Week 1
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Chapter1.OrganizationsandOrganizationTheory.pptxChapter 1 Organizations and Organization Theory
Organization Theory and Design
Thirteenth Edition
Richard L. Daft
Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
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Chapter
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Learning Objectives
Discuss current challenges that organizations face.
Describe the importance of organizations in society.
Describe how the structural dimensions of organizations are shaped by contingencies organizations face.
Outline the evolution of organizational design.
Compare and contrast organic and mechanistic organization designs, including the contingency factors typically associated with each.
Explain the current trend toward bossless organization design.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
A Look Inside General Electric
The Jack Welch Era 1981-2001
The most phenomenal era in company history
The Jeff Immelt Era 2001-2017
Most analysts thought GE fell behind rather than moved ahead
Events Since 2017
GE hit rock bottom during late 2018 and early 2019
CEOs John Flannery and Larry Culp
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organization Design in Action
Current Challenges
Globalization
Intense competition
Sustainability, the green movement, and ethics
Speed and responsiveness
Digital organizations and big data analytics
Organization design provides tools to understand, design, and manage organizations more successfully.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
What is an Organization?
Social entities that are goal-directed
Designed as deliberately structured and coordinated activity systems
Linked to the external environment
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
The Organization is an Open System
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Importance of Organizations (slide 1 of 2)
Organizations
Bring together resources to accomplish desired goals
Produce goods and services efficiently
Facilitate innovation
Use modern manufacturing and information technologies
Adapt to and influence a rapidly changing environment
Accommodate challenges of diversity, ethics, and the motivation and coordination of employees
Create value for owners, customers, and employees
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Importance of Organizations (slide 2 of 2)
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Dimensions of Organization Design
Structural Dimensions
Formalization
Specialization
Hierarchy of authority
Complexity
Centralization
Contingency Factors
Size
Organizational technology
Environment
Goals and strategy
Culture
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Interacting Structural Dimensions of Design and Contingency Factors
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organization Chart
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Differing Characteristics of Two Organizations
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Performance and Effectiveness Outcomes
Efficiency: Amount of resources used to achieve the organization’s goals
Effectiveness: The degree to which an organization achieves its goals
Stakeholder Approach: Balancing the needs of groups within and outside of the organization that have a stake in the organization’s performance
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
The Evolution of Organization Theory and Design
Historical perspectives provide insight into how organization design and management practices have varied over time in response to changes in society.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Historical Perspectives
Efficiency is Everything
Scientific management: Scientifically determined jobs and management practices improve efficiency and labor productivity.
How to Get Organized
Administrative principles: The design and functioning of the organization as a whole
Contributed to development of bureaucratic organizations
What about People?
Hawthorne Studies: Positive treatment of employees improves motivation and productivity.
Can Bureaucracies Be Flexible?
1980s: Corporate cultures valued lean staff, flexibility, learning, rapid response to the customer, engaged employees, and quality products.
Current day: Flexible organizational design approaches are still prevalent.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
It All Depends: Key Contingencies
Contingency: The correct organizational design approach is contingent on the organization’s situation.
Size
Technology
Environment
Goals
Strategy
Organizational culture
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
The Contrast of Organic and Mechanistic Designs
Mechanistic: Organization design is machine-like, with standard rules and procedures and a clear hierarchy of authority
Organic: Organization design is looser and free-flowing, with a decentralized decision-making authority
Depends upon:
Centralized vs. decentralized structure
Specialized tasks vs. empowered roles
Formal vs. informal systems
Vertical vs. horizontal communication
Hierarchy of authority vs. collaborative teamwork
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organic and Mechanistic Designs
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
The Emerging Bossless Design Trend
A few organizations have shifted to an extremely organic, “bossless” design, with no job titles, no seniority, and no managers or executives.
People work together on an equal basis, and no one gives or takes orders from others.
Costs may be lower due to reduced overhead.
Money must be invested in ongoing employee training and development.
The culture must engage employees and support the non-hierarchical environment.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Framework for the Book
Four levels of analysis characterize organizations:
Individual
Group (such as a department)
Organization
External environment (such as a community)
Organizational behavior focuses on the individuals within organizations.
Organization theory and design analyzes the whole organization as a unit.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Levels of Analysis in Organizations
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organizational Design Essentials (slide 1 of 3)
Organization design provides tools to understand, design, and manage organizations more successfully.
Organizations are open systems that obtain inputs from the environment, add value, and discharge products and services.
Many types of organizations exist, such as for-profit and non-profit.
Structural dimensions and contingency factors provide labels for measuring and analyzing an organization.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organizational Design Essentials (slide 2 of 3)
Structural dimensions include formalization, specialization, hierarchy of authority, complexity, and centralization.
Contingency factors include size, organizational technology, environment, goals and strategy, and culture.
Various contingency factors will influence whether an organization is more effective with a primarily mechanistic or a primarily organic design.
Current challenges require greater flexibility and decentralization for most organizations.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
Organizational Design Essentials (slide 3 of 3)
Some organizations have shifted to an extremely organic, “bossless” design.
Organization theory and design is a macro examination of organizations because it analyzes the whole organization as a unit.
Most concepts in organization theory and design pertain to the top- and middle-management levels of the organization.
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Daft, Organization Theory and Design, 13e. © 2021 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or part.
