Module 1 Notes Sem 210 PDF

Week 1: Organizational theory Overview: ➔ We view organizations as a whole ➔ Purpose ◆ How organizations work (develop characteristic cultures and evolve overtime, power and politics) ◆ How organizations emerge, survive, thrive and pass away (how well their...

Week 1: Organizational theory Overview: ➔ We view organizations as a whole ➔ Purpose ◆ How organizations work (develop characteristic cultures and evolve overtime, power and politics) ◆ How organizations emerge, survive, thrive and pass away (how well their characteristics suit there tasks and environment) ◆ How can we effectively navigate organizational life (how to design organizations that are well suited to their tasks and environment) Origins of Organizational Theory: ➔ Late 1800’s - Early 1900’s as people struggled to administer increasingly large/complex organizations ➔ Goal was to help organizations achieve and complete tasks (practical necessity) 1. Rise of engineers: They wanted to design organizations, like machines, to be effective and efficient ◆ Ex: Henri Fayol: Looked at organizations as a whole and developed a framework with functions an organization needs to be able to survive (principles of administration - raising funds, processing material etc) Keep the organization/machines running 1. Planning or forecasting the needs of the organization 2. Organizing the assignment of tasks and responsibilities to different people 3. Providing commands/ensuring people know what they need to do 4. Coordinating all activities so they fit together and have a purpose 5. Control and make sure plans/commands are followed through in practice ◆ Fredrick Taylor: Introduced a framework known as scientific management, believing we could use experiments to identify better ways of performing specific production tasks. This process was the responsibility of managers to design experiments He would observe people's behaviours at work and sequences and experiment to find are to increase efficiency He increased one steel worker’s productivity by 300% and inspired Henry Ford to develop production line and conveyor belt 2. The Challenge of Human Relations  ◆ The Engineers approach ignored features of organizations like psychological and sociological dynamics that shaped decision making, motivation and relationship between workers and their managers Psychologists saw that task must be performed by people and building relationships between workers and their organizations Elton Mayo wanted to increase industrial agitators and he cannot see society as a group collaboration. He wanted workers to work and accept their proper place in life. A social system where people contribute to an overarching cooperative purpose and embrace the purpose of the organization as their own. However efficient organization, at the cost of shared purpose is doomed to fail overtime ➔ Universalistic approaches: Mechanistic (efficiency) vs organic (motivation and commitment) ➔ Organizations as a sociological concern ➔ A world of organizations ◆ Max Weber (modern bureaucracy) Early 1900’s he argued that one of the characteristic features of modernity was a new type of bureaucratic organization, which allowed concentration on power. This organization contrasted organizations where authority was based on on birth and jobs were a source of prestige rather than a vocation Structure- assign duties and jobs to people and within a hierarchy. Authority was issued based on their job rather than charisma or private status Technocracy- Job role is more important than the people who occupy it Accountability- each decision made is recorded, and can be analyzed if it is appropriate Formal Rationalization- make decision objectively based on framework rather than a case-by-case basis The Great Debate; ○ Weber saw bureaucracy as a powerful way of realizing human potential ○ Weber also feared that rationalization could trap people within a system that did not focus on the individuality or circumstances The Emergence of a discipline ➔ Our primordial flux  ◆ Scholars have debated the merits of mechanistic (every cog fitting into place) vs organic organizations (community with an emphasis on aligning goals and sustaining people's commitment to an organization) ◆ Sociologist found themselves divided whether bureaucracy envisaged as a mechanistic organization was tool for enabling human potential or dehumanization ➔ Structural Contingency theory ◆ Ultimately a different approach was created and scholars argued that the best approach is contingent (it depends) ◆ The best design or approach for an organization reflects its task and environment (success is based on the fit of its design and its tasks) ◆ Structure: a set of enduring organizational characteristics, or stable design features 1. Is decision making centralized or decentralized (are they made by a senior official or executive team, or are lower level people allowed to make decisions). Ex: retail stores offer centrally determined set of products to ensure consistency across locations or stock good that our popular locally 2. What is the extent are people's responsibilities fixed? Are they expended to do specific task or are they free to set aside task when they see other problems and project they feel they can assist 3. Are they formal rules that decide how decision are made (promotions, rewards) or are people left to their own discretion ◆ Contingency: the impact of structure is contingent on the fit with the task and environment (scale of the tasks- a individual market seller vs a mass producing products in factories) Empirical work on when particular organizations designs are most likely to succeed or fail Mechanistic and organic types of organization each thrive in different circumstances ◆ Overtime in the contingency approach, people have shifted away from looking at specific contingency and started looking at configurations/bundles of organization characteristics that fit effectively together. Ex: Mechanistic characteristics all work together to make it reliable and predictable and organic organizations characteristics make it adaptive and responsive ➔ Configurational theories remind us that success comes from combinations of characteristics. Performance implications of any one structural characteristic or design decision isn’t just contingent on the task and the environment of the organization, but is also contingent on all the other design decisions made. Moving from one configuration  to another is difficult. Every change to one design feature can have unexpected impacts on others, which will also have to be adjusted, also people get used to certain organizations and they can struggle to adapt to