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  • 1. Bahçeşehir University Page 1 1/18/2010 SUMMARY OF ORGANIZATIONS AND ORGANIZING ORGANIZATIONAL THEORY SUMMARY OF ORGANIZATIONS AND ORGANIZING Reviewdby: Prof.Dr. İlhanAtillaDİCLE Prep.by: İlhanÇİFTÇİ
  • 2. Bahçeşehir University Page 2 Contents Chapter 1: The Subject is Organizations: The Verb is Organizing .......................................................4 The Elements of Organizations....................................................................................................4 Chapter 2: Organizations as Rational Systems..................................................................................5 Taylor and Scientific Management ..............................................................................................5 Fayol and Administrative Theory.................................................................................................6 Weber and Theory of Bureaucracy and Authority.........................................................................6 Simon and Theory of Administrative Behaviour............................................................................7 Chapter 3: Organizations as Natural System ....................................................................................9 Major Contributions To Natural System.....................................................................................11 Barnard’s Cooperative System...............................................................................................11 ”Hawthorne effect”..............................................................................................................11 Parsons’s AGIL Schema.........................................................................................................12 Selznick’s Institutional Approach ...........................................................................................13 Chapter 4: Organizations as Open Systems....................................................................................13 Organizations as Cybernetic Systems.........................................................................................14 Organizations as Loosely Coupled Systems ................................................................................15 Organizations as Hierarchical Systems.......................................................................................16 Chapter 5: Combining Perspectives, Expanding Levels....................................................................16 Contingency Theory .................................................................................................................16 Thompson’s Levels of Model.....................................................................................................17 Scott’s Layered of Model..........................................................................................................17 Chapter 6: Conceptions of Environment........................................................................................20 Organizational Groupings .........................................................................................................20 Environment Typologies...........................................................................................................20 Subjective vs. Objective Definitions of Environments..................................................................21 Organizations and Environments...............................................................................................21 Chapter 7: Creating Organizations.................................................................................................22 Various Theoretical Perspectives on the Emergence of Organizations .........................................23 Chapter 8: Goals, Power and Control.............................................................................................23 Organizational Goal &The Dominant Coalition........................................................................24 Anarchies, Adhocracies & Learning............................................................................................26 Control Systems ...................................................................................................................27
  • 3. Bahçeşehir University Page 3 Authority .............................................................................................................................28 Chapter 9: The Dyadic Enviroment of Organization........................................................................28 Transaction Cost Economics......................................................................................................28 Resource Dependence Theory ..................................................................................................29 Chapter 10: Organization Environment .........................................................................................30 Population Ecology...................................................................................................................31 The New Institutional Approach................................................................................................31 Chapter 11: Networks In and Around Organizations.......................................................................32 Interlock Networks...................................................................................................................32 Indirectly Networks..................................................................................................................32 Chapter 12: Strategy, Structure, and Performance: The Sociology of Organizational Strategy ...........32 Forces Shaping Industry Competition........................................................................................32 Threat of entry by new competitors.......................................................................................32 Intensity of rivalry amongexisting competitors ......................................................................33 Chapter 13: The Rise and Transformation of the Corporate Form ...................................................37 Changing Forms of Organizations..............................................................................................37 Railroads .................................................................................................................................37 Corporationsin the 20th Century...............................................................................................37 Chapter 14: Changing Contours of Organizations and Organization Theory......................................38 From Unitary to Multiparadigm ................................................................................................38 From Monocultural to Multicultural Studies ..............................................................................38 From Present – Centered to Longitudinal and Historical Analysis ................................................38 From Micro to Macro Units and Levels of Analysis .....................................................................39 From Structure to Process ........................................................................................................39
  • 4. Bahçeşehir University Page 4 Chapter 1: The Subject is Organizations:The Verbis Organizing Organizationsplayaleadingrole inourmodernworld.Thispresence affcets –some wouldinsist that the proper term is infects – virtually every sector of ceontemporary social life. What organizations do?,howtheychangedand howpeople have thoughtaboutthemquestions will be solved with this summary. The Elements of Organizations Organization charts are enormously useful but convey only a small part of what we mean by “organizations.” There have been many models that render the diversity and complexity of organizations manageable by focusing on a few central dimensons- somewhere between an organization chart and actual organization. The EssentialIngredients Essential ingredients of organizations are environment, strategy and goal, work and technology, formal and informal organization. Environmentsare all those of significantelements outside the organization that influence its ability to survive and achieve its ends. Strategy describes the choices organizations make about which markets or clients the organization intends to serve, the basis on which it competes in its domain. Works describes the tasks that the organization needs to accomplish given the goals it has set for itself.Itincludesthe characterof the work flowsandthe level of interdependece among the parts of the organization. To focus on the technolgy of an organization is to view the organization as a place where energy is applied to the transformation of materials, as a mechanism for transforming inputs into outputs. Formal Organizationcodifymore orlessexplicitlyhow they do their work and how their parts relate to each other. Informal organization refers to the emergent characteristics of the organization that affcet how the organization operates. This includes the organization’s culture, norms, and values: social networksinside and outside the organization; power and politics; and the actions of leaders.
  • 5. Bahçeşehir University Page 5 Culture describes the pattern of values, beliefs, and expectations more or less shared by the organization’s members. Three contrasting definitions of organizations have arisen, each associated with one of three perspectives on organizations: the rational, natural, and open system. The first definition views organizations as highly formalized collectivities oriented as social systems, forged by consensus or conflict, seeking to survive. And the third definition views organizations as activities involving coalitions of participants with varying interests embedded in wider environments. The three definitionsframe analyticallyuseful,if partial, views of organizations based on differing ontological ceonceptions. And all three perspectives, albeit in varying combinations, continue to guide and influence the ways we think about organizations and organizing. Chapter 2: Organizations as Rational Systems The two prominent characteristics of rational systems are: Goal Specificity: Goalsare conceptionsof desiredends. In the rationalistic view, it is important that goals are clearly defined and are not vague. Vague goals do not provide a solid basis for formal organisations. Formalisation: A structure isformalised: - to the extentthatthe ruleswhichare governingbehaviourare preciselyformulated - to the extentthatrolesandrole relationsare prescribedindependentlyof the personalattributes and relationsof the individuals,whoare occupyingthese positionsinthe organisation. Taylor and Scientific Management Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. Scientifically select, train, and develop each worker rather than passively leaving them to train themselves. Cooperate withthe workerstoensure thatthe scientificallydevelopedmethods are being followed. Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
  • 6. Bahçeşehir University Page 6 These principles were implemented in many factories, often increasing productivity by a factor of three or more.HenryFord appliedTaylor'sprinciples in his automobile factories, and families even began to perform their household tasks based on the results of time and motion studies. Fayol and Administrative Theory Fayol was a qualified engineer and also held a high position industry: managing director of a large French company. A year after the death of Taylor, he published his most famous book entitled: General and Industrial Management While Taylor reorganized from "bottom up", administrative theorists looked at productivity improvements from the "top down". Early influencers were Henri Fayol (1949 trans.), Mooney and Reiley (1939) and Gulick and Urwick (1937). Fayol attempted to develop a science of administration for management. In contrast to a later managementexpert,PeterDrucker,he believed that there was a universal science of management applicable to commerce, industry, politics, religion, war or philanthropy. He was not a theoretician and was one of the first practicing managers to draw up a list of management principles Fayol thought that his principles would be useful to all types of managers. He truly advocated the notion that if a manager wants to be successful, he only needs a certain set of management principles. If a manager climbed the corporate ladder and reached higher positions, this manager would depend less on technical knowledge and more knowledge of administration. When Fayol workedonhisprinciplesinFrance,Taylor’sscientificmanagement was developing “independently” in the USA. Although he was trained as an engineer, he brilliantly realized that management of an enterprise required skills other than those he had studied. Weber and Theory of Bureaucracy and Authority Max Weber wrote about the emergence of rationality in the West by comparing and contrasting differing cultures and historical periods. His typologyon authority -- traditional,rational-legal,andcharismatic-- proposedthatrational-legal authority was becoming the dominant system (supplanting traditional authority) through the modernstate and capitalism,mainlydue to it's "purely technical superiority over any other form of organization".
