Documente Academic
Documente Profesional
Documente Cultură
ORGANIZATION THEORY:
An Overview
SOURCE: ROBBINS
Points to Ponder
Points to Ponder
Current Trends
Organizations now function in a global economy.
International expansion can provide a competitive
advantage:
Entering different countries may provide large numbers of
potential customers.
Building production facilities in countries with low-cost labor
may prove cost-efficient.
The rapid increase in telecommunications and information
technology enables work to be done more rapidly, efficiently,
and effectively around the globe.
McGraw-Hill/Irwin
What It Does
Crossgain
23 of 60 employees
ViAir
Company declines to
specify
CheckSpace
digiMine
Avogadro
8 of 25 employees
Tellme Networks
Source: Reprinted by permission of the Wall Street Journal, Copyright 2000 Dow Jones & Company, Inc. All
Rights Reserved Worldwide. License number 397221136576.
Annual
Market
Book
Ratio of
Sales
Value
Value
Market to
($ billions) ($ billions) ($ billions) Book Value
1.2
30.8
3.9
7.9
Microsoft
28.4
254.1
58.3
4.4
Intel
26.8
142.1
35.4
4.0
182.1
20.0
9.4
2.1
Nucor (Steel)
4.8
3.9
2.3
1.7
J. C. Penney
32.3
5.0
6.4
.78
Note: The data on market valuations are as of June 16, 2003. All other financial
data is based on the most recently available balance sheets and income
statements.
COUNTRY
United States $ 1,404,000
597,000
Brazil
540,000
France
861,000
Argentina
422,000
Germany
546,000
Japan
649,000
Mexico
McGraw-Hill/Irwin
31
60
15
48
11
11
46
What is an organization?
a consciously coordinated social entity
with a relatively identifiable boundary
functions on a relatively continuous
basis
to achieve common goals
Organization Theory
What is organization theory?
The discipline that studies the structure and design of
organization
organization is the unit of analysis
effectiveness used as the parameter to be achieved
Organization Structure
What is organization structure?
How tasks are allocated
Who reports to whom
The formal coordinating mechanisms and interaction patterns that will be
followed
Component:
Complexity:
degree of specialization (extent of differentiations)
number of levels in hierarchy
geographical dispersion
Formalization:
rules and procedure to direct behavior
Centralization:
The focus of decision making authority
Organization Design
What is organization design?
the management side of organization theory
concerns with:
constructing
changing
Applications
Managing the environment
Managing organizational
change
Managing organizational
culture
Managing organizational
evolution
Organization
Structure
Organization
Effectiveness
Organizational Designs
Design options
Bureaucracy
Adhocracy
Points to Ponder
1.
2.
3.
4.
5.
The Metaphors:
Sapu Lidi metaphor
Biological metaphor:
Organization is a biological being
Organization as a system:
System is a set of interrelated and interdependent
parts arranged in manner that produces a unified
whole within the constraint of a larger system or
environment.
1.
Entrepreneurial stage
2.
Collective stage
3.
Stabilization
Roles are defined
Elaboration-of-structure stage
5.
Clarification of missions
Commitment to goals
Formalization-and-control stage
4.
