INDUSTRIAL ORGANIZATION

I. Introduction

THE DEFINING INDUSTRIAL ORGANIZATION

Industrial organization is a specialty in economics that helps to explain

why markets are organized as they are and how their organization affects
the way these markets.
Thus, the study of industrial organization attracts those individuals
interested in the way in which industries are organized, what factors
influence a firm’s behavior, and how these factor affect society in general.
The focus of interest in the past, in the present and probably in the future
centers on national economic problem caused by different types of market
organization.
Industrial organization is intricately tied up with serious public policy
questions concerning the desirability of mergers between large firms, anti-
trust action again existing firms, the possibility of unlawful price fixing and
so on.

The study of industrial organization adds to the perfectly competitive model

real-world frictions such as:

• limited information
• transaction cost
• cost of adjusting prices
• government actions
• barriers to entry by new firms into a market.

It then considers how firms are organized and how they compete. Perhaps a
most appropriate term is the "Economics of Imperfect Competition".
There are two major approaches to the study of industrial organization:

• Primarily descriptive and provides an overview of industrial

organization.
• Price theory, uses microeconomic models to explain firm behavior and
market structure.

II. STRUCTURE, CONDUCT, PERFORMANCE

According to the structure-conduct-performance approach, an

industry's performance (the success of an industry in producing benefits for
the consumer) depends on the conduct of its firms, which then depends on
the structure (factors that determine the competitiveness of the market).
The structure of the industry then depends on basic conditions, such as
technology and demand for a product. For example: in an industry with
technology that the average cost of production falls as output increases, the
industry tends to have one firm, or possibly a small number of firms.

Components that make up the structure, conduct, and

performance model for industrial organization.

 Basic Conditions: Consumer Demand, Production, Elasticity of Demand,

Technology, Substitutes, Raw Materials, Seasonality, Unionization,
Rate of Growth, Product durability, Location, Lumpiness of orders,
Scale of economies, Method of purchase, Scope economies
 Structure: Number of Buyers and Sellers, Barriers to entry of new
firms, product differentiation, Vertical integration, Diversification
 Conduct: Advertising, Research and Development, Pricing behavior,
Plant Investment, Legal Tactics, Product choice, Collusion, Merger and
Contracts
 Performance: Price, Production Efficiency, Allocative Efficiency,
Equity, Product Quality, Technical Progress, Profits
 Government Policy: Regulation, Antitrust, Barriers to Entry, Taxes and
Subsidies, Investment Incentives, Employment Incentives,
Macroeconomic Policies.
 III. MARKET STRUCTURES
Market or industry structure refers to those attributes of the
market that influence the nature of the competitive process. Market
structure thus include size and size distribution of firms, barriers and
conditions of entry, and product differentiation, as well as firm cost
structure and the degree of government regulation.

Market structures is important because such structure determines

the behavior of firms, which then determines the quality of the
industry’s performance.

The common market structures studied in this field are the following:

 PERFECT COMPETITION

Industrial Organization, from the Fundamentals of Microeconomic

Principles

 Perfect Competition

 Monopoly

 Monopolistic Competition

 Oligopoly

1. PERFECT COMPETITION

Perfect competition is a type of market with the number of sellers and

buyers very much and the product sold is homogeneous. Prices are formed
through the market mechanism and the interaction between supply and
demand so that sellers and buyers in this market can not affect the price and
only serves as a recipient of the price (price-taker). Goods and services sold
in this market is homogeneous and can not be distinguished. All the products
look identical.

CHARACTERISTIC OF PERFECT COMPETITION

 • Large number of buyers and sellers.
• Product homogeneity.
• Free entry and exit.

Perfect dissemination Price Taker vs. Price Maker

• Price Taker – Buyers and sellers whose individual transactions are so
small that they do not affect market prices.Price Maker – Buyers and
sellers whose large transactions affect market prices of information.

