28
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-1 1-1 Organizational Theory, Design, and Change Sixth Edition Gareth R. Jones Chapter 1 Organizations and Organizational Effectiveness

Organizational Theory, Design, and Change - Login - …online.columbiasouthern.edu/CSU_Content/courses/Business/MBA/MBA... · Organizational Theory, Design, and Change Sixth Edition

  • Upload
    dohanh

  • View
    237

  • Download
    1

Embed Size (px)

Citation preview

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

1-1 1-1

Organizational Theory,

Design, and Change Sixth Edition

Gareth R. Jones

Chapter 1

Organizations and

Organizational

Effectiveness

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2 2

Learning Objectives

1. Explain why organizations exist and the purposes they serve

2. Describe the relationship between organizational theory and organizational design and change, and differentiate between organizational structure and culture

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3 3 3

Learning Objectives (cont.)

3. Understand how managers can utilize organizational theory to design and change their organizations to increase organizational effectiveness

4. Identify how managers assess and measure organizational effectiveness

5. Appreciate the way contingency factors influence the design of organizations

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4 4

What is an Organization?

Organizations provide goods and services

Organizations employ people

Organizations bring together people and resources to produce products and services

4

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5 5 5

What is an Organization? (cont.)

Organization: a tool used by people to coordinate their actions to obtain something they desire or value

Entrepreneurship: identify opportunities to satisfy needs, and then gather and use resources to meet those needs

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6 6 6

How Does an Organization Create Value? Value creation takes place at three

stages: input, conversion, and output Inputs: include human resources,

information and knowledge, raw materials, money and capital

Conversion: the way the organization uses human resources and technology to transform inputs into outputs

Output: finished products and services that the organization releases to its environment

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 7 7 7

Figure 1.1: How an Organization Creates Value

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8 8 8

Why Do Organizations Exist?

To increase specialization and the division of labor

Division of labor allows specialization

Specialization allows individuals to become experts at their job

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 9 9

Why Do Organizations Exist? (cont.)

To use large-scale technology Economies of scale: cost savings that

result when goods and services are produced in large volume

Economies of scope: cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across several different products or tasks

9

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 10 10 10

Why Do Organizations Exist? (cont.)

To manage the external environment External environment consists of the

political, social, economic, and technological factors that affect organizations

Organizations regularly exchange products and services for needed resources

Organizations need to manage their external environment

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 11

Why Do Organizations Exist? (cont.)

To exert power and control Organizations structure their members to

efficiently produce products and services

To economize on transaction costs Transaction costs: the costs associated

with negotiating, monitoring, and governing exchanges between people who must cooperate

11

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 12 12 12

Figure 1.3: Why Organizations Exist

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 13 13 13

Organizational Theory, Design, and Change: Some Definitions

Organizational theory: the study of how organizations function and how they affect and are affected by the environment in which they operate

Organizational structure: the formal system of task and authority relationships that control how people to coordinate their actions and use resources to achieve organizational goals

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 14 14 14

Some Definitions (cont.) Organizational culture: is the set of

key values, beliefs, and attitudes shared by organizational members and helps shape the behavior within the organization

Organizational design: the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 15 15 15

Some Definitions (cont.)

Organizational change:

the process by which organizations move from their present state to some desired future state to increase their effectiveness

Organizational redesign and transformation

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 16 16 16

Figure 1.4: The Relationship Among Organizational Theory, Structure, Culture, Design, and Change

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 17 17 17

Importance of Organizational Design and Change Dealing with contingencies

Contingencies are events that might occur and must be planned for

Organizations must be designed to be able to respond to changes in the complex and increasingly difficult environment many organizations face

Globalization and changing IT technologies are just two challenges organizations must be ready to face

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 18 18

Importance of Organizational Design and Change (cont.)

Gaining competitive advantage The ability to outperform other companies

because of the capacity to create more value from resources

Core competences: skills and abilities in value creation embedded in the organization’s people or structures

Strategy: pattern of decisions and actions involving core competences that produces a competitive advantage to outperform competitors

18

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 19 19 19

Importance of Organizational Design and Change (cont.)

Managing diversity

Differences in the race, gender, and national origin of organizational members have important implications for organizational culture and effectiveness

Learning how to effectively utilize a diverse workforce can result in better decision making and more effective workforce

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 20 20

Importance of Organizational Design and Change (cont.)

Promoting efficiency, speed, and innovation

The better organizations function, the more value they create

The correct organizational design can lead to faster innovation and quickly get new products to market

20

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 21 21 21

Consequences of Poor Organizational Design

Decline of the organization’s sales and profits

Layoffs occur and talented employees leave to take positions in growing organizations

Resources become harder to acquire

Resulting crisis may result in organizational failure

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 22 22 22

How Do Managers Measure Organizational Effectiveness? Control: external resource approach

Monitors how effectively an organization manages and controls its external environment

Innovation: internal system approach

Develops an organization’s skills and capabilities to change, adapt, and improve the way it functions

Efficiency: technical approach

Measures how efficiently an organization converts a fixed amount of resources into finished goods and services

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 23 23 23

Table 1.1: Approaches to Measuring Effectiveness

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 24 24 24

Measuring Effectiveness: Organizational Goals Official goals: guiding principles that

the organization formally states in its annual report and in other public documents

Mission: a mission statement explains why the organization exists and what it should be doing

Operative goals: specific long- and short-term goals that guide managers and employees as they perform the work of the organization

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 25 25 25

Figure 1.5: Plan of the Book

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 26 26 26

Figure 1.5: Plan of the Book (cont.)

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 27 27 27

Figure 1.5: Plan of the Book (cont.)

1- Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 28 28

Summary

Organizations are a tool people use to achieve their goals

Organizational theory is the study of how organizations function and how they affect and are affected by their environment

Organizational effectiveness must be monitored by managers

28