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Contents
Prefacexv
Part 1 Introduction to Organizations 1

Chapter 1: Organizations and Contingency Factors, 20
Organization Design 2 In Practice: Valve Software 21
A Look Inside Xerox Corporation 3 Performance and Effectiveness
What Went Wrong?, 3 • Entering the Digital Outcomes, 23
Era, 4 • The Culture Problem, 5 • Shaking Up The Evolution of Organization Design 24
a Century-Old Company, 5 • “We No Longer Historical Perspectives, 25
Make Copiers”, 6
How Do You Fit the Design? Evolution of Style 26
Organization Design in Action 6
It All Depends: Key Contingencies, 28
Topics, 7
The Contrast of Organic and Mechanistic Designs 29
Bookmark 1.0: Great by Choice: Uncertainty,
Chaos, and Luck—Why Some Thrive Despite Them All 8
Contemporary Design Ideas: Radical
Decentralization31
Current Challenges, 9 • Purpose of
In Practice: Morning Star 31
This Chapter, 12
Framework for the Book 32
What Is an Organization? 13
Levels of Analysis, 32 • Plan of the Book, 33
Definition, 13 • From Multinationals to
• Plan of Each Chapter, 35
Nonprofits, 14 • Importance of
Organizations, 15 Design Essentials 35
In Practice: Harley-Davidson 16 Chapter 1 Workshop: Measuring Dimensions
Dimensions of Organization Design 17 of Organizations 37
Case for Analysis: It Isn’t So Simple: Infrastructure
Structural Dimensions, 18
Change at Royce Consulting 38
In Practice: Shizugawa Elementary School
Evacuation Center and BP Transocean Deepwater
Horizon Oil Rig 20
Part 2 Organization Purpose and Structural Design 45

Chapter 2: Strategy, Organization Design, BOOKMARK 2.0: Blue Ocean Strategy: How to Create
Uncontested Market Space and Make the Competition
and Effectiveness 46 Irrelevant53
Purpose of This Chapter, 47 In Practice: Amazon 54
The Role of Strategic Direction in Operating Goals, 54 • Goal Conflict and the
Organization Design 48 Hybrid Organization, 57
Organizational Purpose 51 In Practice: Bloomberg LP 57
Strategic Intent, 51 The Importance of Goals, 58
vii
viii Contents
Two Frameworks for Selecting Strategy and Design 59 Relational Coordination, 99

Porter’s Competitive Strategies, 60 IN PRACTICE: Southwest Airlines 100
How Do You Fit the Design? Your Strategy/ Organization Design Alternatives 101
Performance Strength 61 Required Work Activities, 101 • Reporting
In Practice: Allegiant Travel Company 63 Relationships, 102 • Departmental Grouping
Miles and Snow’s Strategy Typology, 63 • Options, 102
How Strategies Affect Organization Design, 65 Functional, Divisional, and Geographic Designs 104
• Other Contingency Factors Affecting
Functional Structure, 104
Organization Design, 66
In Practice: Narayana Hrudayalaya Hospital 105
Assessing Organizational Effectiveness 67
Functional Structure with Horizontal
Definition, 67 • Who Decides?, 68 Linkages, 105 • Divisional Structure, 106
Four Effectiveness Approaches 69 In Practice: Microsoft 109
Goal Approach, 69 • Resource-Based Geographic Structure, 109
Approach, 71 • Internal Process Approach, 72
Matrix Structure 111
In Practice: BNSF Railway 73
Conditions for the Matrix, 112 • Strengths
Strategic Constituents Approach, 73 and Weaknesses, 113
An Integrated Effectiveness Model 75 In Practice: Englander Steel 114
In Practice: Samsung Group 78 Horizontal Structure 116
Design Essentials 78 Characteristics, 117
Chapter 2 Workshop: Identify Your Goal Preferences 80 In Practice: GE Salisbury 118
Case for Analysis: The Venable Museum of Art 80 Strengths and Weaknesses, 119
Case for Analysis: Covington Corrugated
Virtual Networks and Outsourcing 120
Parts & Services 82
How the Structure Works, 121
Chapter 3: Fundamentals of Organization In Practice: Sandy Springs, Georgia 121
Structure86 Strengths and Weaknesses, 122
Purpose of This Chapter, 88 Hybrid Structure 124
Organization Structure 88 Applications of Structural Design 126
Information-Sharing Perspective on Structure 90 Structural Alignment, 126 • Symptoms of
Centralized Versus Decentralized, 90 Structural Deficiency, 127
BookMark 3.0: The Future of Management 91 Design Essentials 128
In Practice: Toyota 92 Chapter 3 Workbook: You and Organization Structure 129
Vertical Information Sharing, 93 • Horizontal Case for Analysis: C & C Grocery Stores, Inc. 130
Information Sharing and Collaboration, 94 Case for Analysis: Aquarius Advertising Agency 133
How Do You Fit the Design?: The Pleasure/Pain of
Working on a Team 99
Part 3 Open System Design Elements 139

Chapter 4: The External Environment 140 In Practice: Fujifilm Holding Corporation 148
Purpose of This Chapter, 141 Framework, 149
The Organization’s Environment 142 BookMark 4.0: Confronting Reality: Doing What
Matters to Get Things Right 150
Task Environment, 142 • General
Environment, 144 • International Adapting to Complexity and Dynamism 152
Environment, 145 Adding Positions and Departments, 152 •
In Practice: Richard Ginori 146 Building Relationships, 153 • Differentiation
and Integration, 154 • Organic Versus
The Changing Environment 146
Mechanistic Management Processes, 156
Complexity, 147 • Dynamism, 148
Contentsix
How Do You Fit the Design? Mind and Environment 157 Design Essentials 202
Planning, Forecasting, and Chapter 5 Workshop: The Shamatosi 204
Responsiveness, 158 Case for Analysis: Why is Cooperation So Hard? 205
Framework for Adapting to Complexity Case for Analysis: Oxford Plastics Company 206
and Dynamism 159
Dependence on Financial Resources 160 Chapter 6: Designing Organizations
Influencing Financial Resources 161 for the International Environment 212
Establishing Formal Relationships, 161 Purpose of This Chapter, 214
In Practice: Omnicom and Publicis 162 Entering the Global Arena 214
Influencing Key Sectors, 164 Motivations for Global Expansion, 215
In Practice: Amazon and Walmart 164 BookMark 6.0: The World Is Flat: A Brief History of
the Twenty-First Century 215
In Practice: Huawei Technologies 165
In Practice: Amway 218
Organization–Environment Integrative Framework 167
Stages of International Development, 219
Design Essentials 168
How Do You Fit the Design? What Is Your Cultural
Chapter 4 Workshop: Organizations You Rely On 169 Intelligence?221
Case for Analysis: CPI Corporation: What Happened? 170 Global Expansion Through International
Case for Analysis: The Paradoxical Twins: Acme Alliances and Acquisitions, 222
and Omega Electronics 171
In Practice: China’s International Expansion 223
Chapter 5: Interorganizational The Challenges of Global Design 223
Relationships178 Increased Complexity and Differentiation, 224
• Increased Need for Coordination, 225 •
Purpose of This Chapter, 180
More Difficult Transfer of Knowledge and
Organizational Ecosystems 180 Innovation, 226
Is Competition Dead?, 181 Designing Structure to Fit Global Strategy 228
In Practice: Apple and Samsung 183
Strategies for Global Versus Local
The Changing Role of Management, 183 • Opportunities, 228
Interorganizational Framework, 185 In Practice: Panasonic 231
Resource Dependence 185 International Division, 231 • Global Product
Types of Resource-Dependence Division Structure, 232 • Global Geographic
Relationships, 186 • Power Implications, 188 Division Structure, 234
In Practice: Facebook 188 In Practice: Colgate-Palmolive Company 235
Collaborative Networks 188 Global Matrix Structure, 235
How Do You Fit the Design? Personal Networking 189 In Practice: ABB Group 237
Why Collaboration?, 189 Additional Global Coordination Mechanisms 238
In Practice: Accelerating Medicines Partnership 191 Global Teams, 238
From Adversaries to Partners, 191 In Practice: L’Oréal 239
BookMark 5.0: Managing Strategic Relationships: Headquarters Planning, 240 • Expanded
The Key to Business Success 192 Coordination Roles, 240 • Benefits of
Population Ecology 193 Coordination, 241
What Hinders Adaptation?, 194 The Transnational Model of Organization 242
In Practice: Barnes & Noble Versus Amazon 194 Design Essentials 246
Organizational Form and Niche, 195 • Chapter 6 Workshop: Made in the U.S.A.? 247
Process of Ecological Change, 195 • Strategies Case for Analysis: TopDog Software 248
for Survival, 196 Case for Analysis: Rhodes Indestries 249
Institutionalism197
The Institutional View and Organization
Design, 198 • Institutional Similarity, 199
x Contents
Part 4 Internal Design Elements 257

Chapter 7: Manufacturing and Service How Do You Fit the Design? Is Goal-Setting
Your Style? 312
Technologies258
Organization Level: The Balanced
Purpose of This Chapter, 261
Scorecard, 313 • Department Level:
Core Organization Manufacturing Technology 262 Behavior Versus Outcome Control, 316
Manufacturing Firms, 262 • Strategy, In Practice: University of Tennessee Medical Center 316
Technology, and Performance, 265
BookMark 6.0: The Checklist Manifesto: How to Get
Contemporary Applications 265 Things Right 318
Trends, 266 Facilitating Employee Coordination and Efficiency 318
In Practice: Carnival Cruise Lines 266 Knowledge Management, 318 • Social
BookMark 7.0: Inviting Disaster: Lessons from the Network Analysis, 320
Edge of Technology 267 Adding Strategic Value 322
The Smart Factory, 268 • Lean Social Business, 323
Manufacturing, 269
In Practice: General Motors 323
In Practice: La-Z-Boy 270
Structural Design for Social Business, 324 •
Performance and Structural Implications, 272 Big Data, 325 • Big Data and Organization
Core Organization Service Technology 273 Structure, 328
Service Firms, 273 In Practice: Caesars Entertainment 330
How Do You Fit the Design? Manufacturing Versus Impact on Organization Design 331
Service276
In Practice: Seattle Children’s Hospital 276
Chapter 8 Workshop: Balanced Scorecard Exercise 334
Designing the Service Organization, 277
Case for Analysis: Century Medical 336
In Practice: Home Depot Inc. 278 Case for Analysis: Is Anybody Listening? 337
Noncore Departmental Technology 279
Variety, 279 • Analyzability, 280 • Chapter 9: Organization Size,
Framework, 280 • Department Design, 282 Life Cycle, and Decline 342
In Practice: Memorial Sloan-Kettering Cancer Center 282 Purpose of This Chapter, 344
Workflow Interdependence Among Departments 284 Organization Size: Is Bigger Better? 344
Types, 285 Pressures for Growth, 344
In Practice: Southwest Airlines 287 BookMark 9.0: Small Giants: Companies That
Choose to Be Great Instead of Big 345
Structural Priority, 288 • Structural
Implications, 288 Dilemmas of Large Size, 346
In Practice: Athletic Teams 289 How Do You Fit the Design? What Size
Organization for You? 348
Sociotechnical Systems 290
In Practice: Dell Inc. 350
Organizational Life Cycle 350
Chapter 7 Workshop: Bistro Technology 294
Stages of Life-Cycle Development, 350
Case for Analysis: AV Corporate: Software Tool Project 294
In Practice: Google 354
Chapter 8: Technology for Control, Social Organizational Characteristics During the
Business, and Big Data 304 Life Cycle, 354
Purpose of This Chapter, 306 Organizational Size, Bureaucracy, and Control 355
Information Technology Evolution 306 What Is Bureaucracy?, 356
The Philosophy and Focus of Control Systems 308 In Practice: United Parcel Service (UPS) 357
The Changing Philosophy of Control, 308 • Size and Structural Control, 358
Feedback Control Model, 311
Contentsxi
Bureaucracy in a Changing World 360 Organizational Decline and Downsizing 368