Formation stage
Infancy
Decline stage
Maturity
1. Entrepreneurial
stage:
Ambiguous
goals
High
creativity
2. Collectivity
Stage:
Informal
communicati
on and
structure
High
commitment
3. Formalizationand-control
stage:
4. Elaboration-ofstructure stage:
Formaliza
More complex
structure
tion of rules
Decentralization
Stable
structure
Diversified
markets
Emphasis of
5. Decline stage:
High
employee
turnover
Increased
conflict
centralization
ENVIRONMENT
System
Inputs
Transformation
Process
Output
Environment awareness:
Interdependency with its environment
Feedback mechanism:
Continually receive information from the environment
Cyclical character
Negative entropy-capability to: repair it self, maintain its structure,
import more energy to live and grow
Steady state
Constancy of the process
Movement toward growth and expansion
Balance of maintenance and adaptive activities
Has a relatively identifiable boundary (that differentiate who is and
who is not part of the organization)
Equifinality:
There are thousand ways to go to Rome
1900-1930
1930-1960
1960-1975
1975-
Perspective
Rational
Social
Rational
Social
Theme
Mechanical and
efficiency
People and
human relations
Contingency
designs
Theoretical
Classification
Type 1:
universal
principles
Type 2:
recognition of
social nature and
human relation
Type 3:
contingency
approach
Type 4:
focuses on
political nature of
organization
Theorists
Taylor
Fayol
Weber
Ralph Davis
Mayo
Barnard
McGregor
Bennis
Simon
Katz and Kahn
Woodward et al.
The Aston Group
Type 1 Theorists
Type 2 Theorists
Type 3 Theorists
Type 4 Theorists
CHAPTER 3: ORGANIZATIONAL
EFFECTIVENESS
What is effectiveness? Is it different from
efficiency?
What does it mean effectiveness is a necessary
condition for survival? Can an organization die?
What are the parameters used to explain
organization effectiveness?
DEFINITION
An organization is effective to the extent
that it .
WHEN USEFUL
The approach is preferred
when .
GOAL ATTAINMENT
SYSTEM
STRATEGIC
CONSTITUENCIES
COMPETING
VALUES
A THREE-DIMENSIONAL MODEL OF
ORGANIZATIONAL EFFECTIVENESS
FLEXIBILITY
MEANS
PEOPLE
ORGANIZATION
ENDS
CONTROL
Ends: Skilled
Work force
Means:
Cohesive
Work force
OPEN SYSTEM
MODEL
Means:
Flexibility
FLEXIBILITY
PEOPLE
Ends: acquisition
Of resources
ORGANIZATION
Ends: Productivity
and efficiency
Means: Availability
Of information
Ends:
Stability
INTERNALPROCESS MODEL
CONTROL
Means:
Planning
RATIONALGOAL
MODEL
DEFINITION
FLEXIBILITY
ACQUISITION OF RESOURCES
PLANNING
PRODUCTIVITY AND
EFFICIENCY
AVAILABILITY OF
INFORMATION
STABILITY
DEFINITION
ABLE TO ADJUST WELL TO SHIFTS IN EXTERNAL CONDITIONS
AND DEMANDS
ABLE TO INCREASE EXTERNAL SUPPORT AND EXPAND SIZE OF
WORK FORCE
GOALS ARE CLEAR AND WELL UNDERSTOOD
VOLUME OF OUTPUT IS HIGH, RATIO OF OUTPUT TO INPUT IS
HIGH
CHANNELS OF COMMUNICATION FACILITATE INFORMING
PEOPLE ABOUT THINGS THAT AFFECT THEIR WORK
SENSE OF ORDER, CONTINUITY, AND SMOOTH FUNCTIONING OF
OPERATIONS
EMPLOYEES TRUST, RESPECT, AND WORK WELL WITH EACH
OTHER
EMPLOYEES HAVE THE TRAINING, SKILLS, AND CAPACITY TO DO
THEIR WORK PROPERLY
Effectiveness Criteria
(Gross; in GIBSON, ET. AL., 1973)
Acquiring resources
Being efficient or cost-effective
Producing outputs
Developing administrative and technical
functions
Investment
Behave according to ethical code of conduct
Satisfying the needs of organization members
Effectiveness Criteria
Expert
Effectiveness Criteria
Gross
Acquiring
