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Forms of Interdependence:

Pooled interdependence: is the most basic form of interdependence. In this form, work does not flow between units. Each department is part of the organization, but works independently. Chain restaurants or bank branches are typically examples of pooled interdependence. Pooled interdependence may be associated with relationships within a divisional structure. (A mediating technology: provides products or services that mediate or link clients and, in so doing, allow each department to work independently). Sequential interdependence: When interdependence takes a serial form, with parts produced in one depart- ment becoming inputs to another department. Sequential interdependence requires the use of horizontal mechanisms such as integrators or task forces. (long-linked technology = which 'refers to the combination in one organization of successive stages of production; each stage of production uses as its inputs the production of the preceding stage and produces inputs for the following stage'). Reciprocal interdependence: The highest level of interdependence. his exists when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A. The outputs of departments influence those departments in reciprocal fashion. Here, there is a two-way flow of materials. Where there is reciprocal interdependence a structure that supports frequent horizontal communication and mutual adjustment is required. (intensive technologies = which provide a variety of products or services in combination to a client).

Miles and Snow's Strategy Typology

Prospector: The prospector strategy is to innovate, take risks, seek out new opportunities and grow. This strategy is suited to a dynamic, growing environment, where creativity is more important than efficiency. Defender: The defender strategy is almost the opposite of the prospector. Rather than taking risks and seeking out new opportunities, the defender strategy is concerned with stability or even retrenchment. This strategy seeks to hold onto current customers, but it neither innovates nor seeks to grow. Analyzer: The analyzer tries to maintain a stable business while innovating on the periphery. It seems to lie midway between the prospector and the defender. Some products will be targeted towards stable, low innovation environments in which an efficiency strategy designed to keep cur- rent customers is used. Others will be targeted towards new, more dynamic environments where growth is possible. Reactor: The reactor strategy is not really a strategy at all. Rather, reactors respond to environ- mental threats and opportunities in an ad hoc fashion. In a reactor strategy, top management has not defined a long-range plan, or given the organization an explicit mission or goal, so whatever actions are taken that seem to meet immediate needs.

Organization Design and Culture

Here, we will focus on two specific dimensions: (1) the extent to which the competitive environment requires flexibility or stability; and (2) the extent to which the organization's strategic focus and strength are internal or external. Four categories of culture associated with these differences. The adaptability culture is characterized by strategic focus on the external environment through flexibility and change to meet customer needs. The culture encourages entrepreneurial values, norms and beliefs that support the capacity of the organization to detect, interpret and trans- late signals from the environment into new behaviour responses. This type of company, however, doesn't just react quickly to environmental changes - it actively creates change. Innovation, creativity and risk-taking are valued and rewarded. (Adaptability Culture Primary Goal: growth, resource acquisition Subgoals: flexibility, readiness, external evaluation) An organization concerned with serving specific customers in the external environment, but without the need for rapid change, is suited to the mission culture. The mission culture is characterized by emphasis on a clear vision of the organization's purpose and on the achievement of goals, such as sales growth, profitability or market share, to help achieve the purpose. (Mission Culture Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting) The clan culture has a primary focus on the involvement and participation of the organization's members and on rapidly changing expectations from the external environment. More than any other, this culture focuses on the needs of employees as the route to high performance. Involve- ment and participation create a sense of responsibility and ownership and, hence, greater commit- ment to the organization. (Clan Culture Primary Goal: human resource development Subgoals: cohesion, morale, training) The bureaucratic culture has an internal focus and a consistency orientation for a stable environment. This organization has a culture that supports a methodical approach to doing business. Symbols, heroes and ceremonies support cooperation, tradition and follow established policies and practices as ways to achieve goals. Personal involvement is somewhat lower here, but that is outweighed by a high level of consistency, conformity and collaboration among members. This organization succeeds by being highly integrated and efficient. (Bureaucratic Culture Primary Goal: stability, equilibrium Subgoals: information management communication)

Sources of Ethical Principles and Actions

History: Religion, Philosophy, Geographic Environment, Nationality, Society, Culture ----Leads to the development of societal morality--- Society: Societal Norms and Values and Laws, Codes and Regulations ----Society shapes the local environment---- Local environment: Organizations, Geographic Regions/Community, Family/Clan ----The local environment shapes individual behaviour---- Individual Ethics and Actions

The pattern of decision stages discovered by Mintzberg and his associates. Each box indicates a possible step in the decision sequence. The steps take place in three major decision phases: identification, development and selection (the incremental decision process model).

Identification Phase The identification phase begins with recognition. Recognition means one or more managers becoming aware of a problem and the importance of making a decision. Recognition is usually stimulated by a problem or an opportunity. Development Phase In the development phase, a solution is shaped to solve the problem defined in the identification phase. The development of a solution takes one of two directions. First, search procedures may be used to seek out alternatives within the organization's repertoire of solutions. Selection Phase The selection phase is when the solution is chosen. This phase is not always a matter of making a clear choice among alternatives. In the case of custom-made solutions, selection is more an evaluation of the single alternative that seems feasible. Dynamic Factors The lower part of the chart shows lines running back towards the beginning of the decision process. These lines represent loops or cycles that take place in the decision process. Organizational decisions do not follow an orderly progression from recognition through authorization.

Functional Structure

In a functional structure, activities are grouped together by common function from the bottom to the top of the organization. All engineers are located in the engineering department, and the vice president of engineering is responsible for all engineering activities. Strengths: Allows economies of scale within functional departments Enables in-depth knowledge and skill development Enables organization to accomplish functional goals Is best with only one or a few products Weaknesses: Slow response time to environmental changes May cause decisions to pile on top, hierarchy overload Leads to poor horizontal coordination among departments Results in less innovation Involves restricted view of organizational goals

Overall Performance Goals

In for-profit organizations, overall performance goals include profit- ability, growth and output volume but may extend to other performance measures of reputation, corporate responsibility and so on.

Power Sources

Jeffrey Pfeffer and Gerald Salancik, among others, have been instrumental in conducting research on the strategic contingency theory. Their findings indicate that a department rated as powerful may possess one or more of the characteristics. In some organizations these five power sources overlap, but each provides a useful way to evaluate sources of horizontal power.

Differences between Large and Small Organizations

LARGE Economies of scale Global reach Vertical hierarchy, mechanistic Complex Stable market 'Organization men' SMALL Responsive, flexible Regional reach Flat structure, organic Simple Niche finding Entrepreneurs

Values-based Leadership

Leaders may strive to influence cultural and ethical values by clearly articulating a vision for organizational values that employees can believe in, communicating the vision throughout the organization and institutionalizing the vision through everyday behaviour, rituals, ceremonies and symbols, as well as through organizational systems and policies.

five sources of personal power:

Legitimate power is the authority granted by the organization to the formal management position a manager holds. Reward power stems from the ability to bestow rewards - a promotion, raise or pat on the back - to other people. The authority to punish or recommend punishment is called coercive power. Expert power derives from a person's greater skill or knowledge about the tasks being performed. The last, referent power, is derived from personal characteristics: people admire the manager and want to be like or identify with the manager out of respect and admiration. Each of these sources may be used by individuals within organizations.

Departments can cope with critical uncertainties by...

(1) obtaining prior information, (2) prevention, and (3) absorption.78 Obtaining prior information means a department can reduce an organization's uncertainty by forecasting an event. Departments increase their power through prevention by predicting and forestalling negative events. Absorption occurs when a department takes action after an event to reduce its negative consequences.

A comparison of successful with unsuccessful decisions in high-velocity environments found the following patterns:

- Successful decision-makers tracked information in real time to develop a deep and intuitive grasp of the business. Two to three intense meetings per week with all key players were usual. Decision-makers tracked operating statistics about cash, scrap, backlog, work in process and shipments to constantly feel the pulse of what was happening. Unsuccessful firms were more concerned with future planning and forward-looking information, with only a loose grip on immediate happenings. - During a major decision, successful companies began immediately to build multiple alternatives. Implementation of alternatives sometimes ran in parallel before they finally settled on a final choice. Companies that made decisions slowly developed just one alternative, moving to another only after the first one failed. - Fast, successful decision-makers sought advice from everyone and depended heavily on one or two savvy, trusted colleagues as counsellors. Slow companies were unable to build trust and agreement among the best people. - Fast companies involved everyone in the decision and tried for consensus; but if consensus did not emerge, the top manager made the choice and moved ahead. Waiting for everyone to be on board created more delays than was warranted. Slow companies delayed decisions to achieve a uniform consensus. - Fast, successful choices were well integrated with other decisions and the overall strategic direction of the company. Less successful choices considered the decision in isolation from other decisions; the decision was made in the abstract

Three properties identify authority:

1. Authority is vested in organizational positions. People have authority because of the positions they hold, not because of personal characteristics or resources. 2. Authority is accepted by subordinates. Subordinates comply because they believe position holders have a legitimate right to exercise power. In most organizations around the world, employees accept that supervisors can legitimately tell them what time to arrive at work, the tasks to perform while they're there and what time they can go home. 3. Authority flows down the vertical hierarchy. Authority exists along the formal chain of command and positions at the top of the hierarchy are vested with more formal author- ity than are positions at the bottom.

A Model of Decline Stages

1. Blinded stage. The first stage of decline is the internal and external change that threatens long-term survival. Leaders often miss the signals of decline. The relevant antidote is the development of effective scanning and control systems, and executives willing to risk play- ing 'devil's advocate', that indicate when something is wrong. With timely information, alert executives can bring the organization back to top performance. 2. Inaction stage. The second stage of decline is called inaction in which denial occurs despite signs of deteriorating performance. Leaders may try to persuade employees that all is well. 'Creative accounting' may make things look healthy during this period. The solution is for leaders to acknowledge decline and take prompt action to realign the organization with the environment. Leadership actions may include new problem-solving approaches, increasing decision-making participation and encouraging expression of dissatisfaction to learn what is wrong. 3. Faulty action stage. In the third stage, leaders are forced by severe circumstances to consider major changes. Actions may involve retrenchment, including downsizing personnel. A major mistake at this stage decreases the organization's chance for a turnaround. 4. Crisis stage. In the fourth stage, the organization still has not been able to deal with decline effectively. There may be organization chaos, efforts to go back to basics, sharp changes, disenchantment and anger. The social fabric of the organization is eroding and dramatic actions, such as replacing top administrators and revolutionary changes in structure, strategy and culture, are necessary. Workforce downsizing may be severe. 5. Dissolution stage. This stage of decline is irreversible. There is a terminal loss of confidence and reputation, the loss of its best personnel and capital depletion. The only available strategy is to close down the organization in an orderly fashion and reduce the separation trauma of employees.

