Organizational Theory & Design – Key Vocabulary

A comprehensive set of vocabulary flashcards covering major concepts, structures, strategies, cultures, environmental factors, and decision-making models from the lecture notes on organizational theory and design.

Organization

A social entity that is goal-directed, deliberately structured and coordinated, and linked to its environment through people and their relationships.

Organization Theory (OT)

A loose collection of different theories that explain how organizations function, are structured, and interact with their environments.

Structural Dimensions

Internal characteristics of an organization—goals, strategy, culture, structure, employee behavior, and performance (inside the box).

Contextual Dimensions

Characteristics describing the entire organization and its environment—industry, market, technology, etc. (outside the box).

Closed System

An organizational view that assumes a stable environment and focuses on internal efficiency while ignoring external factors.

Open System

An organizational view that interacts with and adapts to the external environment for survival and success.

Technical Core

Mintzberg part responsible for producing the organization’s products or services.

Technical Support Staff

Mintzberg part that helps the organization adapt and create innovation.

Middle Management

Mintzberg part that implements strategy and coordinates departments.

Administrative Support Staff

Mintzberg part that ensures smooth operations such as HR, finance, and IT.

Top Management

Mintzberg part that sets direction, strategy, goals, and policies for the organization.

Official Goals

Broad, value-based statements (e.g., mission) that legitimize an organization to stakeholders.

Mission Statement

A brief declaration of an organization’s purpose, values, distinctive strength, and stakeholder focus without financial metrics.

Operative Goals

Specific, measurable ends sought through actual operating procedures—the ‘real’ goals guiding employees.

Balanced Scorecard

A framework balancing financial measures with customer, internal process, and learning & growth metrics.

Strategy

A plan for interacting with the competitive environment to achieve organizational goals.

Low-Cost Leadership

Porter strategy aimed at broad market, competing primarily on efficiency and low price.

Differentiation Strategy

Porter strategy of offering unique products or services to stand out industry-wide.

Focus Strategy

Porter strategy targeting a narrow market segment either through low cost or differentiation.

Prospector

Miles & Snow type that emphasizes innovation, risk-taking, and flexibility to seek new opportunities.

Analyzer

Miles & Snow type that balances efficiency in core operations with innovation on the periphery.

Defender

Miles & Snow type focused on stability, efficiency, and tight cost control in a narrow domain.

Reactor

Miles & Snow type with ad-hoc responses, lacking a consistent strategy or structure.

Organizational Culture

Shared values and assumptions that define what is important and guide behaviors in an organization.

Artifacts

Visible manifestations of culture such as physical structures, language, rituals, and symbols.

Strength of Culture

Degree of agreement on values (consensus) and intensity of adherence among employees.

Adaptability Culture

Culture type with external focus and flexibility, encouraging change and innovation.

Mission Culture

Culture type with external focus and stability, emphasizing clear goals and performance.

Clan Culture

Culture type with internal focus and flexibility, fostering family-like atmosphere and teamwork.

Bureaucratic Culture

Culture type with internal focus and stability, stressing formal rules, hierarchy, and efficiency.

Organizational Structure

Division of labor and patterns of coordination, communication, workflow, and formal power directing activities.

Chain of Command

Formal reporting relationships in an organization, indicating levels of hierarchy and authority.

Span of Control

Number of subordinates directly supervised by a manager.

Functional Structure

Grouping employees by common function (e.g., marketing, HR) to achieve economies of scale.

Divisional Structure

Grouping employees around products, services, or outputs, providing focus and responsiveness.

Geographical Structure

Grouping employees by location or region to address local market needs.

Matrix Structure

Multi-focused structure where employees report to two bosses (e.g., product and function).

Horizontal Structure

Organization around core processes using self-directed teams and minimal departmental boundaries.

Virtual Network Structure

Modular design that outsources many activities to external partners, focusing on core competencies.

Holacracy

Boss-less, self-managed team system where circles govern themselves and authority is distributed.

Hybrid Structure

Combination of multiple structural forms tailored to specific strategic needs.

Vertical Information Linkages

Hierarchically channeled information flows designed for control and efficiency.

Horizontal Information Linkages

Cross-departmental information sharing designed for learning and innovation.

Organizational Environment

All elements outside the organization that can affect it.

Task Environment

External sectors with direct impact—industry, raw materials, labor, market, and international.

General Environment

External sectors with indirect impact—financial, technological, economic, governmental, sociocultural.

Environmental Uncertainty

Extent to which external complexity and rate of change make predictions difficult.

Principle of Fit

Effectiveness increases when strategy, structure, and environment are aligned.

Boundary Spanning

Roles linking the organization to external elements to gather information and manage relationships.

Organizational Differentiation

Differences in cognitive and emotional orientations among functional departments.

Organic Management

Flexible, decentralized design with horizontal communication suited to dynamic environments.

Mechanistic Management

Rigid, centralized design with many rules suited to stable environments and efficiency.

Resource Dependence

Theory that organizations rely on external resources and aim to minimize dependence by controlling them.

Cooptation

Bringing external influential figures onto boards to reduce uncertainty and gain support.

Interlocking Directorate

Arrangement where a member of one company sits on another’s board to coordinate and reduce surprises.

Interorganizational Relationship

Enduring resource flows and linkages among two or more organizations (alliances, joint ventures, etc.).

Population Ecology

Theory focusing on variation, selection, and retention of organizational forms within a population.

Isomorphism

Process by which organizations in similar environments become more alike over time.

Economies of Scale

Cost advantages gained by increasing output volume.

Economies of Scope

Cost advantages gained by producing multiple products or operating in multiple markets.

International Division Structure

Domestic structure augmented with a unit responsible for all international activities (export focus).

Global Product Structure

World-wide grouping by product lines, emphasizing global integration over local responsiveness.

Global Geographic Structure

World-wide grouping by regions to stress national responsiveness.

Global Matrix

Structure balancing global integration and national responsiveness through dual authority lines.

Transnational Organization

Highly integrated, flexible global form aiming to maximize efficiency, responsiveness, and learning.

Power Distance

Extent to which a society accepts unequal power distribution.

Uncertainty Avoidance

Degree to which a society relies on rules to reduce unpredictability.

Triple Bottom Line

Assessment of organizational performance on social, environmental, and financial dimensions.

Corporate Social Responsibility (CSR)

Managerial actions aimed at contributing to the welfare of all stakeholders.

B Corporation

Company certified by B Lab for meeting rigorous social and environmental standards.

Ambidextrous Organization

Design that simultaneously pursues innovation (exploration) and operational efficiency (exploitation).

Incremental Change

Continuous, progressive modifications that affect parts of an organization.

Radical Change

Paradigm-breaking transformation that redefines the entire organization.

Dual-Core Approach

Use of mechanistic core for administrative change and organic core for technical change.

Organizational Development (OD)

Planned efforts focusing on human and social aspects to improve adaptability and problem-solving.

Evidence-Based Management

Making decisions using the best available data and facts, aware of biases.

Bounded Rationality

Concept that decision makers’ information-processing limits prevent fully rational choices.

Cognitive Bias

Systematic error in judgment leading to flawed decisions (e.g., overconfidence, anchoring).

Carnegie Model

Decision model where coalitions of managers make satisficing choices under uncertainty and conflict.

Incremental Decision Process Model

Model describing major decisions as a series of small steps with possible loops and interruptions.

Garbage Can Model

View of decision making in organized anarchies where problems, solutions, and participants mix randomly.