Orgs 2010 Midterm Notes

What is an organization

• An organization is a structured social system made of groups and individuals working together to meet goals

• They are open systems: self sustaining systems transform resources to output.

Identifying organizations – Max Weber (Bureaucracy)

• Weber was the first to systematically discover features that modern large scale organizations in private enterprise and government have in common

• His model has 4 issues/features

o Are work activities being completed in the best way?

o Does each member’s subtask contribute to the whole?

o Is there orderly deference among organizational members?

o Do members work together harmoniously?

Bureaucracy

• Max Weber’s ideal type of organization that includes:

o Strict chain of command

o Selection/promotion criteria based on technical competence

o Detailed rules, regulations, and procedures

o High specialization

o Centralization of power at the top of the organization

o Critique on bureaucracy: Employee alienation, limits innovation, resistance to change, Minimum acceptable performance level

Levels of Analysis in Organizations

• Macro: External organizational environments, organizations

• Micro: Groups and teams, individuals/interpersonal relations

• Behaviors of people at either levels are affected by what is happening at other levels – motivation is influenced by personality and interaction w/ peers, work group, systems of evaluation, rewards in the org and compared to other orgs in the industry

3 ways of categorizing theories at organizational levels (3 Lens)

• Strategic Design, Political System, Culture

• formal organization, interests and power, meaning and values

Strategic Design

• Weber’s Bureaucratic Model 4 issues

o the formal design of the organization: positions, job specifications, formal reporting hierarchy, rules and procedures

• History of organizational design dimension

o The organizational design dimension has changed it used to focus on issues like span and control; 1 person supervising others, formal rules and procedures

o Now researchers focus on formal processes, like as cross-unit teams, task forces, and IT systems

o Today strategic design focuses on getting the right design to carry out the orgs strategy

• Structure and Strategy (nowadays focus)

o Cost Leader

o Differentiation

o Niche

Political System

• Weber saw the org as a formal structure and concentrated on one’s formal position power

• This lens sees the organization as an arena for conflict and for the exercise of power and influence

• Interests

o Different parties pursuing multiple objectives

• Power

o The ability to influence others and resist unwanted influence

• Conflict

o Areas of personal and organizational interest

• This lens points out that organization chart of the design perspective claims everyone to be on the same level – misleading: not all VP’s (finance vs small division) have same amount of power.

Cultural Systems

• This lens focuses on what people believe and value

o how they see their organization and how they develop those views, what kinds of behaviors they expect and take for granted

o it examines norms and values, shared mental models, socialization, habits and routines, symbols

• When people join an org they absorb its culture, if not it’s hard for them to take effective action

• Culture changes over time – more slowly then poltical system and is harder to changed then strategic design

Example of using 3 lens

• Topic: 2008 wall street financial crisis effects on global economy, how could it happen with smart well paid people getting it wrong?

• Strategic Design: would look at rewards and incentive of top managers in banking as the heart of the crisis – systems that were supposed to align the manager behaviors with interests of shareholders but there was to much risk taking on compensation

• Political System: During the late 80s investment banks changed from professional partnerships to public companies this shifted the interest of top managers from long term bank health to short term aggressive performance

• Cultural System: would focus on the increasing trading mindset instead of the investment banking mindset – this deal oriented subculture replaced views of investment bankers

Shifting paradigms

• Globalization

o Effects of globalization on organizations

♣ New structures

♣ Increasing diversity

♣ Increasing competitive pressures, intensification

• Diversity

o Surface Level (e.g. race, ethnicity, gender, age)

o Deep Level (e.g. personalities, beliefs, values, and attitudes)

• Different Workforce Expectations