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Organizational Behaviour II Midterm.docx

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Wilfrid Laurier University
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Organizational Behaviour II – Textbook Notes Chapter One- Organizations and Organizational Theory Change Strategy – plan to guide organizational change Current Challenges For Businesses: 1) Globalization o world is getting smaller- for organizations as many have expanded on a global scale o sense of interconnectedness- some places have headquarters for specific departments thus comm. is harder >> have to learn to cross lines of time, culture geo in order to survive 2) Ethics and Social Responsibility o Ethical- becomes an important part of business o Reputations can become tarnished with unethical practices o Managers and CEO’s one must model proper behavior- role model in order for business to successfully operate morally 3) Speed of Responsiveness o must respond quickly and decisively to environmental changes, organization cries, shifting customer expectations o trends, constant innovation must be met = satisfy customers 4) Digital Workplace need to be technologically savvy in disintegration- often eliminates middle person technologically adaptive 5) Diversity no organization should ignore, provides prospective must have an international face and make up builds organizational culture What is an Organization Organizations are: 1) social enterprises 2) goal directed 3) designed deliberately structured and coordinated activity systems 4) Linked to external environment  comprise of people and relationships w/ each other not buildings -although it can be separated by depart., it has to have a vision in mind- team like setting Organization cannot survive w/o interacting w/ external enviro., customers and environments, suppliers, competitors Types of Organizations MNC, small, large, family oriented, non-profit (money come from grants, fundraisers, corporate donations) Non profits- do no have conventional “bottom line” – last figure Importance of Organizations o All around us they shape our lives o Bring together resources to achieve desired goals and outcomes o Produce goods and services o Facilitate innovation o Use Modern manufacturing and info technologies o Adapt and influence changing environment o Create value for owner, customer and employees o Accommodate ongoing challenges of div., ethics, motives and coordination of employees Perspectives on Organizations Closed System- a system that is autonomous, enclosed, and not dependent on environment- Example: could be seen as a cult Open system- must interact with environment to survive, it both uses resources and exports them to the environment, does not conceal itself  Ex: Tim Hortons, Air Canada etc Asystem is set of interacting elements that acquires inputs from the environment transforms and discharges outputs to external environment Asystem comprises several subsystems >> perform the specific functions required for organizational survival such as boundary spanning, production, maintenance, adaptation and management subsystems are responsible for organizational change and adaptation. Management is a distinct subsystem – responsible for directing other subsystems Organizational Configuration >> Mintzberg’s Five Basic Parts of an Organization Insert Picture Technical core- includes people who do the basic work of organization, performs the production subsystem function and actually produces product or service >>Create the widgets Ex:Air Canada TC= pilots, baggage handlers, flight attendants Management-responsible for directing, strategy, goals and polices for entire organization or major divisions of management, middle in traditional are seen for mediation to top- who create the overall tempo of business Technical Support – helps the organization adapt to environment, employees such as engineers and researchers, scan environment for problems opportunities and technological development. Innovation, organizational change and adaption. Administrative Support – is responsible for smooth operation and upkeep of the organization including physical and human elements. – Includes HR, recruiting, hiring, establishing compensation and benefits, employee training Dimensions of Organizational Design Structural Dimensions - provide labels to describe the internal characteristics of an organization. – Create basis for measuring and comparing organizations 1. Formalization- rules, written documentation, job descriptions 2. Specialization – degree to which organizational tasks are subdivided into separate jobs- extensive each employee performs only a narrow range of tasks 3. Hierarchy of authority – describes who reports to whim and the span of control for each manager – hierarchy depicted by vertical lines 4. Centralization –refers to hierarchel level that has authority to make decision. Centralized at top management, if on lower then decentralized. 5. Professionalism- level of formal education, training etc. 6. Personnel Ratio- refer to deployment of people to various functions and departments. Include admin ratio’s, the clerical ratio, the professional staff ratio, and the ratio of indirect to direct Contextual Dimensions Contextual dimensions- characterize the whole organization, including its size, technology, environment and goals. Represent both organization and environment >> envisioned as a set of overlapping elements that underlie an organization and work processes 1. Goals and Strategy- define purpose and competitive techniques that set it apart from other organization 2. Environment- all elements outside of the boundary of organization, include industry, government, customers supplier and financial community 3. Size- organizations scale reflected in number of people in the organization. Measured as a whole 4. Culture- underlying values, beliefs, understandings and norms shared by employees. – ethical, commitment etc 5. Technology- tools techniques and actions used to transform inputs into outputs Performance and Effectiveness