Organizational Theory Exam Notes

Theory: A general principle or set of principles that is offered to explain observed phenomena and that is falsifiable; a set of concepts whose proposed relationships offer explanation, understanding, or appreciation of a phenomenon of interest. The fact that it is falsifiable = really important part.

Classical Influences on OT

  1. Sociological Stream (Durkheim, Weber, Marx): focused on the changing shapes and roles of formal organizations in society; Broader influences of industrialization on the nature of work and the consequences for workers
  2. Classical Management Theory (Taylor, Fayol, Barnard): focused on practical problems faced by managers of industrial orgs; Scientific Management; Universal principles for rational administration of org activities

Morgan Metaphors: Machine, Organism, Brain, Culture, Political (psychic, domination)

Bolman and Deal Frames: Symbolic (like Morgan’s culture), Structural (machine), Human Resource (organism), Political

Hatch Epistemologies: (what we think it’s possible to know – who gets to say what the truth is? “Truth-making”)

  1. Modernism: measure, predict, control (operationalizing variable, scales to measure)
  2. Symbolic-Interpretivism: multiple truths; reality is the meaning we give to things.
  3. Post-Modernism: does anything exist at all? Deconstruct and look at who is doing the talking and who has control (psychic prisons) – all about power. Who is controlling the language to dominate people? A relativistic approach that abandons notions of universal criteria for truth and excellence: knowledge is fundamentally fragmented. Views questions of right/wrong, good/bad as social constructions that are usefully deconstructed. Challenge modernist quest for objective truth and unifying views.

Enactment theory by Karl Weick, a Symbolic-Interpretivistic Frame: [1] When you use concepts like org, you create phenomenon you are studying [2] Focuses on subjective origin of org realities [3] We make patterns of meaning out of our activities, then assume that these meanings have an objective reality of their own.

General Systems Theory (a modern approach): essential laws and principles that explain all systems. Supersystems, systems, and subsystems. Organizations as open systems [1] depend on the environment for inputs [2] inputs are transformed into outputs [3] outputs become inputs for other systems

Organizations as Machines
  • Like machines, orgs function as a network of independent parts arranged in a specific sequence
  • Classical Management Theory (Henri Fayol): Managers plan, organize, command, and control. Workers are made to fit the requirements of the org. Focused on the practical problems faced by managers of industrial organizations; Scientific Management; Universal principles for the rational administration of organizational activities (also Taylor, Urwick, and Chester Barnard). Army. Division of work, authority, responsibility, discipline, top to bottom decision making.
  • Scientific Management (Frederick Taylor) [1] Shift responsibility for the organization of work from worker to manager. (Managers think/plan; workers do) [2] Use scientific methods to determine the most efficient way of doing work (time and motion) [3] Select the best person to fit each job; [4] Train worker to work efficiently [5] Monitor Performance to ensure appropriate work procedures are followed and appropriate results achieved.
  • Strengths: works well under conditions which machines work well: straightforward tasks, stable environment, same product reproduced. Precision is important. Human machine parts are compliant.
  • Weaknesses: Difficulty adapting to change. Mindless, unquestioning bureaucracy. Dehumanizing effect on employees
Organizations as Organisms
  • Like organisms, orgs operate most efficiently only when their needs are satisfied. Needs met/debilitated by environmental forces
  • Open System Theory: orgs (like organisms) are open to their environment and must achieve an appropriate relation with environment for survival. Consist of interrelated subsystems. Just as molecules, cells, and organs are subsystems of orgs, individuals, groups, and dep’t are subsystems of organizations. Subsystems must function congruently for orgs to survive
  • Contingency Theory: different types (species) of orgs function more efficiently in different environments [1] Machine bureaucracy/divisionalized form: simple, stable environment [2] Professional bureaucracy (more autonomy to staff): relatively stable environment & complex-ish task [3] Simple structure (informal and flexible): unstable environment; simple tasks requiring quick decisions [4] Adhocracy (project teams, matrix org): complex, uncertain tasks in turbulent environment
  • Management experts disagree on explanation for how orgs strike an appropriate relationship with environment. Some say contingency theory; others say survival of the fittest
  • Survival of the Fitting: Organizations as Organisms === Open Systems. Homeostasis. Entropy. Structure, function, differentiation, integration. Requisite variety. Equifinality
  • Strengths: emphasizes importance of orgs relationship with environment (open systems). Focuses on the needs that must be satisfied for survival. Recognizes that options exist in different types of orgs
  • Weaknesses: view orgs and environments as too concrete. Orgs are products of visions, ideas, and norms – all more fragile than the material structure of an organism. There’s an assumption of “functional utility” (that elements work together for the good of the whole like arms, legs, heart, etc.) – not necessarily the case