Importance of Organizations:

1. Bringing together resources to achieve desired goals and outcomes 2. Producing goods and services 3. Facilitating innovation 4. Harnessing modern manufacturing, service and information technologies 5. Adapting to and influencing a changing environment 6. Creating value 7. Accommodating ongoing challenges of diversity, ethics and the motivation and coordination of employees

Political tactics for using power to influence decision outcomes include the following:

1. Build coalitions and expand networks. Coalition building means taking the time to talk with other managers to persuade them to your point of view.96 Most important decisions are made outside of formal meetings. 2. Assign loyal people to key positions. Another political tactic is to assign trusted and loyal people to key positions in the organization or department. 3. Control decision premises. To control decision premises means to constrain the boundaries of a decision. 4. Enhance legitimacy and expertise. Managers can exert the greatest influence in areas in which they have recognized legitimacy and expertise. 5. Make a direct appeal. If managers do not ask, they seldom receive. Political activity is effective only when goals and needs are made explicit so the organization can respond.

Controlling the Environmental Domain

1. Change of domain - The sectors described earlier in this chapter are not fixed. Executives determine which business they are in, the market to enter and the suppliers, banks, employees and location to use, and how this domain can be changed. 2. Political activity, regulation - Political activity includes techniques to influence govern- ment legislation and regulation. Political strategy can be used to erect regulatory barriers against new competitors or to squash unfavourable legislation. The managers of corporations also try to influence the appointment to agencies of people who are sympathetic to their needs. 3. Trade associations - Much of the work to influence the external environment is accomplished jointly with other organizations that have similar interests. In most countries, businesses have powerful associations that lobby legislators, influence new regulations and develop public relations campaigns. 4. Illegitimate activities - Illegitimate activities represent the final technique companies sometimes use to control their environmental domain. Certain conditions, such as low profits, pressure from senior managers, or scarce environmental resources, may lead managers to adopt behaviours not considered legitimate.

Tactics for enhancing collaboration include the following:

1. Create integration devices. As described in Chapter 4, teams, task forces and project man- agers who span the boundaries between departments can be used as integration devices. Labour-management teams, which are designed to increase worker participation and provide a cooperative model for solving union-management problems, are used at many companies throughout the world. 2. Use confrontation and negotiation. Confrontation occurs when parties in conflict directly engage one another and try to work out their differences. Negotiation is the bargaining process that often occurs during confrontation and that enables the parties to systematically reach a solution. One type of negotiation, used to resolve a disagreement between workers and management, is referred to as collective bargaining. 3. Schedule intergroup consultation. When conflict is intense and enduring, and department members are suspicious and uncooperative, top managers may intervene as third parties to help resolve the conflict or bring in third-party consultants from outside the organization. 4. Practice member rotation. Rotation means that individuals from one department can be≈asked to work in another department on a temporary or permanent basis. The advantage is that individuals become submerged in the values, attitudes, problems and goals of the other department. 5. Create shared mission and superordinate goals. Another strategy is for top management to create a shared mission and establish superordinate goals that require cooperation between departments.

Symptoms of Structural Deficiency

1. Decision-making is delayed or lacking in quality. Decision-makers may be overloaded because the hierarchy funnels too many problems and decisions to them. Delegation to lower levels may be insufficient. Another cause of poor-quality decisions is that information may not reach the correct people. Information linkages in either the vertical or horizontal direction may be inadequate to ensure decision quality. 2. The organization does not respond innovatively to a changing environment. One reason for lack of innovation is that departments are not coordinated horizontally. The identificationof customer needs by the marketing department and the identification of technological developments in the research department must be coordinated. Organization structure also has to specify departmental responsibilities that include environmental scanning and innovation. 3. Employee performance declines and goals are not being met. Employee performance may decline because the structure doesn't provide clear goals, responsibilities and mechanisms for coordination. The structure should reflect the complexity of the market environment and be straightforward enough for employees to effectively work within it. 4. Too much conflict is evident. In principle, organization structure is intended to enable departmental goals to combine into a single set of goals for the entire organization. When departments act at cross-purposes or departmental priorities are out of alignment with those attributed to the wider organization, it may be that the structure has incorporated insufficient horizontal linkages.

Four tactics for increasing power for the organization are as follows:

1. Enter areas of high uncertainty. One source of departmental power is to cope with critical uncertainties. If department managers can identify key uncertainties and take steps to remove those uncertainties, the department's power base will be enhanced. 2. Create dependencies. Dependencies are another source of power. When the organization depends on a department for information, materials, knowledge or skills, that department will hold power over others. This power can be increased by incurring obligations. Doing additional work that helps out other departments will obligate the other departments to respond at a future date. 3. Provide scarce resources. Resources are always important to organizational survival. Departments that accumulate resources and provide them to an organization in the form of money, information or facilities will be powerful. 4. Satisfy strategic contingencies. The theory of strategic contingencies says that some elements in the external environment and within the organization are especially important for organizational success. A contingency could be a critical event, a task for which there are no substitutes, or a central task that is interdependent with many others in the organization.

Relationship between Environmental Characteristics and Organizational Actions

1. High complexity and High rate of change = High Uncertainty = Many departments and boundary roles. Greater differentiation and more integrators for internal coordination. Organic structure and systems with low formalization, decentralization and low standardization to enable a high-speed response. 2. Scarcity of valued resources = Resource dependence = Establishment of favourable linkages: ownership, strategic alliances, cooptations, interlocking directorates, executive recruitment, advertising and public relations. Control of the environmental domain: change of domain, political activity, regulation, trade associations and illegitimate activities.

The Costs of Grandiosity: Four Major Problems Associated the Triumph of Emptiness

1. Increased Quantity Leads to Decreased Quality • Growth often occurs at the expense of quality ⟹ Which has already been discussed in connection with higher education 2. Erosion of Trust • Illusion tricks are about trying to maintain or enhance legitimacy and/or grandiosity ⟹ Frequent use of illusion tricks leads to an uncertain or even negative outcome • Titles and certification 3. Narcissism: people suffering from psychic disorder. Kidding, the relevant in this case is the need for confirmation. Unstable, vulnerable selves. Feeling insufficiency. Fragile identity that can lead to increased anxiety, overconsumption. 4. Functional stupidity • Functional stupidity ⟹ A socially supported lack of reflexivity, substantive reasoning, and justification ⟹ It entails a refusal to use intellectual resources outside a narrow and 'safe' terrain of adaptation to and exploitation of a given social situation • Has nothing to do with low intelligence • Mainly means that you follow the flow, avoid too much skepticism and resistance, and let yourself be persuaded by all the beautiful representations on offer. You repress the doubts • Means that you refrain from critical thinking, reflection, and the posing of broader questions about values, ideals, and representations of reality - The story about a man and his daily one trip of fishing — and the end goal

Service Technology

1. Intangible output 2. Production and consumption take place simultaneously 3. Labour- and knowledge-intensive 4. Customer interaction generally high 5. Human element very important 6. Quality is perceived and difficult to measure 7. Rapid response time is usually necessary 8. Site of facility is extremely important

organization structure

1. Organization structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors. 2. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization. 3. Organization structure includes the design of systems to ensure effective communication, coordination and integration of efforts across departments.

a mechanistic organization system (Characteristics)

1. Tasks are broken down into specialized, separate parts 2. Tasks are rigidly defined 3. There is a strict hierarchy of authority and control, and there are many rules 4. Knowledge and control of tasks are centralized at the top of the organization 5.Communication is vertical

Hybrid Structure

Organizations often use a hybrid structure that combines characteris- tics of various approaches tailored to specific strategic needs. Most companies combine char- acteristics of functional, divisional, geographical, horizontal or network structures to take account of the relative strengths and weaknesses of these structures in their own particular business.

product life-cycle management (PLM)

PLM software can manage a product from idea through development, manufacturing, testing and even maintenance in the field. The PLM software provides three primary advantages for product innovation. PLM (1) stores data on ideas and products from all parts of the company; (2) links product design to all departments (and even outside suppliers) involved in new product development; and (3) provides three-dimensional images of new products for testing and maintenance.

Sources of Ethical Values in Organizations

Personal Ethics Personal values and the moral reasoning that translates these values into behaviour are an important aspect of ethical decision-making in organizations. Organizational Culture Rarely can ethical or unethical business practices be attributed entirely to the personal ethics of a single manager or employee. Such practices also reflect the values, attitudes and behaviour patterns of a wider national or organizational culture. Organizational Systems Many companies have established formal ethics programmes, sometimes after facing bad publicity. External Stakeholders Managerial ethics and social responsibility are influenced by a variety of external stakeholders, groups outside the organization that have a stake in the organization's performance. Ethical and socially responsible decision-making recognizes that the organization is part of a larger community and considers the impact of a decision or action on all stakeholders.

horizontal structure

A horizontal structure refers to an organized group of related tasks and activities that work together to transform inputs into outputs that create value for customers. Strengths: Promotes flexibility and rapid response to changes in customer needs Directs the attention of everyone towards the production and delivery of value to the customer Each employee has a broader view of organizational goals Promotes a focus on teamwork and collaboration Improves quality of life for employees by offering them the opportunity to share responsibility, make decisions and be accountable for outcomes Weaknesses: Determining core processes is difficult and time consuming Requires changes in culture, job design, management philosophy, and information and reward systems Traditional managers may baulk when they have to give up power and authority Requires significant training of employees to work effectively in a horizontal team environment Can limit in-depth skill development

administrative principles

A subfield of the classical perspective that focuses on the total organization rather than the individual worker and delineates the management functions of planning, organizing, commanding, coordinating, and controlling.

bureaucratic organizations approach

A subfield of the classical perspective which emphasizes management on an impersonal, rational basis through elements such as clearly defined authority and responsibility, formal recordkeeping, and separation of management and ownership.

Rational Approach

A systematic, step-by-step process for making decisions. According to the rational approach, decision-making can be broken down into eight steps: 1. Monitor the decision environment. In the first step, a manager monitors internal and external information that will indicate deviations from planned or acceptable behaviour. 2. Define the decision problem. The manager responds to deviations by identifying essential details of the problem: where, when, who was involved, who was affected and how cur- rent activities are influenced. 3. Specify decision objectives. The manager determines what performance outcomes should be achieved by a decision. 4. Diagnose the problem. In this step, the manager digs below the surface to analyze the cause of the problem. 5. Develop alternative solutions. Before a manager can move ahead with a decisive action plan, he or she must have a clear understanding of the various options available to achieve desired objectives. 6. Evaluate alternatives. This step may involve the use of statistical techniques or personal experience to gauge the probability of success. 7. Choose the best alternative. This step is the core of the decision process. The manager uses his or her analysis of the problem, objectives and alternatives to select a single alternative that has the best chance for success. 8. Implement the chosen alternative. Finally, the manager uses managerial, administrative and persuasive abilities and gives directions to ensure that the decision is carried out. The first four steps in this sequence are the problem identification stage, and the next four steps are the problem solution stage of decision-making.

life cycle

A useful way to think about the process of organizational growth and change

competitive intelligence (CI) (Boundary Spanning)

Competitive intelligence gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decisions.57 Using techniques that range from internet surfing to searching through rubbish bins, intelligence professionals dig up information on competitors' new products, manufacturing costs or training methods and share it with top leaders.