Outcomes Effectiveness is a broader term- meaning the degree to which an organization achieves goals- Efficiency-“doing things right” while effectiveness is “doing the right thing” Pg.23 Picture Stakeholder Approach- integrates diverse organizational activites by looking at various organizational stakeholders and what they want from the organization  stakeholder- is any group within or outside of organization that has a portion of companies performance Ex: Wal-Mart- customers (stakeholders) love its efficiency and low prices but low cost company emphasis – supplier (stakeholders as well) have caused some frustration. This challenges such a huge organization –leading to strains on some stakeholder relationships ** it is important to note that stake holder interests do conflict Evolution of Organizational Design Historical Perspectives o Scientific Management – Fredrick Taylor  efficiency is everything  SM- claims that decisions about organization and job design should be based on accurate scientific study of individual situations  In SM approach managers develop precise standard procedures for doing each job, select workers with appropriate abilities, train in standard, plan work, and wage incentive to increase output. Ex: Bethlehem Steel Plant- proper tools, resources man was capable of loading 43 as oppose to 11.3 tonnes a day upping wage from 1.15- 1.85 to increase productivity level o Administrative Principles- Henri Fayol  proposed 14 principles of mgmt.  looked at design and functioning of organization as a whole  principles formed the foundation for modern management practice organizational design both SM and AP were powerful and gave organizations fundamental new ideas for establishing high productivity and increase prosperity. Bureaucratic Organizations- emphasized designing and managing organizations on an impersonal, rational basis through elements such as clearly defined authority and responsibility, formal record keeping  Standardized worked well for industrial age Hawthorne Studies –positive treatment of employees improved their motivation and productivity Led to HR management, revolution of worker treatment, leadership and motivation Contingency- means one thing depends on other things and for organizations to be effective there must be a “goodness of fit” between their structure the conditions in their external environment >>“It depends” Chaos theory- suggest that relationships in complex, adaptive systems –including organizations are nonlinear and made up of numerous interconnections and divergent choices to create unintended effects and render the universe unpredictable Learning Organization Learning organization- promotes communication and collaboration so that everyone is engaged in identifying and solving problems enabling the organization to continuously experiment, improve and increase the capability --based on equality, limited hierarchy, adaptability , open info --culture that encourages participation, and adaptability --essential value problem solving vertical structure that creates distance is disbanded in learning Tasks vs. Empowered Roles Tasks- narrowly defined piece of work assigned to a person- traditional organizations break down things into tasks – specialization, efficient performances Roles-has discretion and ability to achieve an outcome or meet a goal ---roles take place in learning Competitive to Collaborative Competitive- efficient Collaborative- learning Levels of Analysis  normally characterize organizations  4 levels of analysis- external environment, organization level of analysis, group level of analysis, individual level analysis Organizational Behaviour- micro approach to organization because it focuses on individuals within organizations as relevant units of analysis. >>related to interactions among diverse employees Organizational theory- macro examination of organizations because it analyzes the whole organization as unit >>facilitate innovation managers need to understand how structure and context >> relevant to top and middle management concerns, only partly concerned with lower because level of supervision >>> BIG PICTURE Meso theory-concerns the integration of both micro and macro levels of analysis. Group affect the organization and the organization in return influences individuals and group Chapter 2  Organizational Purpose and Structural Design  -organization is created to achieve purpose, direction and end purpose -- decided by the CEO and top management team the primary responsibility of top management is to determine an organizations goals, strategy, and design therein adapting organization to a changing environment Mission -- overall goal or organization is the million Mission is sometimes called the official goals- which refers to formally stated definition of business scope and outcomes the organization is trying to achieve Official Goals Typically define business operations, and focus on values, markets, and customers that distinguish the organization - it communicates to current and prospective employees, customers, investors, suppliers Operative Goals -designate the ends sought through the actual operating procedures of the organization and explain what the organization is actually trying to do -describe measureable outcomes and are often concerned with short run o Overall Performance - profitability, reflects overall performance for profit Chapter 2  Organizational Purpose and Structural Design  -measureable o Resources -acquisition of materials o Market -relate to market share o Employee Development -training promoting safety o Innovation and Change -internal flexability and readiness to adapt to unexpected changes o Productivity -concern the amount of output achieved from available resources- inputs required Importance of Goals -Official and mission describes a system for organization, operative represent primary tasks of organization, official legitimize, operative are more well defined Framework for Selecting Strategy and Design Strategy- plan for interacting with competitive environment to achieve organizational