ORGANIZATIONAL THEORY TEXT AND CASES GARETH R. JONES Texas A&M University Addison-Wesley Publishing Company READING, MASSACHUSETTS MENLO PARK, CALIFORNIA NEW YORK DON MILLS, ONTARIO WOKINGHAM, ENGLAND AMSTERDAM BONN SYDNEY SINGAPORE TOKYO MADRID SAN IUAN MILAN PARIS
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
ORGANIZATIONAL THEORY TEXT AND CASES
G A R E T H R. J O N E S Texas A&M University
Addison-Wesley Publishing Company READING, MASSACHUSETTS MENLO PARK, CALIFORNIA NEW YORK
DON MILLS, ONTARIO WOKINGHAM, ENGLAND AMSTERDAM BONN SYDNEY SINGAPORE TOKYO MADRID SAN IUAN MILAN PARIS
CONTENTS
P A R T I THE ORGANIZATION
CHAPTER 1 ORGAIUIZATIOIUS AIUD O R G A N I Z A T I O N A L STAKEHOLDERS l
CASE MOTOROLA HELPS TO REORGANIZE LOS ALAMOS 2
1.1 What Is an Organization? 4
ORGANIZATIONAL INSIGHT 1.1 A New Kind of Video Store 5
1.2 How Does an Organization Create Value? 6
1.3 Why Do Organizations Exist? 9
1.4 What Is Organizational Theory? n
Organizational Structure 12
Organizational Culture 13
Organizational Design 14
1.5 The Importance of Organizational Design 15
Gaining Competitive Advantage 15 Dealing with Contingencies 16 Managing Diversity 16 Increasing Efficiency 16 Increasing Innovation 17 Controlling the Environment 17 Improving Coordination and Motivation 18 Developing and Implementing Strategy 18
1.6 The Consequences of Poor Organizational Design 18
1.7 Levels ofAnalysis 19
1.8 Organizational Stakeholders 21
Inside Stakeholders 21
ORGANIZATIONAL INSIGHT 1.2 The Increasing Power of Institutional Investors 22
Outside Stakeholders 24
ORGANIZATIONAL INSIGHT 1.3 Southwest Airlines Services Its Customers 24
VI CONTENTS
ORGANIZATIONAL INSIGHT 1.4 General Motors Versus Its SuppUers 25
ORGANIZATIONAL INSIGHT 1.5 Is the Government too Soft on the Environment 26
1.9 Organizational Effectiveness: Satisfying Stakeholders' Goals and Interests 27
ORGANIZATIONAL INSIGHT 1.6 Keep Your Stakeholders Glued to Your Company 31
Competing Goals 28 Allocating Rewards 29 Effectiveness over Time 30 Managing Stakeholder Interests 30
7.70 How Do Managers Measure Organizational Effectiveness? 32
The External Resource Approach: Control 32
The Internal Systems Approach: Innovation 34
The Technical Approach: Efficiency 34
Measuring Effectiveness: Organizational Goals 35
7.77 What Are the Factors Affecting Organizations? 37 The Organizational Environment 38 The Technological Environment 38 Organizational Processes 40
MAKING THE CONNECTION 40
Summary 40 Discussion Questions 41
ANALYZING THE ORGANIZATION 42
References 44
CHAPTER 2 BASIC CHALLEIUGES OF O R G A N I Z A T I O N A L DESIGN 47
CASE JOHNSON &JOHNSON'SDECENTRAUZED APPROACH 48
2.1 Differentiation 49
ORGANIZATIONAL INSIGHT 2.1 The B.A.R. and Grille Restaurant 50
Organizational Roles 52
Subunits: Functions and Divisions 53
Differentiation at the B.A.R. and Grille 54
C O N T E N T S
Vertical and Horizontal Differentiation 55
Organizational Design Challenges 56
MANAGERIALIMPLICATIONS Differentiation 57
2.2 Balancing Differentiation and Integration 57
ORGANIZATIONAL INSIGHT 2.2 Communication Problems at IBM 58
Integration and Integrating Mechanisms 58
ORGANIZATIONAL INSIGHT 2.3 Integration at Amgen 62
Differentiation Versus Integration 63
2.3 Balancing Centralization and Decentralization 64
Centralization Versus Decentralization of Authority 65
ORGANIZATIONAL INSIGHT 2.4 The "Health" Hazards of Decentralization 66
2.4 Balancing Standardization and Mutual Adjustment 68
Formalization: Written Rules 69
ORGANIZATIONAL INSIGHT 2.5 Innovative Control at Microsoft 69
Specialization: Understood Norms 70
Standardization Versus Mutual Adjustment 71
2.5 Coordinating the Formal and In formal Organizations 73
ORGANIZATIONAL INSIGHT 2.6 Wildcat Strikes in the Gypsum Plant
Status and Power 76
MANAGERIAL IMPLICATIONS The Design Challenges 76
2.6 Mechanistic and Organic Organizational Structures 77
Mechanistic Structures 77 Organic Structures 78
ORGANIZATIONAL INSIGHT 2.7 Sony's Magic Touch 79
The Contingency Approach to Organizational Design 81
ORGANIZATIONAL INSIGHT 2.8 Wal-Mart 's Race to the Top 81
MAKING THE CONNECTION 83
Sumrnary 83 Discussion Questions 84
ANALYZING THE ORGANIZATION 84
References 85
DESIGNING ORGANIZATIONAL STRUCTURE: AUTHORITY AND CONTROL 87
CASE THE SHAKEUP IN GM'S HIERARCHY 88
3.1 Top Managers and Organizational Authority 89
The Chief Executive Officer 91 The Top-Management Team 92 Other Managers 93
3.2 Authority: How and Why Vertical Differentiation Occurs 96
The Emergence of the Hierarchy 96 Size and Height Limitations 97 Problems with Tall Hierarchies 99
ORGANIZATIONAL INSIGHT 3.1 The Shakeup atDu Pont 100
ORGANIZATIONAL INSIGHT 3.2 Promotion Tournaments at IBM 101
ORGANIZATIONAL INSIGHT 3.3 Big Changes at the Post Office 102
The Parkinson's Law Problem 103
The Ideal Number of Hierarchical Levels: The Minimum Chain of Command 103 The Span of Control 104 Summary 106
3.3 Control: Factors Affecting the Shape of the Hierarchy 107
Horizontal Differentiation 107
ORGANIZATIONAL INSIGHT 3.4 Microsoffs Team Structure 108
Centralization 109
ORGANIZATIONAL INSIGHT 3.5 joo Many Managers at the Bottling Plant 110
Standardization 110 The Influence of the Informal Organization 111 Summary 111
MANAGERIALIMPLICATIONS Authority and Control 112
3.4 The Principles of Bureaucratic Structure 112
ORGANIZATIONAL INSIGHT 3.6 Top-Management Team Dynamics at Chrysler 114
ORGANIZATIONAL INSIGHT 3.7 "Personal Computers Are Just Toys" 116
CONTENTS IX
ORGANIZATIONAL INSIGHT 3.8 Crew G's Rules of Conduct 118
3.5 The Advantages of Bureaucratic Structure 119
MANAGERIALIMPLICATIONS Using Bureaucracy to Benefit the Organization 120
MAKING THE CONNECTION 121
Summary 121
Discussion Questions 122
ANALYZING THE ORGANIZATION 123
References 124
CHAPTER 4 DESIGNING ORGANIZATIONAL STRUCTURE: SPECIALIZATION AND COORDINATION 125
ORGANIZATIONAL INSIGHT 5.9 Ben & Jerrys Ethical Culture 199
5.8 Creating an Ethical Organization 201
Designing an Ethical Structure and Control System 201 Creating an Ethical Culture 202
ORGANIZATIONAL INSIGHT 5.10 Dow Comings Ethics System 202
Supporting the Interests of Stakeholder Groups 203
MAKING THE CONNECTION 204
Summary 204
Discussion Questions 205
ANALYZING THE ORGANIZATION 205
References 206
XÜ CONTENTS
PART ii THE ORGANIZATIONAL ENVIRONMENT
CHAPTER O MANAGING THE ORGANIZATIONAL ENVIRONMENT 209
CASE HOW FORD MANAGES ITS ENVIRONMENT 210
6.1 What Is the Organizational Environment? 212
The Specific Environment 213
The General Environment 214
Sources of Uncertainty in the Organizational Environment 215
MANAGERIALIMPLICATIONS Analyzing the Environment 217
6.2 ContingencyTheory 218
Lawrence and Lorsch on Differentiation, Integration, and the Environment 219 Burns and Stalker on Organic Versus Mechanistic Structures and the Environment 221
ORGANIZATIONAL INSIGHT 6.3 Competitive Alliances in Telecommunications 238
CONTENTS XIII
Merger and Takeover 240
MANAGERIAL IMPLICATIONS Resource Dependence Theory 240
ORGANIZATIONAL INSIGHT 6.4 Lighting Up the Utilities 241
6.7 Transaction Cost Theory 241 Sources ofTransaction Costs 242 Transaction Costs and Linkage Mechanisms 244
Bureaucratic Costs 245 Using Transaction Cost Theory to Choose an Interorganizational
Strategy 245
ORGANIZATIONAL INSIGHT 6.5 Ekco and Its Suppliers 246
MAKING THE CONNECTION 249
Summary 249 Discussion Questions 251 ANALYZING THE ORGANIZATION 251
References 252
O R G A N I Z A T I O N A L S T R A T E G Y A N D STRUCTURE 255
CASE GILLETTE FORGESAHEAD 256
7.1 What Is Organizational Strategy? 257
Sources ofCore Competences 258 Three Levels of Strategy 260
7.2 Functional-Level Strategy 262
Strategies to Lower Costs or Differentiate Products 263 Using Interorganizational Strategies 265 Functional-Level Strategy and Structure 265 Functional-Level Strategy and Culture 268
70.6 Managing Innovation in High-Tech Organizations 405
The Nature of Technological Innovation 405 Managing High-Tech Organizations 406
ORGANIZATIONAL INSIGHT 10.5 Championing the Mustang 408
Creating a Culture for Innovation 410
MANAGERIAL IMPLICATIONS Innovation 412
MAKING THE CONNECTION 413
Summary 413
Discussion Questions 414
ANALYZING THE ORGANIZATION 414
References 415
PART iv MANAGING ORGANIZATIONAL PROCESSES
CHAPTER 1 7 ORGANIZATIONAL BIRTH, GROWTH, DECLINE, AND DEATH 417
CASE DELL COMPUTER FACES A CRISIS 418
77.7 The Organizational Life Cycle 419
77.2 Organizational Birth 420
77.3 A Population Ecology Model of Organizational Birth 422
NumberofBirths 423 Survival Strategies 424
CONTENTS XIX
The Process of Natural Selection 426
ORGANIZATIONAL INSIGHT 11.1 A Shakeup in Securities 427
ORGANIZATIONAL INSIGHT 11.2 Are Network Affiliates an Endangered Species? 428
11.4 Institutional Theory of Organizational Growth 429
Organizational Isomorphism 430 Disadvantages of Isomorphism 431
ORGANIZATIONAL INSIGHT 11.3 The Total Quality Bandwagon 432
11.5 Greiner's Model of Organizational Growth 433
Stage 1: Growth Through Creativity 434
ORGANIZATIONAL INSIGHT 11.4 The Crisis ofLeadership at Apple Computer 435
Stage 2: Growth Through Direction 436 Stage 3: Growth Through Delegation 437 Stage 4: Growth Through Coordination 438 Stage 5: Growth Through Collaboration 439
MANAGERIALIMPLICATIONS Organizational Birth and Growth 439
11.6 Organizational Decline 440
Organizational Inertia 441 Changes in the Environment 443 Weitzel and Jonsson's Model of Organizational Decline 443
ORGANIZATIONAL INSIGHT 11.5 General Dynamics Goesfrom Weakness to Strength 445
ORGANIZATIONAL INSIGHT 11.6 Borden Bites Back 446
The Role of the Founder 448
ORGANIZATIONAL INSIGHT 11.7 No Exitfrom Petrie Stores 448