Chapter One Organizations and Organization Theory 1 Organization

Chapter One Organizations and Organization Theory 1

Organization Theory in Action Topics Current Challenges – Globalization – Ethics and Social Responsibility – Speed of Responsiveness – The Digital Workplace – Diversity 2

What is an Organization? Definition Types of Organizations 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 3

Importance of Organizations (cont’d) – 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 4

Perspectives on Organizations Open Systems Organizational Configuration – Technical Core – Technical Support – Administrative Support – Top Management – Middle Management 5

An Open System and Its Subsystems Environment Transformation Raw Materials People Information resources Financial resources Input Subsystems Boundary Spanning Output Products and Services Process Production, Maintenance, Adaptation, Management Boundary Spanning 6

Dimensions of Organization Design Structural Dimensions Contextual Dimensions Performance and Effectiveness Outcomes 7

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. 8

Organization Chart Illustrating the Hierarchy of Authority for a Community Job Training Program Board of Directors Advisory Committee Executive Committee Level 1 Executive Director Assistant Executive Director for Community Service Level 2 Level 3 Assistant Executive Director for Human Services Director Director Economic Dev. Reg. Planning Housing Criminal Justice Finance AAA CETA Public Info Coord. Level 4 Level 5 Secretary Housing Coord. Alcohol Account. Coord. Records Clerk Secretary Asst. Director Finance Program Contract Spec. Fiscal AAA Manager Adm. Asst Payroll Clerk Lead Counsel Program Planner AAA Secretary CETA Intake & Orient CETA Couns. Devs. Title II ABC CETA Couns. Devs. Youth IV MIS Specialist Lead Counsel CETA Couns. Devs. Title II D CETA &VI&VII Planner Staff Clerk Adm. Asst. 9

Environment Culture Goals and Strategy Size Structure 1. 2. 3. 4. 5. 6. Technology Formalization Specialization Hierarchy of Authority Centralization Professionalism Personnel Ratios 10

Characteristics of Three Organizations TECHNOLOGY SIZE (#employees) Manufacturing 6, 000 Retailing Government Service 250, 000 35 11

The Evolution of Organization Theory and Design Historical Perspectives Contemporary Organization Design Effective Performance versus the Learning Organization 12

Two Organization Design Approaches Natural System Design Mechanical System Design Vertical Structure Routine Tasks Formal Systems Horizontal Structure Rigid Culture Competitive Strategy Stable Environment Efficient Performance Organizational Change in the Service of Performance Empowered Roles Shared Information Adaptive Culture Collaborative Strategy Turbulent Environment Learning Organization Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass. : Harvard Business School) 13

Workbook Activity Organizational Dimensions High Formalization 1 -4 5 -6 7 - 10 Low Formalization High Specialization 1 -4 5 -6 7 - 10 Low Specialization Tall Hierarchy 1 -4 5 -6 7 - 10 Flat Hierarchy Product Technology 1 -4 5 -6 7 - 10 Service Technology Stable Environment 1 -4 5 -6 7 - 10 Unstable Environment Strong Culture 1 -4 5 -6 7 - 10 Weak Culture High Professionalism 1 -4 5 -6 7 - 10 Low Professionalism Well-Defined Goals 1 -4 5 -6 7 - 10 Poorly-Defined Goals Small Size 1 -4 5 -6 7 - 10 Large Size Modern 1 -4 5 -6 7 - 10 Postmodern 14

Xerox Workbook Activity Use for 1959 -1990, Use for 1990 -present High Formalization 1 -4 5 -6 7 - 10 Low Formalization High Specialization 1 -4 5 -6 7 - 10 Low Specialization Tall Hierarchy 1 -4 5 -6 7 - 10 Flat Hierarchy Product Technology 1 -4 5 -6 7 - 10 Service Technology Stable Environment 1 -4 5 -6 7 - 10 Unstable Environment Strong Culture 1 -4 5 -6 7 - 10 Weak Culture High Professionalism 1 -4 5 -6 7 - 10 Low Professionalism Well-Defined Goals 1 -4 5 -6 7 - 10 Goals Not Defined Small Size 1 -4 5 -6 7 - 10 Large Size Modern 1 -4 5 -6 7 - 10 Postmodern 15