goals Goals- define where the organization wants to go and Strategies define how it will get there Porters Competitive Strategies Focus strategy- in which organization concentrates on specific market or buyer group is further divided into focused low cost leadership or focsed differentiation Chapter 2  Organizational Purpose and Structural Design  4 Basic Strategies: o Differentiation Strategy- organizations attempt to distinguish their products or services from others in the industry May use advertising, exceptional service, technological deatures This strategy can reduce rivalary with competitors and fight off the threat of substitute products – loyal to brand o Low Cost Leadership Tries to increase share by emphasizing low cost compared to competitors o Focus- the focus concentrates on a specific regional market or buyer group Miles and Snow Strategy Typology o Prospector - is to innovate, take risks, seek out new opportunities and grow - suited to a dynamic, growing environment where creativity is more important than efficiency Ex: blackberry o Defender - is almost opposite of prospector. Concerned with stability or even retrenchment o Analyzer - tries to maintain a stable business while innovation periphery o Reactor - is not really a strategy, rather reactors to environmental threats and opportunities in ad hoc fashion Porters Competitive Strategies Chapter 2  Organizational Purpose and Structural Design   Differentiation Organizational Design: Learning orientation acts in a flexible, loosely knit way, with strong horizontal coordination Strong capability in research Values and builds in mechanisms for customer intimacy Rewards employee creativity, risk taking and innovation Learning Approach  Low Cost Leadership Efficiency orientation, strong central authority, tight cost control, with frequent detailed control reports Standard operating procedures Highly efficient procurement and distribution systems Close supervision, routine tasks; limited employee empowerment EfficiencyApproach Miles and Snow  Prospector –learning orientation, flexible fluid, decentralized structure Strong capability in research  Defender - efficiency orientation, centralized authority and tight cost control Emphasis on production efficiency low overhead Chapter 2  Organizational Purpose and Structural Design  Close supervision, little employee empowerment Analyzer  Balances efficiency and learning tight cost control with flexibility and adaptability Efficient production for stable product lines, emphasis on creativity research, risk taking for innovation  Reactor - no clear organizational approach design characteristics may shift abruptly, depending on current needs Structure- fluid flexible with strong horizontal coordination Other Factors Affecting Organizational Design - the emphasis placed on efficiency and control versus learning and flexibility is determined through the contingencies- environment, size, technology, life cycle, organizational culture Organizational goals represent the reason for an organization’s existence and the outcomes it seeks to achieve Effectiveness is a broad concept, it implicitly takes into consideration a range of variables at both the organizational and departmental level - evaluates the extent to which multiple goals- whether official or operative- are attained Efficiency is more limited concept that pertains to the internal words the organization Contingency EffectivenessApproaches Goal approach- to organizational effectiveness is concerned with output side and whether the organization achieves its goals in terms of desired levels of output Chapter 2  Organizational Purpose and Structural Design  Resource based approach- assesses effectiveness by observing the beginning process and evaluating whether the organization effectively obtains resources necessary for high performance Internal process- looks at internal activities and assesses effectiveness by indicators of internal health and efficiency Resource BasedApproach - looks at the input side of transformation process - assumes organizations must be successful in obtaining managing valued resources in order to be effective Organizational effectiveness is defined as the ability of the organization to obtain scarce and valued resources and full integrate them Indicators encompass the following dimensions: Bargaining position- the ability of the organization to obtain from its environment scarce and valued resources – financial, raw materials, human resources Abilities of the organization decision makers to perceive and correctly interpret the real properties of external environment Abilities of managers to use tangible and intangible resources in day-to day to achieve superior performance Ability of the organization to respond to changes in the environment Usefulness - useful when other indicators of performance are difficult to obtain Not for profit and social welfare organizations- it is hard to measure output goals or internal efficiency Disadvantage- vaguely considers the organizations link to the needs of customers in external environment Chapter 2  Organizational Purpose and Structural Design  Internal ProcessApproach 7 indicators 1. Strong organizational culture, positive work climate 2. Team spirit, group loyalty, teamwork 3. Confidence, trust and communication between workers and management 4. Decision making near sources of info, regardless of where those sources are on the organizational chart 5. Undistorted horizontal and vertical communication, sharing of relevant facts and feelings 6. Rewards to managers for performance, growth, and development 7. Interaction between the organization and its parts with conflict that occurs over projects resolved in the interest of the organization Usefulness Is important because the efficient use of resources and harmonious internal functioning are ways to assess organizational effectiveness Disadvantages- total output and the organization’s relationship with the external environment are not evaluated GoalApproach Effectiveness consists of identifying an organizations output goals