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Organization effectiveness
constituency (strategic)system resource - bargain
internal process (adaptability,identity, perception)
legitimacygoal
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Organizational goals (Perrow, 1961)
Official goals described in charters, public statement;serve as legitimating devices for the organization
Operative goals organizational ends pursued throughactual policies and decisions of the organization
Operative goals may be in line with official goals The goals most often utilized to assess effectiveness of an
org. are the operative ones
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Healthy organization internal process
Healthy good adaptability with environmentstrong identity
ability to perceive the world and herself correctly
Adaptability problem solving (internal integrity & external
adaptation)
Identity - goals are understood and accepted by members
perceived by members
Concepts of organizations (manifest formally displayed onorganizational chart, assumed members perceive as they way thingswork, extant revealed through systematic investigation, and requisite situation expected by members); healthy, when the four concepts areclosely in line with each other
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Adaptable learning organization
A learning organization is an organization skilledat creating, acquiring, and transferring knowledge,and at modifying its behavior to reflect newknowledge and insights
Learning organizations are skilled at five mainactivities: systematic problem solving,experimentation with new approaches, learning
from their own experiences and past history,learning from the experiences and best practices ofothers, and transferring knowledge quickly andefficiently throughout the organization
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organization Consciously coordinated social unit, composed of two
or more people, that functions on a relativelycontinuous basis to achieve a common goal or set ofgoals
A tool used by people to coordinate their action toobtain something they desire or value
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To be cont. Organizations increase value
create knowledge
core competence competitive
diversity
efficiencyinnovation
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To be cont. Organizational stakeholders
those having interest, claim, stakein what the organization does and
how well it performs
inside (shareholder, manager, workforce)
outside (customer, supplier, government,
union, local communities, general public)
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To be cont. Ethics CSR
societal ethics
sources professional
individual familyfriends
school
religion
organizationproblem self-interest
outside pressure (e.g. Enron, Lapindo)
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Visi, misiVisi, misi titik awal renstra
Pencapaian visi libatkan perubahan
Visi, misi bukan hanya diformulasikan saja, tapiharus dikomunikasikan dan di sharedprogram visioning VIA (cf. strategy in action)
Visi menarik
menantangdapat dipercaya
memberikan inspirasi
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Visimimpi seorang pemimpin berdasarkankenyataan (campuran antara kenyataan dan mimpi)
Visionthe right one is the toughest task and the
truest test of great leadership (Nanus)Visi konotasi ideal
image yg hidup
standard excellence
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Managing in a changing global environment Cf. system theory open
Organization strategic environment (fig.3-1, p. 57)
general specific
Domain good, services, customers &other stakeholders
protected & enlarged to increase values
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system Cf. Ludwig von Bertalanffy, Austrian biologists, 1969 General System theory Katz & Kahn
open system (input-process-output) An entity that has interdependent parts and a purpose All systems have basic characteristics:
operate within an environment (things outside andimportant to the org. but largely beyond its control)
focus on the interrelatedness among systems
negative entropy
feedback
dynamic homeostasis/balance
differentiation
equifinality
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Organizational environment
The organization
customers distributors
suppliers competitors
government unions
Demographic
and culturalforces
Internationalforces Politicalforces
Environmentalforces
Economicforces
Technologicalforces
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To be cont. Environment uncertain
complexity dynamism
richness
Resource
resource dependence theory Strategies for managing resource dependence
symbiotic vs competitive interdependencies
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Strategies for managing symbiotic resource
interdependencies Developing a good reputation Co-optation political tool, by neutralizing
problematic forces Strategic alliances sharing resources to develop
joint new business opportunitiesnetworks
long-term contract
joint venture (jointlyestablish & share ownershipof a new business)
minority ownership (cf. The Fuyo Keiretsu)
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Strategies for managing competitive resource
interdependencies
collusion and cartels(-) (+)
third party linkage mechanism
strategic alliances
merger and takeover
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To be cont. Transaction cost theory
minimize cost of managing exchangingresources in the environment and of managingexchanges inside the org.