2.MONOPOLISTIC COMPETITION

A.THE MEANING OF MONOPOLISTIC COMPETITION

Monopolistic market is one of the market where there are many

manufacturers that produce similar goods but have differences in some
aspects. Monopolistic market sellers are not unlimited, but each of the
product must have its own character that distinguishes it from other
products.
Examples include: shampoo, toothpaste, etc.. Though all the shampoo
the same function, namely to clean the hair, but every product produced a
different manufacturer has a special characteristic, such as differences in
aroma, color differences, packaging, and others.
In monopolistic markets, producers have the ability to influence
prices, although its influence was not as producers from monopoly or oligopoly
markets. This ability comes from the nature of the goods produced. Because
of the differences and characteristics of an item, consumers will not easily
switch to another brand, and still choose the brand manufacturers to raise
prices though. For example, the motorcycle market in Indonesia. Motorcycle
products are likely to be homogeneous, but each has their own special
characteristics. Call it Honda motorcycle, in which particular traits are fuel
efficient. While Yamaha has the advantage of a stable machine and rarely
broken.
As a result of each brand has a loyal customer of each.In monopolistic
competition, price is not a factor that could boost sales.
How the company's ability to create a good image in the minds of the
people, so that makes them want to buy these products despite the high price
will be very influential on the company's sales. Therefore, companies that are
in monopolistic markets should actively promote the product while keeping
the company's image.

B.CHARACTERISTIC OF MONOPOLISTIC COMPETITION

• Large number of buyers and sellers.

• Product heterogeneity.
• Free entry and exit.
• Perfect dissemination of information

3. OLIGOPOLY

Oligopoly market is a bidding market where one type of goods

controlled by several companies. Generally the number of the company more
than two but less than ten. In the oligopoly market, each company positioned
itself as part of the game tied with the market, where profits they earn
depends on the actions of their competitors. Thus all the promotional
efforts, advertising, new product introductions, price changes, etc.
undertaken with the aim to keep customers from their competitors.
Oligopoly is generally done as an effort to keep potential firms to enter the
market, and some companies do make an oligopoly as one attempt to enjoy a
normal profit below the maximum level by setting the selling price is limited,
resulting in price competition among principals doing business oligopoly
becomes nothing.

Oligopoly market structure is generally formed in the industries that

have high capital intensive, such as, cement industry, automobile industry, and
paper industries.
Characteristics of Oligopoly
1. Few sellers

2. Homogenous or unique product.

3. Barriers to entry and exit.

4. Imperfect dissemination

4.MONOPOLY
 Market monopoly (from Greek: monos, one + polein, selling) is a form of
market where there is only one seller who dominate the market. Determinant
of prices in this market is a seller or often referred to as "monopolists".
As a determinant of price (price-maker), a monopolist can raise or
reduce prices by determining the amount of goods to be produced;
the fewer goods produced, the more expensive price of the goods, and
vice versa. However, the seller also has some limitations in pricing. If the
pricing is too expensive, then people will postpone buying or trying to find or
create a substitute (substitute) products or-even worse-looking on the black
market (black market).

Characteristics of Monopoly
1. A single seller.

2. Unique product.

3. Blockaded entry and exit.

4. Imperfect dissemination of information

IV. THE ORGANIZATIONAL STRUCTURE

The organizational structure can be constructed based on specialization and
coordination system that results in the form of functional structure, or
divisional structure, or matrix structure, or network structure.
Differentiation itself can be horizontally or vertically.

Functional Structure = horizontal differentiation

The surplus, the people have the same competencies so that there is transfer
of knowledge for each become more developed. Other benefits, job
specifications more clearly so that it can be more effective in the process of
internal supervision.

This organizational structure is only suitable for:

- Small number of similar products - Production in one or a few locations

- One general type of customer

In the organization functions, there is usually a division of the main functions

(productions or operations) and support functions (marketing, finance, R & D,
etc)

Divisional Structure is functions are grouped

Structural functions are grouped by type of product (product structure),

location (geographic structure), or customer groups (market structure).
Based on its support function, product structure can be:

1. Product division structure

Main functions decentralization, but are supporting Centralized functions.

Changing the structure of the functional product divisional structure to
structure if the amount of product increases. Usually applied to food
manufacturers, furniture, personal care.

2. Multidivisional structure

If a product is more diversified and larger volume, so any support functions

necessary decentralization. This means that each division eventually evolved
to handle more functions. Generally known as the SBU (strategic business
units). Problems that arise are: coordination, communication, cost of "trading"
inter-divisional, Bureaucratic cost.
3. Product team structure

Specialist from the support functions are combined into product development
teams that specialize in the needs of a particular kind of product. Very useful
to integrate the work teams to increase effectiveness.
Centralization / decentralization is determined by the "degrees of freedom"
tactical decision-making operations in the function of each.