Organizing Temporary Systems, 361 Definition and Causes, 368
In Practice: Salvation Army 361 In Practice: Eastman Kodak 369
Other Approaches to Busting A Model of Decline Stages, 370 • Downsizing
Bureaucracy, 362 Implementation, 371
Bureaucracy Versus Other Forms of Control 363 Design Essentials 373
Bureaucratic Control, 363 Chapter 9 Workshop: Classroom Control 375
In Practice: East Resources Inc. and Royal Dutch Case for Analysis: Yahoo: “Get to Work!”375
Shell PLC 365 Case for Analysis: Sunflower Incorporated 376
Market Control, 365 • Clan Control, 366
In Practice: Menlo Innovations, FAVI 367
Part 5 Managing Dynamic Processes 383

Chapter 10: Organizational Culture and Chapter 10 Workshop: The Power of Ethics 413
Ethical Values 384 Case for Analysis: Implementing Change at National
Industrial Products 413
Purpose of This Chapter, 386 Case for Analysis: The Boys Versus Corporate 415
Organizational Culture 386
What Is Culture?, 386 • Emergence and Chapter 11: Innovation and Change 420
Purpose of Culture, 387 Purpose of This Chapter, 422
In Practice: Billtrust 388 The Strategic Role of Change 422
Interpreting Culture, 389 Innovate or Fail, 422 • Strategic Types of
Organization Design and Culture 393 Innovation and Change, 424
The Adaptability Culture, 394 In Practice: Elkay Manufacturing 425
In Practice: Zappos 394 Elements for Successful Change 426
The Mission Culture, 395 • The Clan Culture, Technology Change 428
395 • The Bureaucratic Culture, 395 • Culture How Do You Fit the Design? Are You Innovative? 429
Strength and Organizational Subcultures, 396 The Ambidextrous Approach, 430 • The
How Do You Fit the Design? Corporate Culture Bottom-Up Approach, 431
Preference397
In Practice: Taco Bell and Frito-Lay 431
In Practice: Pitney Bowes Credit Corporation 397
Techniques for Encouraging Technology
Constructive Culture, Learning, and Performance 398 Change, 432
In Practice: Box 398 BookMark 11.0: Creativity Inc.: Overcoming the
Ethical Values and Social Responsibility 400 Unseen Forces That Stand in the Way of True Inspiration 434
Sources of Individual Ethical Principles, 400 New Products and Services 435
• Managerial Ethics, 401 • Corporate Social New Product Success Rate, 436 • Reasons
Responsibility, 403 for New Product Success, 437 • Horizontal
BOOKMARK 10.0: Conscious Capitalism: Liberating Coordination Model, 437
the Heroic Spirit of Business 404 In Practice: Corning, Inc. 439
Does It Pay to Be Good?, 405 Open Innovation and Crowdsourcing, 439 •
How Managers Shape Culture and Ethics 405 Achieving Competitive Advantage: The Need
Values-Based Leadership, 406 for Speed, 441
In Practice: Costco 407 Strategy and Structure Change 441
Formal Structure and Systems, 408 The Dual-Core Approach, 442 •
Organization Design for Implementing
Corporate Culture and Ethics in a Global
Management Change, 443
Environment410
In Practice: GlaxoSmithKline 444
xii Contents
In Practice: Zappos 445 Special Decision Circumstances 497

Culture Change 445 High-Velocity Environments, 497 •
Forces for Culture Change, 446 • Decision Mistakes and Learning, 498
Organization Development Culture Change • Cognitive Biases, 499 • Overcoming
Interventions, 447 Cognitive Biases, 500
In Practice: UnitedHealth Group 448 Design Essentials 501
Strategies for Implementing Change 449 Chapter 12 Workshop: Do Biases Influence Your
Leadership for Change, 449 • Techniques Decision Making? 503
for Implementation, 450 • Techniques for Case for Analysis: Cracking the Whip 504
Overcoming Resistance, 451 Case for Analysis: Medici Mediterranean Restaurant 505
Answers to Questions in “Workshop” 506
Chapter 11 Workshop: Innovation Climate 454 Chapter 13: Conflict, Power, and Politics 512
Case for Analysis: Shoe Corporation of Illinois 456 Purpose of This Chapter, 514
Case for Analysis: Southern Discomfort 460
Interdepartmental Conflict in Organizations 514
Chapter 12: Decision-Making Sources of Conflict, 515
Processes466 in Practice: The U.S. Military 518
Purpose of This Chapter, 468 Rational Versus Political Model, 518 • Tactics
for Enhancing Collaboration, 520
Types of Decisions 468
in Practice: The Freaky Friday Management
In Practice: McDonald’s 469
Technique522
Individual Decision Making 470
Power and Organizations 523
Rational Approach, 471
Individual Versus Organizational Power, 524 •
In Practice: Saskatchewan Consulting 473 Power Versus Authority, 524 • Vertical Sources of
Bounded Rationality Perspective, 474 Power, 525 • The Power of Empowerment, 529
How Do You Fit the Design? Making Important in Practice: Morning Star 530
Decisions477 Horizontal Sources of Power, 530
BookMark 12.0: Blink: The Power of Thinking in Practice: International Alliance of Theatrical
without Thinking 479 Stage Employees 533
Organizational Decision Making 480 in Practice: Carilion Health System 535
Management Science Approach, 480 • Political Processes in Organizations 536
Carnegie Model, 482
Definition, 536 • When to Use Political
In Practice: The New York Times482 Activity, 537
Incremental Decision Model, 484 Using Soft Power and Politics 538
In Practice: Ford Motor Company 485 How Do You Fit the Design? Political Skills 539
Organizational Decisions and Change 488 Tactics for Increasing Power, 540 • Political
Combining the Incremental and Tactics for Using Power, 541
Carnegie Models, 488 • Garbage Can in Practice: The Vatican 541
Model, 488
Bookmark 13.0: Influence: Science and Practice 543
In Practice: Nike 492
in Practice: World Bank 544
Contingency Decision-Making
Framework493
Problem Consensus, 493 • Technical Chapter 13 Workshop: How Do You Handle Conflict? 546
Knowledge about Solutions, 494 • Case for Analysis: The Daily Tribune 547
Contingency Framework, 494 Case for Analysis: The New Haven Initiative 548
Contentsxiii
Integrative Cases 553

1.0 W. L. Gore—Culture of Innovation 555 7.0 Sometimes a Simple Change Isn’t So Simple 600
2.0 Rondell Data Corporation 565 8.0 Costco: Join the Club 605
3.0 IKEA: Scandinavian Style 572 9.0 The Donor Services Department 608
4.0 Engro Chemical Pakistan Limited—Restructuring the 10.0 Cisco Systems: Evolution of Structure 612
Marketing Division 576 11.0 Hartland Memorial Hospital (A): An Inbox
5.0 First Union: An Office Without Walls 588 Exercise 616
6.0 Lean Initiatives and Growth at Orlando Metering 12.0 Disorganization at Semco: Human Resource Practices
Company 591 as a Strategic Advantage 625
Glossary635 Corporate Name Index 657

Name Index 646 Subject Index 661
Preface
My vision for the Twelfth Edition of Organization Theory and Design is to integrate
current organization design problems with significant ideas and theories in a way
that is engaging and enjoyable for students. There is an average of 37 new citations
per chapter for new findings and examples that make the Twelfth Edition current
and applicable for students. In addition, significant elements of this edition include
“Managing by Design Questions” and “How Do You Fit the Design?” boxes, along
with updates to every chapter that incorporate the most recent ideas, new case
examples, new book reviews, and new end-of-book integrative cases. The research
and theories in the field of organization studies are rich and insightful and will help
students and managers understand their organizational world and solve real-life
problems. My mission is to combine the concepts and models from organizational
theory with changing events in the real world to provide the most up-to-date view
of organization design available.
Distinguishing Features of the Twelfth Edition

Many students in a typical organization theory course do not have extensive work
experience, especially at the middle and upper levels, where organization theory is
most applicable. Moreover, word from the field is that many students today often
do not read the chapter opening examples or boxed examples, preferring instead
to focus on chapter content. To engage students in the world of organizations,
the Twelfth Edition uses “Managing by Design Questions” at the start of each
chapter. These questions immediately engage students in thinking and expressing
their beliefs and opinions about organization design concepts. Another in-chapter
feature, “How Do You Fit the Design?” engages students in how their personal style
and approach will fit into an organization. Other student experiential activities that
engage students in applying chapter concepts include new “BookMarks,” new “In
Practice” examples, new end-of-chapter cases, and new integrative cases for student
analysis. The total set of features substantially expands and improves the book’s
content and accessibility. These multiple pedagogical devices are used to enhance
student involvement in text materials.
How Do You Fit the Design? The “How Do You Fit the Design?” feature presents
a short questionnaire in each chapter about the student’s own style and preferences
to quickly provide feedback about how they fit particular organizations or situations.
For example, questionnaire topics include “What Is Your Cultural Intelligence?”
“Your Strategy Strength,” “Are You Ready to Fill an International Role?” “Corporate
Culture Preference,” “Is Goal-Setting Your Style?” “Making Important Decisions,”
xv
xvi Preface
and “Personal Networking.” These short feedback questionnaires connect the