Flexible manufacturing is typically the result of three subcomponents:

Computer-aided design (CAD). Computers are used to assist in the drafting, design and engineering of new parts. Computer-aided manufacturing (CAM). Computer-controlled machines in materials handling, fabrication, production and assembly greatly increase the speed at which items can be manufactured. Integrated information network. A computerized system links all aspects of the firm - including accounting, purchasing, marketing, inventory control, design, production and so forth. (The combination of CAD, CAM and integrated information systems means that a new product can be designed on the computer and a prototype can be produced untouched by human hands).

Bounded Rationality Perspective

Constraints and Trade-offs. Not only are large organizational decisions too complex to fully comprehend, but several other constraints impinge on the decision-maker. For many decisions, the circumstances are ambiguous, requiring social support, a shared perspective on what happens and acceptance and agreement. For example, the decision to outsource production to low labour cost countries is typically based on a limited cost benefit analysis of savings that can be realized by replacing high cost in-house staffing with lower cost contracted labour overseas. However, moving parts of the business process not only outside the company but also outside the home country business environment greatly increases the unknowns. The Role of Intuition. The bounded rationality perspective is often associated with intuitive decision processes. In intuitive decision-making, experience and judgement rather than sequential logic or explicit reasoning are used to make decisions.

Contingencies

Contingency means that what structure or system is viable depends upon the particular circumstances or con- text of its design. For organizations to be effective, this logic suggests, there must be a 'goodness of fit' between the 'structural' and 'contextual' dimensions.

Strategic Contingencies that Influence Horizontal Power among Departments

Dependency. Interdepartmental dependency is a key element underlying relative power. Power is derived from having something someone else wants. The power of departmentA over department B is greater when department B depends on department A. Materials, information and resources may flow between departments in one direction, such as in the case of sequential task interdependence. Financial resources. There's a new golden rule in the business world: 'The person with the gold makes the rules'. Control over resources is an important source of power in organizations. Money can be converted into other kinds of resources that are needed by other depart- ments. Money generates dependency; departments that provide financial resources have something other departments want. Departments that generate income for an organization have greater power. Centrality. Centrality reflects a department's role in the primary activity of an organization. One measure of centrality is the extent to which the work of the department affects the final output of the organization. Non-substitutability. Power is also determined by non-substitutability, which means that a department's function cannot be performed by other readily available resources. Similiarly, if an employee cannot be easily replaced, his or her power is greater. If an organization has no alternative sources of skill and information, a department's power will be greater. This can be the case when management uses outside consultants. Consultants might be used as substitutes for staff people to reduce the power of staff groups. Coping with Uncertainty. Elements in the environment can change swiftly and can be unpredictable and complex. In the face of uncertainty, little information is available to managers on appropriate courses of action. Departments that reduce this uncertainty for the organization will increase their power.

Intergroup conflict can be analyzed in relation to group identification, observable group differences and frustration:

First, employees have to perceive themselves as part of an identifiable group, such as a department. Second, there has to be a group difference of some form. Groups may be located on different floors of the building, members may have different social or educational backgrounds, or members may work in different departments with different responsibilities within the organization. The ability to identify oneself as a part of one group and to observe differences in comparison with other groups is a necessary but not sufficient condition for conflict. The third ingredient is frustration. Frustration means that if one group achieves its goal, the other will not; it will be blocked. Frustration need not be severe and only needs to be anticipated to set off intergroup conflict.

There are four major sources of vertical power:

Formal Position Certain rights, responsibilities and prerogatives accrue to top positions. People throughout the organization accept the legitimate right of top managers to set goals, make decisions and direct activities. Thus, the power from formal position is sometimes called legitimate power. Resources Organizations allocate huge amounts of resources. Buildings are constructed, salaries are paid, and equipment and supplies are purchased. Each year, new resources are allocated in the form of budgets. These resources are allocated downward from top managers. In most cases, top managers control the resources and, hence, can determine their distribution. Resources can be used as rewards and punishments, which are additional sources of power. Resource allocation also creates a dependency relationship. Lower-level participants depend on top managers for the financial and physical resources needed to perform their tasks. Top management can exchange resources in the form of salaries and bonuses, personnel, promotions and physical facilities for compliance with the outcomes they desire. Control of Decision Premises and Information Control of decision premises means that top managers place constraints on decisions made at lower levels by specifying a frame of reference and guidelines for decision-making. In one sense, top managers make big decisions, whereas lower-level participants make small decisions. Top management decides which goal an organization will try to achieve, such as increased market share. Lower-level participants then decide how the goal is to be reached. Network Centrality Network centrality means being centrally located in the organization and having access to information and people that are critical to the company's success. Top executives are more successful when they put themselves at the centre of a communication network, building connections with people throughout the company. People Top leaders often increase their power by surrounding themselves with a group of loyal executives. Loyal managers keep the top leader informed and in touch with events and report possible disobedience or troublemaking in the organization. Top executives can use their central positions to build alliances and exercise substantial power when they have a management team that is fully in support of their decisions and actions.

The difference between routine and nonroutine technologies:

Formalization: Routine technology is characterized by standardization and division of labour into small tasks that are governed by formal rules and procedures. For nonroutine tasks, the structure is less formal and less standardized. When variety is high, as in a research department, fewer activities are covered by formal procedures. Decentralization: In routine technologies, most decision-making about task activities is centralized to management. In engineering technologies, employees with technical training tend to acquire moderate decision authority because technical knowledge is important to task accomplishment. Production employees who have long experience obtain decision authority in craft technologies as they know how to respond to problems. Decentralization to employees is greatest in nonroutine settings, where many decisions are made by employees. Worker skill level: Work staff in routine technologies typically require little education or experience, which is congruent with repetitious work activities. In work units with greater variety, staff are more skilled and often have formal training in technical schools or universities. Training for craft activities, which are less analyzable, is more likely to be through job experience. Nonroutine activities require both formal education and job experience. Span of control: Span of control is the number of employees who report to a single man- ager or supervisor. This characteristic is normally influenced by departmental technology. The more complex and nonroutine the task, the more problems arise in which the super- visor becomes involved. Although the span of control may be influenced by other factors, such as skill level of employees, it is typically smaller for complex tasks where the supervisor and subordinate interact frequently. Communication and coordination: Communication activity and frequency increase as task variety increases.108 Frequent problems require more information sharing to reach solutions and ensure proper completion of activities. The direction of communication is typically horizontal in nonroutine work units and vertical in routine work units.109 The form of communication varies by task analyzability. When tasks are highly analyzable, statistical and written forms of communication (memos, reports, rules and procedures) are frequent. When tasks are less analyzable, information typically is conveyed face-to-face, over the tele- phone, or in group meetings.

Current Challenges (5):

Globalization: With rapid advances in technology and communications, the time it takes to exert influence around the world from even the most remote locations has been reduced from years to only seconds. Markets, technologies and organizations are becoming increasingly inter- connected. Ethics and Social Responsibility: Issues of ethics and social responsibility - relating to concerns about ecological sustainability, and not just corporate survival - are becoming increas- ingly important; and corporations, in particular, are being expected to take a lead on addressing these issues. Responsiveness: A third significant challenge for organizations is to respond quickly and decisively to environmental changes, organizational crises and shifting customer expec- tations. The Digital Workplace: Organizations have been flooded by information technology that affects how they are designed and managed, and the external environments in which they do business. Diversity: In advanced capitalist societies, today's average worker is older, and many more women, ethnic minorities and immigrants are seeking job and advancement opportunities. This development brings a variety of challenges, including fully recognizing and embracing diversity, balancing work and family concerns, and coping with the differences associated with varying cultural styles.

sources of intergroup conflict

Goal Incompatibility Goal incompatibility is probably the greatest cause of intergroup conflict in organizations. The goals of each department reflect the specific objectives members are trying to achieve. The achievement of one department's goals often interferes with another department's goals. Differentiation Differentiation was defined in Chapter 4 as 'the differences in cognitive and emotional orientations among managers in different functional departments'. Departments or divisions within an organization often differ, in values, attitudes and standards of behaviour, and these subcultural differences lead to conflicts. Task interdependence Task interdependence refers to the dependence of one unit on another for materials, resources or information. As described in Chapter 8, pooled interdependence means there is little interaction; sequential interdependence means the output of one department goes to the next department; and reciprocal interdependence means that departments mutually exchange materials and information. Generally, as interdependence increases, the potential for conflict increases. Limited Resources Another major source of conflict involves competition between groups for what members perceive as limited resources.28 There is limited money, physical facilities, staff resources and human resources to share among departments. In their desire to achieve goals or expand empires, groups want to increase their resources. This throws them into conflict. Managers may develop strategies, such as inflating budget requirements or working behind the scenes, to obtain a desired level of resources.

Woodward's scale of technical complexity (three basic technology groups):

Group I: Small-batch and unit production. These firms tend to be job shop operations that manufacture and assemble small orders to meet the specific requirements of customers. Small- batch production relies heavily on the human operator; it is thus not highly mechanized. Example: biodegradable 3D printed shoes. Group II: Large-batch and mass production. Large-batch production is a manufacturing process characterized by long production runs of standardized parts. Output often goes into inventory from which orders are filled, because customers do not have special needs. Example: automobiles or LCD television monitors. Group III: Continuous-process production. In continuous-process production, the entire pro- cess is mechanized. There is no starting and stopping. This represents a level of mechanization and standardization one step beyond those in an assembly line. Automated machines control the continuous process, and outcomes are highly predictable. Example: chemical plants, oil refineries, brewing plants, pharmaceuticals and nuclear power plants.

