Chapter One

Organizations and Organization Theory

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Organization Theory in Action

Topics Current Challenges

Global Competition Ethics and and Social Responsibility Speed of Responsiveness The Digital Workplace Diversity
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What is an Organization?

Definition Importance of Organizations

Bring together resources to achieve desired goals and outcomes Produce goods and services efficiently Facilitate innovation Use modern manufacturing and information technologies
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Importance of Organizations

Importance of Organizations (contd)

Adapt to and influence a changing environment Create value for owners, customers and employees Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees
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An Open System and Its Subsystems

Environment
Raw Materials People Information resources Financial resources
Transformation

Input
Process
Boundary Spanning

Output

Products and Services

Subsystems

Production, Maintenance, Adaptation, Management

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Boundary Spanning

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Five Basic Parts of an Organization

Top Management

Technical Support

Middle Management

Administrative Support

Technical Core
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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Goals and Strategy Environment Size

Culture
1. 2. 3. 4. 5. 6.

Structure Formalization Specialization Hierarchy of Authority Centralization Professionalism Personnel Ratios

Technology

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Organization Chart Illustrating the Hierarchy of Authority for a Community Job Training Program

Board of Directors Advisory Committee Executive Committee Executive Director Assistant Executive Director for Community Service Director
Economic Dev.

Level 1

Level 2

Assistant Executive Director for Human Services Director

Criminal Justice

Level 3

Director
Reg. Planning

Director
Housing

Director
Finance

Director
AAA

Director
CETA

Public Info Coord.

Asst. Director Finance

Lead Counsel CETA Couns. Devs. Title II ABC CETA Couns. Devs. Youth IV

Lead Counsel CETA Couns. Devs. Title II D CETA &VI&VII Planner

Level 4 Level 5

Housing Coord. Records Clerk

Alcohol Account. Coord.

Program Contract Spec. Fiscal AAA Manager

Program Planner AAA

CETA Intake & Orient

Secretary

Secretary

Adm. Asst

Payroll Clerk

Secretary

MIS Specialist

Staff Clerk

Adm. Asst.

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Characteristics of Three Organizations

Formalization 100 Specialization 50 Centralization

Configuration (%nonworkflow personnel)

W.L. Gore & Associates

Wal-Mart

State Arts Agency

TECHNOLOGY SIZE (#employees)

Manufacturing 6,000
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Retailing 250,000

Government Service 35
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Two Organization Design Approaches

Mechanical System Design
Vertical Structure

Natural System Design

Horizontal Structure

Routine Tasks

Rigid Culture

Organizational Change in the Service of Performance

Empowered Roles

Adaptive Culture

Formal Systems

Competitive Strategy

Shared Information

Collaborative Strategy

Stable Environment Efficient Performance

Turbulent Environment Learning 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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Workbook Activity

Organizational Dimensions
High Formalization High Specialization Tall Hierarchy Product Technology Stable Environment Strong Culture High Professionalism Well-Defined Goals Small Size Modern 1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 Low Formalization Low Specialization Flat Hierarchy Service Technology Unstable Environment Weak Culture Low Professionalism Poorly-Defined Goals Large Size Postmodern
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Workbook Activity

Xerox
Use for 1959-1990, Use
1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 1-4 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5-6

for 1990-present
7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 7 - 10 Low Formalization Low Specialization Flat Hierarchy Service Technology Unstable Environment Weak Culture Low Professionalism Goals Not Defined Large Size Postmodern
1-12

High Formalization High Specialization Tall Hierarchy Product Technology Stable Environment Strong Culture High Professionalism Well-Defined Goals Small Size Modern

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