ORGANIZATIONS AND ORGANIZATION THEORY using all types of resources: manpower, parts, wiring,

etc.)
-ORGANIZATIONS are defined in many ways:
-Organizations also produce goods and services that
1. they are social entities that are
customers want at competitive prices
2. goal-directed
-Organizations create a drive for innovation rather than a
3. are designed as deliberately structured and reliance on standard products
coordinated activity systems
-organizations use modern manufacturing and
4. are linked to the external environment information technologies

-organizations are made up of people and their -Organizations adapt to and influence a rapidly changing
relationships with one another (they cannot exists environment
without interacting with customers, suppliers,
-organizations create value for their owners, customers,
competitors, and other elements of the external
and employees
environment)
-Accommodate ongoing challenges of diversity, ethics,
-while distinction of organizations ranges from being
and the motivation and coordination of employees
multinational corporations (large organizations) to small,
family-owned businesses, another IMPORTANT DIMENSIONS OF ORGANIZATIONAL DESIGN
DISTINCTION to note is between for-profit businesses and
Structural Dimensions- provide labels to describe the
non-profit organizations
internal characteristics of an organization
(FP) For-profit Businesses vs. (NP) Nonprofit
-create a basis for measuring and comparing
Organization
organizations
FP:
Contextual Dimensions- characterize the whole
-businesses direct activities toward earning organization: size, technology, environment, and goals
money for the company
-these are a set of overlapping elements that
-focus on improving the organization’s products underlie an organization’s structure and work
and services to increase sales revenues. process

NP: Structural Dimensions

-nonprofit managers direct their efforts toward 1. FORMALIZATION- pertain to the amount of written
generating social impact documentation in the organization (ex: procedures, job
descriptions, regulations, and policy manuals) which
-financial resources typically come from
describe behavior and activities
government appropriations, grants, and
donations (becomes a major problem as 2. SPECIALIZATION- degree to which organizational tasks
securing funds is not always assured) are subdivided into separate jobs; also referred to as
“division of labor”
-services are typically provided to nonpaying
clients Low = employees perform a wide range
of tasks in their jobs
-they market services to attract other clients,
volunteers, and donors Extensive = each employee performs
only a narrow range of tasks
Importance of Organizations
3. HIERARCHY OF AUTHORITY- describes who reports to
-organizations bring together resources to accomplish
whom and the span of control for each manager
specific goals (ex: putting together an aircraft carrier

Source: Organization Theory by Daft By: Zionah Casanaan

 Span of Control- the number of employees -how organizations actually produce products
reporting to a supervisor and services like manufacturing, information
systems, Internet
Narrow = hierarchy tends to be tall
3. ENVIRONMENT- includes all elements outside the
Wide = hierarchy of authority will be
boundary of the organization
shorter
-elements include industry, government,
4. CENTRALIZATION- hierarchical level that has authority
customers, suppliers, and the financial
to make a decision
community
Top Level Decision Making = the organization is
4. GOAL AND STRATEGY- define the purpose and
centralized (decision-making power and
competitive techniques that set it apart from other
authority are concentrated at the top)
organizations
Low Level Decision Making = decentralized
Goal- often written down as an enduring
organization (mid-level/lower-level managers
statement of company intent
and team members are involved in the decision-
making process) Strategy- plan of action that describes resource
allocation and activities for dealing with the
ex: purchasing equipment, establishing goals,
environment and for reaching the organization’s
choosing suppliers, setting prices
goals
5. PROFESSIONALISM- level of formal education and
-these also define the scope of operations and
training of employees
relationships of parties involved in an
High Professionalism = when employees require organization (employee, customers,
long periods of training to hold jobs in the competitors)
organization
5. CULTURE- underlying set of key values, beliefs,
-generally measured as the average number of understandings, and norms shared by employees
years of education of employees
-pertain to ethical behavior, commitment to
6. PERSONNEL RATIOS- deployment of people to various employees, efficiency, or customer service
functions and departments
Performance and Effectiveness Outcomes
-include the administrative ratio, the clerical
Efficiency- refers to the amount of resources used to
ratio, the professional staff ratio, and the ratio of
achieve the organization’s goals
indirect to direct labor employees
-based on the quality of raw materials, money,
-measured by dividing the number of employees
and employees necessary to produce an output
in a classification by the total number of
organizational employees Effectiveness- a broader term referring to the degree to
which an organization achieves its goals
Contextual Dimensions
-many organizations are using new technologies to
1. SIZE- measured for the organization as a whole or for
improve efficiency and effectiveness
specific components, such as a plant or division (can also
be measured by the number of employees) Stakeholders Approach- integrates diverse organizational
activities by looking at various organizational
2. ORGANIZATIONAL TECHNOLOGY- refers to the tools,
stakeholders and what they want from the organization
techniques, and actions used to transform inputs into
outputs Stakeholder- any group within or outside of the
organization that has a stake in the
organization’s performance