  • 7. Bahçeşehir University Page 7 Traditional Authority -- resting on the established belief of sanctity of traditions and legitimacy of those exercising authority under them Rational-legal authority -- resting on a belief of the legality of patterns of normative rules and the right of those elevated under those rules to issue commands Charismatic authority -- restingondevotiontosanctity,heroism, and character of a person, and the normative rules ordained by him or her. Bureaucracy arose bysub-dividingthe functionsthatthe owner-managers originally did themselves such as supervision,personnel selection,accountingandfinancial management, record keeping, job design, and planning. Simon and Theory of Administrative Behaviour Simon(1976) clarifiedthe processesbywhichgoal specificityandformalizationcontribute torational behaviorinorganizations (Scott p. 45). He criticized Fayol's platitudes and Taylor's "economic man" assumptions, proposing the "administrative man" who pursues his self-interests but often doesn't know what they are, is aware of only some of the possible decision alternatives, and is willing to settle for an adequate solution than continue looking for an optimal one Simondistinquishesbetweenthe decisionsapersonmakestoenteror leave an organization and the decisionstheymake asa participant.Organizationssimplifydecisionsandsupportparticipants in the decisions they need to make. Organizations simplify decisions by restricting the ends toward which activity is directed. Goals supplythe value premises that underly decisions. Value premises (assumptions of desirable ends ) are combined with factual premises to make decisions. The more precise the value premises, the greater effect they have on decisions. Participants in high positions make decisions with a higher value component, people in lower positions make decisions with a higher factual component. The top makes "what" decisions, the bottom"how"decisions.Choiceof endscanonly be validated by fiat or consensus, choice of means empirically. While goals are often vauge, they can serve as the starting point for a series of mean-ends chains where one developsasetof meansfor the overall goal,redefineseachmean as a sub-goal, and then develops means for the sub-goal, branching until the means are activities.
  • 8. Bahçeşehir University Page 8 Each goal in the means-end hierarchy is an end to things below it and a mean to those above it. Activitiescanonlybe evaluatedagainstthe goalsabove it. Goals can be delegated to different units whichsimplifiesthe decisionmakingprocessforparticipants.Scottnotesthat"fromthisperspective, an organization's hierarchy can be viewed as a congealed set of means-ends chains promoting consistency of decisions and activities throughout the organization". According to Perrow (1986), Simon's model stresses unobtrusive control of participants through training,information,standardoperatingprocedures,etc. -- channelingof attentionandinformation. Simon also notes the cognitive limitations of decision makers through his and March's concept of bounded rationality (March and Simon, 1958). Overall,Simonhelpsusunderstandhowthe decisionsof hundreds or thousands of individuals in an organization can be directed toward ultimate orgnizational goals. When comparing the various schools, important differences in the approach to the normative structure can be identified:  Taylor: pragmatic approach, bottom up –method  Administrative theory group: lees pragmatic & more prescriptive, belief in general principles  Weber was less concerned with discovering methods to improve organisation but was trying to define characteristics of the bureaucratic structures  The 4 schools used different levels of analysis, Taylor and Simon used the social psychological level,while Fayol(administrative theory group) and Weber worked at structural level Characteristics of the rationalistic perspective:  Control isthe meansof challenging and co-ordinating behaviour in order to achieve specified goals  Structure is celebrated, action is ignored
  • 9. Bahçeşehir University Page 9 Chapter 3: Organizations as Natural System  Organizations are collectivities (not existed to rational)  SpecificityandFormalizationascharacteristicsdifferentiatingorganizationsfromother types of collectivities (rational) but shared with the social group (natural)  Organizational goals and their relation to the behavior of participants are much more problematic. Two general themes characterize of organizational goals:  There is frequently a disparity between the stated and the “real” goals pursued by organizations.  When the stated goals are actually being pursued, they are never the only goals governing participants’ behavior Two Typesof Explanationshave beenproposedtoaccountforthe survival instincts of organizations:  The Organizations are social systems charecterized by a number of needs that must be satisfied if they are to survive.  Othertheoristsrejectsuchassumptionsasbeinganthropomorphicatworstand unnecessary at best.Theysuggestinsteadthatone doeshave toposita survival needforthe collectivityit self.  The main difference between the two perspective scholars background
  • 10. Bahçeşehir University Page 10 The rational and the natural analysts concentrated on different types of organizations The rational systemanalystswere more likelytoinvestigateindustrialfirms and state bureaucracies, while the natural systemanalyststendedtofocusonservice andprofessional organizations-schools, hospital, and voluntary organizations Rational system theorists  only selected aspects of behaviors of participants are relevant to the organization. Natural system theorists:  Such behaviorshave animpactonthe taskbehaviorof participantsandhence are emprically relevant to an understanding of organizational behavior  Organizations as social contexs affect the participants’ well being, a situation that has normative significance to anyone concerned with bettering the human condition. Classical (Rational) Theorist Natural System Managerial Experince (Pratical) Industry Engineer (Pratical) Academic Background Fayol  Mooney  Urwick  Taylor  Mayo  Weber  Gullick  Roethlisber ger  Selznick  McGregor  Parsons  Bendix  Dalton  Gouldner  Dahrendorf  Barnard 
  • 11. Bahçeşehir University Page 11 Major Contributions To Natural System Barnard’sCooperative System  Barnard stressed that organizations are essentiallay cooperative systems, integrating the contributions of their individual participants.  Organizations rely on the willingness of participants to make contributions.  Many ideasthat are consistent witharational systemconceptionof organizations what sets themapart is hisinsistence onthe nonmaterial, informal, interpersonel, and, indeed moral basis of cooperation.  The most critical ingredient to successful organization is the formation of a collective purpose thatbecomesmorallybindingonparticipants.Developingandimpartingamissionis the distinctive “function of the executive.”  The necessity of survival can override the morality of purpose. ”Hawthorneeffect”  Between 1924 and 1932, at a factory called the Hawthorne Works, (a Western Electric manufacturingfacilityoutsideChicagoIL,U.S.A.),aseriesof experiments on factory workers were carried out.  Hawthorne Works had commissioned a study to see if its workers would become more productive in higher or lower levels of light. It was found that the workers' productivity seemed toimprove whenchangeswere made and slumped when the study was concluded. It was suggestedthatthe productivitygainwasdue tothe motivational effect of the interest being shown in them.  However, it was then found that subjects improved their performance in response NOT to changes in experimental manipulation in illumination of their task area BUT simply in response to the fact that they are being studied. In 1955, the term was coined by Henry A. Landsberger when analyzing the experiments from 1924-1932.  In a 2009 reassessment of the original data, University of Chicago economists John List and StevenLevittfoundthatproductivityvaried due to other factors such as the weekly cycle of work or the seasonal temperature and so the initial conclusions were overstated and the effect was weak or illusory.  Although illumination research of workplace lighting formed the basis of the Hawthorne effect, other changes such as maintaining clean work stations, clearing floors of obstacles, and evenrelocatingworkstationsresultedinincreasedproductivityforshort periodsof time.  In appropriate sense,the Hawthorneeffectisa term used to identify any type of short lived increase in productivity.
