Summary Strategy & Organization
Compiled by: Dr. Pushpika Vishwanathan
Daft, Murphy, Willmott
Chapter 1 – What are organizations?
The political economy of organizations = A theoretical framework that focuses on two key
components of organizations and their interaction: the polity or fundamental norms, of the
organization and the system of authority, power and influence. The economy is the economic
structures and processes of the organization; that s, the system for processing and
transforming raw materials into the goods and services that the organization produces.
Current difficult challenges for organizations:
- Globalization (world becomes smaller)
- Ethics and social responsibility (ecological sustainability and scandals)
- Responsiveness (to respond fast to environmental changes, organizational crisis and
shifting customer expectations)
- Digital workplace
- Diversity (older workers and women)
Organizations = (1) Social entities that (2) are goal-directed, (3) are designed as deliberately
structured and coordinated activity systems, and (4) are linked to the external environment.
Chapter 2 – Perspectives on organizations
Closed-system = A perspective that focuses exclusively upon the own organization.
Organizations are conceived as self-contained, effectively sealed off from the outside world.
The organization could be more effective through internal design.
Open system = A way of thinking that pays attention to the (open) boundary between the
organization and its context. Developing a design that effectively manages the exchanges
across this boundary is, in an open systems perspective, key to survival and prosperity
(welfare).
Subsystems = A system that is identified in relation to the specific functions that are
conceived to perform for organizational survival.
This configuration framework suggests that every organization has five parts. These parts
may vary in size and importance depending on an organization’s particular environment, its
technology and other factors.
, Technical core includes the workers who do the basic work of the organization. The
production subsystem function and produces the product/service output. (Teachers in
classes, medical activities in the hospital and the production department in a manufacturing
firm.)
Technical support is responsible for creating innovations in the technical core, helping the
organization change and adapt. (R&D, technology, marketing research)
Administrative support is responsible for the smooth operation and upkeep of the
organization, including the physical and human elements. (recruiting, hiring, employee
training, cleaning building)
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.
Organizational dimensions can be categorized in two types:
1. Structural dimensions: This provide labels to distinguish (onderscheiden) some key,
internal characteristics of an organization.
2. Contextual dimensions: This characterize both the organization as a whole,
including its size, technology, etc. and the broader organizational setting.
Structural dimensions:
1. Formalization: This refers to the reliance upon written documentation in the
organization as procedures, job descriptions and policy manuals.
2. Specialization: This is the degree to which organizational tasks are subdivided into
separate jobs.
3. Hierarchy of authority: This describes who reports to whom and the span of control
(number of employees reporting to a supervisor) for each manager. Narrow span of
control = high specialization.
4. Centralization: This refers to the hierarchical level that has authority to make a
decision. Decision making at top-level = centralized.
5. Professionalism: Used to describe the level of formal education and training of
employees.
6. Personnel ratios: This 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. ->
Typically by number of employees.
2. Organizational technology: Refers to the tools, techniques and actions used to
transform inputs into outputs.
3. Environment: This includes all elements outside the boundary of the organization.
4. Goals and strategy: This defines the purpose and competitive techniques that set it
apart from other organizations.
5. Culture: This is the underlying set of key values, beliefs, understandings and norms
shared by employees.
Efficiency: This refers to the amount of resources used to achieve the organization’s goals.
Effectiveness: The degree to which an organization achieves its goals.
To use a hammer to kill a mosquito is effective, but not very efficient.
Compiled by: Dr. Pushpika Vishwanathan
Daft, Murphy, Willmott
Chapter 1 – What are organizations?
The political economy of organizations = A theoretical framework that focuses on two key
components of organizations and their interaction: the polity or fundamental norms, of the
organization and the system of authority, power and influence. The economy is the economic
structures and processes of the organization; that s, the system for processing and
transforming raw materials into the goods and services that the organization produces.
Current difficult challenges for organizations:
- Globalization (world becomes smaller)
- Ethics and social responsibility (ecological sustainability and scandals)
- Responsiveness (to respond fast to environmental changes, organizational crisis and
shifting customer expectations)
- Digital workplace
- Diversity (older workers and women)
Organizations = (1) Social entities that (2) are goal-directed, (3) are designed as deliberately
structured and coordinated activity systems, and (4) are linked to the external environment.
Chapter 2 – Perspectives on organizations
Closed-system = A perspective that focuses exclusively upon the own organization.
Organizations are conceived as self-contained, effectively sealed off from the outside world.
The organization could be more effective through internal design.
Open system = A way of thinking that pays attention to the (open) boundary between the
organization and its context. Developing a design that effectively manages the exchanges
across this boundary is, in an open systems perspective, key to survival and prosperity
(welfare).
Subsystems = A system that is identified in relation to the specific functions that are
conceived to perform for organizational survival.
This configuration framework suggests that every organization has five parts. These parts
may vary in size and importance depending on an organization’s particular environment, its
technology and other factors.
, Technical core includes the workers who do the basic work of the organization. The
production subsystem function and produces the product/service output. (Teachers in
classes, medical activities in the hospital and the production department in a manufacturing
firm.)
Technical support is responsible for creating innovations in the technical core, helping the
organization change and adapt. (R&D, technology, marketing research)
Administrative support is responsible for the smooth operation and upkeep of the
organization, including the physical and human elements. (recruiting, hiring, employee
training, cleaning building)
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.
Organizational dimensions can be categorized in two types:
1. Structural dimensions: This provide labels to distinguish (onderscheiden) some key,
internal characteristics of an organization.
2. Contextual dimensions: This characterize both the organization as a whole,
including its size, technology, etc. and the broader organizational setting.
Structural dimensions:
1. Formalization: This refers to the reliance upon written documentation in the
organization as procedures, job descriptions and policy manuals.
2. Specialization: This is the degree to which organizational tasks are subdivided into
separate jobs.
3. Hierarchy of authority: This describes who reports to whom and the span of control
(number of employees reporting to a supervisor) for each manager. Narrow span of
control = high specialization.
4. Centralization: This refers to the hierarchical level that has authority to make a
decision. Decision making at top-level = centralized.
5. Professionalism: Used to describe the level of formal education and training of
employees.
6. Personnel ratios: This 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. ->
Typically by number of employees.
2. Organizational technology: Refers to the tools, techniques and actions used to
transform inputs into outputs.
3. Environment: This includes all elements outside the boundary of the organization.
4. Goals and strategy: This defines the purpose and competitive techniques that set it
apart from other organizations.
5. Culture: This is the underlying set of key values, beliefs, understandings and norms
shared by employees.
Efficiency: This refers to the amount of resources used to achieve the organization’s goals.
Effectiveness: The degree to which an organization achieves its goals.
To use a hammer to kill a mosquito is effective, but not very efficient.
