chapter 1
What is an organization?
Organizations are social entities that are goal-directed, are designed as deliberately (met opzet) and
coordinated activity systems and linked to external environment. Counterpoint 1.5 blz 10
The current challenges Organizations face:
- Globalization : Markets, technologies and organizations are becoming increasingly
interconnected. It is feasible for companies to locate different parts on different locations.
- Ethics and social responsibility: Issues of ethics and social responsibility – relating to concerns
about ecological sustainability, and not just corporate survival –
- Speed of responsiveness: respond quickly to environmental changes
- The digital workplace: The new workplace working with computers and systems
- Diversity: In this society there are not only man working, but minorities are also searching for
jobs or work.
Importance of organizations:
- Bring together resources to achieve desired goals and outcomes
- Produce goods and services efficiently
- Facilitate innovation
- Use modern manufacturing and information technologies
- Adapt to and influence a changing environment
- Create value for owners, customers and employees
- Accommodate ongoing challenges of diversity, ethics and the motivation and coordination of
employees.
Types of organisation
- Large (multinationals) or small organizations (family owned)
- Manufacture products – provide services
- Non-profit or profit
- Profit organization want to earn money for the shareholders.
Closed system: Design focus exclusively upon the organization without consideration of its
dependence upon or capacity to influence elements comprising its context. (autonomous) Sealed
from the world.
Open System: Pays attention to the open boundary between the organizations and its context.
Adapt, or to control a changing environment.
An open system and subsystems
Raw materials input Transformation output Products and
People proces services
Information
resources
Financial
resources
Subsystems Boundary Production, Boundary
maintenance, adaption,
spanning management spanning
,Perspective on organizations
- Technical core: the technical core includes people who do the basic
work of the organization. It performs the production subsystem
function and actually produces the product and service outputs of
the organisation.
- Technical support: engineers and researchers scan the environment
for problems, opportunities and technological developments.
(responsible for creating innovations in the technical core, helping
the organization change and adapt)
- Administrative support ( responsible for the smooth operation and upkeep of the
organization, including its physical and human elements. This includes HRM and maintenance
staff.
- Management top and middle: Management is a function responsible for directing and
coordinating other parts of the organization. Top management provides direction, strategy,
goals and policies for the entire organization or major divisions. Middle management is
responsible for implementation and coordination at the department level.
Dimensions of Organization Design
Structural Dimensions: provide labels to distinguish some key, internal characteristics of an
organization, such as the degree of formalization. They provide a basis for comparing the
composition of organizations.
1. Formalization, refers to the reliance upon written documentation in the organization. Such
documentation relates to procedures, job descriptions, regulations and policy manuals.
2. Specialization, is the degree to which organizational tasks are subdivided into separate jobs.
If it is extensive an employee only performs a narrow range of tasks.
3. Hierarchy of authority: who reports to whom and the span of control for each manager. The
hierarchy is depicted by the vertical lines on an organizational chart. The hierarchy is related
to span of control (the number of employees reporting to a supervisor). When span of
control are narrow, specialization is high and the hierarchy tends to be tall. When spans of
control are wide, the hierarchy of authority will be shorter.
4. Centralization: refers to the hierarchical level that has authority to make a decision. When
decisions are delegated to lower organizational levels it is decentralized.
5. Professionalism: the term used to describe the level of formal education and training of
employees. Professionalism is considered high when employees require long periods of
training to hold jobs in the organization.
6. Personnel Ratios: refers to the deployment of people to various functions and departments.
Personnel ratios include the administrative ratio, the clerical ratio, the professional staff ratio
and the ratio of indirect to direct labour employees.
Contextual dimensions: Characterize both the organisation as a whole, including its size, technology,
etc. and the broader organizational setting.
1. Size: can be measured for the organization as a whole or specific components, such as a
plant or division. Because organizations are social systems, size is typically measured by the
number of employees. Other measures such as total sales or total assets also reflect
magnitude, but they do not indicate the size of the human part of the system.
2. Organizational technology: refer to the tools, techniques and actions used to transform input
into outputs. It concerns how the organization actually produces the products and services it
, provides for customers and includes such things as flexible manufacturing, advanced
information systems and the internet. An automobile assembly line, a college classroom and
an overnight package delivery system are technologies, although they are different from
each other.
3. Environment: all elements outside the boundary of the organization. Key elements include
the industry, government, customers, suppliers and the financial community. The
environmental elements that affect an organization the most often are other organizations.
