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Chapter 8

BUSI 3103 Chapter Notes - Chapter 8: Bureaucracy

Course Code
BUSI 3103
Rumisa Shaukat

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Large Size Organization: economies of scale, global reach, mechanistic structure, complex and
stable market
Small Size Organization: Responsive, flexible, regional reach, organic structure, Simple and Niche-
Big-Small Hybrid Design: combines resources of large organization with simplicity and flexibility of a
small one.
Entrepreneurial (Life Cycle 1): Informal, nimble, focus of owners on production of 1 product/service
and survival. Mgmt issues pop up (need for leadership)
Collectivity Stage (Life Cycle 2): organization begins to develop clear goals and direction. Depts
formed with a hierarchy of control. Lower-level employees may feel restricted by top mgmt.
Formalization Stage (Life Cycle 3): Installation and use of rules, procedures, and control systems.
More formal communication, top mgmt focus on strategy and planning. Delegation with control.
Elaboration (Life Cycle 4): more flexible in design, collaboration and teamwork within bureaucracy.
cross functional teams and renewal might be needed after periods of decline.
Weberian Bureaucracy: Rules/Procedures, specialization and division of labor, hierarchy of
authority, technically qualified employees, position and position holder separate, written
Bureaucratic Control (Control Strategy): Use of rules, policies, hierarchy of authority, written
documentation and standardization to standardize behavior
Market (Control Strategy): Use of prices, competition and exchange relationships to exchange
output and productivity
Clan (Control Strategy): use of tradition, shared values, beliefs and trust to control behavior. Best
when Uncertainty and Ambiguity is high
As Organization Size increases: formalization increases, centralization decreases. support staff
increase, top admin and line employees decrease
Organizational Atrophy: when organization becomes inefficient and too bureaucratic
Vulnerability: Organization's strategic inability to prosper in its environment
Environmental Decline or Competition: Reduced energy and resources available to support an
Blinded (Decline Stage 1): internal/external change that threatens organization long-term survival.
Good info will boost survival.
Inaction (Decline Stage 2): denial occurs despite deteriorating performance. Prompt action will
boost survival.
Fault Action (Decline Stage 3): Poor performance can't be ignored, Leaders consider changes.
Correct action will boost survival.
Crisis (Decline Stage 4 ): Organization can't cope with decline, experience chaos, anger, swift
changes. Reorganization will boost survival.
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