Busi 3103 Notes
Introduction to Organizations Chapter One – Organizations and Organizational Theory
Administrative principles: closed system management perspective that focuses on the total organization and grows from the insight of practitioners - Bureaucratic organizations: organization design based on clearly defined authority and responsibility, formal record keeping and uniform application if standard rules - Change strategy: a plan to guide an organizational change - Chaos Theory: a scientific theory that suggests that relationships in complex, adaptive systems are made up of numerous interconnections that create unintentional effects and render the environment unpredictable - Closed system: autonomous, enclosed and not dependent on the external environment - Contextual dimensions: the characteristics of an organization, including size, technology, environment and goals. - Contingency: the applicable management approach to deal with unforeseen events - Effectiveness: the degree to which an organization achieves its goals - Efficiency: the amount of resources used to produce a unit of output - Hawthorne studies: studies worker productivity.
Managers who treat their employees well facilitate increased employee output - Learning organization: everyone is engaged in finding and solving problems enable continuous improvement and capabilities of its own employees - Level of analysis: in systems theory, the subsystem on which the primary focus is placed; four levels of analysis characterize the organization - Meso theory: combines micro and macro levels of analysis - Open System: interacts with the environment for survival - Organization: social entities that are goal directed, deliberately structured and linked to the external environment - OB: micro approach to organizations with focus on individuals in the organization - OT: macro approach to organizations that analyses the whole organization as a unit.
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Role: allows an employee to use their abilities to achieve outcomes and meet goals - Scientific management: claims decisions about organization and job design should be based on precise, scientific procedures - Stakeholder: any group within or outside an organization that has a stake in the rganizations performance - Stakeholder approach: (constituency approach) stakeholder satisfaction indicates the performance of the organization - Structural dimensions: describes the internal characteristics of an organization - Subsystems: divisions of an organization that perform specific functions for the survival of the organization. Functions include boundary pning, production, maintenance, adaptation and management - System: set of interacting elements of inputs, transformation and output to the environment - Task: narrowly defined piece of work assigned to a person PART TWO:
Organizational Purpose and Structural Design Chapter Two – Strategy, Organizational Design, and Effectiveness
Analyzer (62) Competing values model: perspective on organizational effectiveness that combines diverse indictors of performance that represent competing management values - Defender: business strategy that seeks stability or retrenchment rather than innovation or growth - Differentiation strategy: used to distinguish an organization’s products or services from others in the industry - Focus strategy: concentrates on a specific regional market or buyer group Goal approach: concerned with output and whether the organization achieves its output goals - Human relations emphasis: competing-values model that incorporates the values of an internal focus and a flexible structure - Internal-process approach: looks at internal activities and assesses effectiveness by indicators of internal health and efficiency - Internal-process emphasis: competing-values model that looks at the values of internal focus and structural control - Low-cost leadership strategy: tries to increase market share by emphasizing low cost compared to competitors.
Mission: organization reason for existence - Official Goals: formally stated definitions of business scope and outcomes the organization strives to achieve (also called mission) - Open-systems emphasis: competing-values model that looks at the combination of external focus and flexible structure - Operative goals: explain what the organization is trying to achieve, with focus on the actual operating procedures - Organizational goals: desired state the organization attempts to reach - Prospector: business strategy characterized by innovation, risk aking, seeking new opportunities and growth - Rational-goal emphasis: competing-values model that focuses on structural control and external focus - Reactor strategy: business strategy in which environmental threats and opportunities are responded to in an ad hoc fashion - Resource-based approach: organizational perspective that assesses effectiveness based on how organizations successfully obtains, integrates and manages valued resources - Strategy: set of plans, decisions and objectives that have been adopted to achieve the organizations goals - Structure: formal reporting relationships, groupings and systems of an organization
Chapter Three – Fundamentals of Organizational Structure
Centralized: level of hierarchy with authority to make decisions - Chain of command: formal line of authority to make decisions Decentralized: decision making and communication that is spread out across the company - Departmental grouping: structure where employees share a common supervisor and resources, are jointly responsible for performance, and tend to identify and collaborate with each other - Divisional grouping: people are organized according to what the organization produces - Divisional structure: structuring based on individual products, services, product groups, major projects, or profit centers (also called product structure or strategic business units) - Functional grouping: grouping of employees who perform similar functions or work processes or who bring similar knowledge and skills to bear on a task - Functional matrix: structure in which functional bosses have primary authority, and product or project managers simply coordinate product services - Functional structure: grouping of activities by common function - Horizontal grouping: organizing of employees around core work processes rather than by function, product or geography.