Matrix Structure

Sometimes, a matrix structure is developed in an effort to give equal emphasis and attention to product and function, or product and geography. The matrix is more likely to be introduced when, say, technical expertise and product innovation and change are assessed to be of equal importance. Conditions for the Matrix: Condition 1. Pressure exists to share scarce resources across product lines. The organization is often medium sized and has a moderate number of product lines. There are pressures for the shared and flexible use of people and equipment across the product lines. For example, the organization is not large enough to assign engineers full-time to each product line, so engineers are assigned part-time to several products or projects. Condition 2. Environmental pressures exist for two or more critical outputs, such as for in-depth technical knowledge (functional structure) and frequent new products (divisional structure). The dual pressure requires sharing of power between the functional and product sides of the organization, and a dual-authority structure is needed to maintain that balance. Condition 3. The environmental domain of the organization is both complex and uncertain. Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directions. Strengths and Weaknesses: The matrix structure is often introduced in challenging conditions when an equality of con- tribution as well as close collaboration is required between, for example, product and func- tional elements. To be effective, the structure depends on high levels of organizational trustand mutual understanding between managers in different places in the matrix. The dual- authority structure can assist communication and coordination to cope with rapid envi- ronmental change and enables an equal balance between product and functional bosses.62The matrix can facilitate discussion and adaptation to unexpected problems. A significant disadvantage of the matrix is that employees sometimes experiencedual authority, reporting to two bosses and juggling conflicting demands. This can be frustrating and confusing, especially if roles and responsibilities are not clearly defined by top managers. Working effectively in a matrix demands excellent interpersonal and conflict-resolution skills. Strengths: Achieves coordination necessary to meet dual demands from customers Flexible sharing of human resources across products Suited to complex decisions and frequent changes in unstable environment Provides opportunity for both functional and product skill development Best in medium-sized organizations with multiple products Weaknesses: Causes participants to experience dual authority, which can be frustrating and confusing Means participants need good interpersonal skills and extensive training Is time consuming; involves frequent meetings and conflict resolution sessions Will not work unless participants understand it and adopt collegial rather than vertical type relationships Requires great effort to maintain power balance

Contingency Framework for Environment Uncertainty and Organizational Responses

Stable and Simple (Low uncertainty) 1.Mechanistic structure: formal, centralized 2.Few departments 3.No integrating roles 4.Current operations orientation; low-speed response Example: Soft drink bottlers Stable and complex (Low-Moderate Uncertainty) 1.Mechanistic structure: formal, centralized 2.Many departments, some boundary spanning 3.Few integrating roles 4.Some planning; moderate-speed response Example: Universities 'Unstable and simple (High-Moderate Uncertainty) 1.Organic structure, teamwork: participative, decentralized 2.Few departments, much boundary spanning 3.Few integrating roles 4.Planning orientation; fast response Example: E-commerce Unstable and Complex (High uncertainty) 1.Organic structure, teamwork: participative, decentralized 2.Many departments differentiated, extensive boundary spanning 3.Many integrating roles 4.Extensive planning, forecasting; high-speed response Example: Computer firms

Applications of Structural Design

Structural Alignment: One of the most important roles of top managers in structural design is finding the right balance between vertical control and horizontal coordination, depending on the constantly changing needs of the organization. Vertical control tends to be associated with goals of efficiency and stability, while horizontal coordination is associated with learning, innovation and flexibility.

Three domains of political activity (areas in which politics plays a role) in most organizations are structural change, management succession and resource allocation:

Structural reorganizations strike at the heart of power and authority relationships. Reorganizations such as those discussed in Chapter 4 change responsibilities and tasks, which can also affect the underlying power base from strategic contingencies. Organizational changes such as hiring new executives, promotions and transfers have great political significance, particularly at top organizational levels where uncertainty is high and networks of trust, cooperation and communication among executives are important.92 Hiring decisions can generate uncertainty, discussion and disagreement. Managers can use hiring and promotion to strengthen network alliances and coalitions by putting their own people in prominent positions. The third area of political activity is resource allocation. Resource allocation decisions encompass all resources required for organizational performance, including salaries, operating budgets, employees, office facilities, equipment, use of the company aeroplane and so forth. Resources are so vital that disagreement about priorities exists, and political processes help resolve the dilemmas.

Formal Structure and Systems (Culture)

Structure Managers can assign responsibility for ethical values to a specific position, as was the case with Siemens, noted above. This not only allocates organization time and energy to the problem but also symbolizes to everyone the importance of ethics. This significance may be institutionalized in a high-level ethics committee, which is a cross-functional group of executives who oversee company ethics. The committee provides rulings on questionable ethical issues and assumes responsibility for disciplining wrongdoers. Disclosure Mechanisms A confidential hotline is an important mechanism for employees to voice concerns about ethical practices. Holding organizations accountable depends to some degree on individuals who are willing to speak up if they suspect illegal, dangerous or unethical activities. Organizations can establish policies and procedures to support and protect whistle-blowers. Whistle-blowing is employee disclosure of illegal, immoral or illegitimate practices on the part of the organization. Code of Ethics A code of ethics is a formal statement of the company's values concerning ethics and social responsibility; it clarifies to employees what the company stands for and its expectations for employee conduct. Training Programmes To ensure that ethical issues are considered in daily decision making, companies can supplement a written code of ethics with employee training programmes.

Five Basic Parts of an Organization (Mintzberg)

Technical Core: The technical core includes diverse support staff who do the basic work of the organization. It performs the production subsystem function and produces the product and service outputs of the organization. Technical Support: Technical support employees, such as engineers and researchers, scan the environment for problems, opportunities and technological developments. Technical support is responsible for creating innovations in the technical core, helping the organization change and adapt. Administrative Support: The administrative support function is responsible for the smooth operation and upkeep of the organization, including its physical and human elements. This includes human resource activities such as recruiting and hiring, establishing compensation and benefits, and employee training and development, as well as maintenance activities such as cleaning of buildings and service and repair of machines. Top Management: Top management provides direction, strat- egy, goals and policies for the entire organization or major divisions. Middle Management: Middle management is responsible for implementation and coordination at the departmental level. In traditional organ- izations, middle managers are responsible for mediating between top management and the tech- nical core, such as implementing rules and passing information up and down the hierarchy.

The environment comprises several sectors or subdivisions of the external environment that contain similar elements:

Ten sectors can be analyzed for each organization: industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, sociocultural and international.

Zero-sum games

That in an affluent society underpinned by economic growth, the satisfaction provided by consumption has increasingly strong social or relative characteristics ⟹ Personal utility/satisfaction is closely interwoven with that of others in the form of open or light disguised competition • Raising someone's status means to lower someone else's • A benefit for one specific individual or group is gained at the expense of another. • Crucial here is not what you have or do, it is what you have or do in relation to others. • If you have a bike in the village when everyone else is walking, you will be very happy and pleased. But if everyone in the village got a car and you only had a bike, your bike would suddenly not be worth much and you will instead feel frustration over everyone having it better than you (unless you belong to the tiny minority that prefers biking) • You gain more from an increase in pay with 4% if the average is 2% rather than everyone getting 6 % Problem: we consume too much, keep buying new cloths, always want what is new.

An Integrated Effectiveness Model

The competing values model tries to balance a concern with different kinds and aspects of effectiveness rather than focusing on one approach. open systems emphasis= A combination of external focus and flexible structure. The rational goal emphasis= represents management values of structural control and external focus. The internal process emphasis is in the lower-left section, it reflects the values of internal focus and structural control. The human relations emphasis incorporates the values of an internal focus and a flexible structure.

Contingency Effectiveness Approaches

The goal approach to organizational effectiveness is concerned with the output side and whether the organization achieves its goals in terms of desired levels of output. The resource-based approach assesses effectiveness by observing the beginning of the process and evaluating whether the organization effectively obtains resources necessary for high performance. The internal process approach looks at internal activities and assesses effectiveness by indicators of internal health and efficiency.

personnel ratios for administrative and professional support staff.

The most frequently studied ratio is the administrative ratio. Two patterns have emerged. The first is that the ratio of top administration to total employees is usually smaller in large organizations,96 indicating that organizations experience administrative economies as they grow larger. The second pattern concerns professional support staff ratios.97 These tend to increase in proportion to organization size, because of the greater need for specialized skills in larger, complex organizations.

Learning organizations

The principle of the learning organization is for com- munication and collaboration to be actively promoted so that everyone is engaged in identify- ing and solving problems, enabling the organization to continuously experiment, improve and increase its capability. The learning organization is, in principle, based on equality, open informa- tion, little hierarchy and a culture that encourages adaptability and participation, enabling ideas to bubble up from anywhere that can help the organization seize opportunities and handle crises.

Divisional Structure

The term divisional structure is used here as the generic term for what is sometimes called a prod- uct structure or strategic business units. With this structure, divisions can be organized according to individual products, services, product groups, major projects or programmes, divisions, busi- nesses or profit centres. The distinctive feature of a divisional structure is that grouping is based on organizational outputs. Strengths: Suited to fast change in unstable environment Leads to customer satisfaction because product responsibility and contact points are clear Involves high coordination across functions Allows units to adapt to differences in products, regions, customers Best in large organizations with several products Decentralizes decision-making Weaknesses: Eliminates economies of scale in functional departments Leads to poor coordination across product lines Eliminates in-depth competence and technical specialization Makes integration and standardization across product lines difficult

Virtual Network Structure

The virtual network structure extends the concept of horizontal coordination and collaboration beyond the boundaries of the traditional organization. Many of today's organizations farm out some of their activities to other companies. Outsourcing, which means the contracting out of aspects of work (e.g. manufacturing, information technology or credit processing) to other com- panies, is a significant trend in many industries that has implications for organization structure. With a virtual network structure, sometimes called a modular structure, the firm subcon- tracts many or most of its major processes to separate companies and coordinates their activities from a small headquarters organization. Strengths: Enables even small organizations to obtain talent and resources worldwide Gives a company immediate scale and reach without huge investments in factories, equipment or distribution facilities Enables the organization to be highly flexible and responsive to changing needs Reduces administrative overhead costs Weaknesses: Managers do not have hands-on control over many activities and employees Requires a great deal of time to manage relationships and potential conflicts with contract partners There is a risk of organizational failure if a partner fails to deliver or goes out of business Employee loyalty and corporate culture might be weak because employees feel they can be replaced by contract services

How does the environment influence an organization?

These dimensions boil down to two essential ways the environment influences organizations: (1) the need for information about the environment; and (2) the need for resources from the environment.

subsystems

These subsystems are identified in relation to the specific functions they are conceived to perform for organizational survival - such as production, boundary span- ning, maintenance, adaptation and management.

Difference between Grandiosity and Illusion trick

They both in the field of presenting the world in a positive light, BUT there are differences. Grandiosity points to general attempts to redefine meanings by giving something a gild-edged shimmer. (guld-kant glans) Illusion tricks involve specific events, arrangements and texts. Illusion tricks are produced to signal something definite but are in a dubious or misleading relationship with something substantive (practices, behaviors, competence beyond management skills.) Illusion trick do not necessarily have to give a particularly strong impression or attractiveness or success. An illusion trick involves small changes in the substantial content, while repacking an object and presenting it in a more elegant form. Example. A change of the gender composition of the board of directors to display improved gender balance, where the new female members do not represent anything qualitatively different, it's only an illusion trick. One advantage of doing what everyone else is doing is that you gain legitimacy. If you don't have a gender equality policy you may appear to be out of date, irresponsible, sloppy. Therefore, you do like everyone else even though it is difficult to demonstrate any gains in efficiency or any other substantial advantages.

