Chapter One

Organizations and
Organization Theory

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Organization Theory in
Action

Topics
Current Challenges

Global Competition
Ethics and and Social Responsibility
Speed of Responsiveness
The Digital Workplace
Diversity
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What is an Organization?

Definition

Social entities;
Goal oriented; Structured and
coordinated activity;
linked to external environment

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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

Transformation

Raw Materials
People
Information
resources
Financial
resources

Input

Subsystems

Boundary
Spanning

Output

Products
and
Services

Process
Production,
Maintenance,
Adaptation,
Management
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Spanning

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Environment

Culture

Goals and
Strategy

Size

Structure
1.
2.
3.
4.
5.
6.

Technology

Formalization
Specialization
Hierarchy of Authority
Centralization
Professionalism
Personnel Ratios

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Major Stakeholder and What They

Expect

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Historical Perspectives of
Organization theory and Design

Efficiency is everything (1898)

How to get organized

Scientific management, pioneered by Frederick

Winslow Taylor
Administrative principles bureaucratic organization, by
Henry Fayol

What about people?

Hawthorn Studies: Positive treatment on

employees improved their motivation and
productivity
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Can bureaucracies be flexible?

(1980s)

Lean staff, flexibility, and learning

Dont forget the environment

Contingency approach

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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.: PrenticeHall, 1979) 215-297; and Henry Mintzberg, Organization Design: Fashion or Fit? Harvard Business
Review 59 (Jan. Feb. 1981): 103-116.
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Five type of organization

(by Mintzberg)

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Two Organization Design

Approaches

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Measuring Dimension of
Organization

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