student’s personal preferences to chapter material to heighten interest and show the
relevance of chapter concepts.
Managing by Design Questions. Each chapter opens with three short opinion
questions that engage students in clarifying their thoughts about upcoming material
and concepts. These questions are based on the idea that when students express
their opinions first, they are more open to and interested in receiving material that
is relevant to the questions. Example questions, which ask students to agree or
disagree, include:
A certain amount of conflict is good for an organization.
The best measures of business performance are financial.
Savvy organizations should encourage managers to use Twitter.
A CEO’s top priority is to make sure the organization is designed correctly.
Managers should use the most objective, rational process possible when making
a decision.
As a follow-up to the three “Managing by Design” questions, each chapter
contains three “Assess Your Answer” inserts that allow students to compare
their original opinions with the “correct” or most appropriate answers based on
chapter concepts. Students learn whether their mental models and beliefs about
organizations align with the world of organizations.
BookMarks. “BookMarks” are short book reviews that reflect current issues
of concern for managers working in real-life organizations. These reviews, which
represent a unique feature of this text, describe the varied ways companies are
dealing with the challenges of today’s changing environment. New “BookMarks” in
the Twelfth Edition include Great by Choice: Uncertainty, Chaos, and Luck—Why
Some Thrive Despite Them All, Blue Ocean Strategy: How to Create Uncontested
Market Space and Make the Competition Irrelevant, Conscious Capitalism:
Liberating the Heroic Spirit of Business, and Creativity Inc.: Overcoming the
Unseen Forces That Stand in the Way of True Inspiration.
In Practice. This edition contains many new “In Practice” examples that illustrate
theoretical concepts in organizational settings. Many examples are international,
and all are based on real organizations. There are 50 new “In Practice” cases used
within chapters, including Fujifilm Holding Corporation, Carnival Cruise Lines,
Omnicom and Publicis, Amway, Harley Davidson, Morning Star, Valve Software,
Amazon, the Freaky Friday Management Technique, Bloomberg PLC, Apple, Taco
Bell and Frito Lay, L’Oreal, the U.S. Military, Box, BNSF Railway, Toyota Motor
Corporation, Royal Dutch Shell PLC, United Health Group, Allegiant Travel, The
Vatican, Nike, Richard Ginori, Caesar’s Entertainment, International Alliance of
Theatrical Stage Employees, Dell, Town of Sandy Springs, Georgia, Panasonic,
Zappos, and Narayana Hrudayalaya Hospital.
Manager’s Briefcase. Located in the chapter margins, this feature tells students
how to use concepts to analyze cases and manage organizations.
Text Exhibits. Frequent exhibits are used to help students visualize organizational
relationships, and the artwork has been redone to communicate concepts more
clearly.
Prefacexvii
Design Essentials. This summary and interpretation section tells students how
the essential chapter points are important in the broader context of organization
theory and design.
Case for Analysis. These cases are tailored to chapter concepts and provide a
vehicle for student analysis and discussion. New cases for analysis include “It Isn’t
So Simple: Infrastructure Change at Royce Consulting,” “The Venable Museum of
Art,” “CPI Corporation: What Happened?,” “AV Corporate: Software Tool Project,”
“Yahoo: Get to Work!,” “The Boys Versus Corporate,” and “Medici Mediterranean
Restaurant.”
Integrative Cases. The integrative cases at the end of the text have been
expanded and positioned to encourage student discussion and involvement. The
new cases include W. L. Gore—Culture of Innovation, Engro Chemical Pakistan
Limited: Restructuring the Marketing Division, Sometimes a Simple Change Isn’t
So Simple, Rondell Data Corporation, and Disorganization at Semco: Human
Resource Practices as a Strategic Advantage. Previous cases that have been retained
include IKEA: Scandinavian Style, First Union: An Office Without Walls, Lean
Initiatives and Growth at Orlando Metering Company, Costco: Join the Club, The
Donor Services Department, Cisco Systems: Evolution of Structure, and Hartland
Memorial Hospital.
New Concepts
Many concepts have been added or expanded in this edition. New material has
been added on the increasing complexity of the organizational environment, social
business, goal conflict and the hybrid organization, big data analytics, the green
movement and sustainability, the need for collaboration, social network analysis,
quasirationality, manager decision-making biases, stages of disruptive innovation, the
smart factory and trends in manufacturing, innovation contests and crowdsourcing,
types of resource-dependent relationships, radical decentralization and bossless
organization design, conscious capitalism, and global teams as a way to resolve the
tension between a need for global uniformity and a need for local responsiveness.
Chapter Organization
Each chapter is highly focused and is organized into a logical framework. Many
organization theory textbooks treat material in sequential fashion, such as “Here’s
View A, Here’s View B, Here’s View C,” and so on. Organization Theory and
Design shows how they apply in organizations. Moreover, each chapter sticks to
the essential point. Students are not introduced to extraneous material or confusing
methodological squabbles that occur among organizational researchers. The body
of research in most areas points to a major trend, which is reported here. Several
chapters develop a framework that organizes major ideas into an overall scheme.
This book has been extensively tested on students. Feedback from students and
faculty members has been used in the revision. The combination of organization
theory concepts, book reviews, examples of leading organizations, self-insight
questionnaires, case illustrations, experiential exercises, and other teaching devices
is designed to meet student learning needs, and students have responded favorably.
xviii Preface
Supplements
Companion Website. Access important teaching resources on the companion
website. For your convenience, you can download electronic versions of the
instructor supplements at the password-protected section of the site, including the
Instructor’s Manual, Test Bank, and PowerPoint presentations.
To access these additional course materials and companion resources, please
visit www.cengagebrain.com. At the CengageBrain.com home page, search for
the ISBN of your title (from the back cover of your book) using the search box at
the top of the page. This will take you to the product page where free companion
resources can be found.
Instructor’s Manual. The Instructor’s Manual contains chapter overviews, chap-

ter outlines, lecture enhancements, discussion questions, discussion of activities, dis-
cussion of chapter cases, and case notes for integrative cases.
Cognero Test Bank. The Cognero Test Bank contains easy-to-use test creation
software. Instructors can add or edit questions, instructions, and answers and
can select questions (randomly or numerically) by previewing them on the screen.
Instructors can also create and administer quizzes online.
PowerPoint Lecture Presentation. The PowerPoint Lecture Presentation

enables instructors to customize their own multimedia classroom presentations.
Prepared in conjunction with the text and instructor’s resource guide, the package
contains approximately 150 slides. It includes exhibits from the text as well as
outside materials to supplement chapter concepts. Material is organized by chapter
and can be modified or expanded for individual classroom use.
Experiential Exercises in Organization Theor y and Design, Second

Edition. By H. Eugene Baker III and Steven K. Paulson of the University of North
Florida.
Tailored to the table of contents in Daft’s Organization Theory and Design,
Twelfth Edition, the core purpose of Experiential Exercises in Organization Theory
and Design is to provide courses in organizational theory with a set of classroom
exercises that will help students better understand and internalize the basic principles
of the course. The chapters of the book cover the most basic and widely covered
concepts in the field. Each chapter focuses on a central topic, such as organizational
power, production technology, or organizational culture, and provides all necessary
materials to fully participate in three different exercises. Some exercises are intended
to be completed by individuals, others in groups, and still others can be used either
way. The exercises range from instrumentation-based and assessment questionnaires
to actual creative production activities.
Acknowledgments
Textbook writing is a team enterprise. The Twelfth Edition has integrated ideas and
hard work from many people to whom I am grateful. Reviewers and focus group
participants made an especially important contribution. They praised many features,
were critical of things that didn’t work well, and offered valuable suggestions.
Prefacexix
David Ackerman Jane Lemaster

University of Alaska, Southeast University of Texas–Pan American
Kristin Backhaus Kim Lukaszewski
SUNY New Paltz SUNY New Paltz
Michael Bourke Steven Maranville
Houston Baptist University University of Saint Thomas
Suzanne Clinton Rick Martinez
Cameron University Baylor University
Pat Driscoll Ann Marie Nagye
Texas Woman’s University Mountain State University
Jo Anne Duffy Janet Near
Sam Houston State University Indiana University
Cheryl Duvall Julie Newcomer
Mercer University Texas Woman’s University
Allen D. Engle, Sr. Frank Nolan
Eastern Kentucky University Liberty University
Patricia Feltes Asbjorn Osland
Missouri State University George Fox University
Robert Girling Laynie Pizzolatto
Sonoma State University Nicholls State University
Yezdi H. Godiwalla Paula Reardon
University of Wisconsin-Whitewater State University of New York, Delhi
John A. Gould Samantha Rice
University of Maryland Abilene Christian University
George Griffin Richard Saaverda
Spring Arbor University University of Michigan
Leda McIntyre Hall W. Robert Sampson
Indiana University, South Bend University of Wisconsin, Eau Claire
Ralph Hanke Amy Sevier
Pennsylvania State University University of Southern Mississippi
Bruce J. Hanson W. Scott Sherman
Pepperdine University Pepperdine University
Thomas Head Marjorie Smith
Roosevelt University Mountain State University
Patricia Holahan R. Stephen Smith
Stevens Institute of Technology Virginia Commonwealth University
Jon Kalinowski Filiz Tabak
Minnesota State University, Mankato Towson University
Guiseppe Labianca Thomas Terrell
Tulane University Coppin State College
xx Preface
Jack Tucci Richard Weiss

Southeastern Louisiana University University of Delaware
Renee Tyre Judith White
Wilmington University Santa Clara University
Isaiah Ugboro Jan Zahrly
North Carolina A&T State University University of North Dakota
Warren Watson
University of North Texas
Among my professional colleagues, I am grateful to my friends and colleagues at
Vanderbilt’s Owen School—Bruce Barry, Rich Oliver, David Owens, Ty Park, Ranga
Ramanujam, and Bart Victor—for their intellectual stimulation and feedback. I
also owe a special debt to Dean Eric Johnson and Associate Dean Sal March for
providing the time and resources for me to stay current on the organization design
literature and develop the revisions for the text.
I want to extend special thanks to my editorial associate, Pat Lane. She skillfully
wrote materials on a variety of topics and special features, found resources, and did
an outstanding job with the copyedited manuscript and page proofs. Pat’s personal
enthusiasm and care for the content of this text enabled the Twelfth Edition
to continue its high level of excellence. I also thank DeeGee Lester for her work
drafting new end-of-chapter and integrative cases. DeeGee’s creative writing skills
brought to life key organizational issues that students will enjoy discussing and
solving.
The team at Cengage Learning also deserves special mention. Scott Person did
a great job of designing the project and offering ideas for improvement. Managing
Content Developers Suzanne Wilder and Josh Wells were superb to work with and
kept the people and project on schedule while solving problems creatively and
quickly. Jennifer Ziegler and Joseph Malcolm, Project Managers, provided superb
project coordination and used their creativity and management skills to facilitate
the book’s on-time completion. Emily Horowitz, Marketing Manager; Kristen
Hurd, Marketing Director; and Christopher Walz, Marketing Coordinator, offered
additional support, creativity, and valuable market expertise.
Finally, I want to acknowledge the love and support of my daughters, Danielle,
Amy, Roxanne, Solange, and Elizabeth, and my new grandson, Nelson, who make
my life special during our precious time together.
Richard L. Daft
Nashville, Tennessee
January 2015
Introduction to
1
Part
Organizations
Chapter 1 Organizations and Organization Design
Kjel Larsen/Moment/Getty Images
1
Organizations and
Chapter
Organization Design
Learning Objectives A Look Inside Xerox Corporation