Elements in the Population Ecology Model of Organizations: [1] Variation (large number of variations appear in the population of organizations) [2] Selection (some organizations find a niche and survive) [3] Retention (a few organizations grow large and become institutionalized in the environment).

Grow large and prosper and become institutionalized. Requisite variety, selection, retention (environment provides resources in order to retain). Strengths and a limitation: idea of control – ignores that organisms have some control, but focuses on times they don’t have control. Limitations: where does an organism actually have control; active adaptation, not passive.

Population Ecology Theory – how things come to be institutionalized. There are three mechanisms for institutional adaptation: [1] Mimetic [2] Coercive and [3] Normative. In utilizing the mimetic mechanism, reason to become similar is uncertainty. Events that lead to this are innovation or visibility. Social bias for this institutional adaptation culturally supported. An ex: re-engineering or benchmarking. In coercive mechanism, reason to become similar is dependence. The events that lead to this may be political law, rules, or sanctions. Social bias for this adaptation is legal. An example would be pollution controls or school regulations. In normative mechanism, reason to become similar is duty or obligation. Event that leads to this tends to be professionalism (ie: certification or accreditation). Social bias is moral. An example would be accounting standards.

Resource Dependency Theory take a more pro-active approach to controlling the environment. Minimize dependence and keep an eye on resources that are critical to your survival. Minimize threats and think about vulnerabilities. Key concepts [1] Resource, [2] ownership, and [3] control. Power dependence relationships, but examining what resources an org needs, what are the sources, and who is influencing the availability of these resources. Strategies companies use: establishing multiple suppliers, joint ventures, merger, vertical integration, establishing alliances, merging with competitors, personal relationships, lobbying, marketing, recruitment. Modernism. Strengths: not a very granular theory – doesn’t define resources. Perpetuates the illusion of control. Suggests that organisms can figure out what they need. Ignores non-resource pressures. Weaknesses: not a level playing field. Mom and Pop vs. Walmart.

