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Thomson Learning
© 2004 9-1
Chapter Nine
Organization Size,
Life Cycle, and Decline
Thomson Learning
© 2004 9-2
Differences Between Large and
Small Organizations
 LARGE
 Economies of
scale
 Global reach
...
Thomson Learning
© 2004 9-3
Organizational
Life Cycle
ORGANIZATION STAGES OF DEVELOPMENT
1.
Entrepreneurial
Stage
2.
Colle...
Thomson Learning
© 2004 9-4
Organization Characteristics During Four
Stages of Life Cycle
1.
Entrepreneurial
2.
Collectivi...
Thomson Learning
© 2004 9-5
Weber’s Dimensions of Bureaucracy and
Bases of Organizational Authority
 BUREAUCRACY
1. 1. Ru...
Thomson Learning
© 2004 9-6
Percentage of Personnel Allocated to
Administrative and Support Activities
50
75
25
0
Organiza...
Thomson Learning
© 2004 9-7
Three Organizational Control
Strategies
TYPE
Bureaucratic
Market
Clan
REQUIREMENTS
Rules, stan...
Thomson Learning
© 2004 9-8
Evaluation of Control
On the Job
Workbook
Activity
1.
2.
3.
4.
Your job
responsibilities
How y...
Thomson Learning
© 2004 9-9
Evaluation of Control
At the University
Workbook
Activity
1.
2.
3.
4.
Item
How Prof. A
(small ...
Thomson Learning
© 2004 9-9
Evaluation of Control
At the University
Workbook
Activity
1.
2.
3.
4.
Item
How Prof. A
(small ...
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Ch09

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organizational design, structure

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Ch09

  1. 1. Thomson Learning © 2004 9-1 Chapter Nine Organization Size, Life Cycle, and Decline
  2. 2. Thomson Learning © 2004 9-2 Differences Between Large and Small Organizations  LARGE  Economies of scale  Global reach  Vertical hierarchy  Mechanistic  Complex  Stable market  Career longevity and stability  SMALL  Responsive  Flexible  Regional reach  Flat structure  Organic  Simple  Niche finding  Entrepreneurs Source: Based on John A. Byrne, “Is Your Company Too Big?” Business Week, 27 March 1989, 84-94.
  3. 3. Thomson Learning © 2004 9-3 Organizational Life Cycle ORGANIZATION STAGES OF DEVELOPMENT 1. Entrepreneurial Stage 2. Collectivity Stage 3. Formalization Stage 4. Elaboration Stage Crisis: Need to deal with too much red tapeCrisis: Need for delegation with control Crisis: Need for leadership Creativity Provision of clear direction Addition of internal systems Development of teamwork Crisis: Need for revitalization Decline Continued maturity Streamlining, small-company thinking S I Z E Large Small Sources: Adapted from Robert E. Quinn and Kim Cameron, “Organizational Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence,” Management Science 29 (1983): 33-51; and Larry E. Greiner, “Evolution and Revolution as Organizations Grow,” Harvard Business Review 50 (July-August 1972): 37-46.
  4. 4. Thomson Learning © 2004 9-4 Organization Characteristics During Four Stages of Life Cycle 1. Entrepreneurial 2. Collectivity 3. Formalization 4. Elaboration Characteristic Nonbureaucratic Prebureaucratic Bureaucratic Very Bureaucratic Structure Informal, one-person show Mostly informal, some procedures Formal procedures, division of labor, specialties added Teamwork within bureaucracy, small- company thinking Products or services Single product or service Major product or service with variations Line of products or services Multiple product or services lines Reward and control systems Personal, paternalistic Personal, contribution to success Impersonal, formalized systems Extensive, tailored to product and department Innovation By owner-manager By employees and managers By separate innovation group By institutionalized R&D Goal Survival Growth Internal stability, market expansion Reputation, complete organization Top Management Style Individualistic, entrepreneurial Charismatic, direction- giving Delegation with control Team approach, attack bureaucracy Sources: Adapted from Larry E. Greiner, “Evolution and Revolution as Organizations Grow,” Harvard Business Review 50 (July-August 1972): 37-46; G. L. Lippitt and W. H. Schmidt, “Crises in a Developing Organization,” Harvard Business Review 45 (November-December 1967): 102-12; B. R. Scott, “The Industrial State: Old Myths and New Realities,” Harvard Business Review 51 (March-April 1973): 133-48; Robert E. Quinn and Kim Cameron; “Organizational Life Cycles and Shifting Criteria of Effectiveness,” Management Science 29 (1983): 33-51.
  5. 5. Thomson Learning © 2004 9-5 Weber’s Dimensions of Bureaucracy and Bases of Organizational Authority  BUREAUCRACY 1. 1. Rules and procedures 2. Specialization and division of labor 3. Hierarchy of authority 4. Technically qualified personnel 5. Separate position and incumbent 6. Written communications and records  LEGITIMATE BASES OF AUTHORITY 1. Rational-legal 2. Traditional 3. Charismatic
  6. 6. Thomson Learning © 2004 9-6 Percentage of Personnel Allocated to Administrative and Support Activities 50 75 25 0 Organization Size Small Large Line employees Top administrators Clerical Professional staff Percentage of Employees
  7. 7. Thomson Learning © 2004 9-7 Three Organizational Control Strategies TYPE Bureaucratic Market Clan REQUIREMENTS Rules, standards, hierarchy, legitimate authority Prices, competition, exchange relationship Tradition, shared values and beliefs, trust Source: Based upon William G. Ouchi, “A Conceptual Framework for the Design of Organizational Control Mechanisms,” Management Science 25 (1979): 833-48.
  8. 8. Thomson Learning © 2004 9-8 Evaluation of Control On the Job Workbook Activity 1. 2. 3. 4. Your job responsibilities How your boss controls Positives of this control Negatives of this control How you would improve control
  9. 9. Thomson Learning © 2004 9-9 Evaluation of Control At the University Workbook Activity 1. 2. 3. 4. Item How Prof. A (small class) controls How these controls influence you What you think is a better control How Prof. B (large class) controls
  10. 10. Thomson Learning © 2004 9-9 Evaluation of Control At the University Workbook Activity 1. 2. 3. 4. Item How Prof. A (small class) controls How these controls influence you What you think is a better control How Prof. B (large class) controls

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