Chapter One

Organizations and Organization Theory

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Organization Theory in Action

Topics Current Challenges

Global Competition Ethics 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 Production, Maintenance, Adaptation, Management
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Output

Products and Services

Subsystems

Boundary Spanning

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Five Basic Parts of an Organization

Top Management

Middle 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.

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Goals and Strategy Environment Size

Culture

Structure 1. Formalization 2. Specialization 3. Hierarchy of Authority 4. Centralization 5. Professionalism 6. Personnel Ratios

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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

Level 1
Level 2
Director
Economic Dev.

Assistant Executive Director for Community Service Director

Reg. Planning

Assistant Executive Director for Human Services Director

Criminal Justice

Level 3

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

Housing Coord.
Records Clerk

Alcohol Account. Coord.

Program Contract Spec. Fiscal AAA Manager

Program Planner AAA

CETA Intake & Orient

Level 5

Secretary

Secretary

Adm. Asst

Payroll Clerk

Secretary

MIS Specialist

Staff Clerk

Adm. Asst.

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Characteristics of Three Organizations

TECHNOLOGY SIZE (#employees)

Manufacturing 6,000

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

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Xerox
Use
Workbook Activity

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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