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Introduction toorganizations and
organization theory
What is an organisation?
Social entities that are goal directed,designed as deliberately structured andco-ordinated activity systems and linked
to the external environment (Daft,2002).
ENVIRONMENT
ORGANIZATION
OTHER ORGANIZATIONS
PROCESSES
DECISIONMAKING
COMMUNICA-TION
POWER &POLITICS
CONFLICTMANAGEMENT
CULTURE
STRUCTURE
TECHNOLOGY
STRATEGY
EFFECTIVENESS
INTER-ORGANIZATIONALRELATIONSHIPS
ORGANIZATION DESIGN
CHANGE
OrganisationaldevelopmentOrganisationaltheoryMacrofocus
Personnel andIndustrialrelations
Organisationalbehaviour
Micro focus
AppliedTheoretical
DIFFERENT FACETS OF OB
Levels of analysis
Individual - Micro (ID) Personality, attitudes, values, perception,
motivation, stress Group Micro (IGP)
Group dynamics, teams, social influence,social loafing
Organisation Macro (OD) Structure, culture, lifecycle, strategy & goals,
environment
Assessing organisationaleffectiveness
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Effectiveness
Degree to which anorganization realizes itsgoals.
Efficiency
Amount of resources used toproduce a unit of output.
Traditional Effectiveness Approaches
Goal Approach System Resource Approach Internal Process Approach
Problems with Goal Approach
Multiple goals are set that conflict Whose goals receive priority? When should goals change? Individuals set goals not organizations;
process is political Goals are set and pursued through
complex processes of bargaining amongpowerful coalitions of individuals inorganizations
Four Models of Effectiveness Values
Human Relations Emphasis
Primary Goal: human resourcedevelopment
Subgoals: cohesion, morale, training
Internal Process Emphasis
Primary Goal: stability, equilibrium
Subgoals: information management,communication
Rational Goal Emphasis
Primary Goal: productivity, efficiency,profit
Subgoals: planning, goalsetting
Open Systems Emphasis
Primary Goal: growth,resource acquisition
Subgoals: flexibility, readiness,external evaluation
Flexibility
Control
Internal External
STRUCTURE
FOCUS
Adapted from Robert E. Quinn and John Rohrbaugh, A Spatial Model of Effectiveness Criteria: Toward a Competing ValuesApproach to Organizational Analysis, Management Science 29 (1983): 3 63-377; and Robert E. Quinn and Kim Cameron,Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence, Management Science 29(1983): 33-51.
ORGANIZATIONB
ORGANIZATION A
Effectiveness Valuesfor Two Organizations
Human RelationsEmphasis
Internal ProcessEmphasis
Rational GoalEmphasis
Open SystemsEmphasis
STRUCTURE
FOCUS
FLEXIBILITY
CONTROL
INTERNAL EXTERNAL
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Top Management Role in OrganizationDirection, Design, and Effectiveness
CEO, TopManagement
Team
External Environment
OpportunitiesThreats
UncertaintyResource Availability
Internal SituationStrengths
WeaknessesDistinctive Competence
Leadership StylePast Performance
Strategic Direction
OrganizationDesign
EffectivenessOutcomes
Definemission,officialgoals
Selectoperationalgoals,competitivestrategies
ResourcesEfficiencyGoal attainmentCompeting values
Structural Form learning vs.efficiency
Information andcontrol systems
Productiontechnology
Human resourcepolicies,incentives
Organizationalculture
Interorganizationallinkages
Source: Adapted from ArieY. Lewin and Carroll U. Stephens, Individual Properties of the CEO as Determinants of Organization Design,unpublished manuscript, Duke University, 1990; and Arie Y. Lewin and Carroll U. Stephens, CEO Attributes as Determinants ofOrganization Design: An integrated Model, Organization Studies 15, no. 2 (1994): 183-212
External environment
Organization
Specific EnvironmentIndustry-Competitors
SubstituteProducts
BargainingPower ofSuppliers
BargainingPower ofBuyers
PotentialEntrants
CurrentRivalry
GeneralEnvironment
Technological
Political-Legal
Sociocultural
Demographic
Economic
An Organizations External EnvironmentMonitoring, Forecasting and
Assessing The external environmental analysis process
should be conducted on a continuous basis.