Matrix Structure = a type of organic structure

Employees have two bosses, responsible for horizontally and vertically.

The organizational structure should show a hierarchy of authority is

made to control its members. In this regard, apply theory X of the type of
leadership (direct supervision is important).

Authority means power in decision making, could be Centralized (the

authority to make important decisions is retained by managers at the top of
the hirerarchy) or Decentralized (the authority to make important decisions
about organizational resources and to initiate new projects is Delegated to
managers at all levels in the hirerarchy).

Manager is the person responsible for managing the coordination and

motivation. If the organization grew, it also increases the number of
members in the organization in terms of number and specialty, and also
increases levels of the hierarchy.

Problem with tall hierarchy

- Communication problems
- Motivation problems
- Bureaucratic costs (because managers cost money)
An organization with a flat structure will experience fewer communication,
motivation, and cost problems than will a tall organization.

Parkinson's the Law problem

"Work Expands so as to fill the time available."

The more levels of hierarchy, the more the manager that his main job is to
monitor and supervise the work of subordinate managers. For that, was made
the standardization of work activities.
Standardization reduces the need for managers and extra levels in the
hierarchy because rules and standard operating procedures for the direct
supervision subtitute.

The principles of bureaucracy (max weber)

1. A bureaucracy is founded on the concept of rational-legal authority. The

authority of a person based on his position, rather than personal factors.
2. Organizational roles are held on the basis of technical competence, not
because of social status, Kinship, or Heredity. An increase one's position in
the organizational hierarchy must be based on competence, not because of
"purchased" or corruption, etc..
3. A role's task responsibility and decison-making authority and its
relationship to other roles in the organization should be Clearly specified.
Coordination relationships must be clear to avoid role conflict and role
ambiguity.
4. The organization of roles in a bureaucracy is such that each lower office
in the hierarchy is under the control and supervision of a higher office.
5. Rules, standard operating procedures, and norms should be used tocontrol
the behavior and the relationships among roles in an organization.
V.ORGANIZATION DESIGN
Organization will be successful if its members work together
effectively and efficiently to achieve a common goal. Reminded again, the
organization also go through the "life cycle" that started from BORN, then
grown, and then decline, then DIE. The changes were influenced by external
factors that must be adapted (contingency theory). If the company does not
develop, the new design is needed. Organization design discuss how to divide
the work among people and departments. Hard choices must be faced in
determining the pattern of control and coordination.

The higher the level of someone in the organization, the greater the
responsibility for the more extensive control and coordination of work to be
done. Based on the theory of motivation, the leader of type X will do more
stringent controls.

If the organization grow, meaning more and more people are involved
and the organizational structure becomes more complicated.
Examples of operational Warteg (tegal stalls), one person plays several roles
at once as a waitress, cashier, sometimes also as a cook. This condition is
different from the restaurant division of pastures tougher task: Food is
served by a special officer, the payment is handled by the cashier, food
preparation by the chefs.

 BASIC DESIGN DIMENSIONS

• Formalization: Rules and procedures must be adhered together.
• Centralization: the decision-making method. Family firms are usually
strict in the implementation of centralization to maintain control.
• Specialization: Jobs narrowed.
• Standardization
• Complexity
• Hierarchy of authority

 STRUCTURAL CONFIGURATIONS OF
ORGANIZATIONS
 1. SIMPLE STRUCTURE: hierarchy slightly so easy centralized,
emphasizing direct supervision.
Machine Bureaucracy: Standardization of work process.
2. PROFESSIONAL Bureaucracy: Operating level, standardization of
skills.
3. Divisional FORM: Standardization of process output.
4. ADHOCRACY: Emphasizing the relationship between members of the
organization.

 ORGANIZATION DESIGNS

1. Mechanistic organizations external factors are expected to be stable

(remain constant over time).
2. Organic organizations perform better in volatile and unstable
environment (subject to uncertainty and rapid change).

