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  • 1. Thomson Learning © 2004 1-1 Chapter One Organizations and Organization Theory
  • 2. Thomson Learning © 2004 1-2 Organization Theory in Action  Topics  Current Challenges  Global Competition  Ethics and and Social Responsibility  Speed of Responsiveness  The Digital Workplace  Diversity
  • 3. Thomson Learning © 2004 1-3 What is an Organization?  Definition  Importance of Organizations  Bring together resources to achieve desired goals and outcomes  Produce goods and services efficiently  Facilitate innovation  Use modern manufacturing and information technologies
  • 4. Thomson Learning © 2004 1-4 Importance of Organizations  Importance of Organizations (cont’d)  Adapt to and influence a changing environment  Create value for owners, customers and employees  Accommodate ongoing challenges of diversity, ethics, and the motivation and coordination of employees
  • 5. Thomson Learning © 2004 1-5 Transformation Process An Open System and Its Subsystems Environment Raw Materials People Information resources Financial resources Input Subsystems Boundary Spanning Production, Maintenance, Adaptation, Management Boundary Spanning Products and Services Output
  • 6. Thomson Learning © 2004 1-6 Five Basic Parts of an Organization Top Management Technical Support Technical Core Administrative Support Middle Management Source: Based on Henry Mintzberg, The Structuring of Organizations (Englewood Cliffs, N. J.: Prentice-Hall, 1979) 215-297; and Henry Mintzberg, “Organization Design: Fashion or Fit?” Harvard Business Review 59 (Jan. – Feb. 1981): 103-116.
  • 7. Thomson Learning © 2004 1-7 Goals and Strategy Environment Size Culture Technology Structure 1. Formalization 2. Specialization 3. Hierarchy of Authority 4. Centralization 5. Professionalism 6. Personnel Ratios
  • 8. Thomson Learning © 2004 1-8 Organization Chart Illustrating the Hierarchy of Authority for a Community Job Training Program Board of Directors Assistant Executive Director for Human Services Executive Committee Executive Director Advisory Committee Director Economic Dev. Assistant Executive Director for Community Service Director Reg. Planning Director Housing Director Criminal Justice Director Finance Director AAA Director CETA Secretary Lead Counsel Lead Counsel Asst. Director Finance Records Clerk Secretary Adm. Asst Payroll Clerk Secretary MIS Specialist Staff Clerk Adm. Asst. Alcohol Coord. Public Info Coord. Account. Contract Fiscal Manager CETA Couns. Devs. Title II D &VI&VII CETA Planner Housing Coord. CETA Couns. Devs. Title II ABC CETA Intake & Orient CETA Couns. Devs. Youth IV Program Spec. AAA Program Planner AAA Level 1 Level 2 Level 3 Level 4 Level 5
  • 9. Thomson Learning © 2004 1-9 Characteristics of Three Organizations 0 50 100 W.L. Gore & Associates Wal-Mart State Arts Agency Formalization Specialization Centralization Configuration (%nonworkflow personnel) TECHNOLOGY Manufacturing Retailing Government Service SIZE (#employees) 6,000 250,000 35
  • 10. Thomson Learning © 2004 1-10 Two Organization Design Approaches Vertical Structure Routine Tasks Rigid Culture Competitive Strategy Formal Systems Horizontal Structure Adaptive Culture Empowered Roles Collaborative Strategy Shared Information Organizational Change in the Service of Performance Mechanical System Design Natural System Design Stable Environment Efficient Performance Turbulent Environment Learning Organization Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass.: Harvard Business School)
  • 11. Thomson Learning © 2004 1-11 Organizational Dimensions High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy Product Technology 1 - 4 5 - 6 7 - 10 Service Technology Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism Well-Defined Goals 1 - 4 5 - 6 7 - 10 Poorly-Defined Goals Small Size 1 - 4 5 - 6 7 - 10 Large Size Modern 1 - 4 5 - 6 7 - 10 Postmodern Workbook Activity
  • 12. Thomson Learning © 2004 1-12 Xerox High Formalization 1 - 4 5 - 6 7 - 10 Low Formalization High Specialization 1 - 4 5 - 6 7 - 10 Low Specialization Tall Hierarchy 1 - 4 5 - 6 7 - 10 Flat Hierarchy Product Technology 1 - 4 5 - 6 7 - 10 Service Technology Stable Environment 1 - 4 5 - 6 7 - 10 Unstable Environment Strong Culture 1 - 4 5 - 6 7 - 10 Weak Culture High Professionalism 1 - 4 5 - 6 7 - 10 Low Professionalism Well-Defined Goals 1 - 4 5 - 6 7 - 10 Goals Not Defined Small Size 1 - 4 5 - 6 7 - 10 Large Size Modern 1 - 4 5 - 6 7 - 10 Postmodern Use for 1959-1990, Use for 1990-present Workbook Activity

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