Chapter 1: Organizations & Organization Theory

Organization

Organization

Social entities that are goal directed, designed with structure and coordinated systems, and linked to the external environment

Importance of Organizations (7)

• Bring together resources to help attain goals

• Create value for owners, customers, and employees

• Accommodate challenges of diversity, ethics and coordination

• Adapt & influence rapidly changing environment

• Use modern manufacturing and information technologies

• Facilitate innovation

• Produce goods and services efficiently

Closed System

Doesn’t depend on the environment, is completely self-sufficient

Open System

Must Interact and adapt with the environment to survive, consumes and exports resources to the environment

Mintzberg’s Organizational Parts (5)

• Technical Core

• Top Management

• Middle Management

• Technical Support

• Administrative Support

Technical Core

Responsible for basic work.

Top Management

Responsible for direction, strategy, and goals

Middle Management

Responsible for implementation and coordination

Technical Support

Helps organization adapt to environment

Administrative Support

Responsible for smooth operation and upkeep

Structural Dimensions (6)

• Specialization

• Hierarchy of Authority

• Centralization

• Personnel Ratios

• Formalization

• Professionalism

Specialization

Degree to which organizational tasks are subdivided

Hierarchy of Authority

Describes who reports to whom

Centralization

Refers to authority level

Personnel Ratios

Refers to the deployment of people

Formalization

Refers to the amount of written documentation

Professionalism

Level of formal education and training of employees

Dynamics Dimensions (5)

• Goals & Strategy

• The Environment

• Size

• Culture

• Technology

Goals & Strategy

The purpose and competitive techniques that set organization apart

The Environment

All elements outside boundary of the organization

Size

Number of people in the organization

Culture

Key values, beliefs, understandings, and norms shared by employees

Technology

Tools, techniques and actions used to transform inputs into outputs

Performance and Effectiveness Outcomes (3)

• Efficiency

• Effectiveness

• Stakeholder Approach

Efficiency

Amount of resources used to achieve organization’s goals

Effectiveness

Degree to which organization achieves its goals

Stakeholder Approach

Integrates organizational activities based on organization stakeholder and what they want from organization

Chaos Theory

Suggests that complex systems, like organizations, have unpredictable outcomes due to countless interconnected factors and nonlinear relationships.

Learning Organizations

Promotes communication and collaboration so everyone is involved to increase capability