 BASIC FORMS OF ORGANIZATION DESIGNS

• Functional grouping
• Divisional grouping
• Matrix design
• Hybrid

VI TOPICS IN INDUSTRIAL ORGANIZATION

Job Analysis

Job analysis is often described as the cornerstone of successful

employee selection efforts and performance management initiatives. A job
analysis involves the systematic collection of information about a job. Job-
analytic methods are often described as belonging to one of two approaches,
they are :

1. The task-oriented job analysis, involves an examination of the

duties, tasks, and/or competencies required by a job.
2. Worker-oriented job analysis, involves an examination of the
knowledge, skills, abilities, and other characteristics (KSAOs)
required to successfully perform the work.
 These two approaches are not mutually exclusive. Various adaptations
of job-analytic methods include competency modeling, which examines large
groups of duties and tasks related to a common goal or process, and practice
analysis, which examines the way work is performed in an occupation across
jobs.

Job-analytic data are often collected using a variety of quantitative

and qualitative methods. The information obtained from a job analysis is then
used to create job-relevant selection procedures, performance appraisals and
criteria, or training programs. Additional uses of job-analytic information
include job evaluations for the purpose of determining compensation levels
and job redesign.

Personnel Recruitment and Selection

I-O psychologists typically work with HR specialists to design (a)

recruitment processes and (b) personnel selection systems. Personnel
recruitment is the process of identifying qualified candidates in the
workforce and getting them to apply for jobs within an organization.
Personnel recruitment processes include developing job announcements,
placing ads, defining key qualifications for applicants, and screening out
unqualified applicants.

Personnel selection is the systematic process of hiring and promoting

personnel. Personnel selection systems employ evidence-based practices to
determine the most qualified candidates. Personnel selection involves both
new hires and individuals who can be promoted from within the organization.
Common selection tools include ability tests (e.g., cognitive, physical, or
psychomotor), knowledge tests, personality tests, structured interviews, the
systematic collection of biographical data, and work samples. I-O
psychologists must evaluate evidence regarding the extent to which selection
tools predict job performance, evidence that bears on the validity of
selection tools.

Personnel selection procedures are usually validated, i.e., shown to be

job relevant, using one or more of the following types of validity: content
validity, construct validity, and/or criterion-related validity. I-O
psychologists adhere to professional standards, such as the Society for
Industrial and Organizational Psychology's (SIOP) Principles for Validation
and Use of Personnel Selection Procedures and the Standards for
Educational and Psychological Testing. The Equal Employment Opportunity
Commission's Uniform Guidelines are also influential in guiding personnel
selection although they have been criticized as outdated when compared to
the current state of knowledge in I-O psychology.

Performance Appraisal/Management

Performance appraisal or performance evaluation is the process of

measuring an individual's work behaviors and outcomes against the
expectations of the job. Performance appraisal is frequently used in
promotion and compensation decisions, to help design and validate personnel
selection procedures, and for performance management.

Performance management is the process of providing performance

feedback relative to expectations and improvement information (e.g.,
coaching, mentoring). Performance management may also include documenting
and tracking performance information for organization-level evaluation
purposes.

An I-O psychologist would typically use information from the job

analysis to determine a job's performance dimensions, and then construct a
rating scale to describe each level of performance for the job. Often, the I-
O psychologist would be responsible for training organizational personnel how
to use the performance appraisal instrument, including ways to minimize bias
when using the rating scale, and how to provide effective performance
feedback. Additionally, the I-O psychologist may consult with the
organization on ways to use the performance appraisal information for
broader performance management initiatives.

Individual Assessment and Psychometrics

Individual assessment involves the measurement of individual

differences. I-O psychologists perform individual assessments in order to
evaluate differences among candidates for employment as well as differences
among employees.

The constructs measured pertain to job performance. With

candidates for employment, individual assessment is often part of the
personnel selection process. These assessments can include written tests,
physical tests, psychomotor tests, personality tests, work samples, and
assessment centers.

Psychometrics is the science of measuring psychological variables, such

as knowledge, skills, and abilities. I-O psychologists are generally well-trained
in psychometric psychology.

Compensation

Compensation includes wages or salary, bonuses, pension/retirement

contributions, and perquisites that can be converted to cash or replace living
expenses. I-O psychologists may be asked to conduct a job evaluation for the
purpose of determining compensation levels and ranges.