  • 12. Bahçeşehir University Page 12 Parsons’sAGILSchema He developed a very explicit model detailing the needs that must be met if a social system is to survive. The model is identified AGIL.
  • 13. Bahçeşehir University Page 13 Selznick’sInstitutional Approach He was a student of bureaucrarcy under Merton at Colombia but an intellectual descendant of Michels and Bernard, developed his own unique system model, one that has recently been refurbished and elaborated to constitute an influential approach to the analysis of organizations known as institutional theory. “The importantthingaboutthe organizationsisthat,though they are tools, each nevertheless has a life of its own.” He agrees rational system except:  individuals who participate in the organization as “wholes” rather than acting merely in terms of their formal roles  Organizational structures that include the formal aspects but also the complex informal systems that link participants with one another and with others external to the official boundaries  Institutionalization:The processby which an organization “takes on a special character” and “achieves a distinctive competence or, perhaps a trained or built – in capacity”(Selznick 1996)  Thus institutionalization refers to a morally neutral process: “the emergence of orderly, stable,sociallyintegratingpatternsout of unstable, loosely organized or narrowly technical activities” Selznick argued that teh most significant aspect of institutionalization is the process by which structures or activities become “infused with value beyond the technical requirements at hand”  He views organizational structure as an adaptive organism shaped in a reaction to the characteristics and commitments of participants as well as to influences from the external enviroment Chapter 4: Organizations as Open Systems The opensystemperspective emerged as a part of the intellectual ferment following World War II, although its roots are much older. The general movement created new areas of study, such as cyberneticsandinformation theory; stimulated new applications, such as systems engineering and operations research; transformed existing disciplines, inclıding the study of organizations; and proposedcloserlinkagesamongscientific disciplines. The latter interest was fostered especially by general systemtheory.Itsfounder, biologist Luwing von Bertalanffy, was concerned about growing compartmentalization of science. Open system theory was intially developed by Ludwig von Bertanlanffy(1956),a biologist,butitwasimmediatelyapplicable acrossall disciplines.Itdefines the
  • 14. Bahçeşehir University Page 14 conceptof a system,where "all systemsare characterizedbyan assemblage or combination of parts whose relationsmake them interdependent". As one moves from mechanical to organic and social systems, the the interactions between parts in the system become more complex and variable. In mechanical systemsthe partsare highlyconstrained.Insocial systems,the connectionsare loosely coupled.Alsoimportantisthe flowof materials, energy, and information across system boundaries separatingthe systemfromitsenvironment.Simplersystemstransmitprimarilyenergy,while higher order systems transmit information. Open systems like organizations are "multi-cephalous : many heads are present to receive information, make decisions, direct action". Individual and subgroups form and leave coalitions. Boundariesare amorphous,permeable, and ever changing. But the system must exchage resources with the environment to survive. Organizations as Cybernetic Systems inthe second-halfof the 20th century,cyberneticsisequallyapplicable tophysical andsocial (that is, language-based) systems. Cyberneticsispreeminentwhenthe systemunderscrutinyisinvolved in a closed signal loop, where actionby the systeminan environment causes some change in the environment and that change is manifest to the system via information, or feedback, that causes the system to adapt to new conditions: the system changes its behavior. This "circular causal" relationship is necessary and sufficient for a cybernetic perspective Contemporary cybernetics began as an interdisciplinary study connecting the fields of control systems, electrical network theory, mechanical engineering, logic modeling, evolutionary biology, neuroscience,anthropology,andpsychology inthe 1940s, oftenattributedtothe Macy Conferences. Otherfieldsof studywhichhave influencedorbeeninfluenced by cybernetics include game theory, system theory (a mathematical counterpart to cybernetics), sociology, psychology (especially neuropsychology, behavioral psychology, cognitive psychology), philosophy, and architecture.
