Organizational Theory - an Introduction

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Organizational Theory – an introduction

Carl Borge-Andersen, Norwegian School of Management, Oslo


This is article, section, 1 presents an overview of Organizational theory.

Definition of an Organization

” An organization is a social system that is consciously constructed to achieve specific goals”.[1] The term social system reflects the notion that there are groups of individuals working together. Management organizes the group(s) which, will cooperate in reaching the organization’s determined and set goals. Thus an organization can be defined as: ”a group of people, with individual goals, who work together to achieve and materialize the organization’s set, common goals within the frame of their own goals and that of the environment[2]”

What Defines an Organization?

Several issues define an organization. Among these are:

1. Goals - describe what management in cooperation with the employees are to achieve. It is important that the goals are unified in terms of content and goals above, below and to the side. In addition, the goals must be harmonized with all the “Me Ltd’s” in the organization in order for the management and the organization to succeed “. 2. People – are the members of the organization. It is the management’s responsibility to have the individual egos to work together to achieve the organizational goals. 3. People Relationships – the glue of organizations. The relationships are coloured by the organizational culture within the community that the organization represents. The community, on the other hand, is coloured by the values, opinions, disagreements, dependencies and conflicts of the organization. The relationships will also be tainted by power struggles of varying degrees of strength and intensity. 4. Organizational Structure [3]– defines how the organization is structured – what organizational units are necessary, what functions are incorporated in each unit, what the functions consist of in terms of job functions and descriptions – routines and how these tasks and descriptions are related to the jobs. In addition, decision making and a description of deputy manager or employees need to be determined. 5. The interconnection between the Organization and the External Environment. How much impact the external environment has on an organization depends on how closely related the organization is to the external environment and how much control the organization has over the external environment.

Remember that the issues described above are not set in stone. Each of the 5 elements is a variable, which vary in terms of strength, form and extent.

Definition of Organization Theory(OT)

Organization theory(OT), simply put, is the teaching of organizational understanding. A knowledge required through science with the purpose of finding out how organizations “ticks” and how we can make them effective in order to fulfil their missions. A more refined definition of organization theory:

” Understanding and explaining how:
• we design organizations – which involves the organizing of functions and individuals into formal organizational units called departments • individuals and groups think and act within the frame of what we call organizations”[4]

• Organizations behave. How managers/leaders can make the individuals and groups effective and motivated in order to fulfil their own goals and the organization´s objectives ”

Based on the latter definition of OT, OT can be defined as Organization design + Organization behaviour. I will deal with both subjects in the following part of the article.

Organization design

Organization design refers to the overall structure of the organization. The organization design process develops the “wiring diagram” for how the parts are connected together to produce the whole. Part of the design work also covers how individual work tasks are designed....
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