design Two Organization Design ApproachesApproaches
VerticalStructure
RoutineTasks
RigidCulture
CompetitiveStrategy
FormalSystems
HorizontalStructure
AdaptiveCulture
EmpoweredRoles
CollaborativeStrategy
SharedInformation
Organizational Changein the Service of
Performance
Mechanical System Design
Natural System Design
Stable EnvironmentEfficient Performance
Turbulent EnvironmentLearning Organization
Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass.: Harvard Business School)
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Organizational DimensionsOrganizational Dimensions
High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization
High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization
Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy
Product Technology 1 - 4 5 - 6 7 - 10 Service Technology
Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment
Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture
High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism
Well-Defined Goals 1 - 4 5 - 6 7 - 10 Poorly-Defined Goals
Small Size 1 - 4 5 - 6 7 - 10 Large Size
Modern 1 - 4 5 - 6 7 - 10 Postmodern
WorkbookActivity
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XeroxXerox
High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization
High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization
Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy
Product Technology 1 - 4 5 - 6 7 - 10 Service Technology
Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment
Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture
High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism
Well-Defined Goals 1 - 4 5 - 6 7 - 10 Goals Not Defined
Small Size 1 - 4 5 - 6 7 - 10 Large Size
Modern 1 - 4 5 - 6 7 - 10 Postmodern
Use for 1959-1990, Use for 1990-present
Workbook
Activity
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SS Technologies (A & D)SS Technologies (A & D)
Incorporated in 1992 (Canada)Incorporated in 1992 (Canada)
$6.3 Million Revenue in 1993$6.3 Million Revenue in 1993
Integrated engineering and construction Integrated engineering and construction companycompany
Expertise in factory automationExpertise in factory automation
Software and hardwareSoftware and hardware
33% per year growth over last three years33% per year growth over last three years
PG – 64%, ISG – 30%PG – 64%, ISG – 30%
Anticipating further growth (30 to 120 Anticipating further growth (30 to 120 employees)employees)
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SS Tech. Org. ChartSS Tech. Org. Chart
M a rke tingIa n S u ttie
T e ch n ica l
P ro du c t G ro up
S ys te m s A n a lystM a rk S ch w a rtz
P ro je ct M an a g erV iv ien n e O ja lla
In teg ra te d S ys te m sG ro up
P re sid e n tK e ith P ritch a rd
O w n erR ick B ro ck
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ContextContext
How well is SST structured to achieve future How well is SST structured to achieve future goals?goals?
Consultant HiredConsultant Hired
Appropriate Organizational DesignAppropriate Organizational Design
Culture, people, layers of mgt., admin. SystemsCulture, people, layers of mgt., admin. Systems
Are marketing opportunities being missed?Are marketing opportunities being missed?
Employee compensationEmployee compensation
Formalized measurement system directly tied to Formalized measurement system directly tied to strategies of firmstrategies of firm
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Products GroupProducts Group
Direct Link Interface Direct Link Interface CardsCards
PLCsPLCs
Links office Links office computers with computers with factory computersfactory computers
Enhances Enhances communication and communication and controlcontrol
PICS (Programmable PICS (Programmable Industrial Control Industrial Control Simulator)Simulator)
To simulate factory To simulate factory environment on a PCenvironment on a PC
Examine functioning Examine functioning of PLC softwareof PLC software
Debugging, retooling, Debugging, retooling, employee trainingemployee training
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Integrated Systems GroupIntegrated Systems Group
Consulting, Systems engineering, Customer Consulting, Systems engineering, Customer SupportSupportEmployed Computer professionals and engineers Employed Computer professionals and engineers – for complex factory floor systems– for complex factory floor systemsData collection, custom control, batching Data collection, custom control, batching systems, diagnostic systems, PLC simulationsystems, diagnostic systems, PLC simulationImplemented and commissioned packaged Implemented and commissioned packaged softwaresoftwareProvides Project ManagementProvides Project ManagementCustomers: Industrial manufacturers, institutional Customers: Industrial manufacturers, institutional organisationsorganisations
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Key Success FactorsKey Success Factors
PGPG
Quality product Quality product performanceperformance
Quick replacement of Quick replacement of defectivesdefectives
Pace of New Product Pace of New Product DevelopmentDevelopment
Product awareness – Product awareness – systems integration systems integration engrs.engrs.
Effective/efficient Effective/efficient distribution networkdistribution network
ISGISG
On-time project On-time project completioncompletion
Within budget, high Within budget, high qualityquality
Quality of employeesQuality of employees
Excellent customer Excellent customer feedbackfeedback
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EnvironmentEnvironment
Early 1990s Recession in North AmericaEarly 1990s Recession in North America
Maintaining margins by downsizing, Maintaining margins by downsizing, reducing costsreducing costs
Outsourcing engineering systemsOutsourcing engineering systems
SST’s products helped firms meet these SST’s products helped firms meet these objectivesobjectives
SST benefited from recession (partly)SST benefited from recession (partly)
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SST Revenues
1990 1991 1992 1993 19940
2000000
4000000
6000000
8000000
10000000
1 2 3 4 5
Year
Reve
nues
Year
PG
ISG
Total
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SST’s Org. StructureSST’s Org. StructureFlat organisational structure – to respond quickly Flat organisational structure – to respond quickly to environmental changeto environmental change
Doors left open (Open door policy)Doors left open (Open door policy)
Consultative decision makingConsultative decision making
Empowerment – ‘ownership’ of decisionsEmpowerment – ‘ownership’ of decisions
Projects – individuals and teams (self-managed)Projects – individuals and teams (self-managed)
Project scheduling, budgeting, execution up to Project scheduling, budgeting, execution up to team membersteam members
Minimum overhead resources (mktg & admin)Minimum overhead resources (mktg & admin)
4 mktg people, 2 admin, shared controller4 mktg people, 2 admin, shared controller
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MarketingIan Suttie
Technical
Product Group
Systems Analyst
Mark Schwartz
Project Manager
Vivienne Ojalla
Integrated SystemsGroup
PresidentKeith Pritchard
OwnerRick Brock
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Rick BrockRick Brock
CEO of SSTCEO of SST
Eight yrs as President of Sutherland-Eight yrs as President of Sutherland-SchultzSchultz
Nurtured PG and ISGNurtured PG and ISG
Continued involvementContinued involvement
Extensive Knowledge of Bus. & Mgt.Extensive Knowledge of Bus. & Mgt.