resources
Price
-moral
Institu
conformity tionali
adaptation zation
Institutiona
lization
Moral
Adaptation
Institutiona
lization
Mott
Productvity
Adaptation -Adap
tation
-Fleksi
bility
Adaptation
Efficient
Producti Adminis
on
rative &
technical
functions
Productvi Product
ty
vity
Adapta
tion
Fleksibili
ty
Ethical
code
Investment
Satisfying
members
interests
Strategies
Organizational
Maintenance
-Affirmation of the mission
-Operational adjustment
-Commitment of people
Adaptiveness
-Continuous
experimentation and
learning
-Facilitative leadership
-Movement into new
markets
-Innovative alliance
Parameters
-Efficiency
-Effectiveness
Middle term
Long term
Maintenance:
- Production
- Efficiency
- Satisfaction
Adaptation:
- Investment
- Development
Survival
SHORT-RUN
INTERMEDIATERUN
LONG-RUN
ADAPTATION PROCESS
Maintenance
Adaptiveness
INVENTING
Organization
THE FUTURE
Maintenance
Adaptiveness
CHANGING SITUATION
PARAMETER OF THE PROCESS
Effectiveness
Efficiency
ENVIRONMENT
COMPLEXITY
HORIZONTAL DIFFERENTIATION:
the degree of differentiation between units based on the orientation of members, the nature of the
tasks they perform, and their education and training. Include in this definition are:
SPECIALIZATION
FUNCTIONAL OR DIVISION OF LABOR (jobs are
broken down into simple and repetitive tasks)
SOCIAL (hiring professionals who hold skills that
cannot be routinized)
DEPARTEMENTALIZATION (creating groups of specialists
based on: numbers, functions, product or service, client
served, geography, work process)
COMPLEXITY
COMPLEXITY
SPATIAL DIFFERENTIATION:
the degree to which the location of an
organizations offices, plants, and personnel
are dispersed geographically
FORMALIZATION
FORMALIZATION TECNIQUES
EMPLOYEE SELECTION:
CENTRALIZATION
STRATEGY
ORGANIZATION SIZE
TECHNOLOGY
ENVIRONMENT
POWER-CONTROL
Evolutionary mode:
Strategy is not necessarily well-thought-out and systematic
Strategy evolves over time as a pattern in a stream of significant decisions
Strategic Dimensions
Four dimensions and their structural implications:
Innovation: to what degree does an organization introduce
major new products or services?
Market differentiation: to what degree does an organization
strive to create customer loyalty by uniquely meeting a particular
need?
Breadth: to what degree does an organization need to cater
variety of customers, their geographic range, and the number of
products
Cost control: to what degree does an organization tightly control
costs, refrain from unnecessary innovation or marketing
expenses, and cut prices?
ENVIRONMENTAL
FACTORS
AND
ORGANIZATIONAL
CAPABILITIES
STRATEGY
STRUCTURE
STRUCTURE
t+1
SINGLE PRODUCT
LOW
SIMPLE
t+2
DIVERSIFIED PRODUCT
HIGH
FUNCTIONAL DIVISIONAL
2.
3.
4.
GOALS
ENVIRONMENT
STRUCTURAL CHARACTERISTICS
DEFENDER
STABILITY
AND
EFFICIENCY
STABLE
TIGHT CONTROL
EXTENSIVE DIVISION OF LABOR
HIGH DEGREE OF FORMALIZATION
CENTRALIZED
ANALYZER
STABILITY
AND
FLEXIBILITY
CHANGING
PROSPECTOR
FLEXIBILITY
DYNAMIC
LOOSE STRUCTURE
LOW DIVISION OF LABOR
LOW DEGREE OF FORMALIZATION
DECENTRALIZED
LITTLE CHANGE
AND
UNCERTAINTY
DEFENDER
RAPID CHANGE
AND
HIGH UNCERTAINTY
REACTOR
ANALYZER
PROSPECTOR
2.
3.
2.
The key is that the attribute chosen must be different from those
offered by its competitors
3.
1.
2.
CHALLENGE
PREDICTED STRUCTURAL
CHARACTERISTICS
INNOVATION
MARKET DIFFERENTIATION
BREADTH:
-INNOVATION
-STABILITY
COST CONTROL
Ch. 7: TECHNOLOGY
What is technology?