Organizations as Brains
  • This metaphor draws attention to the importance of information processing, learning, and intelligence
  • Orgs as Information Processing Brains (2 perspectives) [1] Simon: Orgs can never be perfectly rational because members have limited info processing abilities. Orgs settle for “good enough.” [2] Info-processing tools have been developed (ie data management systems) that lead to rational decisions. These tools serve as a centralized brain, regulating overall org activity
  • Learning orgs (cybernetics) – Single-looped learning: detecting and correcting error relative to operating norms. Double-looped learning: more difficult (esp. in mech orgs) and involves reevaluating & adjusting norms; detecting and correcting. Step 1: scan & anticipate change in environment to detect variations. Step 2: develop ability to question, challenge, & change operating norms and assumptions. Step 3: allow strategic direction & pattern of org to emerge
  • Holographic brains: five principles [1] Build the “whole” into all “parts” (most imp’t) Common vision, values, and culture. Provide information systems that can be accessed broadly. Design holographic structure to allow growth while staying small (ie org grows to 200 people and spins off to form another unit). Create holistic teams with diversified roles. [2] Importance of redundancy (a) Org members acquire multiple skills and can substitute jobs with one another. (b) Give same job to multiple teams to work independently then come together. [3] Requisite variety (how much redundancy is necessary?): Diversity (redundancy) of an org must match the diversity of its environment in order to deal with environmental challenges. All elements in the org should embody critical dimensions of the environment so they can cope with environmental demands. [4] Minimal Critical Specification orgs must have enough autonomy to allow for innovation to occur. Mangers should define no more than necessary to launch a particular initiative. [5] Learning to learn requires capacity for double-looped learning (norms can be changed)
  • Strengths: Suggestions for creating/identifying learning requirements for orgs. Offers new way of thinking about implications of new info technology to support learning (ie: tech used to develop the “whole” into all of its “parts” by disseminating info broadly. Provides a new theory of management contrary to centralized leadership. The brain metaphor allows groups to develop their own norms through double-looped learning.
  • Weaknesses: no coherent image of the brain to which everyone subscribes. Power is redistributed with double-looped learning (leaders may be upset when norms are revised and feel they’ve lost power)
Organizations as Culture
  • Concept of culture signifies that dif groups of people have dif ways of life. Metaphor explains: (a) the idea that org is a cultural phenomenon, (b) how culture varies from one society to the next, (c) patterns of org culture, (d) how culture evolves
  • Orgs as a cultural phenomenon: compared to jungle tribes, idea of orgs exemplifies a type of culture
  • Culture varies among dif societies: culture shapes the org. (US: “We’re #1”) (Japan: collectivist org culture)
  • Patterns of corp culture/subculture: orgs are mini-societies. Historical explanations within org usually exist for dif aspects of culture. Gender, race, language, religion, etc. affect development of culture. Note: influential, formal leaders do not have a monopoly on development of culture
  • Cultural evolution (creating and sustaining culture): Culture is a process of reality construction that allows people to see and understand events/actions in distinctive ways Karl Weick labels this “enactment” and stresses the proactive role people unconsciously play in developing culture. Culture is ongoing, proactive process of reality construction. Successful orgs build cohesive cultures around norms, values, and ideas. Changing the org means changing the culture (challenging to transform mindsets and visions)
  • Strengths: directs attention to symbolic significance of many aspects of org. Shows how org rests in shared systems of meaning. Leaders are imp’t in developing culture. Recognizes relationship of org and environment are socially constructed. Contributes to understanding of org change (effective change depends on culture)
  • Weaknesses: may promote manipulation such as ideological control or values by manipulative leader
Organizations as Political Systems
  • By recognizing an org is intrinsically political (ppl have diverse and conflicting interests), much can be learned about problems and legitimacy of management as a process of gov’t and relations between org and society
  • Orgs can be characterized in terms of a particular style of political rule: autocracy (power held by an individual), bureaucracy (rule exercised through written word), technocracy (rule exercised by knowledge, expert power), codetermination (opposing parties combine in joint management – like unions), representative democracy (election of officers), and direct democracy (everyone involved in management – voting)
  • Org politics analyzed by focusing on relations btwn interests, conflict, and power. Interests = 3 competing interests within ppl. Goal is to strike a balance. Task interests (work one has to perform), Career interests, Extramural interests (personal life). Conflict = arises when interests collide. It will always be present in orgs. Power = medium through which conflicts of interest are ultimately resolved. Sources of power include: formal authority, control of scarce resources, use of org. structure/rules, control of decision process, control of knowledge/info, control of boundaries, ability to cope with uncertainty, control of technology, personal alliances/networks, control of counterorganizations (unions), symbolism and management of meaning, gender relations, structural factors that define stage of action, and the power one already has
  • “Pluralist” image of orgs recognizes plural nature of interests, conflicts, and sources of power. Groups compete for a share in the balance of power. Management focuses on balance for teamwork
  • Conflict is viewed as inherent and potential positive. Five styles of conflict management: Competing, Avoiding, Compromising, Collaborating, & Accommodating
  • Strengths: Stresses politics is inevitable feature of org. Emphasizes key role of power in determining political outcomes. Explodes myth of org rationality; rationality is always interest-based. Points to tensions that stem from diverse interests – lots of loosely coupled systems. Makes us aware of motivation behind political behaviors of others.