  • 15. Bahçeşehir University Page 15 Organizations as Loosely Coupled Systems Understanding an organization as a loose coupling of actors, rewards, and technology may help better explain how organizations adapt to their environments and survive amidst uncertainties. Weick observes that manifests of loosely coupled systems often are:  situations where several means can produce the same result  lack of coordination  absence of regulations  highly connect networks with very slow feedback times While these manifests appear negative, they actually may help the organization by:  allowing the organization to temporarily persist through rapid environmental fluctuations  improving the organization's sensitivity to the environment  allowing local adaptations and creative solutions to develop  allow sub-system breakdown without damaging the entire organization  allow more self-determination by actors In general, loosely coupled systems probably are cheaper to coordinate, but are very difficult to systematically change. Loose coupling"conveysthe image that coupled events are responsive, but that each event has it's individual identity and the coupling can vary over time'. It also suggests that you can break many
  • 16. Bahçeşehir University Page 16 organizations into largely self-functioning subsystems, and loose coupling is really the "glue" that holds them together. Two couplingelementsoftendiscussedare technical couplings(betweentechnology, task, role) that are task-inducedandauthoritycouplings(positions,offices, rewards, sanctions) that somehow hold the organization together. This is not to say that open systems do not have boundaries. They do, of course, and must expend energy in boundary maintenance. Organizations as Hierarchical Systems General systems theorists also stress that hierarchy is a fundamental feature of complex systems – not hierarchyinthe sense of statusor powerdifferences,buthierarchyasa mechanismof clustering. Systemsare composedof multiple subsytems, and systems are themselves contained within larger systems.Thisissucha commonfeature of virtually all complex systems that it is easily overlooked. Chapter 5: Combining Perspectives,Expanding Levels Contingency Theory Contingencytheoryisaclassof behavioural theorythatclaims thatthere isno bestwayto organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) upon the internal and external situation. Several contingency approaches were developed concurrently in the late 1960s They suggested that previous theories such as Weber's bureaucracy and Taylor's scientific managementhadfailedbecausetheyneglectedthatmanagementstyle andorganizational structure were influencedbyvariousaspectsof the environment: the contingency factors. There could not be "one best way" for leadership or organization. Historically, contingency theory has sought to formulate broad generalizations about the formal structures that are typically associated with or best fit the use of different technologies. The perspective originated with the work of Joan Woodward (1958), who argued that technologies directlydetermine differences in such organizational attributes as span of control, centralization of authority, and the formalization of rules and procedures.
  • 17. Bahçeşehir University Page 17 Scott describesthe ContingencyTheoryinthe followingmanner:"The best way to organize depends on the nature of the environment to which the organization must relate". Other researchers includingPaul Lawrence,JayLorsch,andJamesD. Thompson were complementing to this statement and were more interested in the impact of contingency factors on organizational structure. Their structural contingency theory was the dominant paradigm of organizational structural theories for mostof the 1970s. A majorempirical testwasfurnishedbyJohannesMPennings who examined the interaction between environmental uncertainty, organization structure and various aspects of performance. Thompson’s Levels of Model James D. Thompson in his work Organizations in Action states that all three perspectives apply in differing amounts to different organizations, and suggests researchers should be more flexible in theirapproach.He borrowsParson'slevels(technical, managerial, and institutional) and claims that the rational perspectiveismore suitable tothe technical level,the natural tothe managerial,andthe open to the institutional level . Thompson states that organizations "strive to be rational although they are natural and open systems".Rational notions of effectiveness and efficiency presume a closed system. Organizations attempt to seal off their technical core from external uncertaintities as much as possible. At the institutional levelthe organizationisopentothe environment and must adapt to its changes. At the managerial level managersmediate betweenthe open institutional level and closed technical level and needthe flexibilityof informalstructuresprevalent in the natural system perspective to ensure organizational survival. Scott’s Layered of Model Scott worksout three ideal typical perspectives on organizations: organizations as rational systems, organizationsasnatural systems and organizations as open systems. Although these categories are certainly not new, the comprehensiveness of the discussion is very valuable. Within the rational perspective,organizationsare seenasstronglyformalizedentitiesaimedatthe fulfillmentof specific goals. Within this mechanistic approach toward organizations, the formal structure is emphasized. However, within the natural systems approach, organizations are seen as fundamental social
  • 18. Bahçeşehir University Page 18 collectivities attempting to fulfill their own individual needs. The natural system theorists put a greateremphasize onthe informal andsocial structure of the organization as well. Finally, the open system approach pays particular attention to the reciprocal ties and the mutual dependence between organizations (with different interests) and the environment. The open character of the system is the most important difference between this and the other two previous perspectives. Accordingto Scott,thistheoretical divisionusesidealtypeswhich“partiallyconflict,partiallyoverlap, and partiallycomplement one another” (Scott, 2003:31). This statement is not problematic in so far as the perspectivesare not presented as mutually exclusive. However, Scott takes the view that an attempt to integrate these perspectives is necessary
  • 19. Bahçeşehir University Page 19 Levels of Analysis 1900 - 1930 1930 - 1960 1960 - 1970 1970 - Rational Models Natural Models Rational Models Natural Models Social Scientific Management Human Relations Bounded Rationality Organizing Psychological Taylor (1911) Whyte (1959) March and Simon (1958) Weick (1969) Decision Making Simon (1945) Structural Bureaucratic Theory Cooperative Systems Contingency Theory Sociotechnical Systems Weber (1946) Barnard (1938) Lawrence and Lorsch (1967) Miller and Rice (1967) Administrative Theory Human Relations Comparative structure Fayol (1919) Mayo (1945) Woodward (1965) Pugh et al. (1969) Blau (1970) Ecological Transaction Cost Organizational Ecology Williamson (1975) Hannan and Freeman (1977) Knowledge - based Resource Dependence Nonaka and Takeuchi (1995) Pfeffer and Salancik (1978) Institutional Theory Selznick (1949) Meyer and Rowan (1977) DiMaggio and Powell (1983) Closed System Models Open System Models
  • 20. Bahçeşehir University Page 20 Chapter 6: Conceptions ofEnvironment Organizational environment refers to the forces that can make an impact. Forces made up opportunities and threats. Organizations dose not exist in isolation. It works with the overall environment. Scholars have divided these environmental factors into two main parts as, Internal Environment, External Environment Organizational Groupings Scott notesfourcommongroupingsof organizationsinresearchatthe ecological level: An organization set referstothe fact thatan organizationhasdifferentrelationsbasedonwhich partnerin the environmentitisdealingwith(supplier,customer,agency,etc.). Organizationalpopulation: aggregatesof organizations thatisalike insome respect(thathave similar blueprintinorganizational action). Areal organizationalfields: looksata collectionof organizationswithinageographical area.Ithas beenlabeledecological communitymodel,inter-organizational model,orthe collective-action model,andtendstofocuson the networkof relationsbetweenorganizationsinthe same area. Functionalorganization fields:collectionof organizationsthatcriticallyinfluence the focal organization(suppliers,customers,owners,regulators,competitors,etc.)  Organizational fieldsandenvironmentsevolve overtime.Organizationsmaydevelop temporaryallianceswithotherorganizationsforspecificpurposes(evenwhencompetingin otherarenas). Environment Typologies Variousresearchershave developedtypologiestodescribe organizational environments.Emeryand Trist classifiedthembyextentof ‘interlocking relationships’ andWarrenbasedhison‘decision- makingstructure’. The socio-technical perspective(EmeryandTrist,1965) defines fourfields:  Placid, randomizedenvironments(resourcesunchanging,randomdistribution)  Placid,clusteredenvironments(resourcesunchanging,butlocationbecomes importantforsurvival)  Disturbed,reactive environments(org.strategytogetresourcesimportantfor survival)
  • 21. Bahçeşehir University Page 21  Turbulentenvironments(all actorsare interconnected,andoverallfieldbecomesan importantforce) Warren basedhistypologyondecisionmakingstructure:  Social-choice context  Coalitional context  Federative context Subjective vs. Objective Definitions of Environments Lawrence and Lorsch (1967) and Weick (1979) suggest that basing it on participant's perceptions is the best (if not only) way. Weick notes that participants enact their environment, selectively perceiving and modifying their environment, often unconsciously. March (Cohen and March, 1974) adds to this through definition of an attention structure to "describe the distribution of connections among people, types of information sent and received, distribution of problems, and (decision rules) “. Ultimately,we can'tseparate subjective (enacted) andobjective characterizations of environments. Parts of the environment can affect organizational outcomes even if they are not perceived. What we measure dependsonwhatwe are tryingto predict -- predictingorganizational choices may rely on participant perceptions, but predicting organizational outcomes requires additional information potentially unknown to the participants. Organizations and Environments Contingency and resource dependency theorists argue that organizations can adapt to environmental changes, while population ecologists emphasize structural inertia that prevents adaptation -- more optimal organizational forms are selected, and less optimal ones are replaced. Organizations can absorb part of the environment (through vertical integration) or return part of theirorganizationtothe environment(outsourcing).All of thismakesboundary definitions difficult. The prevalent view is that modern organizational environments are becoming more complex at an increasing rate (Emery and Trist, 1965), largely through technical change. This means that uncertaintyalsoincreases,andthe ratioof externallytointernallyinducedchangesalsoisincreasing.
