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Organizations and
Organization Theory
What is an Organization?
b Definition:
1. Social entity
2. Goal directed
3. Designed as deliberately structured and
coordinated activity systems
4. Linked to the external environment
1
What is an Organization?
b Importance of Organizations
• Bring together resources to achieve desired
goals and outcomes
• Produce goods and services efficiently
• Facilitate innovation
• Use modern manufacturing and computer-
based technology
2
An Open System
and Its Subsystems
Environment
Production,
Boundary Boundary
Subsystems Spanning
Maintenance,
Spanning
Adaptation,
Management
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.
3
Organization Chart Illustrating the Hierarchy of Authority
for a Community Job Training Program
Board of
Directors
Advisory Executive
Committee Committee
Level 1 Executive
Director
Records
Level 5 Clerk
Secretary Secretary Adm. Asst Payroll Clerk Secretary MIS Specialist Staff Clerk Adm. Asst.
Goals and
Strategy
Environment Size
Culture Technology
Structure
1. Formalization
2. Specialization
3. Hierarchy of Authority
4. Centralization
5. Professionalism
6. Personnel Ratios
4
Characteristics of three
Organizations
11 00 00
FF oo rr m
m aa ll ii zz aa tt ii oo nn
SSppeecciiaalliizzaattiioonn
55 00
CCeennttrraalliizzaattiioonn
CC oo nn ff ii gg uu rr aa tt ii oo nn
(( %
% nn oo nn w w oo rr kk ff ll oo ww 00
ppeerrssoonnnneell)) WW .. LL .. GG oo rr ee && W
W aa ll -- M
M aa rr tt SSttaattee AArrttss
AA ss ss oo cc ii aa tt ee ss AA gg ee nn cc yy
TECHNOLOGY Manufacturing Retailing Government
Service
SIZE (#employees) 4,200 200,000 35
Vertical Horizontal
Structure Structure
Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change(Boston, Mass.: Harvard Business School)