  • Weaknesses: Can make us look everywhere for hidden agenda. May overstate power and importance of individual and underplay system dynamics that determine what becomes political and how politics occurs
Organizations as Psychic Prisons
  • Orgs and members become trapped by constructions of reality that give an imperfect grasp on the world. Can get trapped by favored ways of thinking. This metaphor encourages us to be more sensitive about the hidden meaning of our everyday actions and preoccupations and to learn how to transform energy in productive ways.
  • Sometimes orgs become trapped by what used to work, though environment is ever-changing. This trap prevents new ways of thinking. Unconscious concerns among members (repressed sexuality) can affect org function. Patriarchy is a conceptual prison, giving dominance to males/traditional male values. Through orgs we create the myth that we’re actually in control (quest for immortality). When problems arise with group functioning, group may withdraw from performing task. Shadow of “repressed opposites of rationality” (Jung) manifested in unofficial politicking, stress, lying, and sabotage.
  • Strengths: Contributes to our understanding of dynamics and challenges of org. change. Allows us to understand unconscious concerns projected in dysfunctional manner and to find ways of releasing energy in a more positive form. Suggests we pay more attn. to irrational (aggression, fear) drivers and link between rational and irrational: both are real.
  • Weaknesses: Needs to focus on all the ideological processes through which we create and sustain meaning, not just the unconscious. May place too much emphasis on cognitive processes, while neglecting material basis in creating, sustaining, and changing orgs. Can’t liberate us from all undesirable psychological and cognitive constraints. May seem to encourage an attempt to control others’ minds
Organizations as Flux and Transformation
  • To understand secrets of the universe, we have to understand generative processes that link implicate (state of the universe at any point) and explicate (order manifested in the world around us) orders.
  • Theory of Autopoiesis: all living systems ore organizationally closed, autonomous systems of interaction that make reference only to themselves (as opposed to open systems which interact with environment). Living systems are characterized by three features: autonomy, circularity, and self-reference (ie: A bee has a chain of self-referring physiological processes, each with its own circular organization. It lives in a society of bees where relations are also circular. In turn, the relationship btwn society of bees and environment is also circular.) The environment is really a part of the system’s org because it is a part of its domain of essential interaction. Orgs often fail to realize the environment is part of its identity, often treating it as a dumping ground (pollution, etc)
  • Chaos and Complexity: Orgs are complex, nonlinear systems. Random disturbances within the system can produce unpredictable events and relationships that reverberate throughout the system, creating novel patterns of change. Change occurs when systems fall under the influence of a new attractor (the lake) and the old attractor becomes insignificant (the noisy fridge). Behaviors change based on which attractor is providing influence. A “bifurcation point” is the point at which a system has been pushed far from its state of equilibrium (under the influence of one attractor) to a fork in the road where another attractor may potentially take over.
  • Loops, not lines. Orgs are complex, so problems can be better understood by investigating them as a system of mutual causality. Massive path diagram. With all these interrelationships, an intervention will reverberate throughout entire org. Attempts to solve problems in terms of “cause” and “effect” won’t work because one cause is tied to many effects. Adjusting the cause will have a wide range of effects
  • Contradiction and Crisis. The logic of dialectical change. Dialectical View (Marxist perspective): the world evolves as a result of internal tensions between opposites which fuel social change. Every solution leads to new problems. For example, in an org such opposites may include innovation vs. avoiding mistakes, thinking long term vs. immediate results, collaboration vs. competition, etc. Implications for management: creates an awareness of contradictions shaping org life. Provides methods for managing paradox. Managers need to reframe tensions so that new patterns of development can unfold and change can occur. Step 1: recognize that both dimensions of the contradiction (paradox, sources of tension) that accompany change have merit, so don’t try to focus exclusively on avoiding mistakes while disallowing innovation. Step 2: find ways of creating contexts that can mobilize and retain desirable qualities on both sides (avoiding mistakes and innovation) while minimizing negative dimensions. (In other words, reframe contradictions positively.)
  • Strengths: explains sources and logic of change.
  • Weaknesses: discouraging, as it makes us aware of our relative inability to control complex systems. Order is only apparent in hindsight.
Organizations as Instruments of Domination
  • This metaphor is an argument concerning ills of org (very liberal view of orgs) – they are evil entities that exploit their workers for self-interest
  • Lower skilled workers (secondary labor market) are hired and fired with changes in business cycle, while those in the primary labor market enjoy higher pay and more job security. Work related accidents cost an estimated 56,000 American lives/year. It is often cheaper to pay accident compensation rather than to eliminate accidents. Penalties to firms who operate high-risk plants are not stiff enough to shut them down. Multinational orgs exploit host countries, extracting raw materials and using citizens as wage slaves. This relocation undermines power of Western unions.
  • Strengths: forces us to recognize that domination may be intrinsic to the way we organize and not just an unintended side effect. Exposes the seamy side of org life. Encourages us to deal with exploitation.
  • Weaknesses: Goes too far – articulates an extreme form of left-wing ideology.
Other Key Topics in Org Theory

