Chapter One

Organizations and
Organization Theory

1
Organization Theory in Action
Topics
Current Challenges
– Globalization
– Ethics and Social Responsibility
– Speed of Responsiveness
– The Digital Workplace
– Diversity

2
 What is an Organization?
Definition
Types of Organizations
Importance of Organizations
– Bring together resources to achieve desired
goals and outcomes
– Produce goods and services efficiently
– Facilitate innovation
– Use modern manufacturing and information
technologies

3
Importance of Organizations
Importance of Organizations (cont’d)
– Adapt to and influence a changing
environment
– Create value for owners, customers and
employees
– Accommodate ongoing challenges of
diversity, ethics, and the motivation and
coordination of employees

4
Perspectives on Organizations
Open Systems
Organizational Configuration
– Technical Core
– Technical Support
– Administrative Support
– Top Management
– Middle Management

5
 An Open System
and Its Subsystems
Environment

Raw Materials Transformation

People
Information Products
resources Input Output and
Financial Services
resources
Process

Production,
Boundary Boundary
Subsystems Spanning
Maintenance,
Spanning
Adaptation,
Management

6
Dimensions of Organization Design
Structural Dimensions

Contextual Dimensions

Performance and Effectiveness Outcomes

7
 Five Basic Parts of an
Organization
Top
Management

Technical Middle Administrative

Support Management Support

Technical Core

Source: Based on Henry Mintzberg, The Structuring of Organizations (Englewood Cliffs, N. J.: Prentice-Hall, 1979) 215-297;
and Henry Mintzberg, “Organization Design: Fashion or Fit?” Harvard Business Review 59 (Jan. – Feb. 1981): 103-116.

8
 Organization Chart Illustrating the Hierarchy of Authority
for a Community Job Training Program

Board of
Directors

Advisory Executive
Committee Committee

Level 1 Executive
Director

Level 2 Assistant Executive Director Assistant Executive Director

for Community Service for Human Services

Level 3 Director Director Director Director Director Director Director

Economic Dev. Reg. Planning Housing Criminal Justice Finance AAA CETA

Public Asst. Director Lead Lead

Info Finance Counsel Counsel
Coord.

CETA CETA CETA

CETA
Couns. Couns. Couns.
Intake
Program Contract Program Devs. Devs. Devs.
&
Housing Alcohol Spec. Fiscal Planner Title II Youth Title II D CETA
Level 4 Coord. Coord.
Account. AAA Manager AAA
Orient
ABC IV &VI&VII Planner

Records
Level 5 Secretary Clerk Secretary Adm. Asst Payroll Clerk Secretary MIS Specialist Staff Clerk Adm. Asst.

9
 Goals and
Strategy
Environment Size

Culture Technology
Structure
1. Formalization
2. Specialization
3. Hierarchy of Authority
4. Centralization
5. Professionalism
6. Personnel Ratios

10
Characteristics of Three
Organizations
100
Formalization

Specialization
50
Centralization

Configuration
(%nonworkflow 0
W.L. Gore & Wal-Mart State Arts
personnel)
Associates Agency

TECHNOLOGY Manufacturing Retailing Government

Service
SIZE (#employees) 6,000 250,000 35

11
 The Evolution of Organization
Theory and Design
Historical Perspectives

Contemporary Organization Design

Effective Performance versus the Learning

Organization

12
 Two Organization Design
Approaches
Mechanical System Design Natural System Design

Vertical Horizontal
Structure Structure

Routine Rigid Organizational Change Empowered Adaptive

Tasks Culture in the Service of Roles Culture
Performance

Formal Competitive Shared Collaborative

Systems Strategy Information Strategy

Stable Environment Turbulent Environment

Efficient Performance Learning Organization

Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change (Boston, Mass.: Harvard Business School)

13
Workbook
Activity

Organizational Dimensions

High Formalization 1-4 5-6 7 - 10 Low Formalization

High Specialization 1-4 5-6 7 - 10 Low Specialization
Tall Hierarchy 1-4 5-6 7 - 10 Flat Hierarchy
Product Technology 1-4 5-6 7 - 10 Service Technology
Stable Environment 1-4 5-6 7 - 10 Unstable Environment
Strong Culture 1-4 5-6 7 - 10 Weak Culture
High Professionalism 1-4 5-6 7 - 10 Low Professionalism
Well-Defined Goals 1-4 5-6 7 - 10 Poorly-Defined Goals
Small Size 1-4 5-6 7 - 10 Large Size
Modern 1-4 5-6 7 - 10 Postmodern

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Workbook
Activity Xerox
Use for 1959-1990, Use for 1990-present

High Formalization 1-4 5-6 7 - 10 Low Formalization

High Specialization 1-4 5-6 7 - 10 Low Specialization
Tall Hierarchy 1-4 5-6 7 - 10 Flat Hierarchy
Product Technology 1-4 5-6 7 - 10 Service Technology
Stable Environment 1-4 5-6 7 - 10 Unstable Environment
Strong Culture 1-4 5-6 7 - 10 Weak Culture
High Professionalism 1-4 5-6 7 - 10 Low Professionalism
Well-Defined Goals 1-4 5-6 7 - 10 Goals Not Defined
Small Size 1-4 5-6 7 - 10 Large Size
Modern 1-4 5-6 7 - 10 Postmodern

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