Organizations: Structure And, Effectiveness, and Cultures

Chapter 9
(Lecture Outline and

Line Art Presentation)
Organizations
Structure and, Effectiveness,
and Cultures
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 opensystems model.
5. Explain the term learning organization.
6. Explain the time dimension of organizational
effectiveness.
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Lecture Outline and Line Art Presentation, 92
Chapter Objectives (contd)

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.
What is an Organization?
An Organization
A cooperative and coordinated social system of two

or more people with a common purpose.
What is an Organization? (contd)

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.
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.
Classifying Organizations (contd)

Commonweal Organizations
Purpose: To provide standardized public services to
all members of a society without attempting to earn a
profit.
Insert Table 9.1 here
Organization Charts
Organization Chart (Table)
A visual display of an organizations 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.
Figure 9.1
The Evolution of an Organization Chart
Contrasting Theories of
Organization
The Tradition View
The organizations 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 organizations surrounding environment is fairly
predictable.
Contrasting Theories of
Organization (contd)
The Modern View
The organizations principal goal is survival in an
uncertain environment.
The organization is an open-system interacting with
its environment.
The organizations surrounding environment is

composed of variables that are difficult to predict or
control.
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.
The Traditional View of

Organizing (contd)
Max Webers 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
Challenges to the Traditional

View of Organizations
Bottom-up Authority
Acceptance theory of authority (Chester Barnard)
A leaders 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 organizations
purpose.
it serves the subordinates interests.
the subordinate is able to comply.
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.
Figure 9.2
Open-System Model of a Business
Organizations as Open Systems:

A Modern View (contd)
Developing an Open-System Model
Interacting organizational subsystems:
Technical (production function) subsystems define
the organizations transformation process.
Boundary-spanning subsystems provide the
organizations interface with the external
environment.
Managerial subsystems bridge (control and direct)
the technical and boundary-spanning subsystems.
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)
Extending the Open-System Model: The

Learning Organization (contd)
Five Critical Learning Skills
Solving problems.
Experimenting.
Learning from organizational experience/history.
Learning from others.
Transferring and implementing.
Figure 9.3
Garvins Model of the Learning Organization
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.
Organizational Effectiveness (contd)

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.
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.

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
Figure 9.5
Complacency Can Lead to Organizational Decline

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.

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.

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 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 organizations
members together.
Organizational Cultures (contd)

Characteristics of Organizational Cultures
1. Collective: organizations are social entities.
2. Emotionally charged: the organizations culture
serves as a security blanket to its members.
3. Historically based: trust and loyalty result from longterm 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.

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 organizations culture is strong or weak.
Figure 9.6
Forms and Consequences of Organizational Culture

The Organizational Socialization Process
Organizational socialization: the process of
transforming outsiders into accepted insiders.
Orientations
Orientation programs familiarize new employees
with the organizations history, culture, competitive
realities, and compensation and benefits.
Storytelling
Recitations of heroic or inspiring deeds provide

social roadmaps for new employees.

Strengthening Organizational Cultures
Symptoms of a weak organizational culture
Inward focus
Morale problems
Fragmentation/inconsistency
Ingrown subcultures
Warfare among subcultures
Subculture elitism

Organizations: Structure And, Effectiveness, and Cultures

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Chapter 9

(Lecture Outline and

Copyright Houghton Mifflin Company. All rights reserved.

Lecture Outline and Line Art Presentation, 92

Chapter Objectives (contd)

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Lecture Outline and Line Art Presentation, 93

A cooperative and coordinated social system of two

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Lecture Outline and Line Art Presentation, 94

What is an Organization? (contd)

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Lecture Outline and Line Art Presentation, 95

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Lecture Outline and Line Art Presentation, 96

Classifying Organizations (contd)

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Lecture Outline and Line Art Presentation, 97

Insert Table 9.1 here

Vertical and Horizontal Dimensions

A Case Study: The Growth of an Organization

Lecture Outline and Line Art Presentation, 99

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Lecture Outline and Line Art Presentation, 910

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Lecture Outline and Line Art Presentation, 911

The organizations surrounding environment is

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Lecture Outline and Line Art Presentation, 912

The Traditional View of

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Lecture Outline and Line Art Presentation, 914

The Traditional View of

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Lecture Outline and Line Art Presentation, 916

Challenges to the Traditional

the subordinate is able to comply.

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Lecture Outline and Line Art Presentation, 918

Organizations as Open Systems:

Dynamic equilibrium in maintaining internal balances

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Lecture Outline and Line Art Presentation, 919

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Lecture Outline and Line Art Presentation, 920

Organizations as Open Systems:

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Lecture Outline and Line Art Presentation, 921

Extending the Open-System Model: The

Stages of Organization Learning

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Lecture Outline and Line Art Presentation, 922

Extending the Open-System Model: The

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Lecture Outline and Line Art Presentation, 924

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Organizational Effectiveness (contd)

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