Horizontal linkage: amount of communication and coordination that occurs horizontally across organizational departments - Horizontal structure: structure that eliminates both the vertical hierarchy and departmental boundaries by organizing teams of employees around the core work processes, the end to end work, information, and material flow that provide value directly to customers - Hybrid structure: combines various structural approaches (functional, divisional, geographical, and horizontal) tailored to specific strategic needs - Integrator: a position or department that is reated to coordinate several departments - Liaison role: person that is responsible to communicating and achieving coordination with another department - Matrix structure: strong form of horizontal linkage in which both product and functional structures (horizontal and vertical) are implemented simultaneously.
Multifocused grouping: a structure in which an organization embraces structural grouping alternatives simultaneously - Organizational structure: designates formal reporting relationships, including the number of levels in the hierarchy and the p of control of managers and supervisors; identifies the grouping together of individuals into departments and of departments into the total organization; and includes the design of systems to ensure effective communication, coordination and integration of efforts across departments - Outsourcing: contracting out certain functions, e. g. anufacturing,IT…to other organization - Process: organized group of related tasks and activities that work together to transform inputs into outputs that create value for customers.
Product matrix: a variation of the matrix structure in which project or product managers have primary authority, and functional managers simply assign technical personnel to projects and provide advisory expertise - Re-engineering: redesigning a vertical organization along its horizontal workflows and processes - Symptoms of structural deficiency: signs of the organization structure being out of alignment, including delayed or poor quality decision making, failure to respond innovatively to environmental changes, and too much conflict - Task force: temporary committee composed of representatives from each department affected by a problem Teams: permanents task forces often used in conjunction with a full time integrator - Vertical information system: periodic reports, written information and computer based communications distributed to managers - Vertical linkages: communication and coordination activities connecting the top and bottom of an organization - Virtual cross-functional teams: teams comprising individuals from different functions who are separated in space and time as well - Virtual network grouping: organization that is loosely connected cluster of separate components.
Virtual network structure: the firm subcontracts many or most of its major processes to separate companies and coordinates their activities from a small headquarters or organization - Virtual team: made up of organizationally or geographically dispersed members who are linked through advanced information and communications technologies. Members frequently use the internet and collaborative software to work together, rather than meeting face to face SLIDES ONLY - BCG matrix (10): Consider market share and growth for product portfolios
Part Three: Open-System Design Elements Chapter Four – External Environment
Boundary pning roles: activities that link and coordinate an organization with key elements in the external environment - Boundary scanning roles (Slide only) Buffering roles: activities that absorb uncertainty from the environment - Cooptation: when leaders from important sectors in the environment are made part of an organization - Differentiation: the differences (cognitive and emotional) among managers in various functional departments of an organization and formal structure differences among these departments - Direct interlock: occurs when a member of the board of directors of one company sits on the board of another - Domain: an organizations chosen environmental field of activity - General environment: sectors that may not directly affect the daily operations of a firm but will indirectly influence it - Green environment: natural environment Indirect interlock: occurs when a director of one company and a director of another are both directors of third company.
Integration: the quality of collaboration between departments of an organization - Interlocking directorate: formal linkage that occurs when a member of the board of directors of one company sits on the board of another company - Mechanistic: an organization system marked by rules, procedures, a clear hierarchy of authority, and centralized decision making - Organic: free flowing, adaptive processes an unclear hierarchy of authority, and decentralized decision making - Organizational environment: all elements that exist outside the boundary of the organization and have potential to affect all or part of the organization - Resource dependence: a situation in which organization depends on the environment, but strive to acquire control over resources to minimize their dependence - Sectors: subdivisions of the external environment that contain similar elements - Simple-complex dimension: the number and dissimilarity of external elements relevant to an organizations operations - Stable-unstable dimension: the state of an organization’s environmental elements - Task environment: sectors with which the organization interacts directly and that have a direct effect on the organization’s ability to achieve its goals - Uncertainty: occurs when decision makers do not have sufficient information about the environmental factors and have a difficult time predicting external changes
Chapter Five – Interorganizational Relationships
Coercive forces: external pressures such as legal requirements exerted on an organization to adopt structures, techniques, or behaviors similar to other organizations - Collaborative networks: an emerging perspective whereby organizations allow themselves to become dependent on other organizations to increase value and productivity for all - Generalist: an organization that offers a broad range of products or services and serves a broad market - Institutional environment: norms and values from stakeholders that organizations try to follow in order to please stakeholders - Institutional perspective: under high uncertainty, organizations imitate others in the same institutional environment - Institutional similarity: common structures, management approaches and behaviors established by organizations in the same field. Interorganizational relationships: resource transactions, flows and linkages that occur among two or more organizations - Legitimacy: an organizations actions are desirable, proper and appropriate within the environment’s systems of norms, values and beliefs - Mimetic forces: under uncertainty, this is the pressure to copy or model other organizations that appear to be successful in the environment - Niche: domain of unique environmental resources and needs.
