Organizations and Organization Theory Chapter One Organizations and Organization Theory Thomson Learning © 2004

Organization Theory in Action Topics Current Challenges Global Competition Ethics and and Social Responsibility Speed of Responsiveness The Digital Workplace Diversity Thomson Learning © 2004

What is an Organization? Definition 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 Thomson Learning © 2004

Importance of Organizations Importance of Organizations (cont’d) 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 Thomson Learning © 2004

An Open System and Its Subsystems Environment Transformation Process Raw Materials People Information resources Financial Products and Services Input Output Production, Maintenance, Adaptation, Management Boundary Spanning Boundary Spanning Subsystems Thomson Learning © 2004

Five Basic Parts of an Organization Top Management Technical Support Administrative Support Middle Management Technical Core Source: Based on Henry Mintzberg, The Structuring of Organizations (Englewood Cliffs, N. J.: Prentice-Hall, 1979) 215-297; and Henry Mintzberg, “Organization Design: Fashion or Fit?” Harvard Business Review 59 (Jan. – Feb. 1981): 103-116. Thomson Learning © 2004

The Organization Goals and Strategy Environment Size Culture Technology Structure Formalization Specialization Hierarchy of Authority Centralization Professionalism Personnel Ratios Thomson Learning © 2004

Organization Chart Illustrating the Hierarchy of Authority for a Community Job Training Program Board of Directors Advisory Committee Executive Committee Level 1 Executive Director Level 2 Assistant Executive Director for Community Service Assistant Executive Director for Human Services Level 3 Director Economic Dev. Director Reg. Planning Director Housing Director Criminal Justice Director Finance Director AAA Director CETA Public Info Coord. Asst. Director Finance Lead Counsel Lead Counsel CETA Intake & Orient CETA Couns. Devs. Title II ABC CETA Couns. Devs. Youth IV CETA Couns. Devs. Title II D &VI&VII Program Spec. AAA Contract Fiscal Manager Program Planner AAA Level 4 Housing Coord. Alcohol Coord. Account. CETA Planner Level 5 Records Clerk Secretary Secretary Adm. Asst Payroll Clerk Secretary MIS Specialist Staff Clerk Adm. Asst. Thomson Learning © 2004

Characteristics of Three Organizations TECHNOLOGY Manufacturing Retailing Government Service SIZE (#employees) 6,000 250,000 35 Thomson Learning © 2004

Two Organization Design Approaches Mechanical System Design Natural System Design Vertical Structure Routine Tasks Rigid Culture Competitive Strategy Formal Systems Horizontal Structure Adaptive Culture Empowered Roles Collaborative Strategy Shared Information Organizational Change in the Service of Performance Stable Environment Efficient Performance Turbulent Environment Learning Organization Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass.: Harvard Business School) Thomson Learning © 2004

Organizational Dimensions Workbook Activity Organizational Dimensions High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy Product Technology 1 - 4 5 - 6 7 - 10 Service Technology Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism Well-Defined Goals 1 - 4 5 - 6 7 - 10 Poorly-Defined Goals Small Size 1 - 4 5 - 6 7 - 10 Large Size Modern 1 - 4 5 - 6 7 - 10 Postmodern Thomson Learning © 2004

Xerox Use for 1959-1990, Use for 1990-present Workbook Activity Use for 1959-1990, Use for 1990-present High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy Product Technology 1 - 4 5 - 6 7 - 10 Service Technology Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism Well-Defined Goals 1 - 4 5 - 6 7 - 10 Goals Not Defined Small Size 1 - 4 5 - 6 7 - 10 Large Size Modern 1 - 4 5 - 6 7 - 10 Postmodern Thomson Learning © 2004