Monitoring - Detecting meaning through ongoingobservations of environmental changes and trends
Forecasting- Developing projections of anticipatedoutcomes based on monitored changes and trends
Assessing - Determining the timing and importance ofenvironmental changes and trends for firms' strategiesand their management
Relationship Between EnvironmentalCharacteristics and Organizational
Actions
Environmentaldomain
(ten sectors)
Highcomplexity
Establishment of favorable linkages:ownership, strategic alliances, cooptations,
interlocking directorates, executive recruitment,advertising, and public relations
Organic structure and systems with lowformalization, decentralization,
and low standardization
Many departments and boundary rolesGreater differentiation and more
integrators for internal coordinationHighuncertainty
High rateof change
Scarcity of valued
resources
Resourcedependence Control of the environmental domain:
change of domain, political activity,regulation, trade associations, and
illegitimate activities
Environment Organization
Technology and organisations
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Differences Between Manufacturing andService Technologies
Manufacturing Technology1 . Tan gi ble p ro du ct2. Products can be inventoried for later
consumption3. Capital asset intensive4. Little direct customer interaction5. Human element may be less
important6 . Quali ty isdirectly measured7. Longer response time is acceptable8. Site of facility is moderately
important
Service Technology
1 . I nt an gi bl e p ro du ct2. Production and consumption takeplace simultaneously
3. Labor and knowledge intensive4. Customer interaction generally high5. Human element very important6. Quality isperceived and difficult to
measure7. Rapid response time is usually
necessary8. Site of facility is extremely important
Service: Airlines, Hotels,Consultants,
Healthcare, Law firms
Product and Service:Fast-food outlets, Cosmetics,
Real estate, Stockbrokers,Retail stores
Product:Soft drink companies,
Steel companies, Auto manufacturers,
Food processing plantsSources: BasedonF. F. Reichheldand W. E. Sasser, Jr.,ZeroDefections: QualityComes toServices, Harvard Business
Review 68 (September-October 1990):105-11; andDav id E.Bowen, CarenSiehl, andBenjamin Schneider, AFramework for AnalyzingCustomer Service Orientations inManufacturing,
Academy of Management Review 14 (1989):75-95.
Design forJoint Optimization
Work roles, tasks, workflow
Goals and values
Skills and abilities
Design forJoint Optimization
Work roles, tasks, workflow
Goals and values
Skills and abilities
Sociotechnical Systems Model
The Social SystemIndividual and teambehaviors
Organizational/teamculture
Management practices
Leadership style
Degree of communicationand openness
Individual needs anddesires
The Social SystemIndividual and teambehaviors
Organizational/teamculture
Management practices
Leadership style
Degree of communicationand openness
Individual needs anddesires
The Technical SystemType of productiontechnology (small batch,mass production, FMS, etc.)
Level of interdependence(pooled, sequential,reciprocal)
Physical work setting
Complexity of productionprocess (variety andanalyzability)
Nature of raw materials
Time pressure
The Technical SystemType of productiontechnology (small batch,
mass production, FMS, etc.)
Level of interdependence(pooled, sequential,reciprocal)
Physical work setting
Complexity of productionprocess (variety andanalyzability)
Nature of raw materials
Time pressureSources: Based onT. Cummings, Self-RegulatingWork Groups: A Socio-TechnicalSynthesis, Academy ofManagement Review 3 (1978): 625-34; DonHellriegel,JohnW.Slocum, and Richard W. Woodman, Organizational Behavior , 8 th ed.(Cincinnati,Ohio:South-WesternCollege Publishing, 1998),492; and GregoryB. Northcraftand MargaretA. Neale, Organizational Behavior: A ManagementChallenge, 2nd ed. (Fort Worth, Tex.:The DrydenPress, 1994), 551.
FIGURE 9.3
TechnicalComplexity andOrganizationalStructure
Technical Complexity
StructuralCharacteristics
Levels in the hierarchy
Span of control of CEO
Span of control of first-line supervisor
Ratio of managers tononmanagers
Approximate shape of organization
Type of structur e
Cost of operation
Small-BatchTechnology
Mass ProductionTechnology
Continuous-ProcessTechnology
Low High
Organic Mechanistic Organic
High Medium Low
Relatively flat, withnarrow span of control
Relatively tall, withwide span of control
Verytall, with verynarrow span of control
3 4 6
4 7 10
23 48 15
1 to 23 1 to 16 1 to 8
Insert Figure 16.5 here
Organizational Theory
Routine and Non-routine Tasks and Organizational Design
Structural characteristic Nature of technology
Routine tasks Non-routine tasks
Standardization High Low
Mutual adjustment Low High
Specialization Individual Joint
Formalization High Low
Hierarchy of authority Tall Flat
Decision-making authority Centralized Decentralized
Overall structure Mechanistic Organic
Organizational Theory
Thompson identified three types of technology:
Mediating Long-linked Intensive
Each is associated with a different form oftask interdependence.
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NEW CHOICES
T R A D I T I O N A L
C H O I C E S
MassProduction
Small batch FlexibleManufacturingMass
Customization
ContinuousProcess
Relationship of Flexible Manufacturing Technologyto Traditional Technologies
BATCH SIZESmall Unlimited
Customized
Standardized
P R O D U C T F L E X I B I L I T Y
Source: Basedon Jack Meredith, The Strategic Advantages ofNewManufacturing Technologies For Small Firms. Strategic Management
Journal 8 (1987): 249-58;PaulAdler, ManagingFlexibleAutomation,California Management Review (Spring 1988):34-56;andOtis Port, Custom-made Direct from the Plant.
