reflection 111
tao
class6-openorgtheory.pptxOpen Org Theories
Designing Effective Organizations
BUAD 422
Nathan A. Bragaw, PhD
1
Administrivia
Quiz 1 next Thursday, Sept 19th
Next Tuesday: Review
2
Open Theories
Firm as a social system
Open to the environment around it
Complex and hierarchical
Loosely coupled (within and between)
Assumptions
Interdependence
Information flows matter
Synergy – whole > sum of parts
Role of Management
Understand external environment & secure resources for internal use
3
Systems Design Approach
Based on Boulding’s (1956) System Types
Chaotic Unpredictable; initial conditions Weather
Complex Adaptive Unpredictable; feedback loops & Wikipedia
non-linear adaptation
| System Levels | Dinstictiveness | Examples |
| 1. Framework | Static structures | Atom or molecule |
| 2. Clockwork | Simple dynamic systems | Clock |
| 3. Cybernetic | Capable of self-regulation | Thermostat |
| 4. Open | Capable of self-maintenance | Living cell |
| 5. Blueprinted-growth | Capable of reproduction | Acorn-oak; egg-chicken |
| 6. Internal-image | Capable of environmental awareness | Animals |
| 7. Symbol-processing | Capable of self-consciousness | Humans |
| 8. Social | Multi-headed; with order & structure | Organizations |
| 9. Transcendental | Composed of unknowables | Not yet envisioned |
4
Systems Design Approach
Based on Boulding’s (1956) System Types
Focus on system reliability
Systemic failure: design, equipment, or operator error
Normal accidents: inevitability of failure based on unexpected interactions of complex systems
Primacy of information flows
How information is gathered, stored, retrieved, & transmitted
Connects elements of the system
Managerial Role
Understand, adapt, & improve organizations
5
Contingency Theory
Derivative of systems design
Design is contingent on Environment
Applied at the sub-system level
Structural features of sub-units differ based on environmental conditions it faces (e.g., uncertainty)
Greater differentiation requires greater integration & coordination
Size breeds complexity
Organizations will attempt to buffer environment
Technical closed; efficiency-focused
Managerial intermediaries with external environments
Institutional overall articulation of organization
6
Resource Dependence Theory
Jeffrey Pfeffer (1946- )
Business Administration
Sought better explanations for business activities than provided by economic theory
How do organizations secure resources from environment in order to survive?
Over-attribute org character to Leaders; under-attribute role of environment
Orgs have multiple options for enhancing their influence & control
Power is key motivator of organizational behavior
7
Resource Dependence Theory
Coalitions
Temporary groups aimed at achieving some purpose
Mergers & Acquisition
Vertical Integration: gain control of vital exchange relationships
Horizontal Mergers: gain dominance within competitive market
Diversification: decrease dependence on market
Collective Action
Coordinated activities among firms (e.g., trade associations)
Garner resources
Secure information
Exercise influence
Obtain legitimacy/acceptance
8
Open Theories
Firm as a social system
Open to the environment around it
Complex and hierarchical
Loosely coupled (within and between)
Assumptions
Interdependence
Information flows matter
Synergy – whole > sum of parts
Role of Management
Understand external environment & secure resources for internal use
9
Key Takeaways from Class
Open theories view organizations more as complex systems
Focus on their interaction with the environment
Management is focused on leveraging internal capabilities given external constraints
Today’s source material:
Scott, W.R. & Davis, G.F. (2007) Organizations and organizing: Rational, natural, and open systems
perspectives. Upper Saddle River, NJ: Pearson Prentice Hall.
10
For Next Class
Review
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