1. Introduction to Organization
Chapter 1
Introduction to Organization

2. Scope of Chapter 1 Purpose and coverage of the book
Key terms: organizing, organizations, and organization
Components of organization
Main organizational choices
Signs of organizational deficiencies
Strategic contribution of organization

3. What is Organization?
Organization assists the management of a collective activity by providing:
Structure and procedures
Ways of managing fundamental processes
Arrangements for transacting across corporate and national boundaries

4. Organizing, Organization, and Organizations
Organizing: the process of arranging collective effort to achieve an outcome superior to that of individuals working alone
Organization: the regularities of organizing in terms of a structure of roles, tasks, and procedures; processes; and arrangements to transact across the boundaries of an organization
Organizations: the units within which organizing takes place – usually having a formal identity

5. Components of Organization (1)
Structure and procedures
Basic structure:
Hierarchy – levels, layers, designated authority, reporting lines
Specialization – roles, groups, and units
Procedures:
Rules and standards
Schedules
Systems

6. Components of Organization (2)
Ways of managing fundamental processes
Integration & coordination
Control
Reward

7. Components of Organization (3)
Boundary-crossing
Outsourcing
Virtual Organization
Alliances
Organizing across borders

8. Fundamental Purpose of Organization
It enables members of an organization to:
undertake wide variety of activities according to a division of labor (specialization)
coordinate their activities
It also defines the boundaries of the organization and its interfaces with the environment

9. Main Organizational Choices
See Box 1.2 Chapter 1

10. How Does Organization Contribute to Performance?
Management has long been defined as: “getting things done through other people”
Therefore how people are organized will affect the contribution they make through their collective effort

11. Organizational Arrangements can Affect People’s Performance
They can motivate behavior - e.g. via defining jobs & goals, reward systems
They can facilitate behavior - e.g. via providing for communication
They can constrain behavior - e.g. via restrictive rules & procedures

12. Signs of Organizational Deficiencies
Depressed motivation and morale
Decision making is slow and of poor quality
Conflict and lack of co-ordination
Failure to respond innovatively to changing circumstances
Rapidly rising costs, especially in administration

13. The Strategic Contribution of Organization

14. “Organizational Capabilities Represent the Last Truly Sustainable Source of Competitive Advantage”
People are the key strategic resource
Organization is concerned with the ability to organize and motivate people in unique ways to achieve strategic objectives

15. “The Last Truly Sustainable Source of Competitive Advantage” (2)
From a strategic perspective, organization is expected to make an important contribution to:
dealing with changing contingencies (e.g. growth)
effectively implementing strategy, so gaining competitive advantage
managing diversity (e.g. international expansion)
promoting a combination of efficiency and innovation

16. The Key Drivers of Business Strategy that Organization has to Support
Customer demands for higher quality & service
Ability to attract and retain the best people
International competition
New and rapidly changing technologies

17. So, the Design of Organization has to “Fit” With:
Strategy (tasks and priorities)
People
Environment
Technology (physical and informational)