6 pages 48 hours (A0109)

KEY ISSUES

Information & Organisational Design LUBS5002

LECTURE 9 Perspectives on Co-ordination, Information and Motivation

INTRODUCTION

We have now covered the main economic approaches that are currently available for

studying organisations. You should be familiar with the problems addressed by each

approach, the basic concepts used, and the particular mode of analysis. Our final task is to

bring all of this information together and provide an overall perspective on the various

approaches we have covered in this course.

For this session you will need to read chapter 12 of the textbook.

Reading

Economic Approaches to Organisations (2013) 5 th

edition, Sytse Douma and Hein Schreuder.

Prentice Hall. Chapters 12

Further Reading

Milgrom P and Roberts J (1992) Economics, Organisations and Management, Englewood

Cliffs, NJ: Prentice Hall.

Bettis, R.a. and C.K. Prahalad (1995), ‘The Dominant Logic: Retrospective and Extension’,

Strategic Management Journal, 16(1), 5-14.

OBJECTIVES

After completing this unit you should be able to:

 Discuss the similarities amongst our family of economic approaches to organisations

 Discuss the differences amongst our family of economic approaches to organisations

 Indicate future directions of research in this area

Process versus content

approaches

Information

Efficiency

Static versus dynamic

approaches

Organisations and

markets

Organisations as

complex, adaptive

systems

Level of analysis

Information &

Organisational Design

Perspectives on Co-ordination, Information and Motivation.

Introduction

 Give an overall perspective on the various approaches to organisations.

 Outline similarities between these economic approaches.

 Outline differences between these economic approaches.

 Organisations as complex, adaptive systems.

Module Design The division of labour

Specialisation

Co-ordination

Market Information Organisation

·Economic Approaches to Organisations

- Agency Theory - Transaction Cost Economics

- Strategy - Evolutionary Approaches

Similarities between Approaches

 Comparison of organisations with markets

 Use of efficiency as criteria for assessing merits of markets versus organisations.

 The ‘economics of information’.

Differences between Approaches: Process and Content Approaches

Process

Content

Behavioural Theory

Evolutionary Theory

Strategy

Transaction Cost

economics Positive agency

theory Principal/agent theory

Organisational ecology

Differences between Approaches: Static versus Dynamic Approaches

Behavioural

Theory

Evolutionary

Theory

Organisational

Ecology

Strategy

Positive agency

theory

Principal/agent

theory

Transaction cost economics

Process

Control

Static Dynamic

Differences between Approaches: Level of Analysis

System

Population of

Organisations

Organisational Dyad

Organisation

Intergroup

Group

Personal Dyad

Positive

agency

theory

Principal

/agent

theory

Transaction

cost

economics

Transaction

cost

economics

Behavioural

theory

Strategy

Organisational

ecology

Evolutionary

Theory

Intra

organisational

ecology

Evolutionary

Theory

Future Directions: Organisations as Complex, Adaptive Systems

Based on Complexity Theory

‘we cannot hope ever to understand organisations fully by taking them apart and examining all their parts’.

Why?

‘Complex systems have a life of their own’

‘complex systems self organise’.

Future Directions: Organisations as Complex, Adaptive Systems

‘non-linear, dynamic behaviour of complex systems implies that their evolution can be very sensitive on initial

conditions’.

Complex systems adapt to their environment.

Strong links with work on organisational learning, managerial repertories and dominant logic (Bettis and Prahalad, 1995).

Bettis and Prahalad: Organisational Stability

Organisational

Stability

Low

High

Environmental

composite

Equilibria

Organisation in

equilibrium (current

dominant logic)