ADMS 1000 Chapter Notes - Chapter 4: Hierarchical Organization, Outsourcing, Cloning
Course CodeADMS 1000
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Chapter 4 – Establishing the Structure of
The Change Nature of Organizations
Traditional Bureaucracy (TB) Modern Organizations
Tall/ Hierarchical Flat
Rigid, rule oriented Fluid
Buffered from the environment Integrated
Narrow market Global
•Wider span of control than Hierarchical.
•Flat organization is an organization who cuts off many unnecessary levels of
•Increase decision making speed.
•React faster to the environment.
•Allow more responsibility to employees
•Provide lower level employees more decision making power.
•Adaptable to change (unlike bureaucratic organization which has specific rules and
standards that must be followed)
•Suitable in dynamic structures
•A trait of organic structures
•TB has clear lines of authority and control. However in MO, unimportant to maintain
boundaries between levels in hierarchy, individuals and departments. Individual in or out
side of the organization.
•Cross-functional teams: members from various part of the organization.
•Self-managing teams: make decision without approval of formal management.
•Alliance outside the organization.
•Increase in competition and greater access to new markets.
•Industries were protected by tariffs like auto manufacturing faces huge competition with
foreign companies (ex: GM faces Toyota)
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Thinking About Organizations
What is an Organization?
Types of organization:
1. public/governmental organizations, which provide goods and services without
necessarily generating a profit.
2. private/nongovernmental organizations, including voluntary organizations, which offer
goods or services without necessarily generating a profit.
3. And private organizations, which produce goods or services with the intent of making
a profit for the benefit of their owners or shareholders.
•Social: all types of organization made up of people. Involve some level of human
•Interactive with their environment:
oObtain inputs: people, raw materials, technology, and financial capital.
oProduce outputs: goods, services, or knowledge.
•Goals achieving: No matter what types of organizations, they must have their objective
that they want t achieve.
•Structure based: all organization need a structure.
Organizations as Machines (classical management approaches)
oRational and goal-oriented entities.
oEmphasizes control, efficiency, formal rules and structures.
Organizations as Open Systems (behavioural management approaches)
oInteract with their environment
Organizations as System:
oOrganizations are entities that are embedded in and dependent on exchanges with
the environment they operate within.
oOrganizations can be viewed as social systems, with people constituting the basic
oFully self-sufficient entities requiring no interaction with the environment,
oMakes this metaphor difficult to find in practice (led much organizational thinking
to focus on the organization’s internal environment with regard to dealing with
organizational functioning and survival.)
oFailed to recognize the role that the external environment can have on the
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