Industrial Development 3 phases of Western industrial development (Burns):

  1. The factory system: the use of machines to extend and enlarge the productivity of work.
  2. Increased technical complexity of manufacturing operations: parallel growth in social organization and bureaucracy (control, routine, specialization).
  3. Production overtakes demand, leading to new customer focus, new techniques to stimulate consumption, search of new markets, and new technical developments.
  • Industrial societies: organized around the control of labor in the production of goods
  • Post-industrial societies: organized around the creation of knowledge

Organizational Ecology
[1] Industry: competitors, industry size and competitiveness, related issues.
[2] Raw Materials: suppliers, manufacturers, real estate, services.
[3] Human Resources: labor market, employment agencies, universities, training schools, employees in other companies, unions.
[4] Financial Resources: stock markets, banks, savings and loans, private investors.
[5] Market: customers, clients, potential users of products and services.
[6] Technology: techniques of production, science, research centers, automation new materials.
[7] Economic Conditions: recession, unemployment rate, inflation rate, rate of investment, economics, growth.
[8] Government: city, state, federal laws and regulations, taxes, services, court system, political processes.
[9] Socio-cultural: age, values, beliefs, education, religion, work ethic, consumer and green movements.
[10] International: competition from and acquisition by foreign firms, entry into overseas markets, foreign customs, regulations, exchange rates

Org Strategies for Controlling External Environment
[1] Establish Interorganizational Linkages: Ownership. Contracts, joint ventures. Cooptation, interlocking directorates. Executive recruitment. Advertising, public relations.
[2] Control the Environmental Domain: Change of domain. Political activity, regulation. Trade associations. Illegitimate activities

  • Traditional Orientation: Adversarial === Suspicion, competition, arm’s length. Price, efficiency, own profits. Limited info &feedback. Legal resolution of conflict. Minimal involvement and up-front investment. Short-term contracts. Contract limiting the relationship
  • New Orientation: Partnership === Trust, addition of value to both sides, high commitment. Equity, fair dealing, all profit. Electronic linkages to share key information, problem feedback and discussion. Mechanisms for close coordination, people on-site. Involvement in partner’s product design and production. Long-term contracts. Business assistance beyond the contract

Structure is the relationships among the parts of an organized whole. It is the designation of formal reporting relationships, grouping of individuals into departments, design of systems to ensure effective communication, coordination, and integration across departments. In classical and early modernist approaches, structure is static and highly routinized.

Open systems theory: organic growth & development lead to change and evolution in structure. SI and postmodern approaches: focus on processes and relationships; social structure influences and is influenced by the everyday interactions of employees

Differentiation and integration is fundamental issue in organizing. Differentiation (degree differences in function are separated) makes it harder for employees to perform activities/coordinate w others. Strain on coordination leads to pressure for integration.

The structural lens:
[1] Orgs exist to achieve established goals and objectives
[2] Orgs increase efficiency, enhance performance through specialization, clear division of labor
[3] Appropriate coordination and control ensure that diverse efforts mesh
[4] Organizations work best when rationality prevails
[5] Structures should be designed to fit the organization’s goals, technology, & environment
[6] Problems arise from structural deficiencies and can be resolved through restructuring.

Organizations may be integrated by:
[1] Functional groups based on knowledge or skill
[2] Units created on basis of time
[3] Groups organized by product
[4] Groups organized by client or customer
[5] Groupings around place or geography
[6] Grouping by process

  • Vertical structure is designed for efficiency. It’s dominant in specialized tasks, strict hierarchy, and vertical communication and reporting systems. Many rules but few teams or integrators. Centralized decision making. (Note: a bureaucracy is decentralized.)
  • Horizontal structure is designed for learning. The structure dominates in shared tasks, empowerment, relaxed hierarchy, few rules, and face-to-face commun. Many teams. Decentralized decision making.

The structural design for grouping employees into departments may either be functional grouping or divisional grouping

[1] Functional Organizational Structure (ie: Engineering, Marketing). Strengths: Allows economies of scale within functional departments; Enables in-depth knowledge and skill development; Enables organization to accomplish functional goals; Is best with only one or few products. Weaknesses: Slow response time to environmental changes; May cause decisions to pile on top, hierarchy overload; Leads to poor horizontal coordination among departments; Results in less innovation; Involves restricted view of organizational goals.

