2011.02.cesa politics 02

WEEK TWO

Organizational Characteristics: Cornerstones of Organizational Theory (OT)

1. Goals

2. Work

3. Power and Authority

4. Size and Complexity

5. Design

6. Boundary/Environment

7. Adaptation and Change

8. Technology

9. Communication

Types of Organizations

Service Production Governmental/Regulatory Professional Advocacy Fund Raising Religious Communal Total


1. Goals:

Unrealized state that org members deem desirable

-- mission, products, services . . .

OT: Challenge for orgs = Multiple goals (especially when they are at cross-purposes)

Organizational Characteristics: Cornerstones of Organizational Theory

1. Goals:

Unrealized state that members deem desirable -- mission, products, services . . .

Challenge = Multiple goals (esp when at cross-purposes)

Resolution: Top management must

(a) achieve balance between competing goals

(b) clearly define and communicate goals

Why?

Design and maintenance of the organization

Coordination

Motivate members, increase identification w/the organization


1. Goals

2. Work

Type(s) of activity needed to accomplish goals (jobs)

Primary (line) versus secondary (staff) work

OT: How should these functions relate?


1. Goals

2. Work


Power = ability to influence successfully through individual factors

knowledge, skills, money, personality . . .

Authority = influence through official recognition by/role in organization

OT: What is relationship between these for organizational effectiveness?

(e.g., leadership versus ‘managership’)


1. Goals

2. Work



Success/opportunities --> org growth (including size of org)

More members --> assigned to subunits & tasks (delegation)

Delegation --> role elaboration (variance in jobs)

Increased size and role elaboration --> org complexity

(formalization in written rules, policies, procedures)


1. Goals

2. Work



5. Design

Role elaboration --> how units to be formed/fit together

Decisions about form/fit --> org design (structure/process)

Structure - e.g., hierarchical work arrangements

Process - e.g., deciding work flow

Design decisions --> work and unit differentiation

Differentiation must be balanced by integration


1. Goals

2. Work



5. Design (con’t)

OT: What are the structures and processes

that organizations utilize to promote integration?


1. Goals

2. Work



5. Design (con’t)

OT Integration mechanisms?

mission, power & authority, control systems, job design, selection & training, reward systems, performance appraisal & feedback, job rotation, CFTs, site visits, socialization processes, retreats, strategic planning,

communication (meetings, f-to-f, org wide strategic)


1. Goals

2. Work



5. Design

6. Environment

= all groups, norms, and conditions w/which org must deal

-- critical to org’s inputs and for org’s outputs

-- must have boundaries though which inputs/outputs pass


1. Goals

2. Work



5. Design

6. Environment

-- critical to org’s inputs and for org’s outputs

-- must have boundaries though which inputs/outputs pass

MANAGING INPUTS: market research, IS security, sales reports, legal counsel, planners’ & analysts’ activities

MANAGING OUTPUTS: PR releases, distributions systems, trade agreements, non-compete clauses/contracts


1. Goals

2. Work



5. Design

6. Environment


Orgs exist in turbulent environments w/ discontinuous change

OT: How do orgs build in flexibility to deal

w/ actual and potential environments?

Mechanisms?


1. Goals

2. Work



5. Design

6. Environment


Mechanisms to deal w/ actual and potential environments?

strategic planning, internal task forces, consultants,

philosophy, human resources, diversity initiatives, new product development, globalization, marketing plans, strategic internal and external communication


1. Goals

2. Work



5. Design



8. Technology

= The art and science employed in production/distribution

of the organization’s goods and services

Examples?


1. Goals

2. Work



5. Design



8. Technology

Examples?

QWL, CPI, 360 Feedback, Six Sigma, Change Mngt,

Plant Optimization, Inventory Controls, Tracking systems


1. Goals

2. Work



5. Design



8. Technology

9. Communication

a) Often treated only as information transmission in OT

b) Or as integration mechanism (coordination, cooperation)

c) But also is symbolic exchange and sense making

Apply the organizational Characteristics to case

Case One

Copyright 2007 Prentice Hall

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How Does an Organization Create Value?

Value creation takes place at three stages: input, conversion and output Inputs: include human resources,

information and knowledge, raw materials, money and capital

Conversion: the way the organization uses human resources and technology to transform inputs into outputs

Output: finished products and services that the organization releases to its environment


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Figure 1 – 1: How An Organization Creates Value


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Why Do Organizations Exist? To increase specialization and the

division of labor To use large-scale technology

Economies of scale: cost savings that result when goods and services are produced in large volume

Economies of scope: cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across several different products or tasks


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Why Do Organizations Exist? (cont.) To manage the external environment

Pressures from the external environment make organizations the favored mode for organizing productive resources

To economize on transaction costs Transaction costs: the costs associated

with negotiating, monitoring, and governing exchanges between people who must cooperate

To exert power and control


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Figure 1-3: Why organizations exist


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Organizational Theory, Design, and Change: Some Definitions

Organizational theory: the study of how organizations function and how they affect and are affected by the environment in which they operate

Organizational structure: the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals


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Some Definitions (cont.)

Organizational culture: the set of shared values and norms that control organizational members’ interactions with each other and with suppliers, customers, and other people outside the organization

Organizational design: the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals


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Some Definitions (cont.)

Organizational change: the process by which organizations move from their present state to some desired future state to increase their effectiveness


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Figure 1-4: Relationships Among Organizational Theory, Structure, Culture, Design and Change


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Importance of Organizational Design and Change

Dealing with contingencies Contingencies are events that might occur

and must be planned for Gaining competitive advantage

The ability to outperform other companies because of the capacity to create more value from resources

Core competences: skills and abilities in value creation

Strategy: pattern of decisions and actions involving core competences that produces a competitive advantage


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Importance of Organizational Design and Change (cont.)

Managing diversity Differences in the race, gender, and

national origin of organizational members have important implications for organizational culture and effectiveness

Promoting efficiency, speed, and innovation The better organizations function, the more

value they create


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Consequences of Poor Organizational Design

Decline of the organization Talented employees leave to take

positions in growing organizations Resources become harder to acquire Resulting crisis impels managers to

change organizational structure and culture


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How Do Managers Measure Organizational Effectiveness?

Control: external resource approach Method evaluates how effectively an

organization manages and controls its external environment

Innovation: internal system approach Method allows managers to evaluate how

effectively an organization functions and operates

Efficiency: technical approach Method evaluates how efficiently an

organization converts a fixed amount of resources into finished goods and services


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Table 1-1: Approaches to Measuring Effectiveness


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Measuring Effectiveness: Organizational Goals

Official goals: guiding principles that the organization formally states in its annual report and in other public documents

Mission: goals that explain why the organization exists and what it should be doing

Operative goals: specific long- and short-term goals that guide managers and employees as they perform the work of the organization

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2011.02.cesa politics 02

Education