Organizational Behavior Fundamentals

Chapter 1: What are Organizations?

• Organizations are social entities
• Organizations are goal-directed
• Organizations are deliberately structured and coordinated activity systems
• Organizations are linked to the external environment

Block 1

• An organization is more than just its external, concrete aspects; it's also abstract
• Organizations are built by people
• Organizations must be designed to achieve a specific purpose
• The coordination of people and resources is central to any organization

Block 2: Types of Organizations

• Organizations include large, multinational corporations and small, family-owned businesses
• For-profit organizations exist to earn money for their owners; non-profit organizations focus on social impact

Block 2: Hybrid Organizations

• Hybrid organizations pursue both profit and social impact

Block 2, Importance of Organizations

• Organizations bring together resources, produce goods and services, and facilitate innovation.
• Organizations are adaptable to external environment changes

Block 3, Organization Design and Theory

• Managers face challenges due to competition, implementing changes, and maintaining efficiency.
• Sustainability issues, large size, bureaucracy, and outdated culture affect organizations
• Managers need a balance between the different aspects affecting organizations

Block 4, Organization Design

• Design concepts apply to all organizations
• Students and managers learn from organizational examples
• Organization design helps managers understand, diagnose, and respond well to emerging business challenges

Block 5, Organizational Theory in Action

• Globalization offers opportunities and intense competition in third-world countries
• Sustainability, ethics, and social responsibility are crucial factors today
• The speed of responsiveness and digital workplace are important organizational factors
• Diversity and inclusion are essential for effective organizations

Block 6, Levels of Analysis in Organizations

• Organizational behavior studies individuals
• Organization theory and design studies the entire organization

Block 7, Organizational Design Essentials

• Organization design provides tools to understand, design, and manage organizations successfully
• The focus of this course is on how organizational structures are influenced by the wider environment
• Decision-makers design effective structures to manage the external environment

Chapter 2: Perspectives on Organizations

• Organizations can be viewed as either closed or open systems
• A closed system perspective focuses solely on the organization.
• An open system perspective considers the organization's dependencies and interactions with its context

Chapter 2: Input and Output in Organizations

• Organizations are open systems, meaning their inputs and outputs are related to the external environment
• Organizations take in input resources and transform them to output resources

Chapter 2: Five Basic Parts of an Organization

• Technical core: Activities involved in creating a product or service
• Technical support: Activities that help the technical core
• Administrative support: Activities supporting other parts of the organization
• Top management: Direction, strategy, and goals
• Middle management: Operates between top and lower levels

Chapter 2: Dimensions of Organization Design

• Structural dimensions describe the features of an organization ("internal characteristics")
• Contextual dimensions describe the environment influencing organizations ("external")
• Dimensions such as size, technology, environment, goals/strategy, and culture influence organizations

Chapter 2: Structural Dimensions

• Formalization: The amount of written documentation
• Specialization: Division of labor
• Hierarchy of authority: Reporting structures;
• Centralization: Level of decision-making authority
• Professionalism: Levels of education and training of employees
• Personnel ratios: Distribution of people among functions
• Complexity: Number of departmental units

Chapter 2: Contextual Dimensions

• Size: Number of employees or units
• Organizational technology: Tools, techniques, and processes
• Environment: Elements outside the organization (political, social, economic)
• Goals and strategy: Organization's purpose and actions
• Culture: Underlying values and norms shared by employees

Chapter 2: Interacting Different Dimensions of Organizational Design

• Structural and contextual dimensions constantly interact
• There is an interdependence among all dimensions

Chapter 2: Characteristics of Three Organizations

• Table provided to illustrate the varying characteristics of distinct organizations (W.L. Gore & Associates, Carrefour, Wales Millennium Centre)

Chapter 2: Performance and Effectiveness Outcomes

• Efficiency: Amount of resources to achieve organization's goals.
• Effectiveness: Degree to which an organization achieves its goals.
• Stakeholder approach: Balancing needs of the groups involved in organization performance (customers, employees, shareholders)

Chapter 2: Major Stakeholder Groups

• Different stakeholders have varied interests
• Understanding these expectations leads to effective strategies

Chapter 3: The Evolution of Organization Theory and Design

• The evolution of design has historical perspectives (Taylor, Fayol, Hawthorne Studies, Contingency Theory)
• Contemporary design acknowledges dynamic complexity, interrelations and learning in organizations

Chapter 3: Contemporary Organizational Design

• Increased complexity and turbulence requires adaptability
• Chaos theory highlights the dynamic and nonlinear nature of organizations
• A learning organization is based on equality, openness, little hierarchy, and adaptability

Chapter 3: Efficient Performance vs Learning Organizations

• Organizations have shifted in style from vertical structures to horizontal structures
• Traditional formal controls have shifted to the sharing of information
• Competitive strategies had shifted to collaborative strategies
• Rigid structures changed to adaptive cultures.
• Design choices may vary across organizations, but effective ones typically combine organizational elements

Chapter 3: Two Organization Design Approaches

• Mechanistic: Vertical structures, clearly defined hierarchies, rigid routines in stable environments
• Natural System: Horizontal structures, empowered roles, adaptive culture in turbulent environments

Chapter 3: The Role of Strategic Direction

• Organizational design is influenced by strategic goals
• Top managers determine goals and strategies for organizational adaptation

Chapter 3: Top Management Role

• Interpreting the environment, strategizing, and determining goals significantly impact organizational effectiveness
• SWOT, and scenario planning are effective methodologies to set organizational directions

Chapter 3: SWOT Analysis

• A crucial step in direction-setting involves assessing strengths, weaknesses, opportunities, and threats within and outside of the organization.

