Chapter 9 (Lecture Outline Presentation) Organizations Structure and, Effectiveness, and Cultures

Chapter 9(Lecture Outline Presentation)

OrganizationsStructure and, Effectiveness,

and Cultures

Copyright © Houghton Mifflin Company. All rights reserved. Lecture Outline Presentation, 9–2

Chapter Objectives

1. Identify and describe four characteristics common to all organizations.

2. Identify and explain the two basic dimensions of organization charts.

3. Contrast the traditional and modern views of organizations.

4. Describe a business organization in terms of the open-systems model.

5. Explain the term learning organization.

6. Explain the time dimension of organizational effectiveness.


Chapter Objectives (cont’d)

7. Explain the role of complacency in organizational decline and discuss the ethics of downsizing.

8. Describe at least three characteristics of organizational culture and explain the cultural significance of stories.


What is an Organization?

• An Organization• A cooperative and coordinated social system of two

or more people with a common purpose.


What is an Organization? (cont’d)

• Common Characteristics of Organizations1. Coordination of effort: multiplying individual

contributions to achieve results greater than those possible by individuals working alone.

2. Common goal or purpose: having a focus to strive for something of mutual interest.

3. Division of labor: dividing tasks into specialized jobs that use human resources efficiently.

4. Hierarchy of authority: using a chain of command to control and direct the actions of others.


Classifying Organizations

• Business Organizations• Purpose: to make a profit in a socially acceptable

manner.

• Nonprofit Organizations• Purpose: to provide a specific public service to some

segment of society without attempting to earn a profit.

• Mutual-Benefit Organizations• Purpose: to provide a vehicle for individuals to pursue

their own self-interests.


Classifying Organizations (cont’d)

• Commonweal Organizations• Purpose: To provide standardized public services to

all members of a society without attempting to earn a profit.


Organization Charts

• Organization Chart (Table)• A visual display of an organization’s positions and

lines of authority that is useful as a blueprint for deploying human resources.

• Vertical and Horizontal Dimensions• Vertical hierarchy establishes the chain of command.

• Horizontal specialization denotes the division of labor.

• A Case Study: The Growth of an Organization• Generally, specialization is achieved at the expense

of coordination when designing organizations.


Contrasting Theories of Organization

• The Tradition View• The organization’s primary goal is economic

efficiency.

• The organization is characterized by closed-system thinking and no or little interaction with the external environment.

• Planning and strict control are used to eliminate uncertainty in the organization.

• The organization’s surrounding environment is fairly predictable.


Contrasting Theories of Organization (cont’d)

• The Modern View• The organization’s principal goal is survival in an

uncertain environment.

• The organization is an open-system interacting with its environment.

• The organization’s surrounding environment is composed of variables that are difficult to predict or control.


The Traditional View of Organizing

• The Early Management Writers• Henri Fayol

• Frederick W. Taylor

• Four traditional principles of organization

• A well-defined hierarchy of authority.

• Unity of command.

• Authority equal to responsibility.

• Downward delegation of authority.


The Traditional View of Organizing (cont’d)

• Max Weber’s Bureaucracy• The most rationally efficient form of organization

1. Division of labor

2. Hierarchy of authority

3. Framework of rules

4. Impersonal management

• Problems with overly “bureaucratic” organizations

• Slow

• Insensitive

• Inefficient


Challenges to the Traditional View of Organizations

• Bottom-up Authority• Acceptance theory of authority (Chester Barnard)

• A leader’s authority is determined by the willingness of subordinates to comply with authoritative communications only when• the message is understood.

• the message is consistent with the organization’s purpose.

• it serves the subordinate’s interests.

• the subordinate is able to comply.


Organizations as Open Systems: A Modern View

• Characteristics of Open Systems• Interaction with the external environment through

permeable boundaries.

• Synergy in combining resources to achieve superior performance.

• Dynamic equilibrium in maintaining internal balances with help from the external environment.

• Equifinality in achieving similar ends through different means.


