Ch01 Organizations and Organization Theory

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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
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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

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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...
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