[2] Divisional Organizational Structure (ie: Product Division 1, Product Division 2). Strengths: Suited to fast change in unstable environment; Leads to client satisfaction because product responsibility and contact points are clear; Involves high coordination across functions; Allows units to adapt to diffs in products, regions, clients; Best in large orgs w/ several products; Decentralizes decision-making. Weaknesses: Eliminates economies of scale in functional depts; Leads to poor coordination across product lines; Eliminates in-depth competence and tech specialization; Makes integration and standardization across product lines difficult

Matrix Organizational Structure (could be functional or divisional). Strengths: Achieves coordination necessary to meet dual demands from customers; Flexible sharing of human resources across products; Suited to complex decisions and frequent changes in unstable environment; Provides opportunity for both functional and product skill development; Best in medium-sized organizations with multiple products. Weaknesses: Causes participants to experience dual authority, which can be frustrating and confusing; Means participants need good interpersonal skills and extensive training; Is time consuming; involves frequent meetings and conflict resolution sessions; Will not work unless participants understand it and adopt collegial rather than vertical-type relationships; Requires great effort to maintain power balance

Horizontal Structure Strengths: Flexibility and rapid response to changes in customer needs; Directs the attention of everyone toward the production and delivery of value to the customer; Each employee has a broader view of organizational goals; Promotes a focus on teamwork and collaboration—common commitment to meeting objectives; Improves quality of life for employees by offering them the opportunity to share responsibility, make decisions, and be accountable for outcomes. Weaknesses: Determining core processes to organize around is difficult and time-consuming; Requires changes in culture, job design, management philosophy, and information and reward systems; Traditional managers may balk when they have to give up power and authority; Requires significant training of employees to work effectively in a horizontal team environment; Can limit in-depth skill development

Structural Dilemmas
Differentiation vs. Integration
Gap vs. Overlap
Underuse vs. Overload
Lack of Clarity vs. Lack of Creativity
Excessive Autonomy vs. Excessive Interdependence
Too Loose vs. Too Tight
Goalless vs. Goalbound
Irresponsible vs. Unresponsive

Org contextual variables that influence structure: Culture, Size, Technology, Environment, Strategy goals

Symptoms of Structural Deficiency: Decision making- delayed or lacking in quality. Org doesn’t respond innovatively to changing environment. Too much conflict from departments being at cross purposes evident.

Donaldson: Design structure to fit strategy (Strategy –> contingencies –> task –> coordination mechanisms –> structure)
– Coordination mechanisms
– Task interdependence
– Size
– Innovation
– Diversification
– Geographical diversification

Efficient Performance vs. Learning Organization

EfficientVertical, functional groupingsTasks - routine, narrowly definedFormal control systems manage complex infoTop management strategy- competitiveSuccess in stable environment: culture may become rigid
LearningHorizontal workflows, processesEmpowered roles emphasizedWidespread sharing of info, open communication channelsCollaborative strategy emergesCulture adaptive to external environment

Porter’s Competitive Strategies

Competitive ScopeCompetitive EmphasisStrategyExample
BroadLow CostLow cost leadershipWal-Mart
BroadUniquenessDifferentiationStarbucks
NarrowLow CostFocused low-cost leadershipEnterprise
NarrowUniquenessFocused differentiationEdward Jones

Miles and Snow’s Strategy Typology

ProspectorDefenderAnalyzerReactor
Learning org, flexible, fluid, decentralized; strong R&D; values creativity, innovationEfficiency; centralized authority, tight cost control; emphasis on production efficiency/low overhead; close supervision, little empl involvementBalances efficiency and learning; tight cost control w/ flexibility and adaptability; efficient production for stable product lines; emphasis on creativity, researchNo clear org approach, design characteristics may shift abruptly depending on current needs

Rogers: in order for technology to evolve, the diffusion process needs [1] Clear relative advantage [2] Compatibility with existing values [3] Complexity [4] Ability to give it a trial [5] Observability

