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Summary Organization Theory & Design - Organization studies
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Summary + lecture notes of the book: Organizational theory & Design. Hopefully you can use this.
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Summary - Introduction to Organization Studies
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Organizational theory and design Chapters 3 till 5
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Test Bank for Organization Theory and Design 12th Edition by Richard L. Daft.
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Organizational StudiesTable of content
Lecture 1 Introduction ............................................................................................................................ 2
Lecture 2 Theoretical Perspectives on Organizations ............................................................................. 3
Lecture 3 Strategy, design, and effectiveness ......................................................................................... 5
Lecture 4 Fundamentals of Organizational Structure ............................................................................. 8
Lecture 5 External Environment............................................................................................................ 11
Lecture 6 Interorganizational Relationships & International Environment........................................... 12
Lecture 7 Organizational Technology .................................................................................................... 14
Lecture 8 Information Technology & Control ........................................................................................ 17
Lecture 9 Size, Life Cycle and Decline of Organization .......................................................................... 18
Lecture 10 Organizational Culture and Ethical Values .......................................................................... 21
Lecture 11 Innovation and Change ....................................................................................................... 23
Lecture 12 Organizational Decision-Making ......................................................................................... 25
Lecture 13 Influence in Organization (Conflict, Power, Politics) ........................................................... 28
Lecture 14 Q&A ..................................................................................................................................... 32
The question in the exam.................................................................................................................. 32
, Lecture 1 Introduction
Organizations are social entities, goal-directed, designed as systems of activities that are consciously
structured and coordinated and are connected to the external environment
Types of organizations:
• Large organization vs Family businesses – Profit vs Non-profit – Public vs Private –
Manufacturing vs Service
Challenges organizations face:
• Globalization, Speed of responsiveness, ethics and social responsibility, virtual workplace,
diversity, UN Sustainable Development Goals,
Benefits of organizations:
1. Bring together resources to achieve desired goals and outcomes
2. Produces goods and services efficiently
3. Facilitate innovation
4. Use modern manufacturing and information technologies
5. Adapt to and influence a changing environment
6. Create value for owners, customers and employees,
7. Accommodate ongoing challenges of diversity
Input Organizations Environment/ output
• Raw materials • → Structure • Products
• Labor • Process → • Services
• Information • Wast
• Financial means • Ecological impact
• Employee satisfaction
Open: pays attention to the (open) Closed: focuses exclusively upon the
boundary between the organizations organization without consideration of
and its context its dependence upon or capacity to
Environment → organizations influence elements comprising its
context
Only within the organization
Rational: organizations are
collectivises oriented to the pursuit of Open Closed
relatively specific goals and exhibiting Rational Rational
relatively highly formalized social
structures, sees the organization as a
group of people who work together to
pursue specific goals
Natural: organizations are collectivises
whose participants share a common
interest in the survival of the system Open natural Closed natural
and who engage in collective activities,
informally structured, to secure this
end
, Lecture 2 Theoretical Perspectives on Organizations
Organization configurations by Mintzberg: the configuration of an organization is a collection of
elements or components of an organization that can combine to achieve outcomes
Technical core Technical support Administrative support Management
Produces products Scan the environment for threats Smooth operation and Middle management:
or services (output and opportunities maintenance of the directing, and coordinating
of organization) organizations parts of the organization
Help organizations innovative,
Transformation of change & adapt (Human resource, training) Top management: direction,
input to output strategy, goals, policies,
(teachers, doctors) (marketing, research, development) entire company
Contextual dimensions Structural dimensions
Central organization elements and elements of the setting in Central internal elements
which the organization finds itself • Formalization: written documentation
• Size: number of employees • Specialization: tasks subdivided into separate jobs
• Technology: tools and techniques to transform inputs • Hierarchy of authority: who reports to who and the
into actions span of control
• Goals and strategy: purpose and competitive techniques • Centralization: hierarchical level with decision-making
• Environment: elements outside of the organizational authority
boundary • Professionalism: level of formal training of employees
• Culture: key values, norms and beliefs • Personnel ratios: deployment of people to various
functions
Efficiency → the amount of resources used to achieve the organization’s goals
Effectiveness → the degree to which an organization achieves its goals
Organizational design and management practices have varied over time:
Classical perspectives:
Scientific management: Taylor → Closed rational
• Efficiency and productivity are everything
• Workers are machines
• Closed system thinking
Administrative principles: Fayol & bureaucratic theory: Weber
• Focus on how to organize work
• Contributed to the development of bureaucratic organization
, Hawthorne studies (human relations theory): Mayo → Closed natural
• People in focus
• Showed that positive treatment of employees improved motivation and productivity
Contingency perspective: → open rational
• Context in focus
• There must be a goodness of fit between structural and contextual dimensions
• What structure works best depends on the circumstances
• Circumstances change
Contemporary organization Design
• Environment is increasingly turbulent and complex: organization designs are less mechanical and more organic
(natural)
• Chaos theory suggests that relationships in complex, adaptive systems are non-linear and made up of numerous
interconnections and divergent choices. Managers can’t measure, predict, or control in traditional ways the unfolding
drama inside or outside the organization. This theory suggests
that randomness and disorder occur within certain larger
patterns of order
The learning organization is based on: → open natural
• Equality (little hierarchy): intense communication and
collaboration
• Culture based on adaptation and participation: all employees
are involved in identifying and solving problems, leading to
• Outcome: continuous experimentation and improvement
Organizations designed for efficient performances vs designed for learning organizations:
From vertical to horizontal structure:
• Vertical: activities are grouped together from the bottom to the top of the organization. With little collaboration,
the whole organization Is controlled through the chain of command. In stable conditions, is it consistent with
cost-efficient production. In a changing environment, the top is overloaded with decision-making as they struggle
to respond to problems.
• Horizontal: horizontal workflow, processes or networks. In self-directed teams, boundaries between functions are
eroded as teams include members from several functional areas
From routine tasks to empowered roles
• Routine: tasks are broken down into specialized. Knowledge and control of tasks are centralized and employees
are expected to do as they are told
• Empowered: role-holder allows persons to use their discretion and ability to achieve an outcome or meet a goal.
With few rules or procedures, employees are encouraged to take care of problems by working with one another
and with customers
From formal control systems to shared information
• Formal: managing the growing amount of complex information, detecting differences from established standards
and goals
• Shared: information is accessible and shared in a way that optimizes performance. All employees are
knowledgeable about many aspects of the operation of the organization. Letting ideas flow in all directions
From competitive to collaborative strategy
• Competitive: top executives think about how the organization can best respond to competition and efficiently use
resources
• Collaborative: informed and empowered workforce to contribute to strategy development. All employees are in
touch with customers, and suppliers, they can help identify needs and solutions. Boundaries between
organizations are becoming more diffuse, with companies exchanging ideas and forming partnerships to compete
globally
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