Chapter 9 (Lecture Outline and Line Art Presentation) Organizations Structure and, Effectiveness, and Cultures

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–2 Chapter Objectives 1.Identify and describe four characteristics common to all organizations. 2.Identify and explain the two basic dimensions of organization charts. 3.Contrast the traditional and modern views of organizations. 4.Describe a business organization in terms of the open- systems model. 5.Explain the term learning organization. 6.Explain the time dimension of organizational effectiveness.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–3 Chapter Objectives (cont’d) 7.Explain the role of complacency in organizational decline and discuss the ethics of downsizing. 8.Describe at least three characteristics of organizational culture and explain the cultural significance of stories.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–4 What is an Organization? An Organization A cooperative and coordinated social system of two or more people with a common purpose.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–5 What is an Organization? (cont’d) 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.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–6 Classifying Organizations Business Organizations Purpose: to make a profit in a socially acceptable manner. Nonprofit Organizations Purpose: to provide a specific public service to some segment of society without attempting to earn a profit. Mutual-Benefit Organizations Purpose: to provide a vehicle for individuals to pursue their own self-interests.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–7 Classifying Organizations (cont’d) Commonweal Organizations Purpose: To provide standardized public services to all members of a society without attempting to earn a profit.

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Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–9 Organization Charts Organization Chart (Table) A visual display of an organization’s positions and lines of authority that is useful as a blueprint for deploying human resources. Vertical and Horizontal Dimensions Vertical hierarchy establishes the chain of command. Horizontal specialization denotes the division of labor. A Case Study: The Growth of an Organization Generally, specialization is achieved at the expense of coordination when designing organizations.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–10 Figure 9.1 The Evolution of an Organization Chart

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–11 Contrasting Theories of Organization The Tradition View The organization’s primary goal is economic efficiency. The organization is characterized by closed-system thinking and no or little interaction with the external environment. Planning and strict control are used to eliminate uncertainty in the organization. The organization’s surrounding environment is fairly predictable.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–12 Contrasting Theories of Organization (cont’d) The Modern View 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.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–14 The Traditional View of Organizing The Early Management Writers Henri Fayol Frederick W. Taylor Four traditional principles of organization A well-defined hierarchy of authority. Unity of command. Authority equal to responsibility. Downward delegation of authority.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–16 The Traditional View of Organizing (cont’d) 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

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–18 Challenges to the Traditional View of Organizations Bottom-up Authority Acceptance theory of authority (Chester Barnard) A leader’s authority is determined by the willingness of subordinates to comply with authoritative communications only when the message is understood. the message is consistent with the organization’s purpose. it serves the subordinate’s interests. the subordinate is able to comply.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–19 Organizations as Open Systems: A Modern View Characteristics of Open Systems Interaction with the external environment through permeable boundaries. Synergy in combining resources to achieve superior performance. Dynamic equilibrium in maintaining internal balances with help from the external environment. Equifinality in achieving similar ends through different means.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–20 Figure 9.2 Open-System Model of a Business

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–21 Organizations as Open Systems: A Modern View (cont’d) Developing an Open-System Model Interacting organizational subsystems: Technical (production function) subsystems define the organization’s transformation process. Boundary-spanning subsystems provide the organization’s interface with the external environment. Managerial subsystems bridge (control and direct) the technical and boundary-spanning subsystems.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–22 Extending the Open-System Model: The Learning Organization 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)

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–23 Extending the Open-System Model: The Learning Organization (cont’d) Five Critical Learning Skills Solving problems. Experimenting. Learning from organizational experience/history. Learning from others. Transferring and implementing.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–24 Figure 9.3 Garvin’s Model of the Learning Organization

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–25 Organizational Effectiveness Effectiveness A measure of whether or not organizational objectives are accomplished. Efficiency A measure of the relationship between inputs and outputs for the organization. No Silver Bullet There is no single approach to the evaluation of effectiveness that is appropriate in all circumstances or for all organizational types.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–26 Organizational Effectiveness (cont’d) The Time Dimension of Organizational Effectiveness Involves meeting organizational objectives and prevailing societal expectations in the near future. adapting to environmental demands and developing as a learning organization in the intermediate future. surviving as an effective organization into the distant future.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–27 Figure 9.4 The Time Dimension of Organizational Effectiveness Source: Adapted from James L. Gibson, John M. Ivancevich, and James H. Donnelly, Jr., ORGANIZATIONS: BEHAVIOR, STRUCTURE, PROCESSES, 5th ed. (Homewood, IL: Richard D. Irwin, Inc.), p. 37. © l991.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–28 Organizational Decline The weakening of an organization by resource or demand restrictions and/or mismanagement. Sources of decline Mismanagement (complacency) Unsteady economic growth Resource shortages Global competition End of the cold war Reactions to decline Downsizing, demassing, reengineering Organizational Effectiveness (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–29 Figure 9.5 Complacency Can Lead to Organizational Decline

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–30 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. Organizational Effectiveness (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–31 Downsizing: An Ethical Perspective Downsizing: the planned elimination of positions or jobs. Commodity versus human resources viewpoints of the worth of employees. Does downsizing work? Not nearly as well as expected. Only 30-45% of downsized companies report increased productivity and/or profits. Organizational Effectiveness (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–32 Ways of Making Layoffs a Last Resort Redeployment Downgrading Work sharing Job banks Employee sharing Voluntary early retirement Early warning of facility closings Outplacement Helping layoff survivors Organizational Effectiveness (cont’d)

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–33 Organizational Cultures Organizational Culture The collection of shared beliefs, values, rituals, stories, myths, and specialized language that creates a common identity and sense of community. The “social glue” that binds an organization’s members together.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–34 Organizational Cultures (cont’d) Characteristics of Organizational Cultures 1.Collective: organizations are social entities. 2.Emotionally charged: the organization’s culture serves as a security blanket to its members. 3.Historically based: trust and loyalty result from long- term organizational associations. 4.Inherently symbolic: actions often speak louder than words. 5.Dynamic: culture promotes stability and control. 6.Inherently fuzzy: ambiguity, contradictions, and multiple meanings are part of culture.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–35 Organizational Cultures (cont’d) Forms and Consequences of Organizational Cultures Organizational values: shared beliefs about what the organization stands for. The degree of sharing and intensity determine whether an organization’s culture is strong or weak.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–36 Figure 9.6 Forms and Consequences of Organizational Culture

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–37 Organizational Cultures (cont’d) The Organizational Socialization Process Organizational socialization: the process of transforming outsiders into accepted insiders. Orientations Orientation programs familiarize new employees with the organization’s history, culture, competitive realities, and compensation and benefits. Storytelling Recitations of heroic or inspiring deeds provide “social roadmaps” for new employees.

Copyright © Houghton Mifflin Company. All rights reserved.Lecture Outline and Line Art Presentation, 9–38 Organizational Cultures (cont’d) Strengthening Organizational Cultures Symptoms of a weak organizational culture Inward focus Morale problems Fragmentation/inconsistency Ingrown subcultures Warfare among subcultures Subculture elitism