4. Goals and strategy: define the purpose and competitive techniques that set it apart from
other organizations. Goals are often written down as an enduring statement of company
intent. A strategy is the plan of action that describes the resource allocation and activities for
dealing with the environment and for reaching the organization goals.
5. Culture: is the underlying set of key and values, beliefs, understandings and norms shared by
employees. These underlying values may pertain to ethical behaviour, commitment to
employees, efficiency or customer service, and they provide the glue to hold organization
members togheter.
Performance and Effectiveness Outcomes
▪ Efficiency refers to the amount of resources used to achieve
the organization’s goals.
▪ Effectiveness refers to the degree to which an organization
achieves its goals.
▪ Stakeholder Approach – balancing the needs of groups in
and outside of the organization that has a stake in the
organization’s performance.
▪ A stakeholder is any group within or outside of the organization that has a stake in the
organization’s performance.
Major Stakeholders Groups and what they Expect
, The evolution of Organization Theory and Design:
‘’Efficiency is everything’’
Scientific management: postulate that decisions about organizations and job design should be based
on a precise, ‘’scientific’’ study of individual situations to determine which method of doing a job
delivers the greatest output.
‘’how to get organized’’
Administrative principles: looked at the design and functioning of the organization as a whole.
Bureaucratic organizations: which emphasized designing and managing organizations on an
impersonal, ostensibly rational basis by establishing clearly defined authority and responsibility,
formal recordkeeping and uniform application of standard rules.
‘’what about people’’
Hawntorne studies: Interpretations of the results of these experiments concluded that positive
treatment of employees, even by simply acknowledging their presence and contribution, improved
their motivation and productivity.
‘’don’t forget the context’’
Contingency: means that what structure or system is appropriate, or effective, depends upon the
particular circumstances or context of its design.
Contemporary Organization Design
▪ Contemporary Organization Design
- As the context of organizations become more turbulent and complex, managers and
organizations face a range of intertwined challenges.
▪ Chaos theory suggests that relationships in complex systems are nonlinear and made up of
numerous interconnections and divergent choices.
▪ Learning Organization is based on equality, open information, little hierarchy and a culture
that encourages adaptability and participation.
Efficient Performance Versus The Learning Organization
What is an organization?
Organizations are social entities that are goal-directed, are designed as deliberately (met opzet) and
coordinated activity systems and linked to external environment. Counterpoint 1.5 blz 10
The current challenges Organizations face:
- Globalization : Markets, technologies and organizations are becoming increasingly
interconnected. It is feasible for companies to locate different parts on different locations.
- Ethics and social responsibility: Issues of ethics and social responsibility – relating to concerns
about ecological sustainability, and not just corporate survival –
- Speed of responsiveness: respond quickly to environmental changes
- The digital workplace: The new workplace working with computers and systems
- Diversity: In this society there are not only man working, but minorities are also searching for
jobs or work.
Importance of organizations:
- Bring together resources to achieve desired goals and outcomes
- Produce goods and services efficiently
- Facilitate innovation
- Use modern manufacturing and information technologies
- Adapt to and influence a changing environment
- Create value for owners, customers and employees
- Accommodate ongoing challenges of diversity, ethics and the motivation and coordination of
employees.
Types of organisation
- Large (multinationals) or small organizations (family owned)
- Manufacture products – provide services
- Non-profit or profit
- Profit organization want to earn money for the shareholders.
Closed system: Design focus exclusively upon the organization without consideration of its
dependence upon or capacity to influence elements comprising its context. (autonomous) Sealed
from the world.
Open System: Pays attention to the open boundary between the organizations and its context.
Adapt, or to control a changing environment.
An open system and subsystems
Raw materials input Transformation output Products and
People proces services
Information
resources
Financial
resources
Subsystems Boundary Production, Boundary
maintenance, adaption,
spanning management spanning
,Perspective on organizations
- Technical core: the technical core includes people who do the basic
work of the organization. It performs the production subsystem
function and actually produces the product and service outputs of
the organisation.
- Technical support: engineers and researchers scan the environment
for problems, opportunities and technological developments.
(responsible for creating innovations in the technical core, helping
the organization change and adapt)
- Administrative support ( responsible for the smooth operation and upkeep of the
organization, including its physical and human elements. This includes HRM and maintenance
staff.
- Management top and middle: Management is a function responsible for directing and
coordinating other parts of the organization. Top management provides direction, strategy,
goals and policies for the entire organization or major divisions. Middle management is
responsible for implementation and coordination at the department level.
