Definition of Organization

Managing Organization

Intro Material

definition of organization

Organization is a complex social entity. goal directed, deliberately structured and coordinated activity system, linked to the external environment

Theory (what & why)

What: Theories are metaphors/frames that help us make sense of organizations, can influence the design of organizations and what gets done in them. A naturally occurring phenomenon

Why: 1. a “tool” used to make sense out of the world; 2. approach the complex world; 3. focus our attention and direct our actions; 4. ultimate purpose is practical

Relationship between theory, principle and application

By learning theory-----draw out key managerial principles----apply these in real word

Rational & natural & open system

R: exists for a specific, defined purpose and operates “rationally”

   Machine; hierarchy, formal policies, established procedures (CL&CN); formal position (power); move down (objectives); efficiency, quality, reliability (problem)

N: fundamentally a bunch of people who do what people always do

   Family; creating cooperation (problem); politically determined (obj); informal (C&C); Effectiveness (problematic)

O: a product of its environment and must fit with it

   adaptive organism; shift according to environmental change (obj); be negotiated and unstable (C&C); be located at boundaries and shifts (pow); meeting environmental demands (effectiveness)

Managerial implications of the Rhetoric

Environment & nature of organizations & organizational design change a lot, but not entirely different; Fundamental problems of organizational design is still the same;

mobilize action by using interesting languages; change how people think rather than using direct means of control; Negative consequences

Purpose and Governance

purpose of a corporation (Friedman vs. Handy)

Benefits & social responsibility

Not merely---shareholders money; serve customers and make stuff; benefit of employees and managers; abstract social purpose--- a mixture of all and more

purpose of mission statement

provide official goals; make a difference(decision/internalize); matters when fit with actual goals pursued; a mixed blessing(commitment/constraint);

Governance

System by which organizations are directed and controlled(Purposes and goals/control(w/h))

What constitutes “good” governance

Appropriate checks and balances; Pay for performance; Accountability; People of integrity willing to make tough decisions

the agency problem? How to overcome?

Problem: (interests of principal and agent diverge)---1.Self Interest 2.Asymmetric information

Different time horizons; 4.Risk preferences; 5.Difficult to observe behavior

Overcome: 1.Monitoring (Board of Directors; Large investors; Others(media, watchdog groups))  2.Incentives (Ownership; Performance based compensation)  3.Market for corporate control (Risk of take-over by outside party)

the lesson (Google case & The Levi’s case)--same governance

Google: 1.governance structure & agency problem & theory matters;  2.managers is critical in mediating between different groups and balancing competing goals;  3.unique governance structures can be compatible with success

Levi’s: 1.purposes are multiple and contested; 2.how power determines which purposes get priority (ownership&declining economic performance); 3.mission matters; 4.need for balance and danger of “utopianism”; 5.be careful drawing strong conclusions

approaches to measuring effectiveness

Goal (outputs/Quality/Quantity)---Internal process (how working inside)---Resource based (What’s coming in)----Stakeholder (needs of multiple parties)

Design

Appex Case lessons  

⑴An overview of different structures along with each pros&cons; ⑵must consider factors (size, environment, culture, employee capabilities, strategy); ⑶Structure is more than outlining formal relationships for employees; ⑷No perfect design

Organizations basic designs

Functional; Divisional; Hybrid/Matrix

Pros and cons of these designs

F: Advantage---1.efficiency and economies of scale; 2.expertise and skill; 3.high quality and consistency; 4.achieve functional goals

   Disadvantage---1.Internally focused; 2.poor horizontal communication and coordination; 3.slow change / fewer innovations; 4.don’t see overall goals

D: Advantage---1.External focus and adaptability; 2.communication/coordination between functions; 3.More product innovations; 4.Customer needs better understood and served

   Disadvantage---1.less efficient; 2.less expertise and specializion; 3.loss of consistency and quality; 4. Poor coordination/communication between divisions