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Ch01 Organizations and Organization Theory.doc

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Joel Marcus

Chapter 1: Organizations and Organization Theory Current Challenges of Organizations • Globalization o Markets, technologies, and organizations are becoming increasingly interconnected • Ethics and social responsibility o The list of execs and major corporations involved in financial and ethical scandals continues to grow • Speed of responsiveness o Globalization 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 o In 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 o By 2050, it is estimated that 85% of entrants into the workforce will be women and people of colour 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 An Open System and its Subsystems Environment Transformation Raw Materials People Information Output Products Input and resources Services Financial Process resources Boundary Production, Boundar Subsystems Spanning Maintenance, y Adaptation, Spanning Management Organization Configuration • Technical core o Includes people who do the basic work of the organization o The primary transformation of inputs to outputs occurs here o Includes production department, teachers and classes, medical activities in hospitals, etc. • Technical Support o Helps the organization adapt to the environment o Technical support employees such as engineers and researchers scan the environment for problems, opportunities, and technological developments o Responsible for creating innovations in the technical core • Administrative Support o Responsible for the smooth operation and upkeep of the organization, including its physical and human elements o Includes HR activities like recruiting and hiring, making compensation/benefit plans, employee training, etc. • Management o A distinct subsystem responsible for directing and coordinating other parts of the organization o Top management provides direction, strategy, goals, and policies for the entire organization or major divisions o Middle management is responsible for implementation and coordination at the departmental level Top Management 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 2. Specialization  The degree to which organizational tasks are subdivided into separate jobs 3. Hierarchy of authority  Describes who reports to whom and the span of control for each manager  The hierarchy is related to span of control (the number of employees reporting to a supervisor), and when the span is narrow, the hierarchy is tall, and vice versa 4. Centralization  Refers to the hierarchical level that has authority to make a decision  When decision making is kept at the top level, the organization is centralized  When decisions are delegated to lower organizational levels, it is decentralized 5. Professionalism  The level of formal education and training of employees  It’s considered high when employees require long periods of training  Professionalism is measured as the average number of years of education of employees 6. Personnel ratios  Refer to the development of people to various functions and departments  Includes the administrative ratio, the clerical ratio, the professional staff ratio, and the ratio of indirect to direct labour employees  A personnel ratio is measured by dividing the number of employees in a classification by the total number of organizational employees Contextu
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