Chapter One

Organizations and Organization Theory

 Organization Theory in Action
Current Challenges
1
Globalization
2 Organization theory helps us
Intense Competition
explain what happened in
3 Sustainability, the Green Movement and Ethics the past, as well as what
may happen in the future,
Speed of Responsiveness
4 so that we can manage
Digital Organizations and Big Data Analytics organizations more
5
effectively.
Diversity
6
What is an Organization?

Social entities that are goal-directed

Designed as deliberately structured and

coordinated activity systems

Linked to the external environment

Includes large multinational corporations,

family owned businesses as well as nonprofits
 Importance of Organizations
Produce goods and services
efficiently
Use modern manufacturing
and information technologies
Create value for owners,
customers and employees
Bring together resources
to achieve desired goals
and outcomes
Facilitate innovation
Adapt to and influence a
rapidly changing
environment
Accommodate ongoing
challenges of diversity,
ethics, and the motivation
and coordination of
employees
Dimensions of Organization Design
Formalization
a l s
Specialization u r n
ct io
Hierarchy of authority r u n s
Complexity St ime
D
Centralization Size
Professionalism Organizational technology
Personnel Ratios Environment

Fa tin sio ual

Goals and strategy

ct ge ns
on en xt

s) cy
(C i m te

or n
D on
Culture
C
Interacting Contextual and Structural
Dimensions of Organization Design

7. Complexty
Organization Chart
Characteristics of Three Organizations

7. Complexty
Performance and Effectiveness Outcomes

Efficiency
amount of resources used to achieve the organization’s
goals.
Efficiency

Effectiveness
Effectiveness
the degree to which an organization achieves its
goals.
Stakeholder
Approach

Stakeholder Approach
balancing the needs of groups in and outside of the
organization that has a stake in the organization’s
performance.

stakeholder stakeholder
is any group within or outside of the organization that
has a stake in the organization’s outcomes
Major Stakeholder Groups and What they Expect
 The Evolution of Historical Perspectives
Organization Efficiency is Everything
Scientific Management: Pioneered by Frederick
Theory and Design Winslow Taylor

How to Get Organized

Administrative Principles
Historical perspectives provide Contributed to Bureaucratic Organizations

insight into how organization What about People?

design and management Hawthorne Studies

practices have varied over time Can Bureaucracies Be Flexible?

Flexible and lean. Focused on service, quality and
in response to changes in engaged employees (1908s)

society. Don’t Forget the Environment

Contingency: there is no “one best way”
 Mitzberg’s Organizational
Types
• Entrepreneurial
• Machine
• Professional
• Diversified
• Adhocracy
Mitzberg proposed that the five
parts could fit together in any type
of organization
In real-life organizations, the five
parts are interrelated and often
serve more than one function.
Contemporary Ideas
Today’s organizations are still
01 imprinted with hierarchy, bureaucracy
and formalization

As organizations become large and

02 complex, the orderly and predictable role of
managers in the industrial age must change

03 Chaos theory states that relationships in

complex systems are nonlinear
Chaos operates with some predictability
which is the challenge of today’s
managers
Efficient Performance Versus The Learning
Organization
Organizations require → From Vertical to Horizontal Structure
adaptability. Many
organizations are → From Routine Tasks to Empowered Roles
focused on building
learning organizations → From Formal Control Systems to Shared Information
which promotes
communication and → From Competitive to Collaborative Strategy
collaboration
→ From Rigid to Adaptive Culture
Two Organization Design Approaches

7. Complexty
 Framework for the Book
Meso theory is the
integration of both the
Examine specific
Organizational behavior macro and micro which is
characteristics of
is the micro approach the approach of this text
organizations

Examine the nature of

Organization theory is
and relationships among
the macro examination
groups and departments
Thank you for listening
prepared by: Hatem Shaafal