After reading this chapter you should be What Went Wrong? • Entering the Digital Era
able to: • The Culture Problem • Shaking Up a Century-Old
1. Define an organization and the importance of Company • “We No Longer Make Copiers”
organizations in society. Organization Design in Action
2. Identify current challenges that organizations Topics • Current Challenges • Purpose
face. of This Chapter
3. Understand how organization design concepts
apply to a major company like Xerox. What Is an Organization?
4. Recognize the structural dimensions of Definition • From Multinationals to
organizations and the contingencies that Nonprofits • Importance of Organizations
influence structure. Dimensions of Organization Design
5. Understand efficiency and effectiveness,
Structural Dimensions • Contingency Factors
and the stakeholder approach to measuring
effectiveness. • Performance and Effectiveness Outcomes
6. Explain historical perspectives on The Evolution of Organization Design
organizations. Historical Perspectives • It All Depends: Key
7. Explain the differences in organic and Contingencies
mechanistic organization designs and the
The Contrast of Organic and Mechanistic Designs
contingency factors typically associated with
each. Contemporary Design Ideas:
8. Discuss the current trend toward bossless Radical Decentralization
organization design. Framework for the Book
Levels of Analysis • Plan of the Book • Plan of
Each Chapter
Design Essentials
Chapter 1: Organizations and Organization Design3
Before reading this chapter, please check whether you agree or disagree with
each of the following statements:
1 An organization can be understood primarily by understanding the people who

make it up.
I Agree I Disagree
2 The primary role of managers in business organizations is to achieve maximum

efficiency.
I Agree I Disagree
3 A CEO’s top priority is to make sure the organization is designed correctly.

I Agree I Disagree
A Look Inside Xerox Corporation

Everyone has probably used the term Xerox to refer to copying pages. Xerox Cor-
poration built its reputation on the copy machine. On the eve of the twenty-first
century, Xerox seemed on top of the world, with fast-rising earnings, a soaring
stock price, and a new line of computerized copier-printers that were techno-
logically superior to rival products. Less than two years later, however, many
considered Xerox a has-been, destined to fade into history. Consider the following
events:
• Sales and earnings plummeted as rivals caught up with Xerox’s high-end digital
machines, offering comparable products at lower prices.
• Xerox’s losses for the opening year of the twenty-first century totaled
$384 m illion, and the company continued to bleed red ink. Debt rose to
$18 billion.
• The company’s stock fell from a high of $64 to less than $4, amid fears that
Xerox would file for federal bankruptcy protection. Over an 18-month period,
Xerox lost $38 billion in shareholder wealth.
• Twenty-two thousand Xerox workers lost their jobs, further weakening the
morale and loyalty of remaining employees. Major customers were alienated,
too, by a restructuring that threw salespeople into unfamiliar territories and
tied billing up in knots, leading to mass confusion and billing errors.
What Went Wrong?

The company’s deterioration is a classic story of organizational mistakes and
decline. Although Xerox appeared to fall almost overnight, the organization’s prob-
lems were connected to a series of organizational blunders over a period of many
years.
4 Part 1: Introduction to Organizations
Xerox was founded in 1906 as the Haloid Company, a photographic supply

house that developed the world’s first xerographic copier, introduced in 1959. With-
out a doubt, the 914 copier was a money-making machine. By the time it was retired
in the early 1970s, the 914 was the best-selling industrial product of all time, and the
new name of the company, Xerox, was listed in the dictionary as a synonym for pho-
tocopying. Yet, like many profitable organizations, Xerox became a victim of its own
success. Leaders no doubt knew that the company needed to move beyond copiers
to sustain its growth, but they found it difficult to look beyond the 70 percent gross
profit margins of the 914 copier.
Xerox’s Palo Alto Research Center (PARC), established in 1970, became known
around the world for innovation—many of the most revolutionary technologies in
the computer industry, including the personal computer, graphical user interface,
Ethernet, and laser printer, were invented at PARC. But the copier bureaucracy, or
Burox as it came to be known, blinded Xerox leaders to the enormous potential of
these innovations. While Xerox was plodding along selling copy machines, younger,
smaller, and hungrier companies were developing PARC technologies into tremen-
dous money-making products and services.
Xerox’s market share declined from 95 percent to 13 percent by 1982. And with
no new products to make up the difference, the company had to fight hard to cut
costs and reclaim market share by committing to Japanese-style techniques and to-
tal quality management. Through the strength of his leadership, CEO David Kearns
was able to rally the troops and rejuvenate the company by 1990. However, he also
set Xerox on a path to future disaster. Seeing a need to diversify, Kearns moved the
company into insurance and financial services on a large scale. When he turned
leadership over to Paul Allaire in 1990, Xerox’s balance sheet was crippled by bil-
lions of dollars in insurance liabilities.
Entering the Digital Era

Allaire wisely began a methodical, step-by-step plan for extricating Xerox from the
insurance and financial services business. At the same time, he initiated a mixed
strategy of cost cutting and new-product introductions to get the stodgy company
moving again. Xerox had success with a line of digital presses and new high-speed
digital copiers, but it fumbled again by underestimating the threat of the desktop
printer.
Desktop printing, combined with the increasing use of the Internet and e-mail,
cut heavily into Xerox’s sales of copiers. People didn’t need to make as many photo-
copies, but they still needed effective ways to create and share documents. Rebrand-
ing Xerox as “The Document Company,” Allaire pushed into the digital era, hoping
to remake Xerox in the image of the rejuvenated IBM, offering not just “boxes
(machines)” but complete document management solutions.
As part of that strategy, Allaire picked Richard Thoman, who was then serv-
ing as Louis Gerstner’s right-hand man at IBM, as his successor. Thoman came to
Xerox as president, chief operating officer, and eventually CEO, amid high hopes
that the company could regain the stature of its glory years. Only 13 months later,
as revenues and the stock price continued to slide, he was fired by Allaire, who had
remained as Xerox’s chairman.
The Culture Problem

Allaire and Thoman blamed each other for the failure to successfully implement the
digital strategy. Outsiders, however, believe the failure had much more to do with
Xerox’s dysfunctional culture. The culture was already slow to adapt, and some
say that under Allaire it became almost totally paralyzed by politics. Thoman was
brought in to shake things up, but when he tried, the old guard rebelled. A manage-
ment struggle developed, with the outsider Thoman and a few allies on one side
lined up against Allaire and his group of insiders who were accustomed to doing
things the traditional Xerox way. Recognized for his knowledge, business expe-
rience, and intensity, Thoman was also considered to be somewhat haughty and
unapproachable. He was never able to exert substantial influence with key manag-
ers and employees or to gain the support of board members, who continued to rally
behind Allaire.
The failed CEO succession illustrates the massive challenge of reinvent-
ing a century-old company. By the time Thoman arrived, Xerox had been going
through various rounds of restructuring, cost cutting, rejuvenating, and reinvent-
ing for nearly two decades, but little had really changed. Some observers doubted
that anyone could fix Xerox because the culture had become too dysfunctional and
politicized. “There was always an in-crowd and an out-crowd,” says one former
executive. “They change the branches, but when you look closely, the same old
monkeys are sitting in the trees.”
Shaking Up a Century-Old Company

In August 2001, Allaire turned over the CEO reins to Anne Mulcahy, a popular
24-year veteran, who had started at Xerox as a copier saleswoman and worked
her way up the hierarchy. Despite her insider status, Mulcahy proved that she was
more than willing to challenge the status quo. She surprised skeptical analysts,
stockholders, and employees by engineering one of the most extraordinary business
turnarounds in recent history.
How did she do it? Few people thought Mulcahy would take the tough a ctions
Xerox needed to survive, but she turned out to be a strong decision maker. She
quickly launched a turnaround plan that included massive cost cutting and the
closing of several money-losing operations, including the division she had previ-
ously headed. She was brutally honest about “the good, the bad, and the ugly” of
the company’s situation, as one employee put it, but she also showed that she cared
about what happened to employees and she gave them hope for a better future.
People knew she was working hard to save the company. After major layoffs,
Mulcahy walked the halls to tell people she was sorry and let them vent their anger.
She personally negotiated the settlement of a long investigation into fraudulent
accounting practices, insisting that her personal involvement was necessary to signal
a new commitment to ethical business practices. She appealed directly to creditors,
begging them not to pull the plug until a new management team could make needed
changes.
Mulcahy transferred much of production to outside contractors and refocused
Xerox on innovation and service. In addition to introducing new products,
Xerox moved into high-growth areas such as document management services,
IT consulting, and digital press technology. A series of small acquisitions enabled

the company to enter new markets and expand its base of small and medium-sized
business customers.
“We No Longer Make Copiers”

Mulcahy also thought carefully about succession plans, and in 2009 she handed
the top job to her second-in-command, Ursula Burns, who became the first African-
American woman to head a Fortune 500 company. Burns, like Mulcahy, spent de-
cades climbing the ranks at Xerox, actually starting her career there as an intern
before earning a master’s degree in engineering from Columbia University. Just as
Xerox dominated the office of yesterday with its copiers, Burns set a new course to
dominate the office of tomorrow. More than half of Xerox’s business now comes
from services such as running electronic toll solutions on highways and bridges,
processing insurance claims, and managing customer call centers. A services deal in
trial mode with municipalities in California will give people a ping on their mobile
phones saying “There’s a parking spot a block over” and then charge the appropri-
ate amount, which enables cities to maximize parking fees during congested park-
ing times. Sophie Vandebroek, Xerox’s chief technology officer, got tired of people
ignoring the cool new technology at the Xerox booth at career fairs in favor of what
was going on at the Google or IBM booths. So, a few years ago, she put up a sign
that said “We no longer make copiers.” It got plenty of attention from people ask-
ing, “So, what do you do?”
A decade or so after this American icon almost crashed, Xerox is once again
admired in the corporate world. The company was positioned in the “Visionaries”
quadrant of Gartner Inc.’s Magic Quadrant for Enterprise Content Management for
its ability to deliver content management capabilities, including on-site and cloud-
based solutions. Has the “perfect storm” of troubles been replaced with a “perfect
dawn”? Burns and her top management team believe Xerox is positioned to be
resilient in the face of the current economic slowdown, but in the rapidly changing
world of organizations, nothing is ever certain.1
Organization Design in Action

