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Chapter 1

Chapter 1 BU398.docx

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Wilfrid Laurier University
Shawn Komar

BU398 Chapter 1 – Organizations and Organizational Theory Week 1 Current Challenges -The world is changing more rapidly than ever before Globalization -With rapid advances in technology and communications, the time it takes to exert influence around the world from even the most remote locations has been reduced from years to only seconds -Markets, technologies, and organizations are increasingly interconnected -This growing interdependence means that the environment for companies is becoming extremely complex and competitive -Organizations have to learn to cross lines of time, culture, and geography in order to survive -All companies are searching for the right structures and processes that can help them reap the advantages of global interdependence and minimize disadvantages Ethics and Social Responsibility -Leaders face tremendous pressure from the government and the public to hold their organizations and employees to high ethical and professional standards -We encourage business leaders to pursue business as a “calling” to address some of the public’s concerns by “both teaching and role modelling ethical behaviours for the young Canadians who will determine the kind of Canada we will become” Speed of Responsiveness -Organizations must respond quickly and decisively to environmental changes, organizational crises, or shifting customer expectations -Globalization and advancing technology have accelerated the pace at which organizations in all industries must roll out new products and services to stay competitive -Today’s customers also want products and services tailored to their exact needs -Crisis management has moved to the forefront in light of terrorist attacks; a tough economy, rocky stock markets, and weakening customer confidence; widespread ethical scandals; and, in general, an environment that may dramatically shift at a moment’s notice The Digital Workplace -Organizations have been engulfed by information technology that affects how organizations are designed and managed -Many employees perform much of their work on computers and may work in virtual teams, connected electronically to colleagues around the world -The world of e-business is booming as more and more business takes place by digital processes over a computer network rather than in physical space -These advances mean that organizational leaders not only need to be technologically savvy but also are responsible for managing a web of relationships that reaches far beyond the boundaries of the physical organization, building flexible e-links between a company and its employees, suppliers contract partners, and customers Diversity -Many of today’s leading organizations have an international face -This growing diversity brings a variety of challenges, such as maintaining a strong organizational culture while supporting diversity, balancing work and family concerns, and coping with the conflict brought by varying cultural styles What is an Organization? Definition BU398 Chapter 1 – Organizations and Organizational Theory Week 1 -Organizations are social entities that are goal directed, designed as deliberately structured and coordinated activity systems and linked to the external environment -Organizations comprise people and their relationships with one another -An organization exists when people interact with one another to perform essential functions that help attain goals -Managers deliberately structure and coordinate organizational resources to achieve the organization’s purpose -An organization cannot exist without interacting with customers, suppliers, competitors, and other elements of the external environment Types of Organizations -Some are large and some are small -An important distinction is non-profit and for-profit business organizations Importance of Organizations -Organizations are central to people’s lives and exert a tremendous influence -Organizations are all around us and shape our lives in many ways -Organizations bring together resources to accomplish specific goals -Organizations also produce goods and services that customers want at competitive prices -Companies look for innovative ways to produce and distribute desirable goods and services more efficiently – through e-business and through the use of computer-based manufacturing technologies -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 and 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 Open Systems -A closed system would not depend on its environment; it would be autonomous, enclose, and sealed off from the outside world -A true closed system cannot exist -The management of a closed system would be quite easy: the environment would be stable and predictable and would not intervene to cause problems -An open system must interact with the environment to survive; it both consumes resources and exports resources to the environment – it cannot seal itself off, it must continuously adapt to the environment -Every system that must interact with the environment to survive is an open system -System – a set of interacting elements that acquires inputs from the environment, transforms them, and discharges outputs to the external environment -Inputs to an organizational system include raw materials and other physical resources, employees, information, and financial resources -Outputs include specific products and services for customers and clients -A system comprises several subsystems -These subsystems perform the specific functions required for organizational survival, such as boundary spanning, production maintenance, adaption, and management BU398 Chapter 1 – Organizations and Organizational Theory Week 1 -Boundary subsystems are responsible for exchanges with the external environment – activities such as purchasing supplies or marketing products -Adaptive subsystems are responsible for organizational change and adaption Organizational Configuration -Various parts of the organization are designed to perform the key subsystem functions Technical Core -Includes people who do the basic work of the organization -Actually produces the product and service outputs of the organization -Production department Management -Responsible for directing and coordinating other parts of the organization -Provides direction, strategy goals and policies for the entire organization or major divisions -Middle management is responsible for implementation, and coordination at the departmental level Technical Support -Helps the organization adapt to the environment -Scan the environment for problems, opportunities, and technological developments Administrative Support -Responsible for the smooth operation and upkeep of the organization, including its physical dn human elements -Might include the human resources department Dimensions of Organizational Design -These dimensions describe organizations in much the same way that personality and physical traits describe people -Organizational dimensions fall into two types: structural and contextual -Structural dimensions- provide labels to describe the internal characteristic of an organization -Contextual dimensions – characterize the whole organization, including its size, technology, environment and goals Structural Dimensions 1. Formalization – the amount of written documentation in the organization 2. Specialization – the degree to which organizational tasks are subdivided into separate jobs 3. Hierarchy of authority – who reports to whom and the span of control for each manager 4. Centralization – the hierarch
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