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MarketingIan Suttie
Technical
Product Group
Systems Analyst
Mark Schwartz
Project Manager
Vivienne Ojalla
Integrated SystemsGroup
PresidentKeith Pritchard
OwnerRick Brock
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Keith PritchardKeith Pritchard
President of SSTPresident of SST
Risen through the company ranksRisen through the company ranks
Developed PICS product ($500K in Developed PICS product ($500K in revenues)revenues)
Skills in mgt. and technical areas – Skills in mgt. and technical areas – excellent leadershipexcellent leadership
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MarketingIan Suttie
Technical
Product Group
Systems Analyst
Mark Schwartz
Project Manager
Vivienne Ojalla
Integrated SystemsGroup
PresidentKeith Pritchard
OwnerRick Brock
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PG ResourcesPG Resources
Linda Oliver – Lead Programmer for PICSLinda Oliver – Lead Programmer for PICS
Bruce Andrews – Development PICSBruce Andrews – Development PICS
Lorne Diebel – Communications GuruLorne Diebel – Communications Guru
Jonathan Malton – Hardware designerJonathan Malton – Hardware designer– Highly motivated, highly competent, leaders in Highly motivated, highly competent, leaders in
their respective fields, worked well togethertheir respective fields, worked well together
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MarketingIan Suttie
Technical
Product Group
Systems Analyst
Mark Schwartz
Project Manager
Vivienne Ojalla
Integrated SystemsGroup
PresidentKeith Pritchard
OwnerRick Brock
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Marketing TeamMarketing Team
Well rounded, both marketing and Well rounded, both marketing and technical people, stretched to the limittechnical people, stretched to the limitIan Suttie – design, review, mktg., Ian Suttie – design, review, mktg., distbndistbn., ., and salesand salesColleen Richmond – trade shows, Colleen Richmond – trade shows, promotions, advertisingpromotions, advertisingSteve Blakely – Inside SalesSteve Blakely – Inside SalesColleen Dietrich – AnalystColleen Dietrich – AnalystNo formal audit of customer satisfactionNo formal audit of customer satisfaction
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MarketingIan Suttie
Technical
Product Group
Systems Analyst
Mark Schwartz
Project Manager
Vivienne Ojalla
Integrated SystemsGroup
PresidentKeith Pritchard
OwnerRick Brock
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ISG ResourcesISG ResourcesTechnically competent, motivated, loyalTechnically competent, motivated, loyal
Mark Schwarz – Systems Analyst, did Mark Schwarz – Systems Analyst, did most of the marketing, business most of the marketing, business development, scheduling personneldevelopment, scheduling personnel
Vivienne Ojala – Project Manager, Vivienne Ojala – Project Manager, excellent with customers, training and excellent with customers, training and developing people, developing people,
(Who’s the boss?)(Who’s the boss?)
Wide area of expertise – TeamWide area of expertise – Team
Flexible and innovativeFlexible and innovative
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Challenges for futureChallenges for future
Unclear goals and strategies – despite frequent Unclear goals and strategies – despite frequent meetings with Brockmeetings with Brock
Hierarchical structure – Suttie; Schwartz & OjallaHierarchical structure – Suttie; Schwartz & Ojalla
Physical spacePhysical space
Compensation – bonuses, performance Compensation – bonuses, performance measurement, low salary, stock optionsmeasurement, low salary, stock options
Partnering – for retentionPartnering – for retention
High commitment, loved work environment, no High commitment, loved work environment, no politics, flex. work hours, ‘overtime!!’politics, flex. work hours, ‘overtime!!’
Informal induction, Informal appraisalsInformal induction, Informal appraisals
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RecommendationsRecommendations
Third group – focused around customers – Third group – focused around customers – linking PG and ISGlinking PG and ISG
More consulting/service orientedMore consulting/service oriented
Increase awareness of products internally Increase awareness of products internally across groups – to generate better solutionsacross groups – to generate better solutions
FORMALISATION!!FORMALISATION!!
Clearer HierarchyClearer Hierarchy
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RecommendationsRecommendations
Enhance Role clarity – specialisationEnhance Role clarity – specialisation
Profit Sharing plans – depending on Profit Sharing plans – depending on individual, department, and organisational individual, department, and organisational objective accomplishmentobjective accomplishment
Stock OptionsStock Options
Foster continued commitment to culture – Foster continued commitment to culture – stories, rituals, symbols etc.stories, rituals, symbols etc.