Basically it refers to:
The information, equipment, techniques, and
processes required to transform inputs into outputs
The use of devices to produce products or services
The way how inputs are converted into outputs
MASS
PRODUCTION
PROCESS
PRODUCTION
Number of vertical
levels
Supervisors span of
control
24
48
14
Manager/total employee
ratio
1:23
1:16
1:8
Proportion of skilled
workers
High
Low
High
Overall complexity
Low
High
Low
Formalization
Low
High
Low
Centralization
low
high
low
PERROW S TECHNOLOGY-STRUCTURE
PREDICTION
TECHNOLOGY
FORMALIZATI
ON
CENTRALIZATI
ON
SPAN OF
CONTROL
COORDINATION
AND CONTROL
Routine
High
High
Wide
Engineering
Low
High
Moderate
Reports and
meetings
Craft
Moderate
Low
Moderate-wide
Training and
meetings
Nonroutine
Low
Low
DEFINITION
CHARACTERISTICS
STRUCTURAL
DESIGN
LONG-LINKED
TECHNOLOGY
TASKS OR OPERATIONS
ARE SEQUENTIALLY
INTERDEPENDENCE.
ACTIVITY A MUST BE
PERFORMED BEFORE
ACTIVITY B, ACTIVITY B
BEFORE C, ETC.
SEQUENTIAL
INTERDEPENDENCE
FIXED SEQUENCE
REPETITIVE STEPS
HIGHLY
STANDARDIZED, AND
MUST BE PERFORMED
IN A SPECIFIED SERIAL
ORDER, MODERATE
COMPLEXITY, HIGH
FORMALIZATION
MEDIATING
TECHNOLOGY
POOLED
INTERDEPENDENCE
LOW COMPLEXITY,
HIGH FORMALIZATION
INTENSIVE
TECHNOLOGY
A NUMBER OF MULTIPLE
RESOURCES ARE
AVAILABLE TO THE
ORGANIZATION, BUT ONLY A
LIMITED COMBINATION IS
USED
RECIPROCAL
INTERDEPENDENCE
HIGH COMPLEXITY,
LOW FORMALIZATION
INPUT
OUTPUT
LONG-LINKED TECHNOLOGY
TRANSFORMATION
PROCESS
CLIENT A
CLIENT B
MEDIATING TECHNOLOGY
RESOURCES
A
B
C
D
INPUT
TRANSFORMATION
PROCESS
FEEDBACK
OUTPUT
INTENSIVE TECHNOLOGY
WOODWARD
PERROW
THOMSON
ROUTINE
MASS
PROCESS
ROUTINE
ENGINEERING
LONG-LINKED
MEDIATING
NONROUTINE
UNIT
CRAFT
NONROUTINE
INTENSIVE
STRUCTURE
ROUTINE
LOW COMPLEXITY
WIDE SPAN OF CONTROL
INCREASED HORIZONTAL DIFFERENTIATION
HIGH FORMALIZATION
CENTRALIZATION OF AUTHORITY
NONROUTINE
HIGH COMPLEXITY
NARROW SPAN OF CONTROL
INCREASED VERTICAL DIFFERENTIATION
LOW FORMALIZATION
DECENTALIZATION OF AUTHORITY
Chapter 8: ENVIRONMENT
PUBLIC
PRESSURE CUSTOMERS
GROUPS
SUPPLIERS
POLITICS
TRADE
ASSOCIATION
THE
ORGANIZATION
STAKEHOLDERS
SOCIAL
MILIEU
LABOR
UNION
COMPETITOR
GOVERNMENT
ECOLOGY
TECHNOLOGY:
GLOBAL TECH
SOCIAL:
ENVIRONMENT MOVEMENT
ECONOMICS:
HIGH OIL PRICE
POLITICAL:
STRATEGIC ALLIANCES
CONTRIBUTORS
MECHANISTIC
ORGANIC
TASK DEFINITION
RIGID
FLEXIBLE
COMMUNICATION
VERTICAL
LATERAL
FORMALIZATION
HIGH
LOW
AUTHORITY
EXPERTISE
CENTRALIZED
DIVERSE
INFLUENCE
CONTROL
CHARACTERISTICS
RELATIVELY UNCHANGING ENV.
