Theory Current Challenges of Organizations • Globalization o Markets, technologies, and organizations are becoming increasingly interconnected • Ethics and social responsibility o The list of execs and major corporations involved in financial and ethical scandals continues to grow • Speed of responsiveness o Globalization and advancing technology has accelerated the pace at which organizations in all industries must roll out new products and services to stay competitive • The digital workplace In today’s workplace, many employees perform much of their work on computers and may work in virtual teams, connected electronically to colleagues around the world • Diversity o By 2050, it is estimated that 85% of entrants into the workforce will be women and people of colour What Is an Organization? Organizations: social entities that are goal-directed, are designed as deliberately structured and coordinated activity system, and are linked to the external environment Types of Organizations • Multinational corporations • Small, family-owned shops • For-profit versus non-profit organizations
Organizations exist to do the following: 1. Bring together resources to achieve desired goals and outcomes 2. Produce goods and services efficiently 3. Facilitate innovation 4. Use modern manufacturing and information technologies 5. Adapt to influence a changing environment 6. Create value for owners, customers, and employees 7. Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees Perspectives on Organizations Closed System • A system that is autonomous, enclosed, and not dependent on its environment • Don’t truly exist today Early management concepts such as scientific management, leadership style, and industrial engineering were closed-system approaches Open System • A system that must interact with the environment to survive • It both consumes resources and exports resources to the environment, and must continually adapt to the environment An Open System and its Subsystems [pic] Organization Configuration •
Technical core o Includes people who do the basic work of the organization o The primary transformation of inputs to outputs occurs here o Includes production department, teachers and classes, medical activities in hospitals, etc. Technical Support o Helps the organization adapt to the environment o Technical support employees such as engineers and researchers scan the environment for problems, opportunities, and technological developments o Responsible for creating innovations in the technical core • Administrative Support o Responsible for the smooth operation and upkeep of the organization, including its physical and human elements o Includes HR activities like recruiting and hiring, making compensation/benefit plans, employee training, etc. • Management A distinct subsystem responsible for directing and coordinating other parts of the organization o Top management provides direction, strategy, goals, and policies for the entire organization or major divisions o Middle management is responsible for implementation and coordination at the departmental level [pic] Dimensions of Organization Design Structural Dimensions 1. Formalization ? Pertains to the amount of written documentation in the organization, including procedures, job descriptions, regulations, and policy manuals, describing behaviour and activities ?
A large state university would be high on formulization and a small, family-owned business would be low on formulization 2. Specialization ? The degree to which organizational tasks are subdivided into separate jobs 3. Hierarchy of authority ? Describes who reports to whom and the span of control for each manager ? The hierarchy is related to span of control (the number of employees reporting to a supervisor), and when the span is narrow, the hierarchy is tall, and vice versa 4. Centralization ? Refers to the hierarchical level that has authority to make a decision ?
When decision making is kept at the top level, the organization is centralized ? When decisions are delegated to lower organizational levels, it is decentralized 5. Professionalism ? The level of formal education and training of employees ? It’s considered high when employees require long periods of training ? Professionalism is measured as the average number of years of education of employees 6. Personnel ratios ? Refer to the development of people to various functions and departments ?
Includes the administrative ratio, the clerical ratio, the professional staff ratio, and the ratio of indirect to direct labour employees ? A personnel ratio is measured by dividing the number of employees in a classification by the total number of organizational employees [pic] Contextual Dimensions 1. Size ? The organization’s magnitute as reflected in the number of people in the organization ? Because organization’s are social systems, it’s typically measured by # of employees 2. Organizational technology ? Refers to the tools, techniques, and actions used to transform inputs into outputs ?
It concerns how the organization actually produces the products and services and includes things such as flexible manufacturing, advanced info systems, and the Internet 3. Environment ? Includes all elements outside the boundary of the organization ? Key elements include the industry, government, customers, suppliers, and the financial community 4. Goals and Strategies ? Define the purpose and competitive techniques that set it apart from other organizations ? Goals are written down as an enduring statement of company intent.