I-O psychologists may also serve as expert witnesses in pay

discrimination cases when disparities in pay for similar work are alleged.

Training and Training Evaluation

Most people hired for a job are not already versed in all the tasks
required to perform the job effectively. Similar to performance management
(see above), an I-O psychologist would employ a job analysis in concert with
principles of instructional design to create an effective training program.

A training program is likely to include a summative evaluation at its

conclusion in order to ensure that trainees have met the training objectives
and can perform the target work tasks at an acceptable level. Training
programs often include formative evaluations to assess the impact of the
training as the training proceeds. Formative evaluations can be used to locate
problems in training procedures and help I-O psychologist make corrective
adjustments in the while the training is ongoing.

Motivation in the Workplace

Motivation is a positive drive that forces a person to reach the goal. In

a workplace the manager or supervisor has to know the needs or drive of
individual and motivate according to it.

In an organization, when an employee is doing good job or production is

increased by him, he must be rewarded with respect to his needs.
Organizational Culture

Organizational culture can be described as a set of assumptions shared

by the individuals in an organization that directs interpretation and action by
defining appropriate behavior for various situations. There are three levels
of organizational culture: artifacts, shared values, and basic beliefs and
assumptions. Artifacts comprise the physical components of the organization
that relay cultural meaning. Shared values are individuals’ preferences
regarding certain aspects of the organization’s culture (e.g. loyalty, customer
service).

Basic beliefs and assumptions include individuals’ impressions about the

trustworthiness and supportiveness of an organization, and are often deeply
ingrained within the organization’s culture.

In addition to an overall culture, organizations also have subcultures.

Examples of subcultures include corporate culture, departmental culture,
local culture, and issue-related culture. While there is no single “type” of
organizational culture, some researchers have developed models to describe
different organizational cultures. The Organizational Culture Profile (OCP) is
a self-report measure that distinguishes organizational cultures from one
another based on seven different organizational values. The Denison Model
uses four general dimensions and twelve subdimensions to distinguish
different organizational cultures.

Organizational culture is fostered through several different mediums.

Symbols, artifacts, stories, legends, rites, rituals, language and
communication are all examples of how organizational culture is established
and transmitted among an organization’s members. Founding members of
organizations also have an impact on the organizational culture that develops.

The study of organizational culture can be difficult. Two common

methods for researching organizational culture are self-reports and
ethnography. Self-report measures are administered to employees and an
average score is computed for the organization. Ethnographers observe and
record organizational behavior over a period of time in order to decipher an
organization’s culture.
 Changing an organization’s culture can be difficult and usually cannot
be done quickly. While organizations must adapt over time to survive, the
basic assumptions that shape an organization’s culture are difficult to change.

Organizational culture has been shown to have an impact on important

organizational outcomes such as performance, attraction, recruitment,
retention, employee satisfaction, and employee well-being. Also, organizations
with an adaptive culture tend to perform better than organizations with an
unadaptive culture.

Group Behavior

Team Effectiveness

Team effectiveness refers to the system of getting people in a

company or institution to work together effectively. The idea behind team
effectiveness is that a group of people working together can achieve much
more than if the individuals of the team were working on their own.

Job Satisfaction and Commitment

Job satisfaction reflects an employee's overall assessment of their

job particularly their emotions, behaviors, and attitudes about their work
experience. It is one of the most heavily researched topics in
industrial/organizational psychology with several thousand published studies.
Job satisfaction has theoretical and practical utility for the field of
psychology and has been linked to important job outcomes including
attitudinal variables, absenteeism, employee turnover, and job performance.

For instance, job satisfaction is strongly correlated with attitudinal

variables such as job involvement, organizational commitment, job tensions,
frustration, and feelings of anxiety. Job satisfaction also has a weak
correlation with employee's absentee behaviors and turnover from an
organization with employees more likely to miss work or find other jobs if
they are not satisfied. Finally, research has found that although a positive
relationship exists between job satisfaction and performance, it is
moderated by the use of rewards at an organization and the strength of
employee's attitudes about their job.
 There have been three general approaches to researching job
satisfaction including the job characteristics, social information processing,
and dispositional. The job characteristics approach attempts to understand
what characteristics of the employer and employment environment lead to
satisfied employees while the social information processing approach views
jobs as a social construction and evaluates how social judgments and
comparisons influence job satisfaction. To illustrate these two approaches,
research has shown that although higher pay leads to higher satisfaction,
employees satisfaction with pay will depend more on how their pay compares
to others at an organization than on an objective numeric amount.