Source: Organization Theory by Daft By: Zionah Casanaan

 -Managers carefully balance the needs and
interests of various stakeholders in setting goals
and striving for effectiveness

THE EVOLUTION OF ORGANIZATION THEORY AND

DESIGN

Organization Theory- a way to see and analyze

organizations more accurately and deeply than one
otherwise could
1. TECHNICAL CORE- includes people who do the basic
-to understand organizations is to base it on work of the organization
patterns and regularities in organizational design
and behavior -produces the product and service outputs of
the organization
Efficiency is Everything: Scientific Management-
emphasizes scientifically determined jobs and -where primary transformation from inputs to
management practices as the way to improve efficiency outputs takes place
and labor productivity
-include production departments in a
-pioneered by Frederick Winslow Taylor; he manufacturing firm, teachers and classes in
proposed that decisions based on rules of schools, medical activities in a hospital
thumb and tradition should be replaced with
2. TECHNICAL SUPPORT- helps the organization adapt to
precise procedures developed after careful study
the environment
of individual situations
-responsible for creating innovations in the
How to Get Organized: Administrative Principles- looks
technical core, helping the organization change
at the design and functioning of the organization as a
and adapt
whole
-ex: engineers, researchers, information
-contributed to the development of bureaucratic
technology professionals scan the environment
organizations
for problems, opportunities, and technological
Bureaucratic Organizations -emphasized developments
designing and managing organizations on an
3. ADMINISTRATIVE SUPPORT- responsible for the
impersonal, rational basis through elements like:
smooth operation and upkeep of the organization,
-authority and responsibility, formal including its physical and human elements
recordkeeping, and uniform application
-includes human resource activities: hiring,
of standard rules
establishing compensation and benefits, and
Contingency- one thing depends on other things, and for employee training and development
organizations to be effective
-also deals with maintenance activities: cleaning
- there must be a “goodness of fit” between an of buildings and service and repair of machines
organization’s structure and the conditions in its
MANAGEMENT- a distinct function that is responsible for
external environment
directing and coordinating other parts of the organization
ORGANIZATIONAL CONFIGURATION
4. TOP MANAGEMENT- provides direction,
Mintzberg’s Organizational Types planning, strategy, goals, and policies for the
entire organization or major divisions
-framework proposed by Henry Mintzberg that suggests
that every organization has five parts

Source: Organization Theory by Daft By: Zionah Casanaan

 5. MIDDLE MANAGEMENT- responsible for 2. MACHINE BUREAUCRACY (b)- very large and mature;
implementation and coordination at the its technical core is oriented to mass production
departmental level (ex: mediating between top
-has an elaborated technical and administrative
management and technical core,
departments: engineers, market researchers,
implementation rules, passing info up and
and financial analysts (they examine work in the
down)
production center)
-Mintzberg proposed that the five parts could fit together
-there is EXTENSIVE formalization and
in five basic types of organization
specialization = primary goal of efficiency;
doesn’t do well in dynamic environments

3. PROFESSIONAL BUREAUCRACY (c)- its distinct feature

is the size of its technical core (highly skilled professionals
that make up the bulk of the org): professionals in
hospitals, universities, law firms, and consulting firms

-its primary goals are quality and effectiveness

- while there is SOME specialization and

formalization, professionals in the technical core
have autonomy

-exist in complex environments as professional

organizations provide services rather than
tangible goods

4. DIVERSIFIED FORM (d)- mature firms that are

extremely large and are subdivided into product or
1. ENTREPRENEURIAL STRUCTURE (a)- a new, start-up market groups
company, consisting of a top manager and workers in the
technical core -consist of a small top management and
technical support group (for the top), and a large
-top management is the key part of this administrative support staff (handles paperwork
structure and its primary goal is to survive and to and from the divisions/groups)
become established in its industry
-this form helps solve the problem of inflexibility
-there is LITTLE specialization and formalization; experienced by too-large machine bureaucracies
does well in dynamic environments = flexible through the division of smaller parts
and simple
5. ADHOCRACY (e)- develops in a complex, rapidly
Formalization: the degree to which fixed rules changing environment
and procedures dictate how employees should
behave -its goal is frequent innovation and meeting
continually changing needs (ex: Aerospace and
Specialization: a business/individual focusing defense industries)
their productive capacity on a limited set of
goods/services (ex: producing what they are -this organization has professional employees,
good at like KFC and their chicken) and its technical and administrative support staff
have a part in the ongoing innovation teams and
projects