  • 22. Bahçeşehir University Page 22 Thistrend is still unclear, however. And there are instances where changing governance structures and technical changes may actually reduce uncertainty. Chapter 7: Creating Organizations Why are there organizations,and what are the conditions that foster the creation of organizations? These are important questions in organizational theory. Scott notes that "...the history of the development of modern society is also a history of the development of special purpose organizations..." Various historical trends helped create modern organizations: The Changing Relations of Individual and Corporate Actors In pre-modernorganizations,the participantswere whollycontainedintheir organizations, who had full authorityoverthem.Theirrightsandinterestswere determined by the membership. They were builtona strict hierarchy.Overtime individualsgainedrights,andcorporate actorsalsogained rights and were allowed to pursue interests too (often under a charter of the ruler). These new corporate actors no longer contained their individual actors but just the resources investedbythe owners.Theynowcontractedtoindividual participantstoengage incertainactivities for wages. Individuals were only partially involved now. This trend created a surgence of individualism that cooincided with the development of special-purpose organizations. Societal Conditions Favoring the Devlopment of Organizations Stinchcombe (1965) suggests that "the capacity of a population to develop and support special purpose organizationsisdeterminedbygeneralfactorslike literacy,specialized advanced schooling, urbanization, money economy, and political revolution (Scott p. 153). Others like Parsons and Eisenstadtaddrole andinstitutionaldifferentiation,allocationorrolesbyachievement instead of by other criteria, and competition for resources. Stinchcombe addsthatthese factorshave helpedmotivateindividualtoformorganizationsand have improved the chance that this new form will survive. "Stinchcome (also) asserts that organizations
  • 23. Bahçeşehir University Page 23 sufferfromthe liabilityof newness -- new organizations and in particular new forms of organization are likely to fail" Various Theoretical Perspectives on the Emergence of Organizations Each theoretical perspective has a different explanation as to why organizations are created. The rational system perspective emphasizes that organizations are formed to improve efficiency and effectiveness through division of labor, reduced transaction costs, more efficient information processing, and more effective monitoring of agents. "From a rational system perspective, organizationsarise totake advantage of the production economies offered by an elaborate division of labor and to meet the cognitive and control challenges posed complex and uncertain environments" "From a natural systemperspective,institutionalistspropose that organizationsemergeasan embodimentof rationalizedbelief systems thatproliferateinthe widersocial environment.Marxists argue that organizationsarise asstructurescreatedbycapitalists toexpropriate surplusvaluefrom productive labor". But all partiesagree thatindustrializationhascausedthe growthof large organizations. Resource Mobilization Organizations emerge through the collective mobilization of resources in pursuit of a goal. How an organization is formed is partly the result of it's intial resource mix, incentives, membership demographics, and ability to acquire resources. The failure rate of new organizations is high. Chapter 8: Goals,Power and Control 5 alternativesusesfororganizational goals  Cognitive –Rational Approach  Cathetic(Motivational) –Natural System  Symbolic–Institutional Approach  Justification  Evaluative
  • 24. Bahçeşehir University Page 24 Simon (1964: 1997) has most forcefully urged the distinction btw individual goals that govern a participant’sdecisiontojoinorremaininan organization,andorganizationalgoalsthatare expected to govern decisions of individuals as participants. Organizational Goal &TheDominantCoalition Acc. to The Classical Economist’s is to point to the goals of the entrepreneur and to equate the organization’s goals within this person’s objectives. The most satisfactorybasisforadressingthe questionof who setsorganizationalgoalsisprovided by Cyert and March (1963) Acc. To Cyert and March; organizational goals being set by a negotiation process that occurs among members of the dominant coalition. Participants and Stakeholder OwnersandManagers : Those whoown property,whetherinthe formof capital,land,machinery,or disposable goods, have “ a socially defensible right to make a decision on how to use” these resources. Owners delegate control over resources to managers who are expected to act on their behalf.
  • 25. Bahçeşehir University Page 25 Labor: Organizations depend on the energies and skills of workers who carry out the work of transforming resources., BoundaryRoles:Enviromental changes lead to change organization unit and power. Environmental change is determined internal structure External Actors: Power over organizations is not restricted to those within its formal boundaries (Mintzberg, 1983) The power of external constituencies to shape organizational objectives has been clear. (Selznick 1983) “Political economy” perspective provides a systematic framework for examining both internal and external sources of power affecting organizations (Zald 1970) Modes of Capital The power of capital resides in Financial Capital: Property, ownership, cash, investments, creditworthiness Human Capital: Personel attributes and skills, education and experince Social Capital: Putnam defines “those features of social organization, such as networks, norms and trust that facilitate coordination and cooperation for mutual benefit” Sizeof Coalition Acc. Galbraith (1967) one of the most fundamental changes in the organization of the modern corporation has been the shift from an entrepreneurial mode in which a single powerful person dominates the enterprise to a flatter structure in which power is more widely diffused. Thompson (1967) argues that the size of the dominat coalition, is affected both by the nature of organization’s technology and by its task and institutional environments. Uses of Power: What difference,if any,doesitmake whenpowershiftsfromone group to another or is shared with a wider range of individuals and by the organization.