  • Importance of Orgs: Bring together resources to achieve desired goals and outcomes. Produce goods and services efficiently. Facilitate innovation. Adapt to and influence a changing environment. Create value for owners, customers, and employees.
  • What do Orgs do? Organizational Strategy. Military terminology applied to organizations in the 1950s. Traditionally defined as top management’s planned efforts to influence organizational outcomes by managing the organization’s relationship to its environment.
  • Problems with the rational model: Ideal vs. reality. Built on top-down linear model in which ideas flow from top to bottom. Separation between strategy formulation and implementation (Communication problems. Motivation problems)
  • Strategy as symbol: Reverses direction of causality: implementation precedes analysis. Legitimizes organizational actions. Strategy can be inferred from what works; action leads to strategy. We look for leadership in the form of strategy. Strategy stretches into the environment; goals stretch into the org. Official goals (mission) for the purpose of legitimacy. Operative goals for the purpose of employee direction and motivation, decision guidelines, and performance standards.

Service vs. Product/Manufacturing Organization

Service OrgFew boundary rolesGeo dispersion is vastDec. making- decentralizedLower formalizationHigh skill, emphasis on interpersonal
Product OrgMany boundary rolesGeo dispersion is smallDec. making- centralizedHigher formalizationLow skill, emphasis on technical

Perrow’s Framework for Departmental Technologies

RoutineCraftEngineeringNon-Routine
High analyzability, low varietyLow analyzability, low varietyHigh analyzability, high varietyLow analyzability, high variety
Sales positions, clerical, auditingPerforming arts, tradesLegal, engineering, accountingStrategic planning, appl. research
Mechanistic structureMostly organic structureMostly mechanistic structureOrganic structure

Woodward’s Study of Technical Complexity

Small-batch/Unit ProductionCustomized work that is hand-madeLow mgmt. intensityOrganic structureEx: Steinway pianos
Large-batch/Mass ProductionLong production runs w/ standardized partsMedium mgmt. intensityMechanistic structureEx: Assembly line for cars
Continuous Process ProductionNo starting/stopping, completely mechanizedHigh mgmt. intensityOrganic structureEx: Liquor producers/ brewers

Thompson’s Classification of Interdependence and Management Implications

 PooledSequentialReciprocal
DescriptionLow communication, divisional structure, lots of standardization, rules, procedures; low priority for locating units close togetherMedium comm, task forces focus on plans, schedules, feedback; med. priority for locating units close togetherHigh comm, horizontal structure, focus on plans, schedules, feedback, high priority for locating units close together
ExampleBank, basketballAssembly line, footballHospital, basketball

Knowledge Management

  • Explicit– Aim: provide high quality, reliable, fast info systems for access of codified reusable knowledge (people-to-docs); strategy: develop an electronic document system that codifies, stores, disseminates, allows reuse of knowledge; tends to invest heavily in info. tech. (data warehousing, knowledge mapping, e-libraries, intranets, networks)
  • Tacit– Aim: channel individual expertise to provide creative advice on strategic problems (person-to-person); strategy: develop networks linking people so tacit knowledge can be shared; tends to invest moderately in info. tech.; goal of facilitating convos (dialogue, storytelling, comm. of practice)

Orgs exist to achieve established goals and objectives. Orgs increase efficiency and enhance performance through specialization and clear division of labor. The appropriate coordination and control ensure that diverse efforts mesh. Orgs work best when rationality prevails and structures should be designed to fit the organization’s goals, technology, and environment. Problems arise from structural deficiencies and can be resolved through restructuring.

Assumptions in the structural approach: (1) Formal rules and regulations; (2) Impersonal treatment; (3) Hierarchical structure; (4) Authority structure; (5) Lifelong career commitment; (6) Rationality

How is your organization integrated? [Refer “orgs may be integrated by”] What are your organization’s goals? Formal: stated mission; Honorific fictitious goals crediting the org w/ desirable qualities; Taboo: goals an org pursues but doesn’t talk about; Stereotypical: goals any reputable org should have; Existing: goals quietly pursued even though inconsistent w/ org’s stated values and self-image.