Welcome to the real world of organization design. The shifting fortunes of Xerox
illustrate organization design in action. Xerox managers were deeply involved in
organization design each day of their working lives—but many never realized it.
Company managers didn’t fully understand how the organization related to the
environment or how it should function internally. Organization design gives us the
tools to evaluate and understand how and why some organizations grow and suc-
ceed while others do not. It helps us explain what happened in the past, as well as
what might happen in the future, so that we can manage organizations more effec-
tively. Organization design concepts have enabled Anne Mulcahy and Ursula Burns
to analyze and diagnose what is happening and the changes needed to help Xerox
keep pace with a fast-changing world. Organization design gives us the tools to
explain the decline of Xerox, understand Mulcahy’s turnaround, and recognize the
steps Burns is taking to keep Xerox competitive.
Similar problems have challenged numerous organizations. Kodak, for

e xample, once ruled the photographic film business but failed to adapt as the
business went digital. The company invented one of the first digital cameras and
spent hundreds of millions of dollars developing digital technology, but the fear
of cannibalizing their lucrative film business paralyzed managers when time came
to go to market. Kodak is now struggling to stay alive as it remakes itself into
a company that sells printers and ink.2 Or consider the dramatic organizational
missteps illustrated by some U.S. government agencies in recent years. The Secret
Service b ecame embroiled in a public relations nightmare when news broke that
members of the security team sent to prepare for President Barack Obama’s visit to
Cartagena, Colombia, engaged in a night of heavy drinking, visited strip clubs, and
brought prostitutes to their hotel rooms. Several agents were fired, and d irector
Mark Sullivan and other managers were called before a Senate subcommittee to
explain the breakdown in control. The agency was again in trouble in late March
2014 when three agents preparing for Obama’s visit to the Netherlands were sent
home after one member of the group was found intoxicated and passed out in the
hallway of his hotel in Amsterdam.3 The reputation and effectiveness of the I nternal
Revenue Service (IRS) was threatened because of a decision to a pply a dditional
screening to tax-exempt applications from conservative Tea Party groups. It has
long been a practice to give extra scrutiny to certain kinds of groups that present
a potential for fraudulent use of tax-exempt status, but critics say the agency went
too far in how it applied the practice to conservative political organizations, in
some cases delaying applications for years.4
Topics
Each of the topics to be covered in this book is illustrated in the opening Xerox
case. Indeed, managers at organizations such as Xerox, Kodak, the Secret Service,
and the IRS are continually faced with a number of challenges. For example:
• How can the organization adapt to or control such external elements as com-
petitors, customers, government, and creditors in a fast-paced environment?
• What strategic and structural changes are needed to help the organization attain
effectiveness?
• How can the organization avoid management ethical lapses that could threaten
its viability?
• How can managers cope with the problems of large size and bureaucracy?
• What is the appropriate use of power and politics among managers?
• How should internal conflict and coordination between work units be
managed?
• What kind of corporate culture is needed and how can managers shape that
culture?
• How much and what type of innovation and change is needed?
These are the topics with which organization design is concerned. Organiza-
tion design concepts apply to all types of organizations in all industries. Manag-
ers at Hyundai, for example, turned the Korean auto manufacturer once known for
producing inexpensive no-frills cars with a poor reputation into the world’s fourth
largest automaker by relentlessly focusing on quality, cost-control, and customer
satisfaction. Bob Iger and his top management team revitalized the Walt Disney
Briefcase Company by effectively managing internal conflicts and enhancing coordination
As an organization both within the company and with outside partners. Managers at high-end cosmet-
manager, keep these ics firm Estée Lauder undertook a major reorganization to improve sales in a weak
guidelines in mind: economy.5 All of these companies are using concepts based in organization design.
Do not ignore the Organization design also applies to nonprofit organizations such as the United Way,
external environment or the American Humane Association, local arts organizations, colleges and universities,
protect the organization and the Make-A-Wish Foundation, which grants wishes to terminally ill children.
from it. Because the
environment is unpre-
Organization design draws lessons from organizations such as Xerox,
dictable, do not expect Walt Disney Company, and United Way and makes those lessons available to
to achieve complete or- students and managers. As our opening example of Xerox shows, even large,
der and rationality within successful organizations are vulnerable, lessons are not learned automatically, and
the organization. Strive organizations are only as strong as their decision makers. Research shows that many
for a balance between
order and flexibility.
new companies don’t survive past their fifth birthday, yet some organizations thrive
for 50 or even 100 years. This chapter’s BookMark examines some characteristics
Bookmark 1.0 Have You Read This Book?
Great by Choice: Uncertainty, will work and only then bring out the big guns. “After
the cannonball hits,” they write, “you keep 20 Mile
Chaos, and Luck—Why Some Marching to make the most of your big success.”
Thrive Despite Them All • Productive Paranoia. Herb Kelleher, founder and for-
By Jim Collins and Morten T. Hansen mer CEO of Southwest Airlines, was always preparing
for the next recession, even when none was in sight.
Jim Collins, the author of the bestseller Good to Great, has 10X managers “remain productively paranoid in good
spent many years looking at companies that perform better times, recognizing that it’s what they do before the
than their peers despite periods of instability, uncertainty, storm that matters most.” They are always building
and crisis. For his new book Great by Choice, Collins teams buffers and putting in place shock absorbers to deal
with management professor Morten Hansen to describe the with unexpected events.
management actions that contribute to success.
Control and Discipline in the Face of Change
Three Characteristics for Long-Term Success Change is inevitable and innovation is necessary. The
Great by Choice first describes organizations, called public and the media tend to admire and revere the brash
10Xers, that have outperformed their industry averages risk-takers, but the organizations that survive over the
by at least 10 times over a period of at least 15 years long term, Collins and Hansen assert, are those that are
and compares them to similar, less successful compa- specific, methodical, and consistent, which they refer to
nies. The 10Xers include Southwest Airlines, Amgen, as SMaC. Sometimes, they say, it’s better to be “one fad
Intel, and Progressive Insurance. Managers of 10X com- behind.” Successful companies prepare rigorously for what
panies all share three characteristics: they cannot predict, tend to not take excessive risks, and
• Fanatic Discipline. The authors use the metaphor of keep comfortable buffers in every area of their business.
the 20 Mile March, a paced, consistent journey to- Managers in these organizations rely on evidence and tend
ward goals that requires both the ambition to achieve to prefer consistent gains to big winners.
and the self-control to hold back. 10X managers pre- “What’s coming next?” the authors ask. “All we know
fer consistent gains over shoot-for-the moon risks. is that no one knows. Yet some companies and leaders
Andrew Grove at Intel, for example, abandoned the navigate this type of world exceptionally well. . . . They
business of making memory chips only after thor- build great enterprises that can endure. We do not be-
oughly learning about the changing technology envi- lieve that chaos, uncertainty, and instability are good;
ronment and business environment. companies, leaders, organizations, and societies do not
• Empirical Creativity. An entire chapter is devoted to the thrive on chaos. But they can thrive in chaos.”
“fire bullets, then cannonballs” approach. Managers Great by Choice, by Jim Collins and Morten T. Hansen, is published by
in 10X organizations tend to fire bullets to see what HarperBusiness.
that can help organizations thrive over the long term. Organizations are not
static; they continuously adapt to shifts in the external environment. Today, many
companies are facing the need to transform themselves into dramatically different
organizations because of new challenges in the environment.
Current Challenges
Research into hundreds of organizations provides the knowledge base to make
Xerox and other organizations more effective. Challenges organizations face
today are different from those of the past, and thus the concept of organizations
and organization design is evolving. The world is changing more rapidly than ever
before, and managers are responsible for positioning their organizations to adapt
to new needs. Some specific challenges today’s managers and organizations face are
globalization, intense competition, rigorous scrutiny of ethical and green practices,
the need for rapid response, and incorporating social business and big data.
Globalization. The cliché that the world is getting smaller is dramatically true
for today’s organizations. Markets, technologies, and organizations are becom-
ing increasingly interconnected.6 Today’s successful organizations feel “at home”
anywhere in the world. Managers who can help their companies develop a global
perspective, such as Carlos Ghosn, the Brazilian-Lebanese-French CEO of Japanese
automaker Nissan, or Medtronic CEO Omar Ishrak, a Bangladesh native who was
educated in the United Kingdom and worked in the United States for nearly two
decades, are in high demand.7
Companies can locate different parts of the organization wherever it makes the
most business sense: top leadership in one country and technical brainpower and
production in other locales. Alan Mulally, CEO of U.S.-based Ford Motor Com-
pany, spends about a third of his time on matters related to China. Ford was late
getting into China and in 2013 had only about 3 percent of the Chinese auto mar-
ket. Mulally said he planned to build five additional plants in that country, double
the number of dealerships, bring 15 new vehicles to China, and launch the Lincoln
brand there in 2014. “Clearly this is going to continue to be the highest rate growth
for us,” Mulally said.8
Related trends are global outsourcing, or contracting out some functions to
organizations in other countries, and strategic partnering with foreign firms to gain
a global advantage. Cross-border acquisitions and the development of effective
business relationships in other countries are vital to many organizations’ success.
Large multinational corporations are actively searching for managers with strong
international experience and the ability to move easily between cultures. Yet doing
business on a global scale is not easy. Several garment factory fires in Bangladesh in
2012 and the collapse of another apparel plant in 2013 that killed more than 1,100
workers put the spotlight on poor working conditions in that country. The problem
for retailers such as Walmart, H&M, Target, and other big companies that outsource
is that similar poor working conditions exist in other low-wage countries such as
Pakistan, Cambodia, Indonesia, and Vietnam that produce most of the world’s
clothing. Both European and American retailers have announced plans aimed at
improving safety in overseas factories, but the challenge of monitoring contractors
and subcontractors in low-wage countries is a massive one.9 Apple, Amazon, and
other Western companies have also run into problems using overseas contractors to
manufacture other types of products.10
Intense Competition. The growing global interdependence creates new

