MGT504 Highlighted Handouts

Table of contents

Lecture 1.................................................................................................................................................. 1

Lecture 2 ................................................................................................................................................. 6

Lecture 3 ................................................................................................................................................. 8 DIMESNIONS OF ORGANIZATION DESIGN ......................................................................... 8 Lesson 4 ................................................................................................................................................ 10 ORGANIZATIONAL PURPOSE.................................................................................................. 10 Lecture 5 ............................................................................................................................................... 12 MILES AND SNOW’S STRATEGY TYPOLOGY....................................................................... 12 Lecture 6 ............................................................................................................................................... 14 MISSION & GOALS ....................................................................................................................... 14 ORGANIZATIONAL EFFECTIVENESS ................................................................................... 18 ORGANIZATION STRUCTURE ................................................................................................. 22 Lecture 9 ............................................................................................................................................... 26 ORGANIZATION STRUCTURE (contd.) .................................................................................. 26 Lecture 10 .............................................................................................................................................. 30 ORGANIZATION STRUCTURE (contd.) .................................................................................. 30 Lecture 11 .......................................................................................................................................... 34 THE EXTERNAL ENVIRONMENT ......................................................................................... 34 Lecture 12 .............................................................................................................................................. 39 EXTERNAL ENVIRONMENT (contd.) ..................................................................................... 39 Lecture 13 .............................................................................................................................................. 43 ORGANIZATIONAL ECOSYSTEMS .......................................................................................... 43 Lecture 14 .............................................................................................................................................. 53 MANUFACTURING AND SERVICE TECHNOLOGIES ....................................................... 53 Lecture 15 .............................................................................................................................................. 57 MANUFACTURING AND SERVICE TECHNOLOGIES (CONTD.) ................................... 57 Lecture 16 .............................................................................................................................................. 60 MANUFACTURING AND SERVICE TECHNOLOGIES (CONTD.) ................................... 60 Lecture 17 .............................................................................................................................................. 66 INFORMATION TECHNOLOGY .............................................................................................. 66 Lecture 18 .............................................................................................................................................. 71 IT & ORGANIZATION DESIGN ................................................................................................ 71 Lecture 19 .............................................................................................................................................. 74 KNOWLEDGE MANAGEMENT................................................................................................. 74 Lecture 20.............................................................................................................................................. 79 ORGANIZATION SIZE – IS BIGGER BETTER? ..................................................................... 79 Lecture 21 .......................................................................................................................................... 81 ORGANIZATIONAL CHARACTERISTICS DURING THE LIFE CYCLE .......................... 81 Lecture 22.............................................................................................................................................. 84 ORGANIZATION BUREAUCRACY AND CONTROL............................................................ 84 Lecture 23.............................................................................................................................................. 86 ORGANIZATIONAL CULTURE ................................................................................................. 86 Lecture24............................................................................................................................................... 87 ORGANIZATIONAL DESIGN AND CULTURE ...................................................................... 87 Lecture 25.............................................................................................................................................. 91 CULTURE AND LEARNING ORGANIZATION ..................................................................... 91 Lecture 26.............................................................................................................................................. 93 ETHICAL VALUES IN ORGANIZATIONS .............................................................................. 93 Lecture 27.............................................................................................................................................. 96 ETHICS ............................................................................................................................................ 96 INNOVATE OR PERISH; THE STRATEGIC ROLE OF CHANGE ..................................... 97 Lecture 29.............................................................................................................................................. 98 TYPES OF CHANGE ..................................................................................................................... 98 Lecture 30............................................................................................................................................ 101 Lecture 31 ........................................................................................................................................ 105 REASONS FOR NEW PRODUCT SUCCESS........................................................................... 105 Lecture 32 ............................................................................................................................................. 110 Lecture 33........................................................................................................................................ 113 DECISION MAKING IN TODAY’S ENVIRONMENT ......................................................... 113 Lecture 34............................................................................................................................................ 114 INDIVIDUAL DECISION MAKING......................................................................................... 114 Lecture 35............................................................................................................................................ 117 ORGANIZATIONAL DECISION MAKING ............................................................................ 117 Lecture 37............................................................................................................................................ 121 INCREMENTAL DECISION PROCESS MODEL ................................................................. 121 Lecture 38............................................................................................................................................ 123 GARBAGE CAN MODEL ............................................................................................................ 123 Lecture 39............................................................................................................................................ 130 CONFLICT, POWER & POLITICS ........................................................................................... 130 WHAT IS INTER-GROUP CONFLICT? .................................................................................. 130 Lecture 40............................................................................................................................................ 133 INDIVIDUAL VERSUS ORGANIZATIONAL POWER ......................................................... 133 Lecture 41 ............................................................................................................................................ 139 POLITICAL PROCESSES IN ORGANIZATIONS .................................................................. 139 Lecture 42............................................................................................................................................ 145 THE GLOBAL ENVIRONMENT ............................................................................................. 145 LECTURE 43 ..................................................................................................................................... 150 STRUCTURAL DESIGN FOR GLOBAL OPERATIONS....................................................... 150 Lecture 44............................................................................................................................................ 157 TOWARD LEARNING ORGANIZATIONS............................................................................. 157 Lecture 45............................................................................................................................................ 163 REVISION ..................................................................................................................................... 163

