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01:920:101 (90)
Lecture 6

Lecture 6

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Rutgers University
Professor Wilhelms

hhapter 6 C Formal Organizations I. Formal Organizations A. Core Concept 1: The formal organization is a coordinating mechanisthat brings together people, resources, and technology, and then channels human activity toward achieving a specific outcome or goal (Aldrich and Marsden 1988). 1. Formal organizations are classified as secondary groups, distinguishing them from primary groups. a. Primary groups - characterized by face-to-face contact and strong, emotional ties among members; b. Secondary groups - impersonal associations among people who interact with a specific purpose c. Secondary groups can range from small to extremely large. Formal organizations, many of which are large, qualify as secondary groups. d. Formal organizations can be voluntary, coercive, or utilitarian. i. Voluntary organizations (or voluntary associations) - draw in people who give time, talent, or treasure to support mutual interests, meet important human needs, or achieve a not-for- profit goal ii.Coercive organizations - draw in people who have no choice but to participate iiiUtilitarian organizations - draw people seeking material gain in the form of pay, health benefits, or a new status II. The Concept of Bureaucracy A. Most formal organizations can be classified as bureaucracies— organizational structures that strive to use the most efficient means to achieve a valued goal. 1. Bureaucracy - a completely rational organization; one that uses the most efficient means to achieve a valued goal that consists of seven major characteristics: a. A clear-cut division of labor exists. b. Authority is hierarchical. c. Written rules specify the exact nature of relationships among personnel and describe the way tasks should be carried out. d. Positions are filled based on objective criteria and not based on emotional considerations. e. Administrative decisions, rules, procedures, and activities are recorded in a standardized format and preserved in permanent files. f. Authority belongs to the position, not to the particular person who 65 fills that position. g. No one receives special treatment. h. These seven characteristics describe a bureaucracy as an ideal type – “ideal” not in the sense of being desirable but as a standard against which real cases can be compared. 2. Formal and Informal Dimensions a. Formal dimension - the official aspect of the organization; it consists of job descriptions and written rules, guidelines, and procedures established to achieve valued goals. b. Informal dimension includes behaviors that depart from the formal dimension, such as employee-generated norms that evade, bypass, or ignore official policies and regulations. B. Rationalization 1. Core Concept 2: The concept of rationalization—a process in which thought and action rooted in custom, emotion, or respect for mysterious forces is replaced by instrumental-rational thought and action—helps us understand how striving to achieve valued goals can have undesirable, even disastrous, consequences. a. Rationalization refers to the way daily life is socially organized to accommodate large numbers of people, but it does not necessarily refer to the way individuals actually think. b. Rationalization does not assume better understanding or greater knowledge. c. When people identify a valued goal and decide on the means (actions) to achieve it, they seldom consider less profitable or slower ways to achieve it. C. The McDonaldization of Society 1. Core Concept 3: One organizational trend guided by instrumental- rational action is the McDonaldization of society, a process in which the principles governing fast-food restaurants come to dominate other sectors of society. 2. Those principles are a. efficiency - an organization’s claim to offer the “best” products and services, which allow consumers to move quickly from one state of being to another b. quantification and calculation - numerical indicators that enable customers to evaluate a product or service easily c. predictability - the expectation that a service or product will be the same no matter where or when it is purchased d. control - is the guiding or regulating, by detailed planning, of the production and delivery of a service or product 3. Iron cage of rationality - describes the set of irrationalities generated by rational systems D. Expanding Market Share 1. Organizations grow from local operations (McDonald’s began as one restaurant in Illinois in 1955) to global giants by enacting measures to increase profits. 2. Organizations employ five major strategies to reach the valued goal of 66 turning a profit: a. Lower production costs. b. Create new products. c. Improve existing products to make previous versions obsolete. d. Identify ways for people to purchase more products. e. Create new markets. E. Multinational and Global Corporations 1. Multinational corporations (“multinationals”) - enterprises that own, control, or license production or service facilities in countries other than where the corporations are headquartered 2. Critics of multinational corporations maintain that they are engines of destruction. a. They exploit people and natural resources in order to manufacture products inexpensively. b. They take advantage of desperately poor labor forces, lenient environmental regulations, and sometimes nonexistent worker safety standards. c. Externality costs: Hidden costs of using, making, or disposing of a product that are not figured into the price of the product or paid for by the producer. 3. Supporters of multinational corporations maintain that these companies are agents of progress. III. Consequences of Instrumental-Rational Action A. Core Concept 4: To be efficient, organizations somet
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