Dimensions of Organization Design
Structural Dimensions: provide labels to distinguish some key, internal characteristics of an
organization, such as the degree of formalization. They provide a basis for comparing the
composition of organizations.
1. Formalization, refers to the reliance upon written documentation in the organization. Such
documentation relates to procedures, job descriptions, regulations and policy manuals.
2. Specialization, is the degree to which organizational tasks are subdivided into separate jobs.
If it is extensive an employee only performs a narrow range of tasks.
3. Hierarchy of authority: who reports to whom and the span of control for each manager. The
hierarchy is depicted by the vertical lines on an organizational chart. The hierarchy is related
to span of control (the number of employees reporting to a supervisor). When span of
control are narrow, specialization is high and the hierarchy tends to be tall. When spans of
control are wide, the hierarchy of authority will be shorter.
4. Centralization: refers to the hierarchical level that has authority to make a decision. When
decisions are delegated to lower organizational levels it is decentralized.
5. Professionalism: the term used to describe the level of formal education and training of
employees. Professionalism is considered high when employees require long periods of
training to hold jobs in the organization.
6. Personnel Ratios: refers to the deployment of people to various functions and departments.
Personnel ratios include the administrative ratio, the clerical ratio, the professional staff ratio
and the ratio of indirect to direct labour employees.
Contextual dimensions: Characterize both the organisation as a whole, including its size, technology,
etc. and the broader organizational setting.
1. Size: can be measured for the organization as a whole or specific components, such as a
plant or division. Because organizations are social systems, size is typically measured by the
number of employees. Other measures such as total sales or total assets also reflect
magnitude, but they do not indicate the size of the human part of the system.
2. Organizational technology: refer to the tools, techniques and actions used to transform input
into outputs. It concerns how the organization actually produces the products and services it
, provides for customers and includes such things as flexible manufacturing, advanced
information systems and the internet. An automobile assembly line, a college classroom and
an overnight package delivery system are technologies, although they are different from
each other.
3. Environment: all elements outside the boundary of the organization. Key elements include
the industry, government, customers, suppliers and the financial community. The
environmental elements that affect an organization the most often are other organizations.
4. Goals and strategy: define the purpose and competitive techniques that set it apart from
other organizations. Goals are often written down as an enduring statement of company
intent. A strategy is the plan of action that describes the resource allocation and activities for
dealing with the environment and for reaching the organization goals.
5. Culture: is the underlying set of key and values, beliefs, understandings and norms shared by
employees. These underlying values may pertain to ethical behaviour, commitment to
employees, efficiency or customer service, and they provide the glue to hold organization
members togheter.
Performance and Effectiveness Outcomes
▪ Efficiency refers to the amount of resources used to achieve
the organization’s goals.
▪ Effectiveness refers to the degree to which an organization
achieves its goals.
▪ Stakeholder Approach – balancing the needs of groups in
and outside of the organization that has a stake in the
organization’s performance.
▪ A stakeholder is any group within or outside of the organization that has a stake in the
organization’s performance.
Major Stakeholders Groups and what they Expect
, The evolution of Organization Theory and Design:
‘’Efficiency is everything’’
Scientific management: postulate that decisions about organizations and job design should be based
on a precise, ‘’scientific’’ study of individual situations to determine which method of doing a job
delivers the greatest output.
‘’how to get organized’’
Administrative principles: looked at the design and functioning of the organization as a whole.
Bureaucratic organizations: which emphasized designing and managing organizations on an
impersonal, ostensibly rational basis by establishing clearly defined authority and responsibility,
formal recordkeeping and uniform application of standard rules.
‘’what about people’’
Hawntorne studies: Interpretations of the results of these experiments concluded that positive
treatment of employees, even by simply acknowledging their presence and contribution, improved
their motivation and productivity.
‘’don’t forget the context’’
Contingency: means that what structure or system is appropriate, or effective, depends upon the
particular circumstances or context of its design.
Contemporary Organization Design
▪ Contemporary Organization Design
- As the context of organizations become more turbulent and complex, managers and
organizations face a range of intertwined challenges.
▪ Chaos theory suggests that relationships in complex systems are nonlinear and made up of
numerous interconnections and divergent choices.
▪ Learning Organization is based on equality, open information, little hierarchy and a culture
that encourages adaptability and participation.
Efficient Performance Versus The Learning Organization