  • 26. Bahçeşehir University Page 26 Missues ofPower: Crime: A useful distinction differentiates criminal acts organizations into “occupational” and “corporate” crimes. OccupationalCrimes are committed by individual employees against their employers for their own gain. CorporateCrimes are committedbyindividual employees acting on behalf of the corporation itself. Corruption: is by no means limited to developing societies, or societies in transition to a differing mode of governance. Enron, Worldcl etc. Anarchies, Adhocracies & Learning All systemsprovide forthe developmentof asetof goalsby whichorganizational decisionscanbe made. Rational SystemPerspective->Bureaucratic– Administrative Model Natural and OpenSystemPerspective->Coalitional–BargainingModel Decisions and Structures Thompson and Tuden (1959) focus on decisions and structures by constrcuting typology that combines 2 dimensons:  How much agreement there is among organizational particiapnats about the goals or preferred outcomes of the system,  How much agreement there is about the means or the causal processes by which these outcomes can be realized.  The cross – classification of ends – and – means distinction produces 4 types of decision contexts, each of which is calls for different decision strategy:
  • 27. Bahçeşehir University Page 27 Organized Anarchies Acc. to March and hiscolleagues,decisionmaking underconditionsof “inconsistentandill – defined preferences,” “uncler technologies”, and “fluid participation” lead to change or shift in members decision. These conditions are identified Organized Anarchy. TurbulentEnvironments A major factor often accounting for the absence of clearly specified goals is the nature of some organizational environments.If environmentsare turbulent, then it is difficult to establish clear and specific objectives around which to design a structure and orient participant activities. Unstable enviroments undermine clear and consistent goalsi just as they unsettle rigid formalized structures. Conceptions ofGoals and TheoreticalModels Grandori (1987) argues that there is a close relation between an analyst’s conception of organizational goals and the choice of a theorretical model for explaining organization structure. She takes contingency theory as the base line model, a model assumes that organizations are pursuingsingle or consistent objectives that are capable of rationally adapting their structure to fit changing circumstances. Control Systems Power: Emerson views power as relational, situational, and at least potentially reciprocal. BeliefsAbout Causation PreferencesAboutOutcomes Agreement Disagreement Agreement Computation Compromise [bureaucracy] [legislature] Disagreement Judgement Inspiration [collegium] [charismaticleader]
  • 28. Bahçeşehir University Page 28 Power in Formal Organization: It is determined at least in part by design: sanctioning powers are attachedto positions,avaliabletoany individual whooccupiesone,regardless of his or her personal qualities. Power is not personal but structıral. Power in Informal Organization: It is based on the characteristics of individuals – individual differences that can function as resources allowing some to reward and punish others. Authority Acc. Weber (1947): No organization is likely to be content with establishing a power structure; in addition, it will attempt to create am authority structure. Most social scientists define authority as ligitimate power. Acc. to Dornbusch and Scott (1975) mentioned two types of authority : endorsed and authorized Endorsed Power or Authority of endorsement: Social norms that regulate power relations provide the legitimate control structures, Who –what group of participants- defines and enforces these norms. In most informal groups, there is only one possible source: the set of participants who are subjecttothe exercise of powerandhence are subordinatesof the power wielder. This subordinate group can limit and regulate the exercise of power over them by a superordinate. Authorized power or Authority by authorization: A familiar safeguard built into most hierarchies is teh principle of appeal, by which subordinates who feel that their immediate superior is making unfairor unreasonable demandsonthem, mayturnto theirsuperior’sbosswiththe expectationthat he or she will enforce authority norms that curb the superior’s power. Chapter 9: The Dyadic Enviroment of Organization This topic is related to micro economics. It is stressed Transaction Cost Economics and Resource Dependence Theory. Transaction Cost Economics Transaction Cost Economics mostly granted with Ronald Coase. He wondered two questions:  Why speciliazed exchange economy such as ours, are there firms?  What is a firm?
  • 29. Bahçeşehir University Page 29 Firm is “the system of specialized relationships which comes into existence when the direction of resources is dependent on an entrepreneur” rather than on price mechanism. Where the firms boundaries come from as they are transformed from raw materials to final consumption? At each step of production, along the chain, value is added. “Value” is an operational definition. TransactionCost Economicsprovidestoolsforanalyzingwhere the boundaries around organizations arise. Organizationsare opensystems.Itstressesproducedgoodsandservicesexchange between outside of the system rather than production system and technology used by the organization. Produced goods and services exchange is more important than production. Summary of the Transaction Cost Economics is: Organizations want to work at least cost to produce goods and services. One of the way to ensure lesscostis cheaptransactioncosts.Althoughhighlevel management can decrease cost, boundaries rationality, and personal benefits sometimes prevent it. Resource Dependence Theory Resource Dependence Theory is one of many theories of organizational studies regarding the behaviorof organizations.Inmanyways,the predictionsof Resource Dependence Theoryare similar to those of Transaction Economics, but it also shares some aspects with Institutional Theory. Foundation of the Resource Dependence Theory was James Thompson in 1967. Aldrich, Pfeffer and Salancik provided this theory improvement also. Organizationsuse receivedinputs,tosurvive itsexistence.Inputsconsistgoods and services such as; equipment, energy, knowledge, talent, labor force etc. Variety,relative price andimportance,acquisitionof inputs are changed from organizations. Critical value of inputs are differ also. There may be inconsistency to provide some inputs. Organizations take measures to prevent input bottleneck such as: Licensing , Joint Ventures, Consortia , Legal Agreements , Common BOD members
  • 30. Bahçeşehir University Page 30 Precautions prevent to cut operational activities. Moreover it provides to reach resources easily. Organizations, who do not get precaution to provide input, face to suffer get input. Resource Dependency Approach emphasizes the open system. This approach stresses the relationship between organization structure and behavior with other organizations to sustain its presence. Organizationsmustbe integrateditsenvironmenttosurvive itsexistence.Resource dependency and scare ratio of necessities determine the organizations environment dependency in the form of quality and scope. Organizations are active rather than passive with respect to its environment. This means, determinationof theirfuture realize their own decisions. This seperated the resource dependency theory from ecology approach. Chapter 10: OrganizationEnvironment The newly formulated population ecology approach to organizations and the refurbished “new” institutional approachestoorganizationsbothburstonthe scene in the late 1970s. Both approaches defocalized attention on a single organization and its immediate environment to examine wider systems- comprised either of similar kinds of organizations (populations) or of organizations operating in the same domain (fields).
