Week Two: Theories of and Approaches to the Study of Organizations

Objectives – Week Two Themes in readings for today Key management and organization theories Case learning Initial steps in consulting projects Team assignments

What is Management? “Managers develop internal goals, work processes, and strategic plans that seek to better position the organization within its environment and that will help the organization achieve its goals.”

Management Involves: Decisional role – How and when to act – Understanding organizational processes Interpersonal role – Staff and external constituencies Informational role – Commitment to common goals/values – Growth and development – Facilitating communication Performance assessment

What are Organizations? “Organizations are social units deliberately constructed and reconstructed to seek specific goals.” -Etzioni “[Organizations] are groups of individuals bound by some common purpose to achieve objectives.” - North “Organizations have distinctive features other than goal specificity and continuity... fixed boundaries, a normative order, authority ranks, a communication system, and an incentive system,” - Hall

What are Organizations? “An organization is a collectivity with a relatively identifiable boundary, a normative order (rules), ranks of authority (hierarchy), communications systems, and membership coordinating systems (procedures); this collectivity exists on a relatively continuous basis, exists in an environment, and engages in activities that are usually related to a set of goals; the activities have outcomes for organizational members, for the organization itself, and for society.” –Hall, p. 30

Key Organizational Features Goals Environment Task and Technologies Procedures Performance Leadership Structure Communication Incentives

Contradiction of Organizations? “Great social transformations in history have been essentially organizationally based.” “Organizations by their very nature are conservative.” How do we reconcile these two statements?

Why Is Stability Important? Necessary to accomplish goals Necessary to achieve change Necessary, but not sufficient condition What else is necessary for change to occur?

Child Health and CHIP in El Paso, TX Significant need for child health services Few providers CHIP = Medicaid program Enrolled 23,000 children in last few years Dilemmas of Implementation: – Not enough doctors – No specialists – Few facilities – Nursing and support staff shortages

Management Challenges of CHIP Defining goals Navigating environment Developing processes Measuring performance Sharing information

Organizational Realities of CHIP Organizational interdependence Contracting Customer service Coordinating Innovation

Different Theoretical Approaches to the Study of Organizations Group Exercise – Group One – Rational-legal Model (Weber) Group Two – Scientific Management Group Three – Administrative Mgmt School Group Four – Hawthorne Effect; Maslow’s Needs Hierarchy; Theory X and Theory Y Group Five – Limited Rationality (Simon) *Each group must come up with sound bytes or bullet points summarizing key points of assigned theory or theories. Highlight strengths and weaknesses.

Classical Approaches, s Weber – Rational-Legal/Bureaucracy – Specialization, hierarchy, rules, procedures – Bureaucracy = solution to modern complexities

Classical Approaches, s Taylor – Scientific Management – Maximize efficiency, scientific methods – Can find ‘best’ way to structure an organization

Classical Approaches, (cont.) Administrative Mgmt. School - Gulick – Specialization – Coordination – POSDCORB = (P)lanning, (O)rganizing, (S)taffing, (D)irecting, (C)oordinating, (R)eporting, and (B)udgeting

s: Human Relations School Motivating Individuals – Motivation of workers = key to productivity Maslow’s Hierarchy of Needs – Psychological, Safety, Social, Esteem, Self- actualization Criticisms Bounded Rationality

1980s to Today: Systems Approach Organization is an open system Survival and adaptation = key concepts Cannot study organizations without studying the surrounding environment Number of prominent theories evolved from systems approach

Texas State Lottery – Applying Theory to Troubled Organization Texas Lottery Commission = 3 members, 1 executive director Responsible for decisions about games, promotions, and contracts with vendors Controversy over decisions about poor decisions regarding games Frustration with costly office space Why might the commission struggle to perform its duties? What would each model push us to think about?

How To Read Cases Who is the decision-maker? What is the specific decision to be made? What are the objectives of the decision-maker? What other actors are involved? What are the key issues or points of conflict? What features of the external environment are relevant? What course concepts are implicated?

Consulting Projects Expert v. Doctor v. Process-oriented Consultant Group Dynamics – Ground rules, leadership, communication Managing Project Relationship with the Client

Consulting Projects Diagnosis – What is the question(s) to be answered? – What aspects of the organization are involved? – Clients and stakeholders? Do we have relevant data? – If not, how do we get the data? Once we have data, how do we analyze it? – Recommendations – Solutions and required changes – Subsequent steps or paths of action

Readings to Be Completed for Next Class Period Rainey, Chapter 4 Ryan – coursepack Case – “Managing A Press ‘Feeding Frenzy’” Also, note that next week – Short-Paper Assignment #1 will be posted