ITM 102 Lecture Notes - Standard Operating Procedure, Agency Cost, Transaction Cost

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Capital and labour are primary production factors provided by the environment. Stable, formal social structure that takes resources from environment and processes them to produce outputs. A formal legal entity with internal rules and procedures, as well as a social structure. A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution. Principle of efficiently: maximizing output using limited inputs. Routine (standard operating procedure) are precise rules, procedures and practices that have been developed to cope with virtually all expected situation. Firm become more efficiently for producing goods and services as employees learn the routine. Occupy different positions with different specialties, concerns, and perspectives (leads to political struggle, competition and conflict). Divergent viewpoint about how resources, rewards, and punishment should be distributed. All organizations have bedrock unassailable, unquestioned assumptions that define their goals and products. Organizations and environments have a reciprocal relationship.

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