Simple Structure

This is often the first kind of structure used by a founder when a new organization is formed. The organization consists of the founder and a small number of employees. In this type of structure there are no formal hierarchical reporting relationships, therefore there is no chain of command. Strengths: Flexibility and quick response to changes in customer demands Enables employees to focus on product development (delivering value to customers) High employee commitment, loyalty and adaptability High responsiveness with commitment to end result Strong clan and adaptive culture Good for small companies Weaknesses: Hard to know which employees do what Limited use of cross-abilities and development Eliminates economies of scale among employees Big product portofolio Sometimes difficult to coordinate across different employees and customers

point-counterpoint

To improve the chances of a good decision under high-velocity conditions, some organizations stimulate constructive conflict through a technique called point-counterpoint, which divides decision-makers into two groups and assigns them different, often competing responsibilities

Vertical Information Linkages

Vertical linkages: are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization. 1. Hierarchical Referral: The first vertical device is the hierarchy, or chain of command. 2. Rules and Plans: The next linkage device is the use of rules and plans. 3. Vertical Information Systems: A vertical information system is another strategy for increasing vertical information capacity. Vertical information systems include the periodic reports, written information and computer-based communications distributed to managers.

a mechanistic organization system

When the external environment is stable, the internal organization is characterized by rules, procedures and a clear hierarchy of authority. Organizations are formalized. They are also centralized, with most decisions made at the top

the incremental decision process model (Mintzberg)

a model that describes the structured sequence of activities undertaken from the discovery of a problem to its solution. places less emphasis on the political and social factors described in the Carnegie model, but tells more about the structured sequence of activities undertaken from the discovery of a problem to its solution

Weber perceived bureaucracy as...

a potential threat to basic personal liberties, he also recognized it as the most formally rational and equitable system of organizing. He predicted the triumph of bureaucracy because of its ability to remove partiality and nepotism, and thereby deliver more efficient functioning of organizations in both business and government settings.

decision learning

a process of recognizing and admitting mistakes that allows managers to acquire sufficient experience and knowledge to perform more effectively in the future.

Managerial ethics

are principles that guide the decisions and behaviour of managers with regard to whether they are right or wrong. The notion of social responsibility is an example of managerial ethics insofar as its ascribes an obligation to managers to make choices and take action so that the organization contributes to the welfare and interest of all organizational stakeholders, such as employees, customers, shareholders, the community and the broader society.

Programmed decisions

are repetitive and well defined, and procedures exist for resolving the problem. They are well structured because criteria of performance are normally clear, good information is available about current performance, alternatives are easily specified and there is relative certainty that the chosen alternative will be successful

The rule of law

arises from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society and that are enforceable in the courts.

Intergroup conflict

can be defined as the behaviour that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group's achievements or expectations.

Subcultures

develop to reflect the common problems, goals and experiences that members of a team, depart- ment or other unit share. An office, branch or unit of a company that is physically separated from the company's main operations may also take on a distinctive subculture.

Downsizing (3 techniques)

has become a common practice in corporations, particularly in the Anglo-Saxon business world (the UK, the United States, Ireland, Canada, Australia and New Zealand), both in response to business downturns and as part of many change initiatives in today's organizations. A number of techniques can help smooth the downsizing process and ease tensions for employees who leave, and for those who remain: 1. Communicate more, not less. Some executives seem to think the less that's said about a pending layoff, the better. Not so. Managers are ethically obliged to provide as much information as possible. In many jurisdictions the law also requires a lengthy notice period for impending layoffs. 2. Provide assistance to displaced workers. The organization has an ethical if not a legal responsibility to help displaced workers cope with the loss of their jobs and get reestablished in the job market. The organization can provide training, innovative severance pack- ages, extended benefits and assistance getting started in a new business or line of work. 3. Help the survivors thrive. Many people experience guilt, anger, confusion and sadness after the loss of colleagues and these feelings should be acknowledged. Survivors might also be concerned about their own jobs and have difficulty adapting to the changes in job duties, responsibilities and so forth.

coalition

is an alliance among several managers who agree about organizational goals and prob- lem priorities

Uncertainty

is created by decision-makers not having sufficient information about environmental factors, and consequently being unable to accurately predict external changes. Uncertainty increases the risk of failure for organizational responses and makes it difficult to assess costs and probabilities associated with decision alternatives.

organizational environment

is defined as all elements that exist outside the boundary of the organization and have the potential to affect all or part of the organization.

Organizational decision-making

is formally defined as the process of identifying and solving prob- lems. The process has two major stages. In the problem identification stage, information about environmental and organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings. The problem solution stage is when alternative courses of action are considered and one alternative is selected and implemented.

virtual team

is one that is made up of organizationally or geographically dis- persed members who are linked primarily through advanced information and communications technologies.

Boundary spanning

is primarily concerned with the exchange of information to (1) detect and bring into the organization information about changes in the environment; and (2) send information into the environment that presents the organization in a favourable light.

Competition

is rivalry between groups in the pursuit of a common prize, whereas conflict presumes frustration of goal achievement.

Power

is the ability of one person or department in an organization to influence other people to bring about desired outcomes. It is the potential to influence others within the organization with the goal of attaining desired outcomes for power holders.

An organization's domain

is the chosen environmental field of action. It is the territory an organization stakes out for itself with respect to products, services and mar-kets served. Domain defines the organization's niche and defines those external sectors with which the organization will interact to accomplish its goals.

Integration

is the quality of collaboration between departments. Formal integrators are often required to coordinate departments. When the environment is highly uncertain, frequent changes require more information processing to achieve horizontal coordination, so integrators become a necessary addition to the organization structure.

Organizational culture

is the set of values, norms, guiding beliefs and understandings that is shared by members of an organization and is taught to new members

An organization's core technology

is the work process that is directly related to the organization's mission, such as teaching in a high school, medical services in a health clinic or manufacturing

organizational decline (3 factors)

is used to define a condition in which a substantial, absolute decrease in an organization's resource base occurs over a period. In general, three factors are considered to cause organizational decline. 1. Organizational atrophy. Atrophy occurs when organizations grow older and become inefficient and overly bureaucratized such that the ability to adapt deteriorates. Atrophy may follow a long period of success, because an organization takes success for granted, becomes attached to practices and structures that worked in the past and fails to adapt to changes in the environment. 2. Vulnerability. Vulnerability reflects an organization's strategic inability to prosper in its environment. Small organizations that are not yet fully established are especially vulnerable to shifts in consumer tastes or in the economic health of the larger community. Small e-commerce companies are the first to go out of business when the technology sector goes into a downturn. Vulnerable organizations typically need to redefine their environmental domain in order to serve new industries or markets. 3. Environmental decline or competition. Environmental decline refers to reduced energy and resources available to support an organization. When the environment has less capacity to support an organization, managers have either to scale down operations or shift to another domain.

centralized decision-making

means problems and decisions are funnelled to top levels of the hierar- chy for resolution.

Resource dependence

means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence. Organizations are vulnerable if vital resources are controlled by other organizations, so there is an incentive to be as dominant and independent as possible.

Interdependence

means the extent to which departments depend on each other for resources or materials to accomplish their tasks. Where there is low interdependence, departments do their work with minimal interaction, consultation or exchange of materials with other departments. High interdependence requires the continuous exchange of resources between departments.

The garbage can model

model of organizational decision making depicting a chaotic process and seemingly random decisions. Is not directly comparable to the earlier models because it deals with the pattern or flow of multiple decisions within organizations, whereas the incremental and Carnegie models focus on how a single decision is made. The garbage can model assists in considering the whole organization and the frequent decisions being made by managers throughout. Organized Anarchy The garbage can model was developed to explain the pattern of deci- sion-making in which managers experience extremely high uncertainty. Michael Cohen, James March and Johan Olsen, the originators of the model, called the highly uncertain conditions an organized anarchy, which is an extremely organic organization. Organized anarchies do not rely on the normal vertical hierarchy of authority and bureaucratic decision rules. They result from three characteristics: 1. Problematic preferences. Goals, problems, alternatives and solutions are ill-defined. Ambiguity characterizes each step of a decision process. 2. Unclear, poorly understood technology. Cause-and-effect relationships within the organization are difficult to identify. An explicit database that applies to decisions is not available. 3. Turnover. Organizational positions experience turnover of participants. In addition, employees are busy and have only limited time to allocate to any one problem or decision. Participation in any given decision will be fluid and limited. Streams of Events The unique characteristic of the garbage can model is that the decision process is not seen as a sequence of steps that begins with a problem and ends with a solution. The four streams relevant to organizational decision-making are as follows: 1. Problems. Problems are points of dissatisfaction with current activities and performance. They represent a gap between desired performance and current activities. 2. Potential solutions. A solution is an idea somebody proposes for adoption. Such ideas form a flow of alternative solutions through the organization. 3. Participants. Organization participants are employees who come and go throughout the organization. 4. Choice opportunities. Choice opportunities are occasions when an organization usually makes a decision. Consequences There are four specific consequences of the garbage can decision process for organizational decision-making: 1. Solutions may be proposed even when problems do not exist. A manager might be sold on an idea and might try to sell it to the rest of the organization. 2. Choices are made without solving problems. A choice such as creating a new department may be made with the intention of solving a problem; but, under conditions of high uncertainty, the choice may be incorrect. 3. Problems may persist without being solved. Organization participants get used to certain problems and give up trying to solve them; or participants may not know how to solve certain problems because the technology is unclear. 4. A few problems are solved. The decision process does work in the aggregate. In computer simulation models of the garbage can approach, important problems were often resolved.

Adapting to Environmental Uncertainty

organizations best equipped to face uncertainty generally have a more horizontal structure, as this encourages cross-functional communication and collaboration to adapt to environmental change.

Resource goals

refer to the acquisition of needed material and financial resources from the environment. They may involve obtaining financing for the construction of new plants, finding less expensive sources for raw materials or hiring top-quality technology graduates.

Culture strength

refers to the degree of agreement among members of an organization about the importance of specific values. If widespread consensus exists about the importance of those values, the culture is cohesive and strong; if little agreement exists, the culture is weak.

Technical complexity

refers to the extent of mechanization of the manufacturing process. High technical complexity means most of the work is performed by machines. Low technical complexity means workers play a larger role in the production process.