Case How Ford manages its environment (p.85)
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Creating and managing organizational
culture Corporate culture relatively new focus in studying
organizations (cf. Pettigrew, 1979) he felt that culture wasneglected in the field of organizations
Early 1980s research in industrial sociology, psychology,and management science two major journals inorganizational studies:ASQ (1983), and OrganizationalDynamics (1983)
Culture is fuzzy and difficult to define terms bearing a
family resemblance notions of shared values, commonunderstandings, patterns of beliefs and expectations, andbehavioral norms
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culture Culture set of shared values and norms that
controls organizational members interactionswith each other and with people outside theorganization
Values terminalinstrumental
Layers of culture artifactpatterns of behavior
behavioral normsvalues
fundamental assumptions
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culture System of shared symbols and meanings (Geertz, 1973) System of publicly and collectively accepted meanings
(Pettigrew, 1979)
Values, beliefs, and expectations that members come toshare (Van Maanen & Schein, 1979) The set of symbols, ceremonies, and myths that
communicate the underlying values and beliefs of theorganization to its employees (Ouchi, 1981)
The way we do things around here (Uttal, 1983) The glue that holds together an organization through
shared patterns of meaning (Martin & Siehl, 1983) Socially constructed realities that provide learned ways of
coping with experiences (Thompson & Luthans, 1990)
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Hofstedes dimensions of cultural values: Individualism vs collectivism Power distance Uncertainty avoidance
Feminity vs masculinity Short-term vs long-term oriented (Chinese Value Survey)
Do the cultural frameworks really explain cultural differences? Do American theories apply abroad? Martin Gannon & associates, 1994 cultural metaphors:
country metaphor
england traditional british housegermany symphonyitaly opera
japan gardennigeria marketplacerussia balletturkey coffeehouseUS football
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culture How is it formed?
property right system
characteristics culture org. structure
of people in the org.
organizational ethics
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How is an organizations culture
transmitted to its members? Socialization Role orientation institutionalized
individualized
how newcomers respond to a situation
Collective, formalSequential, fixed
Serial, diverstiture
Individual, informalRandom, variable
Disjunctive, investiture
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Stories, ceremonies, and organizational language
Rites
Type example purpose
Rite of passage Induction & basic
training
Learn & internalize
norms and values
Rite of integration Office christmasparty
Build common norms& values
Rite of enhancement Presentation ofannual award
Motivate commitmentto norms and values
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Where does organizational culture come
from?
Characteristics of people within the organization
Organizational ethics
Property rights (managers vs workforce)
Organizational structure (cf. mechanistic vs. organic)
Tall, highly centralized,standardized
Flat, decentralized,Rely on mutual
adjustment
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To be cont.
Levels of culture (Rousseau, 1990fundamentalassumptions, values, behavioral norms, patterns of behavior,artifact/manifest culture Sathe, 1985 manifest culture,expressed values, basicassumptions cf. iceberg phenomenon
manifest
eExpressed values Water line
iceberg
Basic assumption
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Culture to be cont. Managing cultures? Social responsibility!Approaches defensive
accomodativeproactive
Case for analysis
A tale of two cultures (p. 201)-Southwest flat, informal, creative, cooperative-- Value Line efficiency, clean surfaces report, noculture of cooperation,etc
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Culture-performance link Culture long-term economic performance!