The dispositional approach evaluates the characteristics of employees

that lead to job satisfaction. Research from this approach has found that the
Big 5 personality traits extraversion, conscientiousness, openness to
experience, and agreeableness are positively correlated to job satisfaction
after controlling for job characteristics while a tendency to experience
negative affect is negatively correlated with job satisfaction.

Four of the most popular measures of job satisfaction that have shown
to have good construct validity are the Faces Scale, the Job Descriptive
Index (JDI), the Minnesota Satisfaction Questionnaire (MSQ), and the Job
Satisfaction Survey. The Faces Scale is a simplistic measure that asks
respondents to determine which of a series of faces reflects how they feel
in general about their job. The JDI asks individuals to determine if different
descriptors such as the word fascinating, or well paid, reflect their
employment, with a reply of yes, no, or unknown for specific job facets. The
MSQ is a 100-item questionnaire designed to measure multiple facets of job
satisfaction by asking respondents determine their level of satisfaction with
various statements related to their employment. Finally, the JSS is a 36-item
questionnaire that asks respondents to determine how much they agree with
various statements about their job.

Organizational commitment can be defined as feelings of loyalty

toward an organization and an employee’s willingness to stay employed within
the organization. Employees often become committed because they have
positive feelings about the organization (affective commitment), because the
costs of leaving the organization are too great (continuance commitment), or
because they feel morally obligated to stay with the organization (normative
commitment). Employee profiles developed on each of the different
commitment measures may help to predict employee job performance.

Organizational commitment has been shown to be related to attitudinal

variables. Specifically, affective commitment has been shown to be strongly
linked with turnover and moderately linked with job performance. Normative
and continuance commitment have also been linked to turnover, but not as
strongly.

There are two popular methods used in measuring organizational

commitment. The Organizational Commitment Questionnaire (OCQ) is the
most popular and widely used measure.

However, the OCQ only measures affective commitment. A more

recent measure has been developed by Allen and Meyer (1990) measures all
three types of commitment and will likely become the most widely used
organizational commitment measure in the future.

Job Satisfaction and Commitment overlap considerably as psychological

constructs and have been found to be well correlated. This is because it is
often difficult to tease out distinctions between an employee’s satisfaction
with their specific job and their relationship with the organization they work
for. It is also argued that these constructs feed into each other via a cyclical
process with higher job satisfaction leading to higher organizational
commitment and vice-versa.

Counterproductive Behavior

Counterproductive behavior can be defined as employee behavior that

goes against the goals of an organization. These behaviors can be intentional
or unintentional and result from a wide range of underlying causes and
motivations. It has been proposed that a person-by-environment interaction
can be utilized to explain a variety of counter-productive behaviors (Fox and
Spector, 1999). For instance, an employee who steals from the company may
do so because of lax supervision and underlying psychopathology (person) that
work in concert to result in the counterproductive behavior.

The forms of counterproductive behavior with the most empirical

examination are ineffective job performance, absenteeism, job turnover, and
accidents. Less common but potentially more detrimental forms of
counterproductive behavior have also been investigated including theft,
violence, substance use, and sexual harassment.

Within organizations, ineffective job performance is often difficult to

detect, diagnose the cause of, prevent, or resolve. This is because most
performance measurement systems only assess the impact of various
employee behaviors rather than the behaviors themselves. Performance data
is the most common method of evaluating ineffective job performance and
often includes personnel data, production data, subjective evaluations, and
electronic performance monitoring.

The causes of ineffective job performance have been evaluated from

different theoretical approaches including: attribution theory that links
performance to employee characteristics, selection errors that evaluate
mistakes of hiring the wrong employees, and inadequate socialization/training
that evaluate the social environment and structured training employees
receive. Employers need to be careful to avoid the fundamental attribution
error whereby performance is linked to characteristics of the employee
rather than the environment.