Organizations as Open Systems: A Modern View (cont’d)

• Developing an Open-System Model• Interacting organizational subsystems:

• Technical (production function) subsystems define the organization’s transformation process.

• Boundary-spanning subsystems provide the organization’s interface with the external environment.

• Managerial subsystems bridge (control and direct) the technical and boundary-spanning subsystems.


Extending the Open-System Model: The Learning Organization

• Learning Organization• An organization that is skilled at creating, acquiring,

and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.

• Stages of Organization Learning• Cognition (learning new concepts)

• Behavior (developing new skills and abilities)

• Performance (actually getting something done)


Extending the Open-System Model: The Learning Organization (cont’d)

• Five Critical Learning Skills• Solving problems.

• Experimenting.

• Learning from organizational experience/history.

• Learning from others.

• Transferring and implementing.


Organizational Effectiveness

• Effectiveness• A measure of whether or not organizational objectives

are accomplished.

• Efficiency• A measure of the relationship between inputs and

outputs for the organization.

• No Silver Bullet• There is no single approach to the evaluation of

effectiveness that is appropriate in all circumstances or for all organizational types.


Organizational Effectiveness (cont’d)

• The Time Dimension of Organizational Effectiveness Involves• meeting organizational objectives and prevailing

societal expectations in the near future.

• adapting to environmental demands and developing as a learning organization in the intermediate future.

• surviving as an effective organization into the distant future.


• Organizational Decline• The weakening of an organization by resource or demand

restrictions and/or mismanagement.

• Sources of decline

• Mismanagement (complacency)

• Unsteady economic growth

• Resource shortages

• Global competition

• End of the cold war

• Reactions to decline

• Downsizing, demassing, reengineering



• Characteristics of Organizational Decline• Decline Dilemmas

• Exit of leaders from the organization.

• Control that suppresses participation and morale.

• Preference for short-term thinking and risk avoidance.

• Intense conflict, preventing teamwork.

• Strong resistance to change.

• Counteracting Organizational Decline

• Kaizen: the philosophy of continuous improvement.



• Downsizing: An Ethical Perspective• Downsizing: the planned elimination of positions or

jobs.

• Commodity versus human resources viewpoints of the worth of employees.

• Does downsizing work?• Not nearly as well as expected.

• Only 30-45% of downsized companies report increased productivity and/or profits.



• Ways of Making Layoffs a Last Resort• Redeployment

• Downgrading

• Work sharing

• Job banks

• Employee sharing

• Voluntary early retirement

• Early warning of facility closings

• Outplacement

• Helping layoff survivors



Organizational Cultures

• Organizational Culture• The collection of shared beliefs, values, rituals,

stories, myths, and specialized language that creates a common identity and sense of community.

• The “social glue” that binds an organization’s members together.


Organizational Cultures (cont’d)

• Characteristics of Organizational Cultures1. Collective: organizations are social entities.

2. Emotionally charged: the organization’s culture serves as a security blanket to its members.

3. Historically based: trust and loyalty result from long-term organizational associations.

4. Inherently symbolic: actions often speak louder than words.

5. Dynamic: culture promotes stability and control.

6. Inherently fuzzy: ambiguity, contradictions, and multiple meanings are part of culture.



• Forms and Consequences of Organizational Cultures• Organizational values: shared beliefs about what the

organization stands for.

• The degree of sharing and intensity determine whether an organization’s culture is strong or weak.



• The Organizational Socialization Process• Organizational socialization: the process of

transforming outsiders into accepted insiders.

• Orientations

• Orientation programs familiarize new employees with the organization’s history, culture, competitive realities, and compensation and benefits.

• Storytelling

• Recitations of heroic or inspiring deeds provide “social roadmaps” for new employees.



• Strengthening Organizational Cultures• Symptoms of a weak organizational culture

• Inward focus

• Morale problems

• Fragmentation/inconsistency

• Ingrown subcultures

• Warfare among subcultures

• Subculture elitism

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Chapter 9 (Lecture Outline Presentation) Organizations Structure and, Effectiveness, and Cultures