Organizational Theory and Design

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ot26/12/2012

An Organization’s Environment
(a) Competitors, industry size and
(g) Recession, unemployment rate,
competitiveness, related issues
inflation rate, rate of investment,
(j)
(a)
(b) Suppliers,
economics, growth
International
Industry
manufacturers, real
(h) City, state, federal laws
Sector
Sector
estate, services
and regulations, taxes,
(i)
(b)
(c) Labor market,
services, court system,
Sociocultural
DOMAIN
Raw Materials
Sector
employment agencies,
political processes
Sector
universities, training
(i) Age, values, beliefs,
schools, employees
education, religion,
(c)
(h)
in other companies,
work ethic, consumer
Human
Government
Resources
unionization
and green
Sector
ORGANIZATION
Sector
(d) Stock markets,
movements
banks, savings and
(j) Competition from
(g)
(d)
loans, private
and acquisition by
Economic
Financial
Conditions
Resources
investors
foreign firms,
Sector
Sector
(e) Customers, clients,
entry into overseas
(e)
(f)
Market
potential users of products
markets, foreign
Technology
Sector
Sector
and services
customs, regulations,
(f) Techniques of production, science,
exchange rates
computers, information technology
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4-2

Chapter Four
The External Environment

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Differences in Goals and
Orientations Among Organizational
Departments

Organizational Departments
Differentiate to Meet Needs of
Sub-environments
President

Characteristic

Sales
Division

Scientific
Sub-environment

Manufacturing
Sub-environment

Market
Sub-environment

Labor

Professional
associations

Raw Suppliers
materials
Production
equipment

Customers
Advertising
Competitors agencies
Distribution
system

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4-3

Environmental Uncertainty and
Organizational Integrators
Industry:

Plastics

Foods

Container

Environmental
Uncertainty

High

Moderate

Low

Departmental
Differentiation

High

Moderate

Low

22%

17%

0%

Percent of
management in
integrating
roles

Source: Based on Jay W. Lorsch and Paul R. Lawrence,
“Environmental Factors and Organizational Integration,”
Organization Planning: Cases and Concepts (Homewood, Ill.:
Irwin and Dorsey, 1972), 45.

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Sales
Department

Efficient
production

Customer
satisfaction

Time
Horizon

Long

Short

Short

Interpersonal
Orientation

Mostly task

Task

Social

Formality of
Structure

Manufacturing
Division

Research
centers

Manufacturing
Department

New
developments,
quality

Low

High

High

Goals
R&D
Division

Scientific
journals

R&D
Department

Source: Based on Paul R. Lawrence and Jay W. Lorsch,
Organization and Environment
(Homewood, Ill.: Irwin, 1969), pp. 23-29.

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4-4

Organization Forms
Mechanistic:
Organic:
Tasks are broken down
into specialized, separate
parts.
Tasks are rigidly defined.
There is a strict hierarchy
of authority and control,
and there are many rules.
Knowledge and control of
tasks are centralized at
the top of the
organization.
Communication is vertical.

Employees contribute to
the common task of the
department.
Tasks are adjusted and
redefined through
teamwork.
There is less hierarchy of
authority and control, and
there are few rules.
Knowledge and control of
tasks are located anywhere
in the organization.
Communication is
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4-6
horizontal.

Source: Adapted from Gerald Zaltman, Robert Duncan, and Jonny Holbek, Innovations and Organizations (New York: Wiley, 1973), 131.

4-5

1

26/12/2012

Contingency Framework for
Environmental Uncertainty and
Organizational Responses
Low Uncertainty

Low-Moderate Uncertainty

1. Mechanistic structure; formal,
centralized
2. Few departments

STABLE

1. Mechanistic structure; formal,
centralized
2. Many...
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