advantages, but it also means that the environment for companies has become
extremely complex and extremely competitive. Customers want low prices for
quality goods and services, and the organizations that can meet that demand
will win. Outsourcing firms in low-wage countries can often do work for 50 to
60 percent less than companies based in the United States, for instance, so U.S.
firms that provide similar services have to search for new ways to compete or
go into new lines of business. 11 One entrepreneur with a new type of b attery
for notebook computers is having the product manufactured by a factory in
Shenzhen, China. She wanted to produce it in the United States, but U.S. contract
manufacturers wanted millions of dollars up front, a demand not made by any of
the manufacturers she met with in China.12
In today’s weak economy, companies in all industries are feeling pressure to
drive down costs and keep prices low, yet at the same time they are compelled to
invest in research and development or get left behind in the global drive for in-
novation. Texas Instruments (TI) recently announced that it is shifting away from
the mobile-chip business because of intense competition from smartphone makers’
in-house designers. TI is cutting about 1,100 jobs as it refines its focus, which will
include developing new embedded processors such as those used in cars and indus-
trial equipment.13 Or consider McDonald’s. Even as managers were seeking ways to
expand the menu and draw in new customers, McDonald’s labs were testing how to
cut the cost of making basic items on the Dollar Menu. With the price of ingredients
such as cheese, beef, and buns going up, McDonald’s had to cut internal costs or
lose money on its dollar-menu products.14 Auto insurers searched for new ways to
compete as drivers faced with steep gas prices looked for ways to cut their transpor-
tation costs.15
Ethics and the Green Movement. Today’s managers face tremendous pressure
from the government and the public to hold their organizations and employees to
high ethical and professional standards. Following widespread moral lapses and cor-
porate financial scandals, organizations are under scrutiny as never before. A recent
survey of Wall Street workers by the law firm Labaton Sucharow found that almost
25 percent of finance professionals say they would cheat to make $10 million if they
could get away with it. Moreover, 52 percent believe it is likely that their competitors
have engaged in illegal or unethical activity.16 Big banks such as J.P. Morgan Chase &
Company, Bank of America, and Citigroup are spending billions in legal expenses to
clean up the mess related to Justice Department investigations of banking-industry
activities during the housing downturn and the financial crisis. J.P. Morgan has
added 7,000 extra risk-control employees and provided 750,000 hours of training
on regulatory and control issues. “Fixing our controls issues is job No. 1,” CEO
Jamie Dimon said. The bank denies deliberately misleading clients and investors, but
Dimon knows he has to prove to regulators and the public that J.P. Morgan is “as
adept at maintaining controls as it is in recording profits.”17
In addition to calls for higher ethical standards, people are demanding a
stronger commitment by organizations to social responsibility, particularly when
it comes to protecting the natural environment. Going green has become a new
business imperative, driven by shifting social attitudes, new government policies,
climate changes, and the information technology that quickly spreads news of a cor-
poration’s negative impact on the environment. Many companies are embracing the
philosophy of sustainability, which refers to economic development that generates
wealth and meets the needs of the current generation while saving the environment
so future generations can meet their needs as well. 18 Interface, an Atlanta-based
carpet manufacturer, is committed to reducing its use of virgin raw materials
and eliminating its impact on the environment by 2020. Currently, 49 percent of
Interface’s total raw materials are recycled or bio-based. An experimental recy-
cling program called Net-Works in the Philippines allows villagers to dispose of
used fishing nets for cash. The nets are baled and sent to a facility that combines
them with nylon fluff and other waste materials and makes them into carpet fiber.
The program helps the villagers, as well as eliminates a serious hazard for marine
life. Interface hopes to expand the program in the Philippines and launch similar
efforts in Indonesia and Cameroon.19
Speed and Responsiveness. A fourth significant challenge for organizations

is to respond quickly and decisively to environmental changes, organizational
crises, or shifting customer expectations. For much of the twentieth century,
organizations operated in a relatively stable environment, so managers could focus
on designing structures and systems that kept the organization running smoothly
and efficiently. There was little need to search for new ways to cope with increased
competition, volatile environmental shifts, or changing customer demands.
Today, new products, new companies, and even entirely new industries rise and
fall faster than ever. Studies have found that speed of development contributes
to new product success.20 To retain its status as one of the golf industry’s most
innovative companies, Callaway Golf introduces seven to eight new products a
year, which requires a design process that encourages close coordination between
design teams, engineers, manufacturers, marketing staff, and even lawyers, and the
sharing of information with partners in the United States, China, Japan, Korea,
Mexico, and Taiwan. Collaborative technology gives everyone round-the-clock
access to the latest information and documents, eliminating slowdowns created by
time zones.21
Some companies must be even more nimble. Who ever considered that retailers
could accept credit card payments using a smartphone? Who would have thought
that musicians would one day not need a record label to make money? Consider-
ing the turmoil and flux inherent in today’s world, managers and companies need a
mindset of continuous reinvention to succeed, which typically means giving people
on the front lines the power to experiment and make decisions.22 General Stanley
McChrystal, who ran Joint Special Operations Command in Iraq and Afghanistan
and later commanded all U.S. and international forces in Afghanistan before he
resigned, explains. “We grew up in the military with this [classic hierarchy]: one
person at the top, with two to seven subordinates below that, and two to seven
below that, and so on. That’s what organizational theory says works.” Against Al
Qaeda, however, “we had to change our structure, to become a network. We were
required to react quickly. Instead of decisions being made by people who were more
senior—we found that the wisest decisions were usually made by those closest to
the problem.”23
Social Business and Big Data. Today’s realm of the Internet, social network-
ing, blogs, online collaboration, web-based communities, podcasting, mobile de-
vices, Twittering, Facebooking, YouTube-ing, and Skype-ing is radically different
from the world many established managers are familiar and comfortable with.24
The digital revolution has changed everything—not just how we communicate
with one another, find information, and share ideas, but also how organizations
are designed and managed, how businesses operate, and how employees do their
jobs. Social business, which refers to using social media technologies for interacting
with and facilitating communication and collaboration among employees, custom-
ers, and other stakeholders, is one of the most current challenges managers face.
Social media programs, including a company’s online community pages, wikis for
virtual collaboration, social media sites such as Facebook or LinkedIn, video chan-
nels such as YouTube, microblogging platforms such as Twitter, and company on-
line forums, can improve efficiency, increase productivity, and facilitate faster and
smoother operations by improving communication and collaboration within and
across firms.25 In addition, social media technology is being used by companies to
build relationships with customers.26 Dell, for example, launched a social media
command room in 2010 to monitor what was being said about the company on
social media platforms.27
Just as importantly, social media can build stronger, more authentic relation-
ships between managers and employees. Shortly after arriving as the new CEO of
MassMutual, Roger Crandall attended the company’s biggest sales conference and
was asked by an employee with a Flip cam if she could record him at the conference
and post the video on the company intranet’s community page. “A Week in the Life”
was available for the whole company to watch in real time, and “was a great way to
create a personal connection,” Crandall said.28 Some managers have begun incorpo-
rating video streams into their blogs because they allow them to engage with people
in real time on a highly personal level.29
Another aspect of the digital revolution is the use of big data analytics, which
refers to technologies, skills, and processes for searching and examining massive
sets of data to uncover hidden patterns and correlations.30 Facebook, for example,
uses the personal data you put on your page and tracks and monitors your online
behavior along with everyone else’s, then searches through all those data to iden-
tify and suggest potential “friends.”31 Amazon.com collects tons of data on cus-
tomers, including what books they buy, what else they look at, how they navigate
through the website, how much they are influenced by promotions and reviews,
and so forth. The company uses algorithms that predict and suggest what books
a customer might be interested in reading next.32 However, big data is not just for
online companies.33 Walmart collects more than 2.5 petabytes of data every hour
from customer transactions and uses those data to make better decisions (a petabyte
is about a million gigabytes or the equivalent of about 20 million filing cabinets full
of written data).34
Purpose of This Chapter

The purpose of this chapter is to explore the nature of organizations and organiza-
tion design today. Organization design has developed from the systematic study of
organizations by scholars. Concepts are obtained from living, ongoing organiza-
tions. Organization theory and design has a practical application, as illustrated by
the Xerox case. It helps managers understand, diagnose, and respond to emerging
organizational needs and problems.
The next section begins with a formal definition of organization and then ex-
plores introductory concepts for describing and analyzing organizations, including
various structural dimensions and contingency factors. We introduce the concepts of
effectiveness and efficiency and describe the stakeholder approach, which considers
what different groups want from the organization. Succeeding sections examine the
history of organization design, the distinction between mechanistic and organic de-
signs, organizations as open systems, and how organization theory can help people
manage complex organizations in a rapidly changing world. The chapter closes with
a brief overview of the themes to be covered in this book.
What Is an Organization?
Organizations are hard to see. We see outcroppings, such as a tall building, a com-
puter workstation, or a friendly employee, but the whole organization is vague and
abstract and may be scattered among several locations, even around the world. We
know organizations are there because they touch us every day. Indeed, they are so
common that we take them for granted. We hardly notice that we are born in a
hospital, have our birth records registered in a government agency, are educated in
schools and universities, are raised on food produced on corporate farms, are treated
by doctors engaged in a joint practice, buy a house built by a construction company
and sold by a real estate agency, borrow money from a bank, turn to police and fire
departments when trouble erupts, use moving companies to change residences, and
receive an array of benefits from various government agencies.35 Most of us spend
many of our waking hours working in an organization of one type or another.
Definition
Organizations as diverse as a bank, a corporate farm, a government agency, and
Xerox Corporation have characteristics in common. The definition used in this
book to describe organizations is as follows: organizations are (1) social entities that
(2) are goal-directed, (3) are designed as deliberately structured and coordinated
activity systems, and (4) are linked to the external environment.
An organization is a means to an end and it has to be designed to accomplish
that end. It might be thought of as a tool or machine to get things done and achieve
a specific purpose. The purpose will vary, but the central aspect of an organization is
the coordination of people and resources to collectively accomplish desired goals. 36
An organization is not a building or a set of policies and procedures; organizations
are made up of people and their relationships with one another. An organization
exists when people interact with one another to perform essential functions that help
attain goals. Managers and owners deliberately structure organizational resources to
achieve the organization’s purpose. However, even though work may be structured
into separate departments or sets of activities, most organizations today are striving
for greater horizontal coordination of work activities, often using teams of employees
from different functional areas to work together on projects. Boundaries between
departments, as well as those between organizations, are becoming more flexible and
diffuse as companies face the need to respond to changes in the external environment
more rapidly. An organization cannot exist without interacting with customers,
suppliers, competitors, and other elements of the external environment. Today, some
companies are even cooperating with their competitors, sharing information and
technology to their mutual advantage. Exhibit 1.1 shows the organization as an open
system that obtains inputs from the external environment, adds value through a
transformation process, and discharges products and services back to the environment.
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1 table-spoon cinnamon
1 tea-spoon cloves
1 tea-spoon soda
Flour
Mix altogether, dissolving the soda in a very little hot water. Add
sufficient flour to make a fairly stiff dough. Roll out thin and bake in a
quick oven.
Ground Rice Biscuits
¹⁄₂ lb. ground rice

¹⁄₂ lb. flour
¹⁄₂ lb. castor sugar
¹⁄₂ lb. butter
2 eggs
1 tea-spoonful of baking powder
Mix the baking powder with the flour and ground rice, and then rub
the butter into it. Add the well-beaten eggs. Roll out on a board and
cut into rounds about the size of a five-shilling piece. Bake on a
floured tin.
Hazel Nut Biscuits

