Organization Theory & Design - summary
“Organization Theory and Design refers to the study of how organizations function and their
interrelationship with the external environment.”
What are organizations?
An organization is (1) a social entity that (2) is goal-directed, (3) is designed as a deliberately
structured and coordinated activity system, and (4) linked to the external environment
An organization is a tool people use to coordinate their actions to obtain something they
desire or value – that is, to achieve their goals
Types of organizations:
- Large, multinational corporations (Apple) vs family-owned businesses
- For-profit businesses vs non-profit organizations
- Mechanistic vs organic
Examples:
1. Schools
2. Universities
3. Government agencies
4. Hospitals
5. Banks
6. Police
Organization’s environment: Related concepts – Uncertainty
Uncertainty: decision makers have some degree of insufficient information about
environmental factors, making prediction of external changes difficult
Important: uncertainty increases the
risk of failure for organizational
responses and makes it difficult to
assess costs and probabilities
associated with decision alternatives
Therefore, organizations must cope
with and manage uncertainty to be
effective
The simple-complex dimension concerns
environmental complexity, which refers to heterogeneity, or the number and dissimilarity of external
elements relevant to an organization’s operations.
The stable-unstable dimension refers to whether elements in the environment are dynamic.
Week 2
,Perspectives on organizations (Ch. 2)
- Closed and open systems perspectives
- Organizational configuration
- Dimensions of organization design (structural and contextual)
- Evolution of organization theory and design
Closed system: focuses exclusively upon the organization without consideration of its dependence
upon or capacity to influence elements comprising its context.
Organizations are conceived as autonomous, effectively sealed off from the outside world.
Open system: pays attention to the (open) boundary between the organization and its context.
Organizations are conceived as consumers of resources and exporters of resources
To survive and prosper, organizations are impelled to adapt to, or attempt to control, a
changing environment
Organization configuration
Five basic parts of an organization:
1) Top management (CEO / CFO)
2) Middle management (Supervisors on the floor)
3) Technical core
4) Technical support staff (IT)
5) Administrative support staff (HRM /
Finance)
Organizational dimensions can be
categorized in two types:
Structural dimensions: provide labels to describe the internal characteristics of an
organizations.
Contextual dimensions: characterize the whole organization and describe the organization
setting.
Dimensions of organizations design:
Structural dimensions:
1) Formalization: pertains to the amount of written documentation in the organization
2) Specialization: is the degree to which organizational tasks are subdivided into separate jobs
, 3) Hierarchy of authority: describes who reports to whom and the span of the control
4) Centralization: refers to the hierarchical level that has authority to make a decision
5) Professionalism: is the level of formal education and training of employees
6) Personnel ratios: refer to the deployment of people to various functions and departments
Contextual dimensions:
1) Size: can be measured for the organization as a whole or for specific components
2) Organizational technology: refers to the tools, techniques, and actions used to produce the
organization’s products or values
3) Environment: includes all elements outside the boundary of the organization
4) Goals and strategy: define the purpose and competitive techniques that set it apart from
other organizations
5) Culture: is the underlying set of key values, beliefs, understandings, and norms shared by
employees
Historical perspectives:
Scientific management Administrative principles Bureaucracy
(Taylor, 1898) (Fayol, 1916) (Until the 80s)
→
Hawthorne studies
But what did these approaches lack? (1920s – 1930s)
The context
o The contingency theory:
Means that what structure or system is appropriate, or effective, depends
upon the particular circumstances or context of its design.
Efficient Performance versus the Learning Organization
Mechanistic vs. Organic
Foto toevoegen
Fundamentals or organizational structure – Chapter 4
- Key components or organizational structure
- Organization design and structure
- Types of organizational structure
“Organization Theory and Design refers to the study of how organizations function and their
interrelationship with the external environment.”
What are organizations?
An organization is (1) a social entity that (2) is goal-directed, (3) is designed as a deliberately
structured and coordinated activity system, and (4) linked to the external environment
An organization is a tool people use to coordinate their actions to obtain something they
desire or value – that is, to achieve their goals
Types of organizations:
- Large, multinational corporations (Apple) vs family-owned businesses
- For-profit businesses vs non-profit organizations
- Mechanistic vs organic
Examples:
1. Schools
2. Universities
3. Government agencies
4. Hospitals
5. Banks
6. Police
Organization’s environment: Related concepts – Uncertainty
Uncertainty: decision makers have some degree of insufficient information about
environmental factors, making prediction of external changes difficult
Important: uncertainty increases the
risk of failure for organizational
responses and makes it difficult to
assess costs and probabilities
associated with decision alternatives
Therefore, organizations must cope
with and manage uncertainty to be
effective
The simple-complex dimension concerns
environmental complexity, which refers to heterogeneity, or the number and dissimilarity of external
elements relevant to an organization’s operations.
The stable-unstable dimension refers to whether elements in the environment are dynamic.
Week 2
,Perspectives on organizations (Ch. 2)
- Closed and open systems perspectives
- Organizational configuration
- Dimensions of organization design (structural and contextual)
- Evolution of organization theory and design
Closed system: focuses exclusively upon the organization without consideration of its dependence
upon or capacity to influence elements comprising its context.
Organizations are conceived as autonomous, effectively sealed off from the outside world.
Open system: pays attention to the (open) boundary between the organization and its context.
Organizations are conceived as consumers of resources and exporters of resources
To survive and prosper, organizations are impelled to adapt to, or attempt to control, a
changing environment
Organization configuration
Five basic parts of an organization:
1) Top management (CEO / CFO)
2) Middle management (Supervisors on the floor)
3) Technical core
4) Technical support staff (IT)
5) Administrative support staff (HRM /
Finance)
Organizational dimensions can be
categorized in two types:
Structural dimensions: provide labels to describe the internal characteristics of an
organizations.
Contextual dimensions: characterize the whole organization and describe the organization
setting.
Dimensions of organizations design:
Structural dimensions:
1) Formalization: pertains to the amount of written documentation in the organization
2) Specialization: is the degree to which organizational tasks are subdivided into separate jobs
, 3) Hierarchy of authority: describes who reports to whom and the span of the control
4) Centralization: refers to the hierarchical level that has authority to make a decision
5) Professionalism: is the level of formal education and training of employees
6) Personnel ratios: refer to the deployment of people to various functions and departments
Contextual dimensions:
1) Size: can be measured for the organization as a whole or for specific components
2) Organizational technology: refers to the tools, techniques, and actions used to produce the
organization’s products or values
3) Environment: includes all elements outside the boundary of the organization
4) Goals and strategy: define the purpose and competitive techniques that set it apart from
other organizations
5) Culture: is the underlying set of key values, beliefs, understandings, and norms shared by
employees
Historical perspectives:
Scientific management Administrative principles Bureaucracy
(Taylor, 1898) (Fayol, 1916) (Until the 80s)
→
Hawthorne studies
But what did these approaches lack? (1920s – 1930s)
The context
o The contingency theory:
Means that what structure or system is appropriate, or effective, depends
upon the particular circumstances or context of its design.
Efficient Performance versus the Learning Organization
Mechanistic vs. Organic
Foto toevoegen
Fundamentals or organizational structure – Chapter 4
- Key components or organizational structure
- Organization design and structure
- Types of organizational structure