Employee development goals

refers to the training, promotion, health and safety, and growth of employees. It includes both managers and workers. Strong employee development goals are one of the characteristics common to organizations that regularly show up on lists of the best companies to work for.

Technology

refers to the work processes, techniques, machines and actions used to transform organizational inputs (materials, information, ideas) into outputs (products and services). Technology is an organization's production process and includes work procedures as well as machinery. In recent years, connectivity and technology have become closely interwoven, as IT advances enable increasing automation and remote control of products ranging from home heating systems to self-driving cars.

Market goals

relate to the market share or market standing desired by the organiza- tion.

Problemistic

search means managers look around in the immediate environment for a solution to quickly resolve a problem. Managers don't expect a perfect solution when the situation is ill-defined and conflict-laden.

he contingency decision-making framework

which brings together the two dimensions of problem consensus and technical knowledge about solutions. Each cell represents an organizational situation that is appropriate for the decision-making approaches described in this chapter. Cell 1 In cell 1, rational decision procedures are used because problems are agreed on and cause-effect relationships are well understood, so there is little uncertainty. Deci- sions can be made in a computational manner. Alternatives can be identified and the best solution adopted through analysis and calculations. The rational models described earlier in this chapter, both for individuals and for the organization, are appropriate when problems and the means for solving them are well defined. Cell 2 In cell 2, there is high uncertainty about problems and priorities, so bargaining and compromise are used to reach consensus. Tackling one problem might mean the organization must postpone action on other issues. The priorities given to respective problems are decided through discussion, debate and coalition building. Cell 3 In a cell 3 situation, problems and standards of performance are certain, but alternative technical solutions are vague and uncertain. Techniques to solve a problem are ill defined and poorly understood. When an individual manager faces this situation, intuition will be the decision guideline. The manager will rely on past experience and judgement to make a decision. Rational, analytical approaches are not effective because the alternatives cannot be identified and calculated. Hard facts and accurate information are not available. Cell 4 The situation in cell 4, characterized by high uncertainty about both problems and solutions, is difficult for decision-making. An individual manager making a decision under this high level of uncertainty can employ techniques from both cell 2 and cell 3. The manager can attempt to build a coalition to establish goals and priorities and use judgement, intuition, or trial and error to solve problems. Additional techniques, such as inspiration and imitation, also may be required.

Illusion tricks

• A third key is a declining interest in 'substance' and a greater interest in conveying images and ideas that give the impression of something positive: progress, politically correct values, general rationality and adaptive ability. • Pseudo-structures ⟹ Many quality assurance projects, committees, leadership programs, organizational changes etc. • Pseudo-event ⟹ are synthetic news items launched by the media or other actors (various elite groups) with the intent of arousing interest and providing an object for mass-media reporting • Pseudo-events Has the following characteristics ⟹ • Non-spontaneous, but arranged due to someone planning, placing and initiating it • Primarily planned to match an immediate mass-media reporting requirement • Only loosely linked with the underlying reality that it is supposed to reflect. A press conference may mention intentions, plans or opinions about something that has taken place of might take place. • Tendencies to promulgate self-fulfilling prophecies, the pseudo-event becomes part of reality and, as a result, has consequences.

Grandiosity

• The second manifestation of contemporary developments concern living in a society where what Alvesson denotes as' grandiosity' is triumphing • Grandiosity ⟹" attempts to give yourself/organization/society a positive — if somewhat superficial — well-polished and status enhancing image." BOOST your IMAGE, self-glorification but without actual substance. • Grandiosity is linked to an increasingly widespread narcissism and a desire to enhance self esteem • We want to be in the public eye ⟹ and distance ourselves from what us trivial • Restaurant, hotel and tourism studies are being turned into academic disciplines, with special programs offered at university level. Grandiosity seldom appears in a pure naked form. Education, working life, consumption and many other parts of society and life are, whenever possible, charged with this grandiosity. Good example: Expressions like world class and excellence are used more and more frequently often without much backup in terms of demonstrated qualities or accomplishments. Today focus is on image, brands, and not on quality. Basic needs have become less important while consumption and narcissism takes over. Goods and service have become levers for improving self-esteem and status. Products express your identity and enable you to realize yourself to the full. Grandiosity is increasingly haunted by its own emptiness. The lack of concrete content can strike back. People will experience disappointment and frustration.

Structural dimensions (6)

Provide labels to distinguish some key, internal charac- teristics of an organization, such as the degree of formalization. 1. Formalization: refers to the reliance upon written documentation in the organization.Such documentation relates to procedures, job descriptions, regulations and policy manuals. Larger organizations tend to score high on formalization because they have written rules to authorize and control a wide range of activity. 2. Specialization: is the degree to which organizational tasks are subdivided into separate jobs. If specialization is extensive, each employee performs only a narrow range of tasks. 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). When spans of control are narrow, specialization is high and the hierarchy tends to be tall. When spans of control are wide, the hierarchy of authority will be shorter. 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: is the term used to describe the level of formal education and training of employees. Professionalism is considered high when employees require long periods of training to hold jobs in the organization. 6. Personnel ratios: refer to the deployment of people to various functions and departments. Personnel ratios include 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.

Organization Design Alternatives

Required Work Activities: Departments are created to perform tasks considered important to the company. Reporting Relationships Hierarchical reporting relationships, often called the chain of command, are represented by verti- cal lines on an organization chart. Departmental Grouping Options: Early stage companies are typically loosely structured with new functions added (and removed) on an ad hoc basis (simple structure) as the organization finds its market niche and shapes itself around the needs of operating in that niche. As the organization grows and becomes more stable, departmental groupings are typically established to provide efficiency and predictability to oper- ations. 1. Simple grouping: means people work together without any formal reporting relationship. 2. Functional grouping: places together employees who perform similar functions or work processes or who bring similar knowledge and skills to bear. 3. Divisional grouping: means people are organized according to what the organization pro- duces. 4. Multifocused grouping: means an organization embraces two structural grouping alter- natives simultaneously. These structural forms are often called matrix or hybrid. 5. Horizontal grouping: means employees are organized around core work processes, the end-to-end work, information and material flows that provide value directly to customers or support strategic development. 6. Virtual network grouping: is one of the more recent approaches to departmental grouping. With this grouping, the organization is a loosely connected cluster of separate com- ponents. In essence, departments are separate organizations that are electronically connected for the sharing of information and completion of tasks.

Interpreting Culture

Rites and Ceremonies Important artifacts for culture are rites and ceremonies, the elaborate, planned activities that make up a special event and are often conducted for the benefit of an audience. Managers can hold rites and ceremonies to provide dramatic examples of what a company values. Stories Stories are narratives based on events that are frequently shared among organizational employees and told to new employees to inform them about an organization. Many stories are about company heroes who serve as models or ideals for serving cultural normsand values. Some stories are considered legends because the events are historic and may have been embellished with fictional details. Other stories are myths, which are consistent with the values and beliefs of the organization but are not supported by facts. Symbols Another tool for interpreting culture is the symbol. A symbol is something that represents another thing. In one sense, ceremonies, stories, slogans and rites are all symbols. They symbolize deeper values of an organization. Another symbol is a physical artifact of the organization. Physical symbols are powerful because they focus attention on a specific item. Language The final medium for influencing culture is language. Many companies use a specific saying, slogan, metaphor, motto or other form of language to convey special meaning to employees.

The dimensions of variety and analyzability form the basis for four major categories of technology: routine, craft, engineering and nonroutine:

Routine technologies: are characterized by little task variety and the use of objective, computational procedures. The tasks are formalized and standardized. Craft technologies: are characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood. Tasks require extensive training and experience because employees respond to intangible factors on the basis of wisdom, intuition and experience. Although advances in machine technologies seem to have reduced the number of craft technologies in organizations, craft technologies are still important. Engineering technologies: tend to be complex because there is substantial variety in the tasks performed. Nonetheless, many of the activities are handled on the basis of established formulas, procedures and techniques. Employees normally refer to a well-developed body of knowledge to handle problems. Many tasks within an HRM department fall into this category. Nonroutine technologies: have high task variety, and the conversion process is not analyzable or well understood. In nonroutine technology, a great deal of effort is devoted to analyzing problems and activities. Several equally acceptable options typically can be found. Experience and technical knowledge are used to solve problems and perform the work. Basic research, strategic planning and other work that involves new projects and unexpected problems are nonroutine.

Configuration and Structural Characteristics of Service Organizations versus Product Organizations

Service 1. Separate boundary roles: Few 2. Geographical dispersion: Much 3. Decision-making: Decentralized 4. Formalization: Lower Human Resources 1. Employee skill level: Higher 2. Skill emphasis: Interpersonal Product 1. Separate boundary roles: Many 2. Geographical dispersion: Little 3. Decision-making: Centralized 4. Formalization: Higher Human Resources 1. Employee skill level: Lower 2. Skill emphasis: Technical

Productivity goals

concern the amount of output achieved from available resources.

Lean manufacturing

the production of goods using less of everything compared to mass production. uses highly trained employees at every stage of the production process who take a painstaking approach to details and problem solving in order to cut waste and improve quality.

joint optimization

where the best fit between the social and technical elements of systems is achieved.

business intelligence (Boundary spanning)

which refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant.

positional goods

Positional goods are goods and services that people value because of their limited supply, and because they convey a high relative standing within society. Positional goods may include brand-name luxury handbags, a custom Feadship motor yacht, or front-row tickets to the Super Bowl.

job enrichment

Studies of flexible manufacturing have found that it is accompanied by the follow- ing: more opportunities for intellectual mastery and enhanced cognitive skills for workers; more worker responsibility for results; and greater interdependence among workers, enabling more social interaction and the development of teamwork and coordination skills.

An ethical dilemma

arises in a situation concerning right and wrong in which values are in conflict.

Technical knowledge

refers to understanding and agreement about how to solve problems and reach organizational goals.

When cultures are purposefully constructed or shaped by managers, they are valued for performing at least two functions:

(1) to integrate members so that they know how to relate to one another, and (2) to facilitate adaptation to the external environment. Internal integration means that members develop a collective identity and know-how to work together effectively. t is culture that guides day-to-day working relationships and determines how people communicate within the organization, what behaviour is acceptable or not acceptable, and how power and status are allocated. External adaptation refers to how the organization meets goals and deals with outsiders. Culture helps guide the daily activities of workers to meet certain goals. It can help the organization respond rapidly to customer needs or the moves of a competitor.