Kotter & Heskett: strong, strategically appropriate,adaptive
Iswanto: integrative, congruent with strategy, unique,employee-oriented, consistent, adaptable, mission-driven
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Transformasi nilai (cf. Kasali, 2005)
Culture is what keeps the herd (of employees) movingroughly west (Walton)
Pada masa transisi setidaknya ada 7 budaya negatifyang mengontaminasi organisasi (Deal & Kennedy,1998):
culture of fear, of denial, of self-interest, of cynicism(mencela), of distrust, of anomie, and the rise ofunderground subculture (mengedepankan kelompok)
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Ketika ada tuntutan peran baru, muncul nilai-nilaiikutan yang tidak dikehendaki:
Tuntutan peran baru Nilai ikutan yg takdikehendaki
Daya saing
Efisiensi
Pelayanan
KeterbukaanKewirausahaan
Manipulasi
Perilaku kurang loyal
Ketidakpercayaan
Self-interest
Korupsi
Kedaerahankekuasaan
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Budya korporat
Cf. Konosuke Matsushitamisi sebuah industri
membebaskan masyarakat dari kemiskinan dankesulitan-kesulitan hidup, menjadi sebuahkemakmuran yang sejahtera (1932)
Dia yakin bahwa perubahan harus dimulai dengan
figur, kerja keras, dan filosofi Ketika masa sulit, dia bersama kepala pab rik turun ke
toko-toko, dan memberikan contoh pelayanan
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Lapisan budaya korporat
Visible artifacts:
Simbol kasat mata
(logo, merek)
Seremoni
Slogan
Ritual, perilaku dsb
Nilai dasar & keyakinanAsumsiKepercayaanSikapPerasaanSejarah korporat
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Karakteristik budaya korporat Dibentuk oleh keyakinan individu korporat
Mencerminkan aspirasi anggota Memiliki sosiodinamika
Memiliki konsekuensi
Sulit dipahami
Membentuk identitas, memperkuat image, positioning,dan pencapaian tujuan
Menuntut keseimbangan antara nilai-nilai
belajar
Adalah pola Membentuk hubungan sinergi
Terdiri atas subkultur
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Hubungan antara lingkungan dan strategi manajemen
terhadap budaya
Budaya adaptasi Budaya misi
Budayapartisipatif
Budayakonsisten
ekstern
intern
Fokus adatasi
labil stabil
Keadaan lingkungan
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Memperkuat budaya baru
Budaya disiplin utk meraih keunggulan bersaing(Collins, 2001 all companies have a culture; somecompanies have discipline; but few companies have aculture of discipline):
rekrut yg terbaikberikan pengertian yg terbaik
letakkan pada kursi yg tepat
keluarkan yg di bawah standar
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Organizational design and strategy in a
global environment Organizations vie/exist, grow, create
values competitive
advantage
core competence strategy (decisions & actions)
skill, abilities efficiency, quality,innovation, etc
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Design & strategy Core competence strategy create
values competitive adv. Sources functional
organizationalcoordination abilityglobal expansion
transferring core competence abroad:global network, access to globalresources & skills, global learning
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Strategy -- levels Functional-level functional resources
organizational resources
coordination ability Business-level combining functional
core competences
top-management team
Corporate-level protect, enlarge, andexpand into new domains
Global expansion
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strategy Strategic goal core competence competitive adv.
Lower costs differentiate products
Design?
structure! (cf. fig.8-3, p. 236) culture
level!
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Design -- strategy Strategy plan of action to create value
organizations at all levels (functional,
business, corporate, global) developvalue-creation skills and abilities
Managers manage strategy, structure, and culture to protect its domain , to create value tosatisfy stakeholders (cf. p. 259
Analyze case Levi Strauss goes global
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Organizational change Hiraclituss penta rei
(planned) changeto find new/improved ways of
using resources and capabilities in order toincrease an organizations ability to create valuesand improve returns to its stakeholders
Levels of change human resources
functional resources
technological capabilities
organizational capabilities
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levels of change Human resources training & dev.
organizational culture
diversitypromotion & reward system
organizational learning & decision
Functional resources structureculture
technology
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To be cont. Technological capabilities redesign of
organizational activities
Organizational capabilities through design of
structure & culture
The four levels are interdependent!
Human resource change new functional
resource/new technological capabilities, etc
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Forces for change Competitive forces
Economic, political, and global forces (cf. Nafta, Afta,Apec, EU, ACFTA, etc)
Demographic and social forces (diverse work force, cf.learning to live together)
Ethical forces (!?) Nike, adidas, etc.