  • 31. Bahçeşehir University Page 31 Population Ecology Populationecology or natural selection has been considered in social systems since the 1940's, but was best defined by Hannan and Freeman (1977) and Aldrich (1979). It primarily applies to populationsof organizations,andtriestoexplainwhy some organizational forms survive and others fade away. They propose that organizational forms with the best fit to environmental characteristics will be selected and proliferate. In natural selection, a variety of forms are created, some are selected for better fit, and the form is retained through reproduction or duplication. They contend that organizationsusuallydon'tchange oradapt but are replacedbyorganizations with forms that better fit the current environment. It has become very popular due to its defined and accepted biological paradigm and it's quantitative methodologies. One important concept from population ecology is density dependence, which suggests that the concentration of a certain organizational form follows a curvilinear approach -- rising legitimacy increases founding rates early on and later competition reduces founding rates. The New Institutional Approach Institutional theorists examine the rules norms, and beliefsthat constrain and support social structuresand processes,includingorganizations.While economistsandpoliticalscientistsstressthe importance of rules and regulations (both externally) in the guise of the state and internally in the formof governance systems),sociologistsand organizational theorists have emphasized the role of sharednormsand beliefsthatproivdethe cultural foundationsof social order.Social order,including organizations in all their forms, is not simply constrained by institutional rules; it is constituted by cultural models. Such models are sometimes conflicting, always contested, giving rise to different kindsof actors, interestsandappropriate actions.The examination of such processes at work within organizational fieldshasprovidedvaluableinsightsintothe co-evolutionof organizational forms and institutiional patterns.
  • 32. Bahçeşehir University Page 32 Chapter 11: Networks Inand Around Organizations Network thinking has a long history in sociology. Many consider Georg Simmel (1955), a German contemporary of Weber, to be a founder of the sociology of networks with his discussion of the dynamicsof triads and the “web of group affiliations” Triads is, of course, small networks, but they have interestingpossibilities.A friend of my friendmaybe a friend, an enemy of my friend is likely to be an enemy- butthere are more interestingpossibilitieswhenmyfriendactsasa broker(keeping the two of us separate and acting as conduit), an arbitrator (mediating conflicts between us), or a spoiler (fomenting conflicts between us) Any organization or other social system can be represented as a network. Indeed, “network” is a general concept applicable at any level of analysis. A few examples of networks will illustrate this. Nodes can be people tied by friendship or acquaintanceship, as in the triads described by Simmel. Interlock Networks Interlocknetworksisrelatedto differentcompaniesholdBoardof Director Members on their Board. Sabancı Group in Turkey shows the best application of interlocking networks. For instance, Kordsa and Brisa hold BOD Member to their Board mutually. Indirectly Networks Indirectly network is related to different companies hold Board of Director Members on other company Board. For instance, Kordsa and Brisa hold BOD Member on Enerjisa Board. This application provides information of companies each other and managing reciprocal. Chapter 12: Strategy,Structure,and Performance:The Sociology of Organizational Strategy Forces Shaping Industry Competition Threatof entryby new competitors Economies of scale, in microeconomics, are the cost advantages that a business obtains due to expansion.Theyare factorsthatcause a producer’saverage costperunitto fall as scale is increased.
  • 33. Bahçeşehir University Page 33 Economiesof scale isa longrun concept and refers to reductions in unit cost as the size of a facility, or scale,increases.[1] Diseconomiesof scale are the opposite.Economiesof scale may be utilized by any size firm expanding its scale of operation. The common ones are purchasing (bulk buying of materials through long-term contracts), managerial (increasing the specialization of managers), financial (obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments), and marketing (spreading the cost of advertising over a greaterrange of outputin media markets). Each of these factors reduces the long run average costs (LRAC) of production by shifting the short-run average total cost (SRATC) curve down and to the right. Loyalty: The state or quality of being loyal Switching costs: The negative costs that a consumer incurs as a result of changing suppliers, brands or products. Although most prevalent switching costs are monetary in nature, there are also psychological, effort- and time-based switching costs. Intensity ofrivalryamongexistingcompetitors The intensityof rivalryamongcompetitorsinanindustryreferstothe extenttowhichfirmswithinan industry put pressure on one another and limit each other’s profit potential. If rivalry is fierce, competitors are trying to steal profit and market share from one another. This reduces profit potential forall firmswithinthe industry.AccordingtoPorter’s5 forcesindustryanalysisframework, the intensityof rivalryamongexistingfirmsisone of the forcesthat shape the competitive structure of an industry. The intensity of rivalry in an industry affects the competitive environment for the existing competitors and influences the ability of existing firms to achieve profitability. High intensity of rivalry means competitors are aggressively targeting each other’s markets and aggressively pricing products. This represents potential costs to all competitors within the industry. High intensity of competitive rivalry can make an industry more competitive and decrease profit potential for the existing firms. On the other hand, low intensity of competitive rivalry makes an industry less competitive and increases profit potential for the existing firms. Intensityof Rivalry – DeterminingFactors Several factorsdetermine the intensityof competitiverivalryinanindustry.If the industryconsistsof numerouscompetitors,industryrivalry will be more intense. If the competitors are of equal size or marketshare,the intensityof rivalrywill increase. If industry growth is slow, the intensity of rivalry
  • 34. Bahçeşehir University Page 34 will be high.If the industry’sfixedcostsare high,competitiverivalrywill be intense. If the industry’s products are undifferentiated or are commodities, rivalry will be intense. If brand loyalty is insignificantandconsumerswitchingcostsare low,thiswill intensify industry rivalry. If competitors are strategically diverse – they position themselves differently from other competitors – industry rivalry will be intense. An industry with excess production capacity will have greater rivalry among competitors.Andfinally,highexitbarriers –costsor lossesincurredas a result of ceasing operations – will cause intensity of rivalry among industry firms to increase. And of course, if the opposite is true for any of these factors, the intensity of rivalry among competitorswill be low.Forexample,a small numberof firms in the industry, a clear market leader, fastindustrygrowth,lowfixedcosts,highly differentiated products, prevalent brand loyalties, high consumer switching costs, no excess production capacity, lack of strategic diversity among competitors,andlowexitbarriersall indicate thatthe intensityof rivalryamongexistingfirmsis low. Intensityof Rivalry – Analysis Whenanalyzingagivenindustry,all of the aforementioned factors regarding the intensity of rivalry amongexistingcompetitors may not apply. But some, if not many, certainly will. And of the factors that do apply, some may indicate high intensity of rivalry and some may indicate low intensity of rivalry. The results will not always be straightforward. Therefore it is necessary to consider the nuances of the analysis and the particular circumstances of the given firm and industry when using these data to evaluate the competitive structure and profit potential of a market. Intensityof Rivalry is High if: Competitors are numerous, Competitors have equal size, Competitors have equal market share Industry growth is slow, Fixed costs are high, Products are undifferentiated, Brand loyalty is insignificant, Consumer switching costs are low, Competitors are strategically diverse, There is excess production capacity, Exit barriers are high
