HRM303 Chapter Notes - Chapter 2: Differentiator, Organizational Culture, Organizational Architecture

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Chapter 2: a strategic framework for compensation
Organizations: systems that apply procedures to a set of resources to transform
inputs into valued outputs
Technology: procedures and resources used by an organization to transform inputs
into outputs
Four types of resources in the transformation process:
Human, information, physical and financial
Management must acquire these resources, combine and deploy them to
achieve organizational goals
Business strategy: organization’s plan for how it will achieve its goals
Organization structure: vehicle for executing this strategy and has several
structural dimensions or variables
A strategic framework for compensation
Contingency approach to organization design: approach to organization design
based on premise that the best type of structure for an organization depends on the
key contingencies associated with that organization
Structural variables
To generate behaviours necessary to execute a corporate strategy, an
organization structure needs to do two main things: divide total task in
manageable subtasks and then it needs to coordinate the completion of these
subtasks so they fit together to accomplish organization’s total task
Job design: dimension of organization structure that describes the manner in which
the total task of an organization is divided into separate jobs
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Coordination and departmentation: dimension of organization structure that
describes the methods used to coordinate the work of individual employees and
subunits in an organization
Decision making and leadership structure: a dimension of organization structure
that describes the nature of the decision making and leadership processes used in
an organization
Communication and information structure: dimension of organization structure
that describes the nature of and methods for communication in an organization
Control structure: dimension of organization structure that describes the nature of
the processes used to control employee behaviour in an organization
Managerial strategy
Three main patterns of structural variables known as managerial strategies have
emerged:
Classical managerial
Human relations managerial strategy
High involvement managerial strategy
Managerial strategy: one of three main patterns or combinations of structural
variables that can be adopted by an organization – namely, classical, human
relations, or high involvement
Contextual variables
Contextual variables: factors in the firm’s context that indicate the most
appropriate managerial strategy and organizational structure
Domain: describes specific products or services offered by a given organization
Interaction between the goals of the founders and general environment in
which the firm will be situated, organization’s domain emerges
Task environment: portion of the general environment that has direct relevance to
a given organization
Key elements of task environment include customers or clients of
organization as well as competitor, suppliers and regulatory agencies
Managerial strategies and reward systems
Classical managerial strategy: an approach to management that assumes most
employees inherently dislike work but can be induced to work in order to satisfy
their economic needs
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