4 ozs. hazel nuts
1 oz. sweet almonds
Whites of two eggs
6 ozs. powdered sugar
Flour
Blanch the nuts and pound them, but not very finely. Beat the
whites to a stiff froth. Mix them with the nuts. Add the sugar. Mix in
sufficient flour to make a paste. Roll it out on a board as thin as
possible. Cut into small rounds. Bake on buttered tins in a slow oven.
*Kletskoppen
7 ozs. flour
12 ozs. brown sugar
4 ozs. almonds
2 ozs. butter
Mix sugar and butter together. Add the flour and the almonds
blanched and chopped. Divide into small cakes. Bake in a quick
oven.
*Little Biscuits
¹⁄₂ lb. flour

2 eggs
¹⁄₄ lb. butter
¹⁄₄ lb. powdered sugar
A small tea-spoonful baking powder
A small wine-glass of sherry
Put the flour, sugar and baking powder into a basin and stir well
together. Rub in the butter and add the well beaten eggs. Mix with
the wine into a paste just firm enough to roll out on a paste-board.
Cut out in little rounds with a small wine-glass. Bake on a floured tin
until a delicate colour, like nicely baked pastry.
*Little Dutch Cakes

4 ozs. butter
4 ozs. white sugar
4 ozs. flour
Vanilla
2 yolks
1 white of egg
1 oz. almonds blanched and chopped
Mix the butter and sugar thoroughly together. Add the flour.
Flavour with a few drops of vanilla. Beat the yolks and add them to
the mixture. Roll out the paste. Shape it into rings. Dip each in the
white of egg and sprinkle over them the chopped almonds.
Louisa Cakes
3 oz. cornflour
3 oz. flour
4 ozs. butter
3 eggs
4 ozs. powdered sugar
1 tea-spoon baking powder
Beat the butter to a cream and add the sugar. Then add one egg
at a time, beating thoroughly. Stir in the flour (in which the baking
powder has been mixed) and beat well. Bake in greased patty pan in
a quick oven from 15 to 20 minutes. Ice when nearly cold with plain
icing, p. 65, and ornament with crystallised cherries.
Macaroons
1 lb. sweet almonds
10 bitter almonds
Whites of eight eggs
1 tea-spoon arrowroot
Blanch and pound the almonds, adding to them a little rose water.
Put in a basin, cover and set aside for twenty-four hours. Then beat
the whites to a very stiff froth. Stir in the sugar lightly and add the
almonds and arrowroot gradually. Drop spoonfuls of the mixture on
buttered paper, sprinkle with powdered sugar and bake on a tin
sheet in a quick oven until a delicate brown. One or two sliced
almonds can be stuck into each biscuit.
Macaroons
1 lb. sweet almonds
Whites of four eggs
1 lb. powdered sugar
Rose water
Blanch and pound the almonds, add to them a little rose water. Mix
thoroughly with the sugar over a fire. Whisk the whites to a stiff froth.
Add to the almonds. Grease a paper and spread it on a baking
sheet. Put the mixture on by spoonfuls. Bake in a rather slow oven
for twenty minutes.
Madeleines
¹⁄₂ lb. butter

14 ozs. flour
6 eggs
1 dessert-spoon orange flower water
Melt the butter and pour it into a basin. Add to it gradually, beating
all the time, the flour and sugar. Beat the yolks and whites
separately. Add the yolks first, then the flavouring, and, lastly, the
whites. Butter a number of little tin shapes, fill them and bake in a
moderate oven.
Oat Cakes
1 lb. oatmeal
A pinch of soda
Hot water
Mix oatmeal and soda, adding hot water to make a soft dough.
Knead till smooth. Press into a round cake ¹⁄₂ inch thick, then roll out
as thin as required with a roller. Divide into cakes with a cutter. Place
them on a hot griddle and bake till firm. Take them off, rub them with
meal and toast before the fire till they curl.
Orange Biscuit
Several Seville oranges
Their weight in powdered sugar
Boil the oranges whole, three times, changing the water each time.
Cut them in halves and take out all the pulp and juice. Beat the
outside very fine in a mortar and add to it the sugar. Mix into a paste.
Spread very thinly on glass or plates and set in the sun to dry. When
nearly dry cut into shapes and turn over. When quite dry put away in
an air-tight tin.
*Orange Wafers
¹⁄₂ lb. sugar

¹⁄₄ lb. flour
4 eggs
¹⁄₂ orange
1 lemon
Grate the yellow rind from half an orange. Put it in a cup and
squeeze the juice of a whole lemon over it. After half-an-hour strain
off the juice.
Beat the sugar and yolks until light and creamy. Add the strained
juice and the whites whipped to a stiff froth. Sift in the flour and do
not beat any more. Drop by the spoonful on to greased paper and
bake quickly. Spread half of the wafers, when baked, with
marmalade and put the others on top of them, pressing them lightly
down.
Rice Cakes
2 eggs
Their weight in flour, powdered sugar and butter
1 large table-spoon rice flour
¹⁄₂ tea-spoon baking powder
Cream the butter and add the sugar. Mix the baking powder, flour
and rice flour together and add to the butter and sugar. Whisk the
eggs till light and frothy. Beat all well together. Bake in buttered patty
pans.
Rock Cakes—I
¹⁄₂ lb. flour

2 ozs. butter
3 ozs. moist sugar
2 ozs. currants
2 eggs
¹⁄₂ tea-spoon baking powder
Rub the butter into the flour. Add the sugar and currants. Beat the
eggs well and add to the mixture. Mix well together and drop in
irregular shapes on a buttered tin. Bake in a moderate oven.
Rock Cakes—II
¹⁄₂ lb. self-raising flour

1 egg
¹⁄₄ lb. Demerara sugar
¹⁄₂ tea-cup milk
¹⁄₄ lb. butter and lard mixed
2 ozs. currants
Candied peel
1 table-spoon desiccated cocoanut
Mix flour, sugar, butter, currants and cocoanut well, then add the
egg and milk. If the butter is soft it will not require all the milk, for
they are better mixed as dry as possible. Put the mixture in rough
pieces on a tin, and bake in a rather quick oven for fifteen or twenty
minutes.
Shortbread
1 lb. flour
¹⁄₂ lb. fresh butter
¹⁄₄ lb. powdered sugar
Soften the butter a little and cut it into the flour. Knead in the sugar.
Roll out. Cut into shapes. Bake in a tin, on buttered paper, until a
delicate brown.
*Shortbread Biscuits
1 lb. flour
4 ozs. butter
1 egg
A little cream
Rub the butter into sifted and dried flour. Add the sugar and the
egg slightly beaten.
Moisten with a very little cream or milk. Roll out thin. Cut into
rounds. Bake on tins in a quick oven.
Snow Cakes
2 cups sugar
¹⁄₂ cup butter
1 cup sweet milk
3 cups flour
3 tea-spoons baking powder
Whites of five eggs
Cream the butter. Add the sugar and beat well. Then add the flour,
in which the baking powder should be mixed, and the milk. Beat for
ten minutes. Whisk the whites to a stiff froth, and stir in lightly. Bake
in square tins. When quite cold, cut off all the brown outside and
divide into pieces about two inches square. Take each piece on a
fork and ice and roll in finely grated cocoanut.
Sponge Fingers or Cakes

10 eggs
³⁄₄ lb. flour
Beat the eggs together until very light. Add the sugar and beat for
fifteen minutes. Sift the flour in lightly. Bake in tins made for the
purpose, in a quick oven.
Sugar Cakes
6 eggs
1 cup butter
3 cups sugar
Flour
Beat the yolks and whites separately very thoroughly. Cream the
butter and sugar. Add the yolks. Beat well. Stir in the whites and
enough flour to make a paste that can be lightly rolled out. Flavour
with a few drops of lemon juice. Cut into rounds and bake in a quick
oven.
Whole Meal Biscuits

1 cup rich cream, sour or sweet
¹⁄₄ cup powdered sugar
1 salt-spoon salt
2 cups fine whole meal
Mix together and knead with the hand until stiff enough to roll out
as thin as a wafer. Cut into rounds and bake on floured tins in a very
hot oven.
Breakfast and Tea Cakes
PAGE
American Crumpets 111
” Muffins with Eggs 111
” Muffins without Yeast 113
Balloon Cakes 113
Breakfast Scones 114
Cringles 115
Crumpets 115
Dropped Scones 116
Echaudés à Thé 117
Golden Corn Cake 117
Little Breakfast or Tea Rolls 118
Quickly-made Scones 118
Scones 119
Soda Scones 119
Tea Buns 120
Tea Cakes—I. 121
” ” II. 122
” ” III. 122
” ” (self-raising flour) 123
York Cakes 123
Yorkshire Cake 124
*American Crumpets
3 cups warm milk
¹⁄₂ cup yeast
2 table-spoons melted butter
1 salt-spoon salt
1 salt-spoon soda
Flour
Mix the yeast, milk, salt and sufficient flour to make a good batter,
together and set to rise. When well risen beat in the melted butter.
Sift the soda and stir it in dry. Put in well greased patty pans or
muffin rings, allowing the batter to rise for fifteen minutes before
putting into the oven. Bake in a quick oven.
American Muffins with Eggs

1 quart milk
³⁄₄ cup yeast
2 table-spoons powdered sugar
1 table-spoon butter
1 tea-spoon salt
4 eggs
Flour
Mix all the ingredients, except the eggs, with sufficient flour to
make a good batter, overnight. Cover and set to rise. In the morning
beat the eggs till very light. Stir them in. Bake for twenty minutes in a
quick oven in well greased muffin rings.
*American Muffins without Yeast
¹⁄₂ pint milk

¹⁄₂ pint cream
1 heaping pint of flour
3 eggs
1 table-spoon of melted lard and butter mixed
Beat the yolks and whites separately. Stir them together. Add the
milk, salt, butter and flour. Bake at once in well-greased muffin tins in
a quick oven. The tins should only be filled half full of the mixture.
Serve hot.
Balloon Cakes
2 table-spoons yeast
4 table-spoons cream
6 table-spoons flour
Mix the yeast with the cream. Sift the flour. Work the yeast and
cream into it. Set in a warm place to rise. When risen roll out very
thin. Cut into round cakes. Bake for four minutes.
*Breakfast Scones
1 quart milk
³⁄₄ cup lard and butter
³⁄₄ cup yeast
2 table-spoons white sugar
1 tea-spoon salt
Flour
Warm the milk. Melt the lard and butter. Add it to the milk. Stir in
sufficient flour, sugar, salt and yeast to make a soft dough. Mix over
night. Cover and leave to rise. Roll out lightly, in the morning, until
about three-quarters of an inch thick. Cut into round scones. Let
them rise twenty minutes. Bake for twenty minutes.
OR,
Mix the ingredients in the morning with half the quantity of flour.
Set to rise for five hours. Work in the rest of the flour and let it rise
another five hours. Cut into round cakes. Let them rise twenty
minutes.
Cringles
¹⁄₄ lb. butter

