Organizations and Organizational Theory

Week 1 – Organizations and Organizational Theory Organizations are: 1) Social entities that are 2) goal-directed, 3) designed as deliberately structured and coordinated activity systems, and 4) linked to the external environment. Organizations exist to: 1. Bring together resources to achieve desired goals and outcomes 2. Produce goods and services efficiently 3.

Facilitate innovation 4. Use modern manufacturing and information technologies 5. Adapt to and influence a changing environment 6. Create value for owners, customers, and employees 7.Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees.

Mintzberg’s Five Basic Parts of an Organization 1. Technical core – includes people who do the basic work of the organization, performs production subsystem function and actually produces product and service outputs of the organization. Eg. Pilots, teachers and classes 2. Top management – Provides direction strategy, goals, and policies for entire organization or major divisions. 3.

Middle management – implementation and coordination at the department level.Mediates between top management and technical core, such as implementing rules and passing info up and down hierarchy. 4. Technical support – Helps organization adapt to environment. Responsible for creating innovations in the technical core. Eg.

Engineers and researchers. 5. Administrative support – responsible for smooth operation and upkeep of the organizationl including physical and human elements. Eg. Human resources, maintenance.

Structural dimensions – provide labels to describe the internal characteristics of an organization.Create a basis for measuring and comparing organizations. Contextual dimensions – characterize the whole organization, including size, technology, environment, and goals. Week 2 – Strategy, Organizational Design, and Effectiveness The primary responsibility of top management is to determine an organization’s goals, strategy, and design, therein adapting the organization to a changing environment. Organizational design – is the administration and execution of the strategic plan.

Mission (official goals) – overall goal for the organization, and its reason for existence.Serves as a communication tool. Operative goal – represent primary tasks of the organization (more explicit and well defined than official goals) * Mission (official goals) * Legitimacy * Provide a set of values and a vision * Theory behind the organization * Operative goals * Employee motivation and direction * Guidelines for behaviour and decision making * Standard of performance Strategy – a plan for interacting with the competitive environment to achieve organizational goals. Week 3 - STRUCTURE Mechanistic VS Organic Management Mechanistic | Organic| 1.

Tasks are broken down into specialized, separate parts. 2. Tasks are rigidly defined. 3.

There is a strict hierarchy of authority and control, and there are many rules. 4. Knowledge and control of tasks are centralized at the top of the organization. 5. Communication is vertical. | 1.

Employees contribute to the common tasks of the department 2. Tasks are adjusted and redefined 3. There is less hierarchy of authority and control, and there are few rules. 4.

Knowledge and control of tasks are located anywhere in the organization. 5. Communication is horizontal. Strengths and Weaknesses of Structures Functional Structure Strengths| Weaknesses| 1. Economies of scale 2. In-depth knowledge and skill development 3.

Enables organization to accomplish functional goals 4. Is best with only one or a few products| 1. Slow response time to environmental changes 2. May cause decisions to pile up, hierarchy overload 3. Leads to poor horizontal coordination among departments 4. Results in less innovation 5.

Involves restricted view of organizational goals | Divisional Structure 1. Suited to fast change in unstable environment. . Leads to customer satisfaction because product responsibility and contact points are clear. 3. Involves high coordination across functions 4.

Allows units to adapt to differences in products, regions, customers 5. Best in large organizations with several products | 1. Eliminates economies of scale in functional departments 2. Leads to poor coordination across product lines 3. Eliminates in-depth competence and technical specialization 4. Makes integration and standardization across product lines difficult | Matrix Structure .

Achieves coordination necessary to meet dual demands from customers. 2. Flexible sharing of human resources across products. 3. Suited to complex decisions and frequent changes in unstable environment. 4.

Provides opportunity for both functional and product skill development. 5. Best in medium-sized organizations with multiple products. | 1.

Causes participants to experience dual authority, which can be frustrating and confusing. 2. Means participants need good interpersonal skills and extensive training 3.Is time consuming; involves frequent meetings and conflict-resolution sessions 4. Will not work unless participants understand it and adopt collegial rather than vertical-type relationships 5.

Requires great effort to maintain power balance | Horizontal Structure Week 4 – The External Environment Organizational environment – all elements that exist outside the boundary of the organization that have the potential to affect all or part of the organization. Domain – focus (boundaries), the territory an organization stakes out for itself for its products, services, and markets served.Defines the organization’s niche and defines external sectors with which the organization will interact to accomplish its goals. Sectors – subdivisions of the external environment (10 sectors) Task environment – includes sectors with which organization interacts directly and have a direct impact on its ability to achieve its goals. * Industry * Raw materials * Market * Human resources * International sector General environment – includes sectors that might not have direct impact on daily operations but will indirectly influence it.

* Government * Socio-cultural * Economic conditions * Technology * Financial resources