Lecture 1

THE EVOLUTION OF ORGANIZATION THEORY AND DESIGN

Organization theory is not a collection of facts: it is a way of thinking about organization. Organization theory is a way to see and analyze organizations more accurately and deeply than one otherwise could. The way to see and think about organizations is based on patterns and regularities, define them, measure them, and make them available to the rest of us. The facts from the research are not as important as the general patterns and insights into organizational functioning.

HISTORY

Organization design and management practices have varied over time in response to change in the larger society you may recall from an earlier management course that modern era of management theory began with the classical management perspective in the late nineteenth and early twentieth century. The earlier of the factory system during the Industrial Revolution posed problems that earlier organizations had not encountered. As work was performed on a much larger scale by a larger number of workers, people began thinking about how to design and manage work in order to increase productivity and help organizations attain maximum efficiency. The classical perspective, which sought to make organizations run like efficient, well-oiled machines, is associated with the development of hierarchy and bureaucratic organizations and remains the basis of much of modern management theory and practice. Two subfields of the classical perspective are scientific management and administrative principles.

Scientific Management: Pioneered by Frederick Winslow Taylor, scientific management postulates that decisions about organizations and job design should be based on precise, scientific study of individual situations. To use this approach, managers develop precise, standard procedures for doing each job, select workers with appropriate abilities, train workers in the standard procedures, carefully plan work, and provide wage incentives to increase output. Taylor’s approach was used in the unloading of iron from rail cars and reloading finished steel for the Bethlehem Steel plant in 1898. Taylor calculated that with correct movements, tool, and sequencing, each man was capable of loading 47.5 tons per day instead of the typical 12.5 tons. He also worked out an incentive system that paid each man $1.85 per day for meeting the new standard, and increase from the previous rate of $1.15. Productivity at Bethlehem Steel shoots up overnight. These insights helped to establish organizational assumptions that the role of management is to maintain stability and efficiency, with top managers doing the thinking and workers doing what they are told.

Administrative Principles: Whereas scientific management focused primarily on the technical core on work performed on the shop floor administrative principles looked at the design and functioning of the organization as whole. For example, Henri Fayol proposed fourteen principles of management, such as “each subordinate receives orders from only one superior” (unity of command) and “similar activities in an organization should be grouped together under one manager” (unity of direction). These principles formed the foundation for modern management practice and organization design. Fayol believed these principles could be applied in any organizational setting. The scientific management and administrative principles approaches were very powerful and gave organizations fundamental new ideas for establishing high productivity and increasing prosperity. Administrative principles in particular contributed to the development of bureaucratic organizations, which emphasized designing and managing organizations on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules. Although the term bureaucracy has taken on negative connotations in today’s organizations, bureaucratic characteristics worked extremely well for the needs of the Industrial Age. Following classical management theory, other academic approaches emerged to address issues such as the social context and workers’ needs.

The Hawthorne Studies: Early work on industrial psychology and human relations received little attention because of the prominence of scientific management. However, a major breakthrough occurred with a series of experiments at a Chicago electric company, which came to be known as the Hawthorne Studies. Interpretations of these studies concluded that positive treatment of employees improved their motivation and productivity. The publication of these findings led to a revolution in worker treatment and laid the groundwork for subsequent work examining treatment of workers, leadership, motivation, and human resource management. These human relations and behavioral approaches added new and important contributions to the study of management and organizations.