Figure 1.1 How organizations create value:
1) Organization’s input, obtained from the environment:
- Raw materials
- Money and capital
- Human Resources
- Information and knowledge
- Customers of service organizations
2) Organization’s Conversion Process, organization transforms inputs and
adds value to them
- Machinery
- Computers
- Human skills and abilities
3) Organization’s outputs. Organization releases outputs to its environment
- Finished goods
- Services
- Dividends
- Salaries
- Value for stakeholders
4) Organization’s environment, Sales of outputs allow organization to obtain
new supplies of inputs
- Customers
- Shareholders
- Suppliers
- Distributors
- Government
- Competitors
Figure 1.3 Why do organizations exist?
The use of organization allows people jointly:
- Increase specialization and the division of labor
- Use large-scale technology
- Manage the external environment
- Economize on transaction costs
- Exert power and control
Which increases the value that an organization can create.
Figure 1.4 The relationship among organizational theory and
organizational structure, culture, and design, and change.
, Organizational theory: The study of how organizations function and how they
affect and are affected by the environment in which they operate.
Organizational structure:
- The formal system of task and authority relationships that control how
people are to cooperate and use resources to achieve the organization’s
goals.
- Controls coordination and motivation: shapes behavior of people and the
organization
- Is a response to contingencies involving environment, technology and
human resources
- Can be managed and changed through the process of organizational
design.
Organizational design and change:
- The process by which managers select and manage various dimensions
and components of organizational structure and culture so that an
organization can controller the activities necessary to achieve its goals.
- Balances the need of the organization to manage external and internal
pressures so that it can survive in the long run.
- Allows the organization to continually redesign and transform its structure
and culture to respond to a changing global environment
Organizational culture:
- The set of shared values and norms that controls organizational members
interactions with each other and with people outside the organization
- Controls coordination and motivation; shapes behavior of people and the
organization
- Is shaped by people, ethics and organizational structure
- Evolves as organization grows and differentiates
- Can be managed and changed through the process of organizational
design
1) Organization’s input, obtained from the environment:
- Raw materials
- Money and capital
- Human Resources
- Information and knowledge
- Customers of service organizations
2) Organization’s Conversion Process, organization transforms inputs and
adds value to them
- Machinery
- Computers
- Human skills and abilities
3) Organization’s outputs. Organization releases outputs to its environment
- Finished goods
- Services
- Dividends
- Salaries
- Value for stakeholders
4) Organization’s environment, Sales of outputs allow organization to obtain
new supplies of inputs
- Customers
- Shareholders
- Suppliers
- Distributors
- Government
- Competitors
Figure 1.3 Why do organizations exist?
The use of organization allows people jointly:
- Increase specialization and the division of labor
- Use large-scale technology
- Manage the external environment
- Economize on transaction costs
- Exert power and control
Which increases the value that an organization can create.
Figure 1.4 The relationship among organizational theory and
organizational structure, culture, and design, and change.
, Organizational theory: The study of how organizations function and how they
affect and are affected by the environment in which they operate.
Organizational structure:
- The formal system of task and authority relationships that control how
people are to cooperate and use resources to achieve the organization’s
goals.
- Controls coordination and motivation: shapes behavior of people and the
organization
- Is a response to contingencies involving environment, technology and
human resources
- Can be managed and changed through the process of organizational
design.
Organizational design and change:
- The process by which managers select and manage various dimensions
and components of organizational structure and culture so that an
organization can controller the activities necessary to achieve its goals.
- Balances the need of the organization to manage external and internal
pressures so that it can survive in the long run.
- Allows the organization to continually redesign and transform its structure
and culture to respond to a changing global environment
Organizational culture:
- The set of shared values and norms that controls organizational members
interactions with each other and with people outside the organization
- Controls coordination and motivation; shapes behavior of people and the
organization
- Is shaped by people, ethics and organizational structure
- Evolves as organization grows and differentiates
- Can be managed and changed through the process of organizational
design