  • 35. Bahçeşehir University Page 35 Intensityof Rivalry is Low if: Competitors are few, Competitors have unequal size, Competitors have unequal market share Industrygrowthisfast,Fixedcostsare low, Productsare differentiated, Brand loyalty is significant, Consumer switching costs are high, Competitors are not strategically diverse, There is no excess production capacity, Exit barriers are low Intensityof Rivalry Interpretation WhenconductingPorter’s5 forcesindustryanalysis,lowintensityof rivalrymakesanindustrymore attractive and increasesprofitpotentialforthe firms alreadycompetingwithinthatindustry,while highintensityof rivalrymakesanindustrylessattractiveanddecreasesprofitpotential forthe firms alreadycompetingwithinthatindustry.The intensityof rivalryamongexistingfirmsisone of the factors to considerwhenanalyzingthe structural environmentof anindustryusingPorter’s5forces framework. o Pressure from substitute products o Bargaining power of buyers o Bargaining power of suppliers  How are Strategies and Structures Chosen o Overall cost leadership o Differentiation Porter o Focus o Prospectors o Defenders Miles and Snow o Analyzers  How are Strategies and Structures Chosen (cont.) o Plan: intended course of action o Ploy: manoeuvre intended to mislead o Pattern:consistency of actions Mintzberg o Position: a location that specifies the domain of action
  • 36. Bahçeşehir University Page 36 o Perspective: a way of perceiving the events  Founding Conditions o Available labour o Information and other technologies o Contracting laws to create organizations  Law and Public Policy o Sets the ground rules for possible structures o Regulatory changes can eliminate existing forms and enable new ones  Organizational Performance  Multiple criteria and indicators o Outcomes:focusison the specificcharacteristicsof materialsorobjectsonwhichthe organization has performed. o Processes: focus is on the quantity or quality of activities carried on by the organization. o Structure: assess the capacity of the organization for effective performance.  Shareholder value  Internal assessment of performance o Bounded rationality of mangers o The match between organizational structure/practices and their environment o The parallelism between individual and corporate goals  External assessment of performance o Standard-setting bodies  Rating agencies
  • 37. Bahçeşehir University Page 37 Chapter 13: The Rise and Transformationofthe Corporate Form Changing Forms of Organizations  Predecessorsof moderncorporations o The guildsinthe Middle Age o Charteredcompaniesthatheldmonopoliesontrade duringthe age of empire  Corporationsare differedfromearlier, traditional formsbyhaving; o Separate legal personality o Unlimitedlife o Limitedliability  These featuresenabledthe organizationstogrow tovast size andinfluence. Railroads  Newmethodsformanagingrationallythe largermassesof men,moneyandmaterialswere developed.  Railroadsincubatedthe private,professionallymanagedcorporationsinthe secondhalf of the nineteenthcentury,andmass-productionmanufacturersestablishedthe characteristic featuresof the contemporarycorporation,whichare; o Multidivisionalstructure o Professionalmanagement o Ownershipbydispersedshareholders  Railroadsare associatedwiththe developmentof the functional,unitary orU-formstructure, composedof a central managementunitandseveral functionallyorganizeddepartments. Corporations in the 20th Century  The twentieth century corporations have a multidivisional or M-form structure, which consistedof a general corporate office andseveral product-basedorregional divisions, each of which contained functionally differentiated departments.  Globalization,informationtechnologyandcompetitivepressures have reversed prior trends towards increasing scale and scope in many industries.  Contemporary multinationals challenge many of the categories and assumptions of modernist theory.
  • 38. Bahçeşehir University Page 38  Corporationshave come tolookmore like statesin the range of their activities, while states have come to look more like business corporations as both compete for each others’ business. Chapter 14: Changing Contours ofOrganizations and Organization Theory 5 majortrendto explainchangingorganizationenviroment  From Unitaryto Multiparadigm  From Monocultural toMulticultural Studies  From Present–cneteredtoLongitudinal andHistorical Analysiss  From Micro to Macro Unitsand Levels of Analysis  From Structure to Process From Unitary to Multiparadigm It should be examined from two dimensions: Sources of Multiplicity: Organization studies are the amalgam of sciences. It has been studied from the perspectives of socilogy, psychology, political science, social science. Scholors bring their disciplinary habits with them to their object of study. Proposed Solutions: Given the complexity of the problem posed by multiple paradigms, it is not suprising that the solutions proposed cover a similarly wide range. From Monocultural to Multicultural Studies It should be examined from two dimensions: Myopic View and Signs of Process Acc. to myopic view, social experince is filtered through cultural lenses.Although their exists great variance of cultural experince andexpression within most societies, on the one hand, and societies are struggling to maintain relevance in a globalizing world, on the other, nation states and their associated cultural systems continue to be significant and influential social contexts for organizations. Changing myopic view has been defined Signs of Process. From Present – Centered to Longitudinal and Historical Analysis
  • 39. Bahçeşehir University Page 39 It should be examined from three dimensions: It’s about time: Social Mechanisms: Longtudinal Studies: From Micro to Macro Units and Levels of Analysis It should be examined from two dimensions: Levels of Unit: From an earlier, simpler time when all organizations were local, situated in spesific geographically delimited contexts, we now find ourselves in a world in which the reach of many organizations is worldwide. Levels of Analysis: Organizations today are no longer stable and fixed, but transitory and flexible. Operations are more expand, and merge with related forms.Not also boundaries of fileds and industries also undergo change. From Structure to Process It should be examined from three dimensions: Changing Conception of Structure: A process view is taken not only of internal operations of the organization, but of the organization itself as a system persisting overtime. Recent decades organizations are: Organizations as shiftingcoalitionsof participants (Cyert& March, 1963) Organizationsasshiftingrelationalnetworks(Burt,1982, Nohria& Eccles,1992) Organizationsasa “nexusof contracts” (Jensen&Meckling,1976) Organizationsasa fluid“networkof treaties”(Powell,2001) Organizationsas“portfolioof financialassets” Organizationsasongoingnarrativesof conversationsamongparticipants
  • 40. Bahçeşehir University Page 40 The Boundary Problem: The world of organizations circa 2000 is vastly different from that of 1950 or 1900. The Rhythm of Field Development: No scientific field develops in a predictable or orderly manner. Uncertainand shiftingprocessthatcharecterize organizational field development also apply to any scientific field.

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