Organizational theoryLecture 3- Chap 4

The Innovative firm Not many innovations in the modern age

Optimization instead of innovation
Optimization=looting a firms success
Innovating firms- transforming its marketing and technological environments.
Alfred Marshall- Author of Principles of Economics
There is a limit to growth.
Major environment forces:
The need for information and
The need for resources.
Task environment.
Includes sectors with which the organization interacts directly and that have a direct
impact on the organizations ability to achieve its goals. This environment consists
of raw material, human resources, international sectors etc
General Environment
Those environments that may not have a direct impact on the organizations daily
activities. This includes, govt sectors-EU, technology sector.
Environmental uncertainty
Simple complex dimension- the number of external environmental factors
relevant to the organization and that might affect the organization. The more
factors the more complex the environment. It gets harder to survive in the market.
Stable-unstable dimension- deals with whether the organizations domain is
dynamic or not. A stable domain wont have many changes over a period of time.
Reverse- not so stable.
Organizations response to uncertainty
1. Positions and departments
2. Buffering and boundary spanning
3. Differentiation and integration
Departments increase internal complexity. They are made to adapt to various
changes/uncertainties
Differentiation- various departments find their own ways to cope with
uncertainties in the external environment and they eventually formulate unique
methods and gets better at it. That department therefore gains expertise in

levels/aspects the other departments arent familiar with, hence, differentiating

themselves.
Integration- integrating various departments together. Bringing their talents/skills
together to achieve organizational goals.
Characteristics of different departments

Passion driven business- a passion to

Grantmanship
Mechanistic vs organic
Burns & stalker- As the external environment gets more dynamic the organizations
environment (Internal) should be more flexible- less mechanistic and more organic.
Stopped at slide 24