Chap1.pdf

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Department
Business
Course
BUS3 161B
Professor
Declineto State
Semester
Fall

Description
Chapter 1 What isAn Organization 1. Organization: a tool people use to coordinate their actions to obtain something they desire or value, to achieve their goals. ɾ Created in response to and a means of satisfying some human need. ɾ New organization created when new tech or needs are discovered ɾ▯Old organizations die/transform when needs are satisfied or no longer important or have been replaced 2. Entrepreneurship: the process by which people recognize opportunities to satisfy needs an the negater an use resources to meet the need How Does an Organization Create Value 1. Organizational Environment: the set of forces and conditions that operate beyond an organizations boundaries but affect its ability to acquire and use resources to create value ɾ the amount of value an organization creates is a product of the quality of skills and ability to learn from and adapt to the environment 2. Value creation takes place at 3 stages - Value Creation Model ɾ Input: includes resources like raw materials, machinery, information and knowledge, human resources, money, capital. ex customers ▸  the way an organization choose and obtains the input it needs from its environment to produce g&s determines how much value the organization creates at this stage ɾ Conversion: ex. satisfying customers with service ▸  the amount of value is determined by how well the organization uses it's inputs to transform into outputs is how much value is created at the conversion stage ɾ Output: results of conversion process of finished g&s that the organization releases to its environment where they are purchases to satisfy needs. ex. satisfied customer ɾrevenue allows for the company to continually improve its skills and expand to satisfy customers Why Do Organizations Exist 1.Allows people to… ɾIncrease specialization and division of labor ɾUse large-scale tech ▸  economics of scale: cost savings that results when g&s are produced in large volume on automated production lines ▸  economics of scope: cost savings that result when an organization is able to use underutilized resources more effectively cause they are shared across several diff products/tasks ɾManage the eternal environment ▸  pressures arise from the environment and an organization must be ready to anticipate or influence these pressures ɾEconomize on truncation costs ▸  transaction costs: costs associated with negotiating, monitoring, and governing exchanges between people ▸  goal is to have a good work system so productivity increase ɾExert power and control ▸  organization can pressure workers to conform to increase productivity/company goals/ needs Organizational Theory, Design and Change 1. Organizational theory: study of how organizations function and how organizations they affect and are affected by the environment 2. Organizational Structure ɾorganizational structure: formal system of task and authority relationships that control how ppl coordinate their actions and use resources to achieve organizational goals ▸  control ppl by coordinating ppl to achieve work goal ▸  contr
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