and assessing how well organization has attained those goals Indicators The important goals to consider are operative goals, efforts to measure effectiveness have been more productive using operative goals than using office goals Usefulness Chapter 2  Organizational Purpose and Structural Design  - used in business organizations because output goals can be readily measured. Firms typically evaluate performance terms of profitability, growth, market share, and return on investment Identifying operative goals and measuring performance of an organization are not always easy Disadvantage some goals are hard to measure, Integrated Effectiveness Model Competing values model tries to balance a concern with various parts of the organization rather than focusing on one part Indicators-  the first value dimension pertains to organizational focus- whether dominant values concern issues that are internal and external to the company  The second value dimension pertains to organizational struct, whether stability vs flexibility is the dominant structural consideration o Acombination of external focus and flexible structure leads to an open systems emphasis o dominant value is establishing a good relationship with the environment to acquire resources and grow o Rational Goal Emphasis- represents management values of structural control and external focus o goals: are productivity, efficiency and profit o Human Relations- incorporates values of an internal focus and flex structure Usefulness the competing values model makes two contributions, first it intergrates diverse concepts of effectiveness into a single perspective -incorporates the ideas of output goals, resource acquisition and HR development as a goal the organization tries to accomplish Model calls attention to effectiveness criteria as management values and show how opposing values exist at the same time CH 3 Fundamentals of Organizational Structure 01/30/2014 3 Key components of definition of organizational structure CH 3 Fundamentals of Organizational Structure 01/30/2014 1. Organizational structure designates formal reporting relationships include number of levels in the hierarchy and the span of control of managers and supervisors 2. Identifies the grouping together of individual departments and of departments into the total organization 3. Includes the design of systems to ensure effective communication, coordination and integration of efforts >> pertain to both vertical and horizontal aspects of organizing The third element pertains to the pattern of interactions amoung organizational employees Organizational chart stems- largely from the Industrial Revolution Information Processing Perspective on Structure • vertical linkages are designed primarily for control, horizontal linkages are designed for coordination and collaboration which usually means reducing control • Organizations can choose whether to orient toward a more traditional organization designed for efficiency which emphasizes vertical communication and control or toward a more learning organization which emphasizes horizontal communication and coordination • Vertical- functional- traditional- centralized decision- making which means problems and decisions are funneled to top levels of hierarchy for resolution • Contemporary, learning, Divisional, horizontal- Decentralized Decision making- is pushed down to lower organizational levels less hierarchy, openness • Ex Proctor and Gamble Vertical information linkages  are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization ­ lower levels should carry out activities consistent with top goals Hierarchical Referral CH 3 Fundamentals of Organizational Structure 01/30/2014 -chain of command, which is illustrated by vertical lines, of problem arises that employees don’t know how to solve, reffered up to the next level in hierarchy  communication channels Rules and Plans ­ rule or procedure can be established so employees know how to respond without communicating directly ­ rules provide a standard information source Vertical info systems- • is another strategy for increasing vertical information capacity • include the periodic reports written information and computer based communications distributed to managers Horizontal Information Linkages • -horizontal linkage- refers to amount of communication and coordination horizontally across organizational departments 1) Information systems • significant method of providing horizontal linkages is the use of cross-functional information systems • Ex: Siemens – uses organization wide info system to 450 thousand employees around the world to share knowledge and collaborate 2) Direct Contact higher level of horizontal linkage is direct contact between managers and employees • affected by a problem  Liaison role- promotes direct contact • is a person located in one department but has responsibility for communicating and achieving coordination with another department CH 3 Fundamentals of Organizational Structure 01/30/2014 • generally links two departments 3) Tasks Forces • when linkage involves several departments a more complex device such as a task force is required. Aforce is a temporary committee composed for representatives from each organizational unit affected by a problem • are an effective horizontal linkage device for temporary issues to solve problems by direct horizontal coordination and reduce the information load the vertical hierarchy • Ex: set up specifically to identify ideas for increasing cooperation and component sharing among Chrysler, Mercedes and Mitsubishi 4) Full-time integrator • a stronger horizontal linkage device is to create a full-time position solely for purpose of coordination. • Generally title of project manager, product manager, program and brand manager • Located outside the departments and has the responsibility for coordinating several departments • Ex: GM has brand managers who are responsible for marketing and sales strategies for each of GM’s new models 5) Teams • teams (project teams) tend to be t
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