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Resistances to change Organization-level power & conflictdifferences in functional orientation
mechanistic structureorganizational culture
Group-level groupthink (Janis, 1972) members of highly cohesive groupunable to evaluate each others inputs critically:
Illusions of invulnerability Illusions of unanimity Illusions of group morality Stereotyping of the enemy as weak, evil or stupid Self-censorship by members Mind-guarding Direct pressure
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To be cont.Groupthink develops under these conditions:
There are highly cohesive individualsThe group closes itself from outside
information/opinion
Group members seldom systematically evaluatealternatives to come to appropriate conclusion
The group is under pressure to reach a decision
The group is dominated by a strong figure
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To be cont. Individual-level uncertain, insecure, habit, perceptual process selective
Managing change
Approaches leadershiptop-down change fails
(lower level employees know best what requires change)no agreement what and how to change
OD applying social sciences research and theories tocreate more rational organization
Improve efficiency & effectivenessOrganizational health
building capacity to change
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To be cont. Lewins planned model of change (modified)
diagnosis
unfreezingmovement
refreezing (institutionalizationof change)
renewal
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To be cont. Cf. fig. 10-2, p. 309
forces for change and resistance to change are equalno change!
To changemanagers must increase forces forchange, or reduce resistance to change, or do both
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change Evolutionary (cf. incremental, operasional)
sociotechnical system theory
total quality management
creation of empowered, flexible work group
Revolutionary (strategis, radikal)
reengineeringrestructuring
innovation
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OD-dealing with resistance to change Education & communication
Participation & empowerment
Facilitation Bargaining & negotiation
Manipulation
Coercion
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OD to promote change The more revolutionary, the more likely the org. to use
OD techniques at three levels individual, group,organization
Changing attitudes & behaviorcounseling
sensitivity training
process consultation
Case Sears changes again and again, p. 334
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Organizational transformations: birth,
growth, decline, and death Organizations may survive, prosper, fail or die
ability to manage strategies,
structures, cultures to gain accessto environmental resources
life cycle: birth, growth, decline,
death at different rates
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Organizational birth Entrepreneurs recognize and take advantage ofopportunities to use skills and competence to create values
Risky stage new experience, uncertainty Lacks formal structure flexiblewritten! Environment may be hostile! Develop a business plan!
goods/services, customers/marketSWOT analysis!
FSdetailed business plan (mission, vision,strategy, resources, schedule)
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To be cont. Population ecology model
explaining factors that affect the
rate at which new organizations
are born in a population of existing
organizations
birth can be rapid or decrease!strategies r vs k-strategy
specialist vs generalist
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Organizational growth Develop value-creation skill and competences,
allowing to acquire additional resources
Institutional theory studies how organizations
can increase ability to grow and survive in acompetitive environment by becoming legitimatein the eyes of stakeholders
Adopting institutional environment (values,
norms, goals, structures, cultures etc) Organizational isomorphism: coercive, mimetic,
normative
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Implications for managersAnalyze the resources in the environment to
determine a niche
Then, how you compete
Develop the competence/strategy to attractresources
Analyze the institutional environment to learnvalues, norms, benchmark
Anticipate/prepare for problems, managementteam
Manage crisis
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To be cont.
Greiners model
grow through creativity crisis of leadership
grow through direction crisis of autonomy
grow through delegation crisis of control
grow through coordination crisis of red tape
grow through collaboration crisis of ?
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Organizational decline and death Decline fail to anticipate, recognize, avoid, neutralize, or
adapt to external or internal pressures that threaten long-term survival
Decline grow too muchorganizational inertia (forces
resistant to change)
risk aversion
desire to maximize rewardsoverly bureaucratic culture
changes in the environment
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Organizational declineWeitzel and Johnsons model five stages
blinded unable to recognize
internal & external probleminaction little action to correct problem
faulty action wrong decision, conflict
crisis radical changes!
dissolution cannot recover, death!
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Implications for manager To prevent decline, continually analyze theorganization to identify inertia
Analyze the environment, niche, to identify
changes in resourcesWhen facing difficulties to pinpoint problems, call
on other managers, outside consultants for helpYou have concern for stakeholders satisfaction. So,
be prepared to step aside if new leadership isrequired case analysis: The Body Shop reaches middleage (p. 364)
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Managing conflict, power, and politics Organization consists of different groups of
stakeholders, each contributing to the org. inreturn for rewards
To grow, change, and survive, an organizationmust manage cooperation and competition amongstakeholders
Each stakeholder group has its own goals andinterests, which overlap somewhat with those ofother groups
Stakeholders goals and interests are not identicalconflict arises goals, preferences, interestsdiffer
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conflict Pondys model of conflict process of five sequential
stages
latent - potential
perceived - escalates
felt respond emotionally
manifest open aggression
conflict aftermath resolved(combative or cooperative)
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Sources of conflict Interdependence
Differences in goals and priorities
Bureaucratic factors
Incompatible performance criteria
Competition for resources
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Pandangan mengenai konflik Tradisional (1930-1940-an) negatif, merugikan,
jelek, bikin kelompok kacau dihindari
Hubungan manusiawi (1940-1970-an) lumrah,alami, tidak bisa dihindari, malah bisa merupakandaya positif yang meningkatkan kinerja kelompok
Interaksionis (1970- sekarang) tidak hanya bisa
positif, tetapi justru diperlukan, bahkan mutlakperlu, agar kelompok bisa efektif
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Conflict resolution If conflict escalates, it may sour organizational culturemanage!
