Chapter 1: Organizations and Organization Theory
Cur rent Challenges of Organizations
•Globalization
oMarkets, technologies, and organizations are becoming increasingly
interconnected
•Ethics and social responsibility
oThe list of execs and major corporations involved in financial and ethical
scandals continues to grow
•Speed of responsiveness
oGlobalization and advancing technology has accelerated the pace at which
organizations in all industries must roll out new products and services to stay
competitive
•The digital workplace
oIn today’s workplace, many employees perform much of their work on
computers and may work in virtual teams, connected electronically to
colleagues around the world
•Diversity
oBy 2050, it is estimated that 85% of entrants into the workforce will be women
and people of colour
Rapid Change
Purpose of the Course?
Developing insights/concepts/decision making
What Is an Organization?
Organizations: social entities that are goal-directed, are designed as deliberately structured
and coordinated activity system, and are linked to the external environment
Types of Organizations
•Multinational corporations
•Small, family-owned shops
•For-profit versus non-profit organizations
Organizations exist to do the following:
1. Bring together resources to achieve desired goals and outcomes
2. Produce goods and services efficiently
3. Facilitate innovation
4. Use modern manufacturing and information technologies
5. Adapt to influence a changing environment
6. Create value for owners, customers, and employees
7. Accommodate ongoing challenges of diversity, ethics, and the motivation and
coordination of employees
Perspectives on Organizations
Closed System
•A system that is autonomous, enclosed, and not dependent on its environment
•Don’t truly exist today
•Early management concepts such as scientific management, leadership style, and
industrial engineering were closed-system approaches
Open System
•A system that must interact with the environment to survive
•It both consumes resources and exports resources to the environment, and must
continually adapt to the environment
Organization Configuration
•Technical core
oIncludes people who do the basic work of the organization
oThe primary transformation of inputs to outputs occurs here
oIncludes production department, teachers and classes, medical activities in
hospitals, etc.
•Technical Support
oHelps the organization adapt to the environment
oTechnical support employees such as engineers and researchers scan the
environment for problems, opportunities, and technological developments
oResponsible for creating innovations in the technical core
•Administrative Support
oResponsible for the smooth operation and upkeep of the organization, including
its physical and human elements
oIncludes HR activities like recruiting and hiring, making compensation/benefit
plans, employee training, etc.
•Management
oA distinct subsystem responsible for directing and coordinating other parts of
the organization
oTop management provides direction, strategy, goals, and policies for the entire
organization or major divisions
oMiddle management is responsible for implementation and coordination at the
departmental level
Dimensions of Organization Design
Structural Dimensions
1. Formalization
Pertains to the amount of written documentation in the organization, including
procedures, job descriptions, regulations, and policy manuals, describing
behaviour and activities
A large state university would be high on formulization and a small, family-
owned business would be low on formulization