Business Week/21 st Century Capitalism, 18 November 1994, 158-59.
Decision making
Steps in the Rational Approach toDecision-Making
Monitor Decision
Environment
ImplementChosen
Alternative
DefineDecisionProblem
SpecifyDecision
Objectives
DiagnoseProblem
Develop
AlternativeSolutions
EvaluateAlternatives
ChooseBest
Alternative1
2
345
6
78
Choice Processes in theCarnegie Model
Hold joint discussionand interpret goalsand problems
Share opinions
Establish problempriorities
Obtain social supportfor problem, solution
Adopt the firstalternativethat is acceptableto the coalition
Conduct a simple,local search
Use establishedprocedures if appropriate
Create a solutionif needed
Managers havediverse goals,opinions, values,experience
Information islimitedManagers havemany constraints
Uncertainty Coalition Formation Search
Satisficing
Conflict
The Incremental DecisionProcess Model
Identification Phase Recognition Diagnosis
Development Phase Search Screen Design
Selection Phase Judgment (evaluation choice) Analysis (evaluation) Bargaining (evaluation choice) AuthorizationDynamic Factors (decision interrupts)
Garbage can model
1. Solutions may be proposed even whenproblems do not exist.
2. Managers create problems to the solutions thathave already been created.
3. Choices are made without solving problems.4. Problems may persist without being solved5. A few problems are solved6. Different coalitions may champion different
alternatives.
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Conflict, power and politics
Vertical Sources of Power
Formal Position
Resources
Control of Decision Premises and Information
Network Centrality
What is power?
Position power. Derives from organizational sources. Types of position power.
Reward power. Coercive power. Legitimate power. Process power. Information power.
Representative power.
Power and Political Tactics inOrganizations
5. Create superordinategoals
5. Make preferencesexplicit, but keep powerimplicit
4. Practice memberrotation
4. Enhance legitimacy andexpertise
4. Satisfy strategiccontingencies
3. Schedule inter-groupconsultation
3. Control decision premises3. Provide resources
2. Use confrontation andnegotiation
2. Expand networks2. Create dependencies
1. Create integrationdevices
1. Build coalitions1. Enter areas of highuncertainty
Tactics for EnhancingCollaborationPolitical Tactics for Using
Power
Tactics for Increasingthe Power Base
Strategic Contingencies That InfluenceHorizontal Power Among Departments
Dependency
Financial Resources
Centrality
Nonsubstitutability
Coping with Uncertainty
Department Power
Organisational communication
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Forms of communication
Verbal Written Spoken
Non-verbal Kinesics (body language, facial cues, eye
movements, hand movements) Vocal cues (inflections, laughter, pauses, volume) Proxemics (private zone, public zone, territoriality) Haptics (touch) Physical appearance Aesthetics (colour, lighting)
Forms of communication Aural
Hearing Listening
Direction of communication
Formal Upward DownwardSerial
Horizontal
Informal (grapevine/gossip/rumour)
SELECTION OF COMMUNICATION CHANNEL
Type of message
Routine/ Non-routine
Clear/ Ambiguous
Richness
Volume
History/ importance
Face to face talk
Telephone
Electronic mail
Memos, letters
Bulletins, general reports
Organisational structure Insert Figure 15.4 here
Note: only include part A
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Insert Figure 15.4 here
Note: only include part B
Insert Figure 15.4 here
Note: only include part C
Insert Figure 15.5 here
Hierarchy of Authority -
the degree of vertical
differentiationacross
levels ofmanagement
Specialization -the degree to
which jobs arenarrowly
defined anddepend on
uniqueexpertise
BasicDesign
Dimensions
Formalization - the degreeto which the organization
has official rules,regulations, and procedures
Standardization - thedegree to which work
activities are accomplishedin a routine fashion
Complexity - the degree towhich many different types
of activities occur in theorganization
Centralization - the degreeto which decisions aremade at the top of the
organization
Adhocracy - aselectively
decentralizedform of
organization thatemphasizes thesupport staff &
mutual adjustmentamong people
Simple Structure - acentralized form of organization that
emphasizes the upper echelon & directsupervision
Machine Bureaucracy -a moderately
decentralized form of organization that
emphasizes thetechnical staff &standardization of
work processes
Divisional Form - amoderately decentralized
form of organizationthat emphasizes the
middle level &standardization of outputs
ProfessionalBureaucracy -a decentralized
form of organization thatemphasizes theoperating level
& standardizationof skills
StructuralConfigurations
of Organizations
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