Understanding Organisations

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| MMM262|
| UNDERSTANDINGORGANIZATIONSTRIMESTER 2 2012 |

[assignment 1 – decision analysis]Ford Australia’s decision to cut 440 Jobs – July 2012
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AUTHOR:| |
SHAUN VICTOR PICKERING|
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Table of Contents
INTRODUCTION2
PART 1 - Modernist Analysis3
1.1 Environment4
1.2 Social Structure6
1.3 Technology8
1.4 Culture9
PART 2 - Symbolic Interpretive Critique11
2.1 Environment11
2.2 Social Structure12
2.3 Technology13
2.4 Culture14
PART 3 - Postmodern Critique15
3.1 Environment16
3.2 Social Structure17
3.3 Technology18
3.4 Culture19
CONCLUSION20
REFERENCES21

INTRODUCTION

Ford Australia is one of the leaders in Australia’s automotive manufacturing industry. However as the industry continues to suffer from foreign pressures and competitive disadvantage, so too has Ford Australia. This analysis exercise aims to better understand Ford Australia’s recent decision to ‘sack’ over 400 workers from their Geelong plant. Through referencing and applying theories from three predominant perspectives of organization theory, it is hoped that the cause and effect of Ford’s decision can be better understood and defined. First the decision will be analysed through modernist interpretation and further critiqued through application of symbolic interpretive theories and finally, post-modern ideologies.

PART 1 - Modernist Analysis

Unlike other organization theorists, modern theorists believe the best way to gain complete knowledge of the organization is to understand the how and why they function a certain way. Furthermore, they use diagnostic tools to pinpoint problems and understand how functioning can be influenced by different environmental conditions (Hatch & Cunliffe 2006).

The modernist perception of organization theory can be described to encapsulate many intricate and differing ideas of various theorists on a variety of facets in organization functionality. Despite the differentiations, they each contain crucially similar ideals which align with those of the modernist era.

1.1 Environment

As defined in by modern theorists, Ford’s environment is the “entity that lies outside the boundary of the organization” (Hatch & Cunliffe 2006). Therefore, Ford’s environment would consist of their customers, suppliers, competitors, the media and other external groups which impose restraints and influences on Ford’s organizational decisions.

As outlined by Rolfe and Drill (2012), the decision to cut jobs was an unfortunate one which was the result of continually trying industry conditions, looming overseas competitors and changing demands for Ford vehicles. From this article, Ford Australia appears to be acting in an attempt to better ‘fit’ within their ecological niche.

One of the most influential theories on organization-environment is ‘population ecology’. Population Ecologists assume a great degree of power lies with an organization’s environment and, unlike resource dependence theorists, they focus on the competitive ability of competitors within the given ecological ‘niche’. When Ford chose to commit to ‘axing’ down their employees to better withstand environmental pressures, they are hence trying to achieve ‘Selection’ and better adhere themselves to their environmental needs.

In addition to Selection are two other tools organizations should use to survive successfully in their niche: ‘Variation’ and ‘Retention’. Variation can occur or be created through innovation creating new organizations or new forms of adaptation from established organizations. Retention, on the other hand, is the ongoing ‘feeding’ of resources to ensure the strength of the organization (Hatch & Cunliffe 2006).

While three of these actions are all necessary for survival, they are inter-related and continuously prompt organizations to keep adapting to their environment. If Ford does decide to partially offshore to Thailand, it may be a form of forced...
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