Manufacturing Technology

1. Tangible product 2. Products can be inventoried for later consumption 3. Capital asset-intensive 4. Little direct customer interaction 5. Human element may be less important 6. Quality is directly measured 7. Longer response time is acceptable 8. Site of facility is moderately important

stakeholder

A stakeholder is any group within or outside of the organization that has a stake in the organi- zation. The satisfaction level of each group can be assessed as an indication of the organization's performance and effectiveness.

non-positional goods

Goods whose value for one person does not depend on how much of the good others have. • Example: Health (at least usually).

an organic organization system

In rapidly changing environments, the internal organization is much looser, free-flowing and adaptive. Rules and regulations are not written down or, if written down, are ignored. People need to find their own way through the system to figure out what to do. The hierarchy of authority is not clear. Decision-making authority is decentralized.

The management science approach

Management approach that uses decision-making techniques involving mathematical models and advanced technology; also known as quantitative methods approach.

Closed systems

Organizations are conceived as self-contained, effectively sealed off from the outside world. Early management philosophies tended to be closed system in approach.

escalating commitment

Refers to continuing to invest time and money in a decision despite evidence that it is failing.

The mission statement or official goals

communicates to current and prospective employees, cus- tomers, investors, suppliers and competitors what the organization stands for and what itis trying to achieve.

The approach of buffering

is somewhat static and defensive. Some organizations are attempting to remove or reduce the buffers in a way that exposes the technical core to the uncertain environment. Potentially, this has the benefit of adapting the core more directly to its environment as emphasis is placed upon being well connected to customers and suppliers rather than ensuring the stability of the established technical core

The stable-unstable dimension

refers to whether elements in the environment are dynamic. An environmental domain is stable if it remains the same over a period of months or years. Under unstable conditions, environmental elements shift abruptly.

One reason for having different approaches is that...

they appear and have purchase in different organizational situations. Two characteristics of organizations that condition the use of decision approaches are (1) problem consensus and (2) technical knowledge about the means to solve those problems.98 Analyzing organizations along these two dimensions suggests which approach will be used to make decisions.

What is an Organization?

(1) social entities that (2) are goal-directed, (3) are designed as deliberately structured and coordi- nated activity systems, and (4) are linked to the external environment.

Stages of Life Cycle Development

1. Entrepreneurial stage. When an organization is 'born', the emphasis is on creating a product or service and surviving in the marketplace. The founders tend to devote their full energies to the technical activities of production and marketing. The organization is often informal and nonbureaucratic. The hours of work are frequently long. Control is generally based on the owners' personal supervision. Crisis: Need for leadership. As the organization starts to grow, the larger number of employees can cause problems. The creative and technically oriented owners are confronted with management issues, but they may prefer to continue to focus their energies on mak- ing and selling the product or inventing new products and services. At this time of crisis, entrepreneurs must either adjust the design of the organization to accommodate continued growth or else bring in managers who can do so. 2. Collectivity stage. If the leadership crisis is resolved, the organization may then develop clearer goals and direction. Departments are established along with a hierarchy of author- ity, job assignments and a division of labour. Crisis: Need for delegation. If the new management has been successful, lower-level employees may gradually find themselves restricted by the emergence of top-down leader- ship. An autonomy crisis can develop as top managers, who were successful because of their strong leadership and vision, do not want to give up responsibility. Top managers want to make sure that all parts of the organization are coordinated and pulling together but middle-level managers are typically resistant to micro-management from above. During this phase, there is pressure to find mechanisms to control and coordinate departments without reliance upon detailed supervision from the top. 3. Formalization stage. The formalization stage involves the installation and use of rules, procedures and control systems. Communication is less frequent and more formal. Engineers, human resource specialists and other staff may be added. Top management becomes concerned with issues such as strategy and planning and introduces systems to support and monitor delegation of control of operations to middle management. Product groups or other decentralized units may be formed to improve coordination. Incentive systems based on profits may be implemented to ensure that managers work towards what is best for the overall company. When effective, the new coordination and control systems can enable the organization to continue growing by establishing linkage mechanisms between top manage- ment and field units. Crisis: Too much red tape. At this point, the proliferation of systems and programmes may begin to stifle initiatives from middle-level executives. Middle management may resent the intrusion of staff. Innovation may be restricted. 4. Elaboration stage. One solution to the red tape crisis is to engender a new sense of collaboration and teamwork. Managers are urged to develop skills for diagnosing problems and working together. Social control and self-discipline can mitigate reliance upon for- mal controls. Managers learn to work within the bureaucracy without becoming excessively dependent upon it, or adding to it. Formal systems may be simplified and partially replaced by teams and task forces that may operate across functions or divisions of the company. Alternatively, the organization may be split into multiple divisions to maintain a small-company philosophy. Crisis: Need for revitalization. At some point, the organization loses momentum and enters a period of relative decline, which may be temporary or terminal. The organization shifts out of alignment with the environment or perhaps becomes slow moving and overbureaucratized. To counter decline, efforts to streamline and innovate may be made. Under pressure from shareholders to revive company fortunes, top managers are often replaced. 5. Three alternative scenarios: A) Streamlining, Small Company B) Continued maturity C) Decline (Usually connected to environmental change, Three major causes: Organizational atrophy, vulnerability, environmental decline

social capital

A related concept concerning the influence of norms and values on how people work together and how they treat one another and customers

Blue Ocean Strategy

An approach where firms seek to create and compete in uncontested "blue ocean" market spaces, rather than competing in spaces ("red oceans") and ways that have attracted many, similar rivals.

decentralized decision-making

Decentralized decision-making means decision-making authority is pushed down to lower organizational levels.

Organizing Strategies for Controlling the External Environment

Establishing Interorganizational Linkages and Controlling the Environmental Domain

Hawthorne Studies

Interpretations of the results of these experiments concluded that positive treatment of employees, even by simply acknowledging their presence and contribution, improved their motivation and productivity. That the potency of basic recognition of workers by managers had not been widely acknowledged prior to these studies gives a strong indication of the social distance between them. The Hawthorne Studies laid the groundwork for subsequent explorations of 'the human side of enterprise' includ- ing leadership, motivation and, more recently, diverse aspects of human resource management.

Levels of Corporate Culture

Observable symbols, ceremonies, stories, slogans, behaviours, dress, physical settings Underlying values, assumptions, beliefs, attitudes, feelings

Strategic Contingencies

Strategic contingencies are events and activities both inside and outside an organization that are essential for attaining organizational goals. Departments involved with strategic contingencies for the organization tend to have greater power. Departmental activities are important when they provide strategic value by solving problems or crises for the organization.

Five ideas in the technology literature stand out:

The first is Woodward's research into manufacturing technology. Woodward went into organizations and collected practical data on technology characteristics, organization structure and management systems. She found clear relationships between technology and structure in the highest performing organizations that suggest how competitive advantage may be achieved by co-aligning strategy with an appropriate fit between structure and technology. The second important idea is that there are some key differences between service and manufacturing technologies. Service technologies are characterized by intangible outcomes and direct client involvement in the production process. Service firms tend to have the fixed, machine-based technologies that appear in manufacturing organizations although some do approximate closely to their levels of standardization; hence, organization design often differs as well. The third significant idea is Perrow's framework applied to department technologies. Under- standing the variety and analyzability of a technology gives pointers to how the elements of management style, structure and process might be developed and combined to attain the most effective outcome. Routine technologies are characterized by mechanistic structure and nonroutine technologies by organic structure. Applying an incongruent management system to a department increases the risk of dissatisfaction and reduced efficiency. The fourth important idea is interdependence among departments. The extent to which departments depend on each other for materials, information or other resources affects the amount of coordination required between them. Greater interdependence tends to increase the demands on the organization for coordination. To address these demands, design must accommodate appropriate forms of communication and coordination across departments. The trend towards business process outsourcing, including offshoring, presents challenges in maintaining interdependence across distance, which can be partially, but not fully, handled through new information and communication technologies. The fifth important idea is that new flexible manufacturing systems are having a significant impact upon organization design. Where technologies replace routine jobs without job losses, allow employees more autonomy who want more challenges and/or responsibility, and encourage teamwork when this is not experienced as oppressive, it is probable that the new systems will be highly effective in increasing flexibility and improving response to customer demands. At the same time, there can be significant job losses, particularly at the lower end of the labour market in high-wage, 'developed' economies. Where the social conditions for introducing new technologies are less than positive with regard to job losses, interest in greater responsibility, etc., then their impact on productivity will be disappointing In this respect, sociotechnical systems theory, which attempts to design the technical and human aspects of an organization to fit one another, is highly relevant as advances in technology alter the nature of jobs and social interaction in today's manufacturing and service companies.

the 'big-company/small-company hybrid'

combines a large corporation's resources and reach with a small company's simplicity and flexibility.

Operative goals

describe specific measurable outcomes and are often concerned with the short run. Operative goals typically pertain to the primary tasks an organization must perform.

isomorphic

generations look similar

The task environment

includes sectors with which the organization interacts directly and that have a direct impact on the organization's ability to achieve its goals. The task environment typically includes the industry, raw materials and market sectors, and perhaps the human resources and international sectors.

Job design

includes the assignment of goals and tasks to be accomplished by employees.

Carnegie Model

organizational decision making that involves many managers making a final choice based on a coalition among those managers

Horizontal Structure

organizes employees around core processes

scientific management (Frederick Winslow)

postulate that decisions about organizations and job design should be based on a precise, 'scientific' study of individual situations to determine which method of doing a job delivers the greatest output.

Innovation goals

refer to internal flexibility and readiness to adapt to unexpected changes in the environment. Innovation goals are often defined with respect to the development of specific new services, products or production processes.

classical perspective

sought to apply rational calculations to turn organiza- tions into efficient, well-oiled machines. This perspective is associated with the development of extended hierarchies and bureaucratic procedures of control.

mission

the organization's reason for its existence. The mission conveys the organiza- tion's vision, shared values and beliefs. It can have a powerful impact on an organization.

Perrow specified two dimensions of departmental activities that are relevant to organization structure and process:

variety, which is the frequency of unexpected and novel events and analyzability of work activities. When the process of transforming inputs to the department into outputs for other departments is analyzable, the work can be reduced to mechanical steps and participants can follow an objective, computational procedure to solve problems.