UNCERTAINTY IS LOW
DEMANDS DISTRIBUTED RANDOMLY
PLACID-CLUSTERED
DISTURBED-REACTIVE
TURBULENT-FIELD
COMPLEX
SIMPLE
SCARCE
DYNAMIC
Chapter 9: Power-Control
THOSE IN POWER SELECTING A
STRUCTURE THAT WILL, TO THE MAXIMUM
DEGREE POSSIBLE, MAINTAIN AND
ENHANCE THEIR CONTROL
DECISION MAKERS
INTEREST
ORGANIZATIONS
INTEREST
Divergent interest
Non-rationality
Dominant coalition
Power sources:
> hierarchy,
> control resources,
> network centrality
MECHANISTIC
ORGANIC
DECISION
DISCRETION
Chapter 10
ORGANIZATIONAL DESIGN OPTIONS
Designing Organization
CONSTRUCTING, DEVELOPING,
CONFIGURATING, AND ESTABLISHING AN
ORGANIZATION STRUCTURE IN ORDER TO
ENHANCE ORGANIZATION CAPABILITIES IN
ACHIEVING ITS GOALS.
IT REFERS TO THE CREATION OF MEANS AND
PLANS TO FACILITATE THE ATTAINMENT OF
ORGANIZATION GOALS
TYPE OF DECISION
DESIGN
OPERATING CORE
DECENTRALIZED
PROFESSIONAL
BUREAUCRACY
STRATEGIC APEX
CENTRALIZED
SIMPLE STRUCTURE
MIDDLE LINE
AUTONOMOUS
DIVISIONAL STRUCTURE
TECHNOSTRUCTURE
STANDARDIZATION
MACHINE BUREAUCRACY
SUPPORT STAFF
MUTUAL ADJUSTMENT
ADHOCRACY
SIMPLE
STRUCTURE
LOW
MACHINE
BUREAUCRACY
PROFESSION
AL
BUREAUCRA
CY
HIGH FUNCTIONAL
HIGH SOCIAL
Specialization based on
individual skills
DIVISIONAL
STRUCTURE
ADHOCRA
CY
HIGH FUNCTIONAL
HIGH SOCIAL
FORMALIZATION
LOW
HIGH
LOW
HIGH WITHIN
DIVISION
LOW
CENTRALIZATION
HIGH
HIGH
LOW
LIMITED
DECENTRALIZATION
LOW
GENERAL
STRUCTURAL
CLASSIFICATION
ORGANIC
MECHANISTIC
MECHANISTIC
MECHANISTIC
ORGANIC
EVIRONMENT
SIMPLE AND
DYNAMIC
COMPLEX AND
STABLE
SIMPLE AND
STABLE
COMPLEX
AND
DYNAMIC
SIZE OF
ORGANIZATION
SMALL
LARGE
LARGE
LARGE
LARGE
Chapter 11
BUREAUCRACY:ORGANIZATIONAL
DESIGN OPTION
POSITIVE QUALITIES OF
BUREAUCRACY
CREATION OF STABILITY OVERTIME
EMPLOYEES WILL BE GUARANTEED TO BE
TREATED FAIRLY AND OBJECTIVELY
FAVORITISM WILL BE DIMINISHED
REDUCE UMBIGUITY, INCREASE UNIFORMITY
OR STANDARDIZATION OF PROCEDURE
HIERARCHY OF AUTHORITY MAKES LINE OF
AUTHORITY CLEAR
NEGATIVE QUALITIES OF
BUREAUCRACY
CONFORMITY, RELIABILTY, AND PREDICTABILITY WILL LEAD TO
INFLEXIBILITY (MERTON)
RULES AND REGULATIONS BECOME ENDS RATHER THAN MEANS
(MERTON, SELZNICK)
RULES AND REGULATIONS DEFINE MINIMUM LEVELS OF PERFORMANCE.
