1 Knowledge Objectives 1.Describe the four characteristics common to all organizations. 2.Explain dynamic equilibrium and equifinality in open-systems models. 3.Explain the ways in which organizations learn and decline (fail to learn)

2 What is an Organization? Common Characteristics of Organizations 1.Coordination of effort: multiplying individual contributions to achieve results greater than those possible by individuals working alone. 2.Common goal or purpose: having a focus to strive for something of mutual interest. 3.Division of labor: dividing tasks into specialized jobs that use human resources efficiently. 4.Hierarchy of authority: using a chain of command to control and direct the actions of others.

3 Organizing Max Weber’s Bureaucracy –The most rationally efficient form of organization 1.Division of labor 2.Hierarchy of authority 3.Framework of rules 4.Impersonal management –Problems with overly “bureaucratic” organizations Slow Insensitive Inefficient

4 Organizing Open systems perspective –The organization’s principal goal is survival in an uncertain environment. –The organization is an open-system interacting with its environment. –The organization’s surrounding environment is composed of variables that are difficult to predict or control.

5 Organizing Characteristics of Open Systems –Interaction with the external environment through permeable boundaries. –Dynamic equilibrium in maintaining internal balances with help from the external environment. –Equifinality in achieving similar ends through different means. –Management of the Technical Core & Boundary Spanning units

6 Extending the Systems Model: Learning Organizations Learning Organization –An organization that is skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. Stages of Organization Learning –Cognition (learning new concepts) –Behavior (developing new skills and abilities) –Performance (actually getting something done)

7 Learning Organizations Five Critical Learning Skills –Solving problems. –Experimenting. –Learning from organizational experience/history. –Learning from others. –Transferring and implementing.

8 Organizational Decline –The weakening of an organization by resource restrictions and/or mismanagement. –Sources of decline Complacency/Simplification Unsteady macroeconomic environment Resource shortages Global competition –Reactions to decline Downsizing, demassing, reengineering Decline

9 Characteristics of Organizational Decline –Decline Dilemmas Exit of leaders from the organization. Control that suppresses participation and morale. Preference for short-term thinking and risk avoidance. Intense conflict, preventing teamwork. Strong resistance to change. –Counteracting Organizational Decline Kaizen: the philosophy of continuous improvement. Decline