Abseenteeism is typically measured by time lost measures and

frequency measures. It is weakly linked to affective predictors such as job
satisfaction and commitment. Research has found that women are more likely
to be absent than men, and that the absence control policies and culture of
an organization will predict absenteeism.

Research on employee turnover has attempted to understand the

causes of individual decisions to leave an organization. It has been found that
lower performance, lack of reward contingencies for performance, and better
external job opportunities.

Accidents are a serious and costly form of counterproductive behavior.

Most research on this topic has attempted to evaluate characteristics of the
work-place environment that lead to accidents and determination of ways to
avoid accidents. There has also been some research on the characteristics of
accident-prone employees has found they are typically younger, more
distractible, and less socially adjusted than other employees.
 Leadership

Leadership is a process of influencing and supporting and motivating

others to work enthusiastically or effectively towards achieving the
objectives or goal.

A leader acts as a catalyst, who identifies the potential of a worker

and tries to put that into reality. A leader can be a positive leader or a
negative leader

PREFACE
First of all, I am we are from the first group want to say thanks to
ALLAH SWT that had given me occasion to created this paper and also thanks
to my lecturer which had learned us and gave long time for us to finished this
paper and so far thanks to all of my beloved friends that always support me
to finished my paper because they had support and help me to finished my
paper about
“THE MEANING OF INDUSTRIAL ORGANIZATION”

This paper tell about the study of industrial organization attracts those
individuals interested in the way in which industries are organized, what
factors influence a firm’s behavior, and how these factor affect society in
general. The focus of interest in the past, in the present and probably in the
future centers on national economic problem caused by different types of
market organization. Hopefully this paper can be useful to whosever read this
but in the other side I consider that this paper is so far from a perfect one
For sure the author need developed critics and suggestions for the author
reports in the future can be better.

Author
 The first group

REFFERENCES

www.google.com, organisasi industry, access on February 18,

2010

www.google.com, Topics in Industrial Organizational, access on

February 18, 2010

www.google.com, The Structure, conduct, performance Of

Industrial Organization, access on February 18, 2010
 CREATED BY THE 1st GROUP:

GITA PRIYANTI (0810514039)

HERANOF AL BASYIR (0810514036)

MUSTIKA MARDATILAH (0810514038)

MULYANIS (0810514026)

RATI KORNIATI (0810514031)

SUCI SABILLY (0810514040)

YOGI ASHARI (0810514025)

Supervisor :
Prof.Dr.H.Firwan Tan, SE, M.Ec,DEA.Ing
 ABSTRACT

Industrial organization as a separate economic field or specialty

is a relatively recent phenomenon. The label “industrial organization” and the
initial impetus to study it came from Harvard University in the late 19330s.
prior to that time, there were descriptive institutional courses in the fields
of corporations, agriculture, marketing, utilities, financial organizations, and
trusts. These courses were generally not integrated with economic theory.
According to Grether, it was the Great Depression couples with the
publication of Berle and Means’ The Modern Corporation and Private Property
in 1932 that led to a demand for a more basic theoretical/empirical approach
to the use of economics in understanding business institutions. Additionally,
the hearings, studies, and final report of the Temporary National Economic
Committee on the concentration of economic power in the late 1930s
provided further impetus and apparently welcomed empirical materials for
such an approach.

At Harvard, Professors Chamberlin and Mason began the first

truly industrial organization course. As an introduction to a collection of
essays he started writing in 1936, mason characterized the study of business
organizations as “electric methodology” and as a “muddy, but not
uninteresting, field.” Empirical studies started to come out Harvard at an
increasing rate. They included Wallace’s study on market control in the
aluminum industry and numerous others surveyed by Bain in 1948.

In the late 1930s and early 1940s, the primary interest of

investigators in industrial organization was pricing policy or, according to
Mason in a 1938 position paper, “the deliberative action of buyers and sellers
to influence price” and, in particular, the policies of industrial firms. All these
case studies and empirical work generally focused on theoretical structure
associated with pure monopoly. In this context, markets and market
structures “must be defined with the reference of the position of a single
seller or buyer.” By 1948 Bain, one of the earliest of Mason’s Ph.D.s in the
field, had become dissatisfied. He concluded that empirical research until
then had made “little definite progress in the establishing an objective
classification of markets, with subcategories which would contain industries
with uniform and distinctive types of competitive behavior.”