1 lb. flour
2 ozs. sugar
2 table-spoons yeast
¹⁄₂ pint milk
2 eggs
Rub the butter into the flour. Add the sugar. Take half of this
mixture. Add to it quarter of a pint of milk and the yeast. Cover over
and set to rise in a warm place. When risen add the rest of the flour,
etc., to it. Add also a quarter of a pint more milk and the two eggs.
Mix into a light dough. Roll out to the thickness of a finger. Cut into
fancy shapes. Set them on a baking tin in a warm place to rise. Bake
when risen. When baked wash over with milk and sugar.
*Crumpets
³⁄₄ lb. of fine flour

³⁄₄ oz. German yeast
1 tea-spoonful powdered sugar
A pinch of salt
1 pint, bare measure, of milk
1 egg
Mix the salt and sugar with the flour. Dissolve the yeast in a little of
the milk and stir it into the flour. Break the egg into it, and beat
together with a wooden spoon. Then add the remainder of the milk
by degrees, making it into a nice batter.
Set it before the fire, covered with a cloth, to rise for two hours,
and bake in tin rings, on a slab of stone or marble, heated on the top
of an ordinary kitchen range or close stove. (This will take about two
hours to heat. The stone must be not less than one and a half inches
thick, or it is liable to crack with the heat. A discarded marble mantel-
piece is excellent for this purpose.)
The crumpet rings should be slightly buttered. Place them on the
stone when your batter is ready and pour into each a small tea-
cupful of the batter. As soon as the crumpet has risen, remove the
ring, and turn the crumpet over on the stone. They cook very quickly.
Dropped Scones
4 cups flour
2 cups milk
1 egg
¹⁄₂ tea-spoon carbonate of soda
¹⁄₄ tea-spoon tartaric acid
2 table-spoons powdered sugar
Beat the egg. Mix all together into a smooth batter. Fry in butter in
a small frying pan a spoonful at a time.
Echaudés à Thé
¹⁄₂ lb. sifted flour

3 eggs
2 ozs. butter
2 lumps of sugar
Rub the sugar on a lemon and when dry crush it finely. Work all
the ingredients together thoroughly with the hand. Set aside for an
hour. Then roll out the paste on a floured board. Form into little balls
the size of a walnut, rolling them with the hand which should be well
floured. Throw them into boiling water. When they come to the
surface take them out and throw them quickly into cold water. Leave
them in the water for two hours. Drain them and put them on a
baking tin in a hot oven. Bake for quarter of an hour.
*Golden Corn Cake
³⁄₄ cup corn meal

1¹⁄₄ cups flour
¹⁄₄ cup powdered sugar
1 cup milk
1 egg
4 tea-spoons baking powder
Mix the meal, flour, sugar and baking powder thoroughly together
and sift. Beat the egg well, add it to the milk. Melt the butter and stir
it into the milk. Mix all together. Bake for twenty minutes in a shallow
buttered tin in a hot oven.
*Little Breakfast or Tea Rolls
³⁄₄ lb. flour

2 ozs. butter
1 oz. powdered sugar
A dessert-spoonful of baking-powder
A little milk
Stir the sugar and baking powder into the flour. Then rub the butter
into it. Mix with the milk into rather a stiff paste. Form into little rolls,
rolling them lightly on a paste-board with the hand to get them
smooth, about three inches in length, and a good inch wide and
thick. Bake on a floured tin in a hot oven.
Quickly-made Scones
1 pint sour milk
1 tea-spoon carbonate of soda
2 tea-spoons melted butter
Flour
Add the butter to the milk. Dissolve the soda in it. Stir in sufficient
flour to make a dough that can be rolled out. Mix. Roll out lightly and
quickly. Cut into round shapes. Bake in a quick oven.
*Scones
1 lb. flour
2 ozs. fresh butter
1 oz. white powdered sugar
¹⁄₂ oz. cream of tartar
¹⁄₄ oz. carbonate of soda
A little milk, or buttermilk
Put the flour in a large basin and add the sugar, soda and cream
of tartar. Rub the butter thoroughly into the flour. Mix into a paste
with the milk, as lightly as possible. Roll it out lightly to about half an
inch in thickness. Cut in rounds the size of a large saucer, and divide
each round into four quarters. Bake on floured tins in a hot oven.
Soda Scones
1 quart sifted flour
1 even tea-spoon salt
1 even tea-spoon carbonate of soda
2 tea-spoons cream of tartar
1 large table-spoon butter
Milk (about 1 pint)
Mix the soda, salt and cream of tartar with the flour. Sift twice. Rub
in the butter with the fingers. Add the milk gradually, mixing lightly
with a knife until just stiff enough to be handled. Then turn the dough
out on to a well floured board. Flour the rolling-pin, and roll, or rather
dab out the mixture until about half an inch thick. Cut into rounds and
bake at once on a floured tin for about ten minutes.
In making these scones, the mixture, once the butter has been
rubbed into the flour, must be touched as little as possible with the
hands.
Tea Buns
1 lb. flour
2 ozs. butter
1 table-spoon powdered sugar
¹⁄₄ lb. currants
¹⁄₂ tea-spoon bi-carbonate of soda
¹⁄₂ tea-spoon tartaric acid
1 egg
1 pint milk
Mix the soda and tartaric acid with the flour. Sift the flour. Rub in
the butter, add the sugar and the currants. Beat up the egg in a large
basin. Add the milk to it, and when well mixed, stir in the flour, etc.,
gradually. Bake in a quick oven, in small cakes, in a buttered baking
tin.
*Tea Cakes—I
¹⁄₂ lb. fine flour

³⁄₄ oz. German yeast
1 oz. powdered sugar
1 egg
¹⁄₂ pint milk, very bare measure
2 ozs. fresh butter
Dissolve the yeast in a little of the milk and rub down smoothly. Put
the flour and sugar into a pan and mix them together, then rub in the
butter and add the egg, previously beaten. Next add the yeast by
degrees, stirring it in with a wooden spoon, and then gradually add
sufficient milk to make the mixture of the consistency of an ordinary
cake or stiff batter. Beat it for five to ten minutes. Set it to rise before
the fire, covered with a cloth and protected from the draught. Let it
rise for an hour. Fill two or three buttered tins half full and bake in a
very hot oven. Lay them on a sieve to cool when turned out of the
tins.
Tea Cakes—II
2 lbs. flour
¹⁄₂ tea-spoon salt
¹⁄₄ lb. lard
1 egg
Yeast the size of a walnut
Milk
Mix the salt with the flour and then rub the lard thoroughly into it.
Beat the egg well and stir the yeast into it. Add to the flour with
enough milk to make a paste, knead well. Let it rise for a couple of
hours in a warm place. Form it into round cakes on tins. Let them
rise for twenty minutes and bake from quarter to half-an-hour.
Tea Cakes—III
1 lb. flour
1 pint milk
2 eggs
¹⁄₂ lb. sugar
2 table-spoons baking powder
Mix and sift the dry ingredients together. Add the milk with which
the well-beaten eggs have been mixed and a little salt. Bake in flat
round tins.
*Tea Cakes made with Self-raising Flour

2 cups self-raising flour
Milk or cream
Rub the butter well into the flour, add a little salt. Make it into a
dough with a little milk or sour cream. Roll out. Cut into small rounds.
Bake in a quick oven. Split open, butter and serve at once.
*York Cakes
¹⁄₂ lb. fine flour

6 ozs. butter
1 oz. castor sugar
1 yolk
A little milk
Rub the butter into the flour. Add the yolk previously well beaten,
and then sufficient milk to mix into a paste. Roll out about three-
quarters of an inch thick, and cut into squares about two and a half
inches square, and cut these again into triangles. Bake on a floured
tin until a delicate brown.
Yorkshire Cakes
1 lb. flour
2 spoonfuls yeast
1 egg
3 ozs. butter
¹⁄₂ pint warm milk
Rub the butter into the flour. Add the yeast, egg and milk. Beat the
whole well together. Set to rise in a warm place for three-quarters of
an hour. Cut into round cakes. Set to rise again. Bake in a moderate
oven. Wash over, when baked, with milk and sugar.
Schoolroom Cakes
PAGE
Fruit Cake without Eggs 126
Gingerbread 126
One Egg Cake 127
Plain Sultana Cake 127
Seed Cake—Lunch 128
Fruit Cake without Eggs

1 cup butter
1 cup sugar
1¹⁄₂ pints sifted flour
1 lb. stoned and chopped raisins
1 tea-spoon grated nutmeg
1 tea-spoon powdered cinnamon
1 pint sour milk or cream
1 tea-spoon soda
Beat the butter to a cream. Add the sugar. Beat again very
thoroughly. Add one pint of flour. Mix the raisins and spices with half
a pint of flour. Add them to the mixture. Mix thoroughly and beat five
minutes. Dissolve the soda in the sour milk. Stir it in. Bake at once in
buttered tins, one hour, in a moderate oven.
Gingerbread
1 lb. flour
¹⁄₂ lb. butter

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Jack Tucci Richard Weiss

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Learning Objectives A Look Inside Xerox Corporation

1 An organization can be understood primarily by understanding the people who

2 The primary role of managers in business organizations is to achieve maximum

3 A CEO’s top priority is to make sure the organization is designed correctly.

A Look Inside Xerox Corporation

What Went Wrong?

Xerox was founded in 1906 as the Haloid Company, a photographic supply

Entering the Digital Era

The Culture Problem

Shaking Up a Century-Old Company

IT ­consulting, and digital press technology. A series of small acquisitions enabled

“We No Longer Make Copiers”

Organization Design in Action

Similar problems have challenged numerous organizations. Kodak, for

Bookmark 1.0 Have You Read This Book?

Intense Competition. The growing global interdependence creates new

Speed and Responsiveness. A fourth significant challenge for organizations

Purpose of This Chapter

Ground Rice Biscuits

¹⁄₂ lb. ground rice

Hazel Nut Biscuits

¹⁄₂ lb. flour

*Little Dutch Cakes

¹⁄₂ lb. butter

¹⁄₂ lb. sugar

¹⁄₂ lb. flour

¹⁄₂ lb. self-raising flour

Sponge Fingers or Cakes

Whole Meal Biscuits

American Muffins with Eggs

Two Frameworks for Selecting Strategy and Design 59 Relational Coordination, 99

Bureaucracy in a Changing World 360 Organizational Decline and Downsizing 368

In Practice: Zappos 445 Special Decision Circumstances 497

Glossary635 Corporate Name Index 657

IT consulting, and digital press technology. A series of small acquisitions enabled