The symbolic frame highlights: What is most important is not what happens, but what it means

  • Activity and meaning are loosely coupled; events have multiple meanings
  • People use symbols to resolve confusion, increase predictability, and find direction in the face of uncertainty
  • Events and processes may be more important for what is expressed than for what is produced
  • Culture is the glue that holds the organization together

Schein’s definition: Culture is a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to these problems

Levels of culture: Artifacts <-> Espoused beliefs and values <-> Underlying assumptions

Organizational Symbols

  • Symbols reveal and communicate culture (McDonald’s golden arches/legend of Ray Kroc; Harvard’s myth, mystique, rituals)
  • Myths: deeply-rooted narratives that explain, express and build cohesion — Often rooted in origin legends (“how it all began”)
  • Values: what an organization stands for and cares about
  • Vision: image of future rooted in core ideology

Organizations as Cultures

  • Organizations have cultures or are cultures?
  • Definitions of culture: “How we do things around here”
  • Culture is both product and process (Embodies accumulated wisdom; must be continually renewed and recreated as newcomers learn old ways and eventually become teachers)
  • Managers who understand culture are better equipped to understand and influence organizations

Organizational Process as Theatre

  • Meetings as “Garbage cans” – attract an unpredictable mix of problems looking for solutions, solutions looking for problems, and participants seeking opportunities for self-expression
  • Planning as ceremony to maintain legitimacy and reinforce participants’ bonds: Plans are symbols. Plans become games. Plans become excuses for interaction. Plans become advertisements.
  • Evaluations often fail in intended goals of improving performance and identifying strengths and weaknesses. Ceremony signals the organization is well-managed and cares about performance improvement.
  • Collective Bargaining – Public face: intense, dramatic contest. Private face: back-stage negotiation, collusion
  • Power exists in eye of beholder – you are powerful if others think you are. May be attributed based on outcomes

Organizations judged by appearance. The right drama: (1) Provides a ceremonial stage; (2) Reassures stakeholders; (3) Maintains confidence and faith. Drama serves powerful symbolic functions (Engages actors in their performances; builds excitement, hope, momentum)

Alternative Views of Change

  • The aim of organizations is to reproduce themselves and their identities
  • The line between organization and environment is artificial, they are interacting systems. Organizations and their environment are part of the same broad pattern…how does this pattern evolve?
  • Organizations interact with projections of themselves and their environments
  • Challenge becomes understanding how orgs change and transform themselves along with/in tandem with environments

Morgan’s Postmodern View of Change

  • Change is not a linear progression of “a” causing “b”
  • Change can be viewed through the lenses of circular loops, attractor patterns, study of opposites, management of paradox
  • We are never “in control”; we are no more than butterflies… But small changes can set in motion patterns of change with tremendous consequences. Even through our actions shape and are shaped by change, we are part of an evolving pattern that we cannot entirely control

Modern approaches: stages of commitment to change: Change as creating new attractors and breaking down resistors (Unfreezing, Attracting, Refreezing); Preparation (Initial contact, awareness). Acceptance (understanding, decision to implement). Commitment (Installation, Institutionalization)

Barriers to change (modern): Excessive focus on costs, Failure to perceive benefits, Lack of coordination and cooperation, Uncertainty avoidance, Fear of loss.

Techniques for change implementation (modern): Identify a true need for change. Find an idea that fits the need. Obtain top management support. Design the change for easy implementation (in stages/steps). Develop plans to overcome resistance. Create change teams. Foster idea champions. (emphasize control, rationality)

Change implementation and barriers (postmodern): What are the forces locking the organization into its existing pattern? Is the “attractor” appropriate? Should it be changed? How can small changes be used to create large effects? How can we manage inherent contradictions and inconsistencies to support change? How can we manage through chaos? How can we influence new forms (because we can’t entirely control them)? (Emphasis on fluidity, complexity, chaos)

Postmodern caveats: superstitious learning: misattribution where org’ns learn wrong thing. Ambiguity of success: difficult to know when success has occurred. Competency traps: improving ‘great’ procedures that may no longer be relevant

Structural Inertia Theory: Orgs have difficulty changing strategy and structure quickly. Under uncertain conditions, there are severe constraints on the ability of individuals to correctly conceive of and implement needed changes. Therefore, the actions of individuals don’t explain much of the variation and diversity of organizational populations (Individuals still matter, but they have bounded rationality and limited resources)

Structural Inertia Theory and Change: How changeable are organizations? Orgs have pressure to be reliable and accountable for their actions. Leads to institutionalization and standardization. These are strongly anti-change… Inertia has a strong effect on orgs. Varies by age and size, different features of the organization have more inertia (goals, authority