-in the professional center, this type of

organization is decentralized

Source: Organization Theory by Daft By: Zionah Casanaan

 Contemporary Design Ideas EFFICIENT PERFORMANCE VS. THE LEARNING
ORGANIZATION: From Routine Tasks to Empowered
-because of the dynamic environment of the modern era,
Roles
managers may be seen as shifting from a mindset based
on rigid mechanical systems to one based on flexible Task- a piece of work assigned to a person
natural systems
-in a traditional organization, tasks are broken
-Newtonian science suggest that “the world functioned down into specialized, special parts (like a
like well-ordered machine” which continued to guide machine)
managers’ beliefs about organizations (maintain stability)
-knowledge and control of tasks are centralized
-ex: managers did all the planning and thought at the top of the organization
work while employees did the manual labor (for
Role- part in a dynamic social system; has discretion and
wages and compensation)
responsibility that allows a person to use their own
Chaos Theory- because the environment in today’s time discretion and ability to achieve/meet an outcome or
is anything but stable, this suggests that relationships in goal
complex, adaptive systems are non-linear and made up of
-in a learning organization, employees play a role
divergent choices that crate unexpected effects
in the team/department and roles may be
-this theory suggests that organizations should redefined and adjusted
be viewed more as natural systems rather than
-employees are encouraged to take care of
as well-oiled predictable machines
problems by working with one another and with
EFFICIENT PERFORMANCE VS. THE LEARNING customers
ORGANIZATION: From Vertical to Horizontal Structures
EFFICIENT PERFORMANCE VS. THE LEARNING
Learning Organization (Horizontal Structure)- promotes ORGANIZATION: From Formal Control Systems to Shared
communication and collaboration so that everyone is Information
engaged in:
-in young and small organizations, communication is
-identifying and solving problems generally informal and face-to-face, but when
organizations grow large and complex, distance between
-enabling orgs to experiment, improve, and
top leaders and technical core workers increases
increase its capabilities
-Formal Systems then become implemented to
-self-directed teams are the fundamental work
manage the growing amount of complex
unit in the learning organization
information and to detect deviations from
Efficient Performance (Vertical Structure)- an established standards and goals
organization where activities are grouped together by
-in learning organizations, the wide-spread of information
common work from the bottom to the top
keeps the organization well-functioned
-little collaboration occurs, the organization is
-strives to provide employees with complete
coordinated and controlled, and decision-
information about the company, for them to act
making authority resided with upper-level
quickly
managers
-they also maintain open lines of communication
-may work as it promotes efficient production
with customers, suppliers, and competitors to
and in-depth skill development but becomes
enhance learning capabilities
overloaded in rapidly changing environments

Source: Organization Theory by Daft By: Zionah Casanaan

 EFFICIENT PERFORMANCE VS. THE LEARNING
ORGANIZATION: From Competitive to Collaborative
Strategy

-in traditional organizations, strategy is formulated by top

managers and imposed on the organization

-in learning organizations, the accumulated actions of an

informed and empowered workforce contribute to
strategy development

-organizations become collaborators and

competitors, as they experiment to find the best
way to learn and adapt
Organizational Behavior- micro approach to
EFFICIENT PERFORMANCE VS. THE LEARNING organizations as it focuses on the individuals within
ORGANIZATION: From Rigid to Adaptive Culture organizations (they are the relevant unit of analysis)
-the main danger for many organizations is when -examines concepts such as motivation,
corporate culture becomes fixed leadership style, and personality
-cultural values, ideas, and practices that helped -more concerned with cognitive and emotional
attained success can be a problem to effective differences among people within organizations
performance in a rapidly changing environment
- “Psychology of Organization”
-in learning organizations, the culture encourages
openness, equality, continuous improvement, and Organization Theory- a macro examination of
change, which minimizes boundaries within the org and organizations as it analyzes the whole org as a unit
other companies
-concerned with people added into departments
FRAMEWORK: Levels of Analysis and orgs, and with the differences in structure
and behavior at the organization level of analysis
Levels of Analysis- because an organization is a system
composed of subsystems, one level of analysis has to be - “Sociology of Organization”
chosen as the primary focus (there are four that
Meso Theory- “meso = in between”; concerned with the
characterize an organization)
integration of both macro and micro levels of analysis
Level 1: Human being, which is the basic
-examines how individuals and groups affect the
building block of an organization
organization and vice versa
Level 2: Group/Department, which are
-ex: to facilitate innovation, managers need to
collections of individuals who work together to
understand structure and context (organization
perform group tasks
theory) are related to interactions among
Level 3: Organizations, which are collections of diverse employees (organizational behavior)
groups/departments that combine into the total
organization

Level 4: Interorganizational set and community,

a grouped organization with which a single
organization interacts (other orgs in the
community make up an important part of the
org’s environment)

Source: Organization Theory by Daft By: Zionah Casanaan