THEY ENCOURAGE APATHY TO PERFORM ABOVE MINIMUM (GOULDNER)
BUREAUPATHIC BEHAVIOR EMERGED. DECISION MAKERS USE RULES
AND REGULATION TO PROTECT THEMSELVES FROM MAKING ERRORS.
THEY HIDE BEHIND RULES. dont blame me. I was just following the rules
(THOMSON).
EMPLOYEE ALIENATION AS A RESULT OF HIGH SPECIALIZATION
CONCENTRATION OF POWER IN HIGH-RANK HIERARCHY
Chapter 12
ADHOCRACY: AN ORGANIC
ORGANIZATIONAL DESIGN
ADHOCRACY
AN ORGANIC TYPE OF ORGANIZATION DESIGN.
IS A RAPIDLY CHANGING, ADAPTIVE, USUALLY
TEMPORARY SYSTEM ORGANIZED AROUND
PROBLEMS TO BE SOLVED BY GROUPS WITH
DIVERSE PROFESSIONAL SKILLS.
AN EXCELLENT VEHICLE FOR RESPONDING TO
CHANGE, FACILITATING INNOVATION, AND
COORDINATING DIVERSE SPECIALISTS.
ADHOCRATIC DESIGNS
MATRIX
THEORY Z
COLLATERAL FORM
NETWORK
TASK FORCE
COMMITTEE DESIGN
COLLEGIAL FORM
THEORY J
THEORY Z
SHOR-TERM EMPLOYMENT
LIFE-TIME EMPLOYMENT
LONG-TERM EMPLOYMENT
SPECIALIZEPATHD CAREER
MODERATELY SPECIALIZED
CAREER PATH
CONSENSUAL DECISION
MAKING
CONSENSUAL DECISION
MAKING
INDIVIDUAL RESPONSIBILITY
COLLECTIVE RESPONSIBILITY
INDIVIDUAL RESPONSIBILITY
FREQUENT APPRAISAL
INFREQUENT APPRAISAL
INFREQUENT APPRAISAL
EXPLICIT, FORMALIZED
APPRAISAL
RAPID PROMOTION
SLOW PROMOTION
SLOW PROMOTION
COMPREHENSIVE CONCERN
FOR PEOPLE
COMPREHENSIVE CONCERN
FOR PEOPLE
COLLATERAL FORM
THE USE OF ENTREPRENEURSHIP WITHIN A
LARGE BUREAUCRACY
(=INTRAPRENEURING)
A LOOSELY STRUCTURED ORGANIC DESIGN
THAT COEXIST WITH A BUREUCRACY
TYPICALLY CONSIST OF SMALL TEAMS THAT
ARE GIVEN THE INDEPENDENCE AND
RESOURCES TO FUNCTION FULLY
TOMORROW ORGANIZATIONS
(PETER DRUCKER & TOM PETERS)
FLAT, LESS HIERARCHICAL, MORE DECENTRALIZED
FLEXIBLE, LOW IN FORMALIZATION, MORE ADHOCRATIC
WILL WORK ACROSS ORGANIZATION BOUNDARIES
RISKS AND UNCERTAINTIES BECOME PART OF
STRATEGIC ORGANIZATION CHALLENGES
WILL LIKE LARGE SYMPHONY ORCHESTRAS, CONSIST
OF SPECIALISTS AND PROFESSIONAL IN DIFFERENT
FIELDS
BECOME INFORMATION-BASED