Normative forces: pressures to adopt structures, techniques or management processes because they are considered by the community to be up to date and effective - Organizational ecosystem: system formed by the interaction of a community of organizations and their environment, usually cutting across traditional industry lines - Organizational form: an organization’s specific technology, structure, products, goals, and personnel - Population: set of organizations engaged in similar activities with similar resources and utcomes - Population-ecology perspective: the focus is on organizational diversity and adaptation within a community or population or organizations - Retention: The preservation and institutionalization of selected organizational forms .
Selection: process by which organizational variations are determined to fit the external environment, variations that fail to fit the needs if the environment are selected out and fail - Specialist: an organization with a narrow range of goods or services or serves a narrow market - Struggle for existence: principle of the population ecology model that states that organizations are engaged in a competitive struggle for resources and fighting to survive - Variation: new organizational forms that respond to the needs of the external environment (mutations in biology) SLIDES ONLY - Agency theory (9-13): The relationship between Shareholders and Managers is dominated by this question, How can the Agent shareholder/owner make sure that the managers are acting in their best interest? - Transaction cost theory (21-25): The inclusion of all costs are considered when making a decision and not just the market prices.
Chapter Six – Designing Organizations for the International Environment
Consortia: groups of firms that venture into new products and technologies - Domestic stage: first stage of international development in which a company is domestically orientated while managers are aware of the global environment - Economies of scale: achieving lower costs through large volume production, often made possible by global expansion - Economies of scope: achieving economies by having a presence in many product lines, technologies or geographic areas - Factors of production: supplies necessary for production e. g. raw materials, land, labor - Global companies: no longer thinks of itself as having a home country - Global geographic structure: an organization divides its operation into world regions, each of which reports to the CEO - Global matrix structure: A horizontal linkage in an international organization in which both product and geographical structures are implemented simultaneously to achieve a balance between standardization and globalization. - Global product structure: product divisions take responsibility for global operations in their specific product areas -
Global stage: stage in international development in which the company transcends any one country - Global teams: work groups comprising MNC members whose activities p in different countries (transnational teams) - Globalization strategy: standardization of product design and advertising strategy throughout the world - International division: equal in status to other major departments within the company and has its own hierarchy to handle business in various countries - International stage: 2nd stage of international development where company takes exports seriously and is multidomestic - Joint venture: separate entity of sharing developments and production costs and penetrating into a new market between two or more firms.
Multidomestic: company that responds to local customers and competition in each country independent of other countries - Multidomestic strategy: competition in each country is handled independently of competition in other countries - Multinational stage: stage of international development where a company has marketing and production facilities in many countries and more than one third of its sales outside its home country - Power distance: level of inequality people are willing to accept within an organization - Standardization: all branches of the company at all locations operate in the same way - Transnational model: horizontal organization with multiple centers, subsidiary managers who initiate strategy and innovations for the company as a whole, and unit and coordination achieved through corporate culture and shared vision and values - Uncertainty avoidance: level of tolerance for and comfort within, uncertainty and individualism within a culture.
Internal Design Elements Chapter Seven – Manufacturing and Service Technologies
Analyzability: a dimension of technology in which work activities can be reduced to mechanical steps and participants can follow an objective, computational procedure to solve problems - Continuous process production: completely mechanized manufacturing process with no sorting or stopping - Core technology: work process directly related to the organization mission - Craft technology: technology used for stable stream of activities where the conversion process is not well understood or analyzable - Engineering technologies: technology used when there is a substantial variety in the tasks performed, but activities are handled on the basis of established formulas, procedures, and techniques - Flexible manufacturing systems: using computers to link manufacturing components e. g. obots, machines, product design and engineering analysis to enable fast switching from one product to another.
Intensive technologies: variety of products or services provided in combination to a client - Interdependence: the extent to which departments depend on each other for resources or materials to accomplish their tasks - Job design: the assignment of goals and tasks to be completed my employees - Job enlargement: the designing of jobs to expand the number of different tasks performed by an employee - Job enrichment: the designing of jobs to increase responsibility, recognition and opportunities for growth and achievement - Job rotation: moving employees from job to job to give them a greater variety of tasks and alleviate boredom - Job simplification: the reduction of the number and difficulty of tasks performed by a single person - Joint optimization: the goal of the sociotechnical system approach, which states that organization will function best only if its social and technical systems are designed to fit the needs of each other - Large-batch production: manufacturing process with long production runs of standardized parts.