Chapter 3: Scenario Planning

• Future possibilities are considered, and contingency plans are developed.

Chapter 3: Top Management Role in Organization Direction

• The CEO and top management are crucial in defining an organization's mission, goals, and strategies for optimal performance
• Internal situations and the external environment, strengths, and weaknesses are considered in decisions

Chapter 3: Organizational Purpose, Strategic Intent

• Goals help organizations achieve their purpose
• Strategic intent is focused, comprehensive, and directed towards a specific organizational goal
• Strategic intent is comprised of Aspects: Mission, Competitive Advantage, and Core Competence

Chapter 3: Strategic Intent; Mission

• Mission describes the purpose and scope of an organization.

Chapter 3: Strategic Intent: Competitive Advantage

• Competitive advantage distinguishes an organization from its competitors

Chapter 3: Strategic Intent: Core Competence

• This refers to what the organization does better than other competitors.

Chapter 3: Organizational Purpose: Operating Goals

• Operating goals are detailed, action-oriented, short-term goals.
• These goals support the organization's mission.

Chapter 3: Typical Operating Goals

• Organizations face conflicts of different goals
• Goals frequently conflict with one another.

Chapter 3: Goals, Types and Purposes

• Mission and official goals provide the purpose of the organization
• Operating goals guide everyday activities and decisions

Chapter 3: Selecting Strategy and Design

• Goal Setting requires consideration of organizational goals, strategies, and techniques to fulfill goals.
• Useful models: Porter's Competitive Strategy and Miles and Snow's Approach.

Chapter 3: Porter's Competitive Strategies

• Porter's strategies include Differentiation and Cost Leadership (Broad and Narrow Scope)

Chapter 3: Miles and Snow's Strategy Typology

• Models of organizational strategies include Prospector, Defender, Analyzer, and Reactor strategies.
• This typology guides how structure and strategy align with external environments.

Chapter 3: How Strategies Affect Organizational Designs

• Porter's & Miles & Snow models lead to design implications
• Prospector vs Defender strategies demonstrate organization's ability to adapt to change.

Chapter 3: Strategies Affect Organization Design

• Organization design varies based on business strategies
• Managers select the design elements most congruent with their chosen strategy
• Using approaches like Porter's and Miles & Snow's Typology allows for strategy selection and effective outcomes

Chapter 3: Other Contingency Factors Affecting Organization Design

• Several factors (Strategy, Environment, Size, Technology, and Culture) affect organization design
• Contingencies should be addressed to achieve organizational effectiveness

Chapter 3: Top Management Role in Organization Direction, Design, and Effectiveness

• Top management must align strategies with organizational goals, evaluate the internal environment, and the external environment .

Chapter 3: Assessing Organizational Effectiveness

• Organizational effectiveness reflects the organization's ability to achieve its goals.
• Several approaches are possible to assess organizational effectiveness.

Chapter 3: Approaches to Measuring Organizational Effectiveness

• Goal-based, Resource-based, Internal Process, Strategic Constituents approaches are utilized in assessing organizational effectiveness

Chapter 3: Examples of Organizational Effectiveness Indicators

• Meeting deadlines, acquiring resources, maintaining quality products/services, satisfaction of stakeholders, and market share are important indicators of organizational effectiveness.

Chapter 3: 1-Goal Approach

• Goal-based approach focuses on accomplishing objectives.
• Usefulness: Output goals are frequently quantifiable
• Problems: Goals might conflict and indicators can be subjective

Chapter 3: 2- Resource-Based Approach

• Resource-based approach focuses on obtaining resources
• Usefulness: Valuable when direct performance data is not available.
• Challenges: Changing values of different resources can affect this approach

Chapter 3: 3- Internal Process Approach

• Internal Process Approach focuses on internal operations and efficiency
• Usefulness: Enables measuring if internal structures are performing optimally
• Problems: Evaluations can be subjective due to different factors (culture, norms).

Chapter 3: 4- Strategic Constituents Approach

• This approach considers the needs of different stakeholders. (employees, customers, suppliers)
• Usefulness: Provides a holistic view of effectiveness.
• Problems: Every organization could have different constituents with different needs, and this approach requires addressing them all.

Chapter 3, An Integrated Effectiveness

• The competing values approach balances multiple aspects of organizational effectiveness

Chapter 3, Summary and Interpretation

• Organizations are purposeful
• Leaders set direction by considering external and internal factors
• Goals and strategies help achieve objectives
• Models and approaches guide strategy development
• Organizational effectiveness needs constant assessment

Test your knowledge on the key concepts of organizational behavior and theory. This quiz covers challenges organizations face, the importance of organizational design, and various perspectives that describe how organizations operate. Assess your understanding of the critical aspects that contribute to effective organizational management.