Method? depending on the source of the problem
level of structure
level of attitude & indiv.
Good conflict aftermath!cooperative attitudes canbe maintained over time
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Teknik resolusi konflikProblem solving face-to-face meetingSuperordinate goals creating a shared goal
Expansion of resourcesAvoidanceSmoothingCompromiseAuthoritative commandAltering human variable trainingAltering structural variable
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powerAll organizations control their participants, esp.formal ones
Essence of organizational control power
Power ability to get others to do what one wantsthem to doAuthority has a narrower scope than powerWebers def: probability that (certain specific)
commands from a given source will be obeyed by agiven group of persons Types of authority: charismatic (non rational,
affective or emotional), traditional, legal
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To be cont. Sexual harassment isnt about sex but Power described as the last dirty word (cf. money) Power concerns dependencyA has the capacity to influence the behavior of B;
so B acts in accordance with As wishes Cf. leaders achieve goals; power is a means of
facilitating the achievement
Sources/bases of power (French & Raven, 1959):coercive, reward, legitimate, expert, referent
T b
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To be cont. Mintzbergs typology of power: power stems from control over a
resource, a technical skill, or a body of knowledge, legal prerogatives,those who have access to power holders Etzioniconcept of power and subordinates response to power
compliance; three types of power: coercive, remunerative, normative Reactions to power from subordinates:
commitment intense positive involvement
alienation intense negative involvementcalculation mild positive or mild negative involvement
Dependency postulate: the greater Bs dependence on A, the greater thepower A over B; dependence is inversely proportional to the alternativesource of supply (cf. intelligence, monopoly, expertise etc)
What creates dependency?importance
scarcitynonsubstitutability
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To be cont. Power tactics how power bases are translatedinto actions
reason
friendlinesscoalition
bargainingassertiveness (defending )
higher authoritysanctions
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Politics power in action Usage of power tacticswhen managers managers-
influence superiors subordinates
most popular reason reason
coalition assertiveness
friendliness friendliness
bargaining coalition
assertiveness bargainingless popular higher authority higher authority
sanctions
S f i ti l
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Sources of organizational
powerAuthority Control over resources
Control over information
Nonsubstitutability Centrality
Control over uncertainty
Controlling the premises of decisionmaking/unobtrusive power
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Authority (cf. Dessler, 1998) the right to take action, to make decisions, and todirect the work of others
Essential part of organizing
Derives from several sources: personsposition/rank, personal traits (intelligence,charisma), expertise (cf. bases of power)
must come from the bottom up and be based onsubordinatess acceptance of supervisors orders (!)
Cf. workers empowerment and team-building!
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Politics (cf. organization is a political
arena!?) Politics acquisition and use of power Integral part of decision making To benefit, an organization must establish a
balance of power in which alternative views andsolutions can be offered/ considered by all parties Power should flow to those who can be of most
help to organization
Prevent a political manager/group from pursuingtheir interest at the expense of organizationalinterest
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Authority, power, influence The words are often used interchangeably
Influence effect of
Power cf. Webers
Authority notion of legitimacy or ethicalsanctification; power does not have to be legitimate
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Winning at office politics Control vital information (cf. expert power)
Hook your career to a star
Minimize power vacuums
Open communication channels
Cases: The power of the Subordinates
(Robbins, 1998); The Shake-up in the GMs hierarchy
(Jones, 2004)