Lean manufacturing: uses highly trained employees at every stage of the production process who take painstaking approach to details and continuous problem solving to cut waste and improve quality - Long-linked technology: the combination, within one organization, of successive stages of production, with each stage using as its inputs the production of the preceding stage - Mass customization: the use of computer integrated systems and flexible work processes to enable companies to mass produce a variety of products or services designed to exact customer specification - Meditating technology: the provision of products or services that mediate or link clients from the external environment and allow each department to work independently.
Noncore technology: a department work process that is important to the organization but is not directly related to the central mission - Nonroutine technologies: there is high tasks variety and the conversion process is not analyzable or well understood - Pooled interdependence: the lowest form of interdependence among departments in which work does not flow between units - Reciprocal interdependence: the highest level of interdependence in which the output of one operation is the input of the second, and then the output of the second operation is the input of the first. Routine technologies: technology that’s characterized by little task variety and the use of objective, computational procedures - Sequential interdependence: serial form of interdependence in which the output of one operation becomes the input of another operation - Service technology: characterized by simultaneous production and consumption, customized output, customer participation, intangible output and being labour intensive .
Small-batch production: manufacturing process, often custom work that is not highly mechanized and relies heavily on the human operation - Sociotechnical systems approach: combines the needs of people with the need for technical efficiency - Task variety: the frequency of unexpected and novel events that occur in the conversion process - Technical complexity: the extent of mechanization in the manufacturing process Technology: tools, techniques and actions used to transform organizational inputs into outputs.
Chapter Nine – Organizational Size, Life Cycle, and Decline
An organizational framework marked by rules and procedures, specialization and division of labour, hierarchy of authority, technically qualified personnel, separation of position and person, and written communications and records (p. 30) bureaucratic control. The use of rules, policies, hierarchy of authority, written documentation, standardization, and other bureaucratic mechanisms to standardize behaviour and assess performance (p. 336) centralization. Level of hierarchy with authority to make decisions (p. 332). charismatic authority Based in devotion to the exemplary character or heroism of an individual and the order defined by him or her (p. 337) clan control. The use of social characteristics, such as culture, shared values, commitments, traditions, and beliefs, to control behaviour (p. 338) collectivity stage The life-cycle phase in which an organization has strong leadership and begins to develop clear goals and direction (p. 24) downsizing Intentionally reducing the size of a company’s workforce by laying off employees (p. 343)| elaboration stage. The organizational life-cycle phase in which the red-tape crisis is resolved through the development of a new sense of teamwork and collaboration (p. 326) entrepreneurial stage. The life-cycle phase in which an organization is born and its emphasis is on creating a product and surviving in the marketplace (p. 324) Formalization The degree to which an organization has rules, procedures, and written documentation (p. 332) formalization stage The phase in an organization’s life cycle involving the installation and use of rules, procedures, and control systems (p. 26) incident command sytem Developed to maintain the efficiency and control benefits of bureaucracy yet prevent the problems of slow response to crises (p. 334) life cycle A perspective on organizational growth and change that suggests that organizations are born, grow older, and eventually die (p. 323)market control A situation that occurs when price competition is used to evaluate the output and productivity of an organization (p. 337) organizational decline A condition in which a substantial, absolute decrease in an organization’s resource base occurs over a period of time (p. 340) personnel ratios| The proportions of administrative, clerical, and professional support staff (p. 32) rational-legal authority| Based on employees’ belief in the legality of rules and the right of those in authority to issue commands (p. 337) self-control A person’s values are brought into line with the organization’s values to control behaviour (p. 339) traditional authority Based in the belief in traditions and the legitimacy of the status of people exercising authority through those traditions9)
Part Five: Managing Dynamic Processes Chapter Ten – Organizational Culture and Ethical Values
adaptability culture A culture characterized by strategic focus on the external environment through flexibility and change to meet customer needs (p. 60) bureaucratic culture A culture that has an internal focus and a consistency orientation for a stable environment (p. 363)| chief ethics officer High-level executive who oversees all aspects of ethics, including establishing and broadly communicating ethical standards, setting up ethics training programs, supervising the investigation of ethical problems, and advising managers in the ethical aspects of decisions (p. 379) clan culture A culture that focuses primarily on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment (p. 362) code of ethics A formal statement of the company’s values concerning ethics and social responsibility (p. 80) culture The set of values, guiding beliefs, understandings, and ways of thinking that are shared by members of an organization and are taught to new members as correct (p. 356) culture strength . The degree of agreement among members of an organization about the importance of specific values (p. 364) ethical dilemma When each alternative choice or behaviour seems undesirable because of a potentially negative ethical consequence (p. 372) ethics The code of moral principles and values that governs the behaviour of a person or group with respect to what is right or wrong (p. 369) ethics committee| A group of executives appointed to oversee company ethics (p. 378) ethics hotline| A telephone number that employees can call to seek guidance and to report questionable behaviour (p. 79) external adaptation.
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