Chapter 1 Introduction to Organization

1. Chapter 1 Introduction to Organization

2. Scope of Chapter 1 • Purpose and coverage of the book • Key terms: organizing, organizations, and organization • Components of organization • Main organizational choices • Signs of organizational deficiencies • Strategic contribution of organization

3. What is Organization? Organization assists the management of a collective activity by providing: • Structure and procedures • Ways of managing fundamental processes • Arrangements for transacting across corporate and national boundaries

4. Organizing, Organization, and Organizations Organizing: the process of arranging collective effort to achieve an outcome superior to that of individuals working alone Organization: the regularities of organizing in terms of a structure of roles, tasks, and procedures; processes; and arrangements to transact across the boundaries of an organization Organizations: the units within which organizing takes place – usually having a formal identity

5. Components of Organization (1) Structure and procedures • Basic structure: Hierarchy – levels, layers, designated authority, reporting lines Specialization – roles, groups, and units • Procedures: Rules and standards Schedules Systems

6. Components of Organization (2) Ways of managing fundamental processes • Integration & coordination • Control • Reward

7. Components of Organization (3) Boundary-crossing • Outsourcing • Virtual Organization • Alliances • Organizing across borders

8. Fundamental Purpose of Organization It enables members of an organization to: • undertake wide variety of activities according to a division of labor (specialization) • coordinate their activities It also defines the boundaries of the organization and its interfaces with the environment

9. Main Organizational Choices See Box 1.2 Chapter 1

10. How Does Organization Contribute to Performance? • Management has long been defined as: “getting things done through other people” • Therefore how people are organized will affect the contribution they make through their collective effort

11. Organizational Arrangements can Affect People’s Performance • They can motivate behavior - e.g. via defining jobs & goals, reward systems • They can facilitate behavior - e.g. via providing for communication • They can constrain behavior - e.g. via restrictive rules & procedures

12. Signs of Organizational Deficiencies • Depressed motivation and morale • Decision making is slow and of poor quality • Conflict and lack of co-ordination • Failure to respond innovatively to changing circumstances • Rapidly rising costs, especially in administration

13. The Strategic Contribution of Organization

14. “Organizational Capabilities Represent the Last Truly Sustainable Source of Competitive Advantage” • People are the key strategic resource • Organization is concerned with the ability to organize and motivate people in unique ways to achieve strategic objectives

15. “The Last Truly Sustainable Source of Competitive Advantage” (2) From a strategic perspective, organization is expected to make an important contribution to: • dealing with changing contingencies (e.g. growth) • effectively implementing strategy, so gaining competitive advantage • managing diversity (e.g. international expansion) • promoting a combination of efficiency and innovation

16. The Key Drivers of Business Strategy that Organization has to Support • Customer demands for higher quality & service • Ability to attract and retain the best people • International competition • New and rapidly changing technologies

17. So, the Design of Organization has to “Fit” With: • Strategy (tasks and priorities) • People • Environment • Technology (physical and informational)