The incident command system

was developed to maintain the efficiency and control benefits of bureaucracy yet prevent the problem of slow response to crises. The approach is being adapted by other types of organizations to help them respond quickly to new opportunities, unforeseen competitive threats or organizational crises.

job enlargement

which is an expansion of the number of different tasks performed by an employee which include those that require additional skill sets.

job rotation

which means moving employees from job to job to give them a greater variety of tasks.

job simplification

which means that the variety and difficulty of tasks performed by a single person are reduced, with a potential increase in boredom and potential demotivation.

an organic organization system (Characteristics)

1. Employees contribute to the common tasks of the department 2. Tasks are adjusted and redefined through employee teamwork 3. There is less hierarchy of authority and control, and there are few rules 4. Knowledge and control of tasks are located anywhere in the organization 5.Communication is horizontal

Establishing Interorganizational Linkages

1. Ownership - Companies use ownership to establish linkages when they buy a part of, or a controlling interest in, another company. 2. Contracts, joint ventures - When there is a high level of complementarity between the business lines, geographical positions or skills of two companies, the firms often go the route of a strategic alliance rather than ownership through merger or acquisition. These result in the creation of a new organization that is formally independent of the parents, although the parents will have some control. In a joint venture, organizations share the risk and cost associated with large projects or innovations 3. Cooptation, interlocking directorates - Cooptation occurs when leaders from important sectors in the environment are made part of an organization. An interlocking directorate is a formal linkage that occurs when a member of the board of directors of one company sits on the board of directors of another company. When one individual is the link between two companies, this is typically referred to as a direct interlock. An indirect interlock occurs when a director of company A and a director of company B are both directors of company C. 4. Executive recruitment - Transferring or exchanging executives also offers a method of establishing favourable linkages with external organizations. 5. Advertising, public relations - A traditional way of establishing favourable relationships is through advertising. Organizations spend large amounts of money to influence the taste of consumers. Advertising is especially important in highly competitive consumer industries and in industries that experience variable demand.

strategy

A strategy is a plan for interacting with the competitive environment to achieve organizational goals. Some managers think of goals and strategies as interchangeable, but for our purposes, goals define the direction of travel, and strategies define how to get there.

Geographical Structure

Another basis for structural grouping is the organization's users or customers. The most common structure in this category is geography. Each region of the country may have distinct tastes and preferences. Each geographic unit includes all functions required to produce and market products or services in that region. This structure is particularly common in large NGOs and other civil society organizations that depend upon a close connection with volunteers, supporters or clients at the local level. The strengths and weaknesses of a geographic divisional structure are parallel to those of the divisional organization characteristics.

Porter's Competitive Strategies

Differentiation: In a differentiation strategy, organizations attempt to distinguish their products or services from others in the industry. An organization may use adver- tising, distinctive product features, exceptional service or new technology to achieve a product perceived as unique. Low-Cost Leadership: The low-cost leadership strategy pursues strong market share by emphasizing low cost compared to competitors. With a low-cost leadership strategy, the organ- ization aggressively seeks efficient facilities, pursues cost reductions and uses tight controls to produce products or services more efficiently than its competitors. Focus: With Porter's third strategy, the focus strategy, the organization concentrates on a spe- cific market or buyer group. It pursues either a low-cost advantage or a differentiation advantage within a narrowly defined market.

Individual Decision-Making

First is the rational approach, which suggests how managers should try to make decisions. Second is the bounded rationality perspective, which describes how decisions actually have to be made under severe time and resource constraints. The rational approach is an ideal managers may work towards but never reach.

Horizontal Information Linkages

Horizontal linkage: refers to the amount of communication and coordination horizontally across organizational departments. 1. Information Systems A significant method of providing horizontal linkage in today's organizations is the use of cross-functional information systems. 2. Direct Contact: A higher level of horizontal linkage is direct contact between managers or employees affected by a problem. One way to promote direct contact is to create a special liaison role. A liaison person is located in one department but has the responsibility for communicating and achieving coordination with another department. 3. Task Forces: Liaison roles usually link only two departments. When linkage involves several departments, a more complex device such as a task force is required. A task force is a temporary committee composed of representatives from each organizational unit affected by a problem. 4. Full-time Integrator: A stronger horizontal linkage device is to create a full-time position or department solely for the purpose of coordination. A full-time integrator frequently has a title, such as product manager, project manager, programme manager or brand manager. Unlike the liaison person described earlier, the integrator does not report to one of the functional depart- ments being coordinated. He or she is located outside the departments and has the responsibility for coordinating several departments, or even, in the case below, in integrating internal depart- ments, suppliers and customers. 5. Teams: Project teams tend to be the strongest horizontal linkage mechanism. Teams are per- manent task forces and are often used in conjunction with a full-time integrator. When activities between departments require strong coordination over a long period of time, a cross-functional team is often the solution.

Comparison of Organizational Characteristics Associated with Mass Production and Flexible Manufacturing Systems

Mass Production Structure Span of control: Wide Hierarchical levels: Many Tasks: Routine, repetitive Specialization: High Decision-making: Centralized Overall: Bureaucratic, mechanistic Human Resources Interactions: Standalone Training: Narrow, one time Expertise: Manual, technical Inter-organizational Customer demand: Stable Suppliers: Many, arm's length FMS Structure Span of control: Narrow Hierarchical levels: Few Tasks: Adaptive, craft-like Specialization: Low Decision-making: Decentralized Overall: Self-regulating, organic Human Resources Interactions: Teamwork Training: Broad, frequent Expertise: Cognitive, social: solve problems Inter-organizational Customer demand: Changing Suppliers: Few, close relationships

Open systems

Organizations are conceived as consumers of resources (inputs, such as raw materials) and exporters of resources (outputs, such as services). In order to survive and prosper they are impelled, according to an open systems perspective, to adapt to, or attempt to control, a changing environment.

Non-programmed decisions

are novel and poorly defined, and no procedure exists for solving the problem. They are used when an organization has not seen a problem before and may not know how to respond

Rational versus Political Model

Rational Model Goals: Consistent across participants Power and control: Centralized Decision process: Orderly, logical, rational Rules and norms: Norm of efficiency Information: Extensive, systematic, accurate Political Model Goals: Inconsistent, pluralistic within the organization Power and control: Decentralized, shifting coalitions and interest groups Decision process: Disorderly, result of bargaining and interplay among interests Rules and norms: Free play of markets forces; conflict is legitimate and expected Information: Ambiguous; information used and withheld strategically.

Weber's Dimensions of Bureaucracy

Rules and procedures Written communications and records Separate position from position holder Technically qualified personnel Hierarchy of authority Specialization and division of labour

stakeholder approach

The idea of balancing the preferences of different groups

Contextual dimensions (5)

characterize both the organization as a whole, including its size, technology, etc. and the broader organizational setting. 1. Size: can be measured for the organization as a whole or for specific components, such as a plant or division. As organizations are social systems, size is typically measured by the num- ber of employees. 2. Organizational technology: refers to the tools, techniques and actions used to transform inputs into outputs. 3. The environment: includes all elements outside the boundary of the organization. Key elements include the industry, government, customers, suppliers and the financial com- munity. 4. The organization's goals and strategy: define the purpose and competitive techniques that set it apart from other organizations. 5. An organization's culture: is the underlying set of key values, beliefs, understandings and norms shared by employees. These underlying values may pertain to ethical behaviour, commitment to employees, efficiency or customer service, and they provide the glue to hold organization members together.

flexible manufacturing systems (FMS)

combine automated machines, robots, and material handling systems that are all controlled by a single computer. The ultimate automated factories

The simple-complex dimension

concerns environmental complexity, which refers to heterogene- ity, or the number and dissimilarity of external elements relevant to an organization's operations. The more external factors that regularly influence the organization and the greater number of other companies in an organization's domain, the greater the complexity. A complex environment is one in which the organization interacts with and is influenced by numerous diverse external elements. In a simple environment, the organization interacts with and is influenced by only a few similar external elements.

The general environment

includes those sectors that might not have a direct impact on the daily operations of a firm but will indirectly influence it. The general environment often includes the government, sociocultural, economic conditions, technology and financial resources sectors

Re-engineering, or business process re-engineering

involves the redesign of a vertical organization along its horizontal workflows and processes

Organizational differentiation

is 'the differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments'.

Effectiveness

is a broader term, meaning the degree to which an organization achieves its goals.

An intelligence team

is a cross-functional group of managers and employees, usually led by a CI professional, who work together to gain a deep understanding of specific business issues, with the aim of presenting insights, possibilities and recommendations to top leaders.

Organizational goal

is a desired state of affairs or outcome that members of an organization are entreated to reach.

A non-core technology

is a work process that is important to the organization but is not directly related to its primary mission. Non-core work processes are illustrated by the departments of human resources (HR), accounting, research and development (R&D) and marketing. Thus, R&D transforms ideas into new products, and marketing transforms inventory into sales, each using a somewhat different work process. The output of the HR department is people to work in the organization, and accounting produces accurate state- ments about the organization's financial condition.

Authority

is also a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and report- ing relationships.

Satisficing

means accepting a satisfactory rather than a maximum level of performance, enabling managers to achieve several goals simultaneously. In decision-making, the coalition will accept a solution that is perceived as satisfactory to all coalition members. Second, managers are concerned with immediate problems and short-run solutions. They engage in what Cyert and March called problemistic search.

Imitation

means adopting a decision tried elsewhere in the hope that it will work in this situation.

The sociotechnical systems approach

recognizes the interaction of technical and human elements in effective job design. The socio element of the approach refers to the people and groups that work in organizations and how work is organized and coordinated. The technical element refers to the materials, tools, machines and processes used to transform organizational inputs into outputs.

Inspiration

refers to an innovative, creative solution that is not reached by logical means.

Formalization

refers to rules, procedures and written documentation, such as policy manuals and job descriptions, that prescribe the rights and duties of employees.

Problem consensus

refers to the agreement among managers about the nature of a problem or opportunity and about which goals and outcomes to pursue.

Efficiency

refers to the amount of resources used to achieve the organization's goals.

Centralization

refers to the level of hierarchy with authority to make decisions. In centralized organizations, decisions tend to be made at the top. In decentralized organizations, sim- ilar decisions are made at a lower level. Decentralization represents a paradox. It might seem that, in the perfect bureaucracy, all decisions would be made by the top administrator, who would have perfect control. However, as an organization grows larger and has more people and departments, decisions cannot be passed to the top because senior managers would be overloaded. Accordingly, larger organizations are often characterized by greater decentralization.

Horizontal power

sources of power accessed by otherwise equal departments or subunits according to their ability to address strategic issues for the organization

What Woodward's findings suggest is that effectiveness is contingent upon an alignment of...

strategy, structure and technology.

Chaos Theory

suggests that relationships in complex, adaptive systems - including organizations - are non- linear and made up of numerous interconnections and divergent choices. This is a world full of uncertainty, characterized by surprise, rapid change and confusion. Managers can't measure, predict or control in traditional ways the unfolding drama inside or outside the organization. At the same time, chaos theory suggests that randomness and disorder occur within certain larger patterns of order.

social audit

which measures and reports the ethical, social and environmental impact of a company's operations.

mass customization

which refers to using mass-production technology to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers.