Ch1 of Org Behavior by Jones

8/10/2019 Ch1 of Org Behavior by Jones

1/28

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

1-11-1

Organizational Theory,Design, and Change

Sixth Edition

Gareth R. Jones

Chapter 1

Organizations andOrganizational

Effectiveness


2/28


3/28

1-Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 333

Learning Objectives (cont.)

3.

Understand how managers can utilizeorganizational theory to design andchange their organizations to increase

organizational effectiveness4.

Identify how managers assess and

measure organizational effectiveness

5.

Appreciate the way contingency factorsinfluence the design of organizations


4/28


What is an Organization?

!

Organizations provide goods andservices

!Organizations employ people

!

Organizations bring together peopleand resources to produce products and

services

4


5/28


What is an Organization? (cont.)

!

Organization:a tool used by peopleto coordinate their actions to obtainsomething they desire or value

!

Entrepreneurship:identifyopportunities to satisfy needs, andthen gather and use resources to meet

those needs


6/28


How Does an OrganizationCreate Value?

!

Value creation takes place at threestages: input, conversion, and output! Inputs: include human resources,

information and knowledge, rawmaterials, money and capital

! Conversion: the way the organizationuses human resources and technology to

transform inputs into outputs! Output: finished products and services

that the organization releases to itsenvironment


7/28


8/281-Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 888

Why Do Organizations Exist?

!

To increase specialization and thedivision of labor

! Division of labor allows specialization

! Specialization allows individuals tobecome experts at their job



Why Do Organizations Exist?(cont.)

!

To use large-scale technology!

Economies of scale:cost savings thatresult when goods and services are

produced in large volume!

Economies of scope:cost savings thatresult when an organization is able to useunderutilized resources more effectively

because they can be shared acrossseveral different products or tasks

9




!

To manage the external environment!

External environment consists of thepolitical, social, economic, and

technological factors that affectorganizations

! Organizations regularly exchangeproducts and services for needed

resources!

Organizations need to manage theirexternal environment




!

To exert power and control!

Organizations structure their members toefficiently produce products and services

!To economize on transaction costs!

Transaction costs:the costs associated

with negotiating, monitoring, andgoverning exchanges between peoplewho must cooperate

11



Figure 1.3: WhyOrganizations Exist



Organizational Theory, Design, andChange: Some Definitions

!

Organizational theory:the study ofhow organizations function and how theyaffect and are affected by the

environment in which they operate

!

Organizational structure:the formalsystem of task and authority

relationships that control how people tocoordinate their actions and useresources to achieve organizational goals



Some Definitions (cont.)

!

Organizational culture:is the set ofkey values, beliefs, and attitudes sharedby organizational members and helpsshape the behavior within theorganization

!

Organizational design:the processby which managers select and manage

aspects of structure and culture so thatan organization can control the activitiesnecessary to achieve its goals



Some Definitions (cont.)

!

Organizational change:

! the process by which organizationsmove from their present state tosome desired future state to

increase their effectiveness

! Organizational redesign andtransformation



Figure 1.4: The Relationship AmongOrganizational Theory, Structure, Culture,Design, and Change



Importance of OrganizationalDesign and Change

!

Dealing with contingencies!

Contingencies are events that might occurand must be planned for

! Organizations must be designed to beable to respond to changes in thecomplex and increasingly difficultenvironment many organizations face

! Globalization and changing ITtechnologies are just two challengesorganizations must be ready to face

I t f O i ti l



Importance of OrganizationalDesign and Change (cont.)

!

Gaining competitive advantage!

The ability to outperform other companiesbecause of the capacity to create more

value from resources!

Core competences: skills and abilities invalue creation embedded in theorganizations people or structures

! Strategy:pattern of decisions andactions involving core competences thatproduces a competitive advantage tooutperform competitors

18

I f O i i l




!

Managing diversity

! Differences in the race, gender, andnational origin of organizational members

have important implications fororganizational culture and effectiveness

! Learning how to effectively utilize a

diverse workforce can result in betterdecision making and more effectiveworkforce

I f O i i l




!

Promoting efficiency, speed, andinnovation

! The better organizations function, the

more value they create

! The correct organizational design can lead

to faster innovation and quickly get new

products to market

20

C f P



Consequences of PoorOrganizational Design

!

Decline of the organizations sales andprofits

!Layoffs occur and talented employeesleave to take positions in growing

organizations

!

Resources become harder to acquire

!

Resulting crisis may result inorganizational failure


22/28


How Do Managers MeasureOrganizational Effectiveness?

!

Control:external resource approach!

Monitors how effectively an organizationmanages and controls its external environment

!Innovation:internal system approach

! Develops an organizations skills andcapabilities to change, adapt, and improve theway it functions

!Efficiency:technical approach! Measures how efficiently an organization

converts a fixed amount of resources intofinished goods and services


23/28


Table 1.1: Approaches toMeasuring Effectiveness


24/28


Measuring Effectiveness:Organizational Goals

!

Official goals:guiding principles thatthe organization formally states in itsannual report and in other publicdocuments

!

Mission:a mission statement explainswhy the organization exists and what itshould be doing

!

Operative goals:specific long- andshort-term goals that guide managersand employees as they perform thework of the organization


25/28


Figure 1.5: Plan of the Book


26/28


Figure 1.5: Plan of the Book(cont.)


27/28


Figure 1.5: Plan of the Book(cont.)


28/28

Summary

!

Organizations are a tool people use toachieve their goals

!Organizational theory is the study ofhow organizations function and how

they affect and are affected by theirenvironment

!

Organizational effectiveness must bemonitored by managers

Ch1 of Org Behavior by Jones

Documents