Organisation Theory

Introduction to Organisation
Theory

7 November 2022

© HÖGSKOLAN DALARNA | 2017-03-02

• Organisation Theory or Organisational Theory?

• The Boundaries of the Organisation

• Stakeholders
Theories about Organization
• What are organizations?
• Why are there organizations?
• What do orgnizations look like?
• How do organizations function?

Theories based in organization

• What is the optimal way to organize….
• Fayols hierarchies in business administration
 Or?

• Theories that Form Organisation

• Performative: ideals that form expectations
and practices
Division of labor
• Organizational Behaviour
• How people in organizations behave
• How people organize

• Organization Behaviour
• How do organizations behave
• How organizations organize
• Public sector, private sector (markets)
• Gareth Jones:
• Organizational theory. The study
of how organizations function and
how they affect and are affected
by the environment in which they
operate.
• Organization. A tool people use to
coordinate their actions to obtain
something they desire or value
Is a boat an organization? • Is traffic an organization?
Private organizations
• Legal limits/ Charters
• Accounting/Tax limits
• Owners

Public organizations
• Legal limits/ Charters
• Members/Political representatives
• Public Mission: Government/ non-government
The balance between Control and Uncertainty
• What can be controlled?
• What is outside of control?

• Karl Weick: ”Organizing”

• Dealing with Uncertainty in 3 looping stages
• ENACTMENT
• SELECTION
• RETAINMENT
• The organization is a consequence of this continuous process
”To Increase Specialization
and the Division of Labor”
• Knowledge-base
• Skills
• Resources
• Ricardian economics:
• Specialization
• Trade
”To Use Large-Scale
Technology”
• Economies of scale
• Large volumes of production
• Standardization
• Lower marginal costs
• Economies of scope
• Different tasks and products
• Better use of existing resources
• Potential of increased
flexibility
”To Exert Power and
Control”
Continuity and structure
• Allows coordination
• Lowers uncertainty
• Designates responsibility
• Legitimizes authority
• Makes possible long term
planning
Contrast: The Uncertainty of a
pure Market situation with day
work and reactive decisions
”To Economize on
Transaction Costs”
Costs that involve
agreements:
• Negotiations (ex ante)
• Governing (power and
control)
• Monitoring (ex post)
Contrast: Every action requires
market interaction.
”To Manage the • Bonus: ”Because
Organizational they’ve always been
Environment” there”
• Competitive Intelligence • We are thrown into our
existences
• Monitoring the External
Environment • It’s part of our society
and culture(s)
• Spot emerging trends and
changes • We expect the order of
the organization
• Is it possible to stand • Must organization have
outside organizations? the organiser(s) and the
• The workplace organised?
• The Education institute • Hierarchies
• Foodstore membership • Contracts
• Sports team • Laws
• The family • Duty (tax, military service)
• The economy
• The political system
• The planetary system (air, water,
climate, magnetic pull)
What kind of Value?
Financial (2019)
• Profit:
• Skistar 287 million SEK
• Scandic Hotels Group loss 1,3 billion SEK
• Tesla loss $862 million

• Market Value (Skistar 8.2 billion SEK, Scandic

5.7 billion SEK Tesla $389 billion
•Shareholders (owners)
• Stock market
• Private owned

•Stakeholders
• Anyone who ’holds a stake’
• Inside:
• Shareholders • Competing Goals?
• Managers
• Workforce

• Outside: • Allocating rewards?

• Customers
• Suppliers
• Government
• Trade Unions
• Community
• General Public
• The global ecology?
 Low Level of attention High

Low
A B
Minimal effort Keep informed

Power C D
Keep satisfied Key players

High
• 15 minute break.

• Please ask questions in

the chat.
• Lectures
• 11 including today
• Most of the time related to a chapter in the course
book

• Group work
• Questions from text book
• 1 workshop
• 1 seminar on campus
• Group log on Learn
• Two types of online exams (combined)
• Online multiple choice
• ’Home’ exam

• 1 seminar online
• Individual based on home exam