multiple design changes at once. The Great Explosion: Or, “theories galore” ➔ Organization theory arises from the efforts of practitioners to make sense of how organizations work and can be effectively designed and from the efforts of sociologists to understand the changing nature of the world and impacts of new kinds of organizations like modern bureaucracies. ➔ It moves from universalistic ideas (people think there is one best way to design organizations) to more of a contingency theoretical approach (people think when specific designs might fit with particular tasks and environments, and how the decisions can be different in particular circumstances) Week 2: Strategy Overview ➔ Strategic Planning ◆ Modern strategic planning took shape in the 60’s and 70's. Looking back to those early days can help us see what certain tools were originally designed to do and why and when they might be most useful to us now Before the 60’s, long range planning was most popular. Forecasting predicts the resources that will be needed where, to enable continuation and growth.There focus was ensuring funds, materials and trained personnel was all in place to allow them to scale up successfully. Ex: A new factory open had machines in it and people to run them In the 60’s and 70’s there was economic uncertainty and organizations had to learn to cope with frequent economic fluctuations and disruptions. There was an increase in competitions through increased effort in trust busting, where the government broke up large, monopoly companies when they controlled too much of the market and prevented competition. Corporate managers looked for solutions to these challenges in strategic planning. The idea behind strategic planning was to develop some conscious and coherent direction for the organization; a set of decision and actions that all fit together to achieve it goals and took into account a range of factors (Ex: profitability of different industries they might want to join, it resources, and responses and reactions of competitors (lowering price)) ◆ Some of the defining practices: Industry and portfolio analysis: ○ Which industries should be in, and how should we behave? Ex: BCG matrix- looks at market share and industry growth rate to tell us whether we should invest, flee or making most of the industry  Scenario analysis: ○ What is more or less likely to happen, and how will it affect us- what can we do to make the most of likely futures or buffer ourselves from bad ones ○ Scenario planners would look at the organization's environment, from customer trends, the risk of new competitors and the possibility of economic recession. They provide decision makers with information on how particular decision could play out in different scenarios and how likely those different scenario might be ○ Ex: pandemic waves and lockdowns and trade Game Theory: ○ How competitors respond to different moves, given their interests and options ○ Once we understand the game people are playing, we can think of how best to play the game or change it for the better ➔ Strategic management ◆ Planning practices remain prevalent-but in the 80’s, planning began to be assimilated in the broader approach of strategic management Planning was attacked as overly rationalistic, inflexible and decoupled from decision and actions; too much formulation, not enough implementation… Strategic management was then corrective: an emphasis on three issues, first managing implementation, second continuous change, and third learning and adaptation. The number of companies using strategic planning reached a new high in 2007 ◆ Some of the defining practices: Generating strategy and strategic but-in through ongoing engagement with middle management and other staff→planning becomes less insulated Building management systems–iterative shaping of and learning from activity→ plans become less fixed Ex: Student and faculty rome free through interdisciplinary boundaries, registering for courses outside of their faculty Advantage becomes less about having a better plan, and more about cultivating hard-to-imitate cultures of planning and change management, to generate and implement an evolving strategy ➔ Open strategy ◆ Open strategy is rooted in the 90’s, but is still taking shape: In strategic planning, the plan is imagined as a “secret” source of advantage…  In strategic management, strategy is made more transparent across the organization, and advantage is sought in shard-to imitate “strategy-in-action” Open strategy involves sharing strategy with outsiders: even involving them in strategy formulation.It builds on the ideas of strategic management Why? External expectation- proving rationality to investors and stakeholders– and tapping into vaunted creativity of the commons (must have a coherent direction convinces people to invest and tell people potential harms of your strategy) ◆ Some of the defining practices: Public strategy reporting, and strategic transparency Strategy jams (open forum to contribute and reactions to a strategy or to some part of a strategy) and crowd-sourcing have become more common ◆ Some of this was foreshadowed, some may be faddishness…The new is built on the old An Integrative Framework ➔ The purposes of strategy ◆ In general, strategy is about the pursuit of: Competitive advantage ◆ Competitive Advantage Something rewarding, at which we excel relative to our competitors) This reward is usually profit–but could be otherwise (services,charity) ◆ Sustainable: we want this advantage to endure, and outperform our competitors into the future ➔ The art of positioning ◆ Strategy as a matter of positioning. Your whole organization is designed around a specific set of activities that help you produce some distinctive kind of value, it can't be easily copied Operational effectiveness (it is doing whatever you do as effectively as possible) is not enough as it is relatively easy to copy. And the problem with this is that we all end up in the same place. Positioning as being different Positioning as being based on fit: ○ First order fit–or consistency across activity (all activities work towards the same goal/strategy) ○ Second order fit–or mutual enhancement of activities (Ex: hiring and course design work together at university, they work together to have value) ○ Third order of fit–or optimization of activities (every activities is mutually optimized to deliver value)  The importance of trade-offs–making a position sustainable (all activities fit together in a mutually enhancing way to produce some distinctive kind of value, where no one can adopt that same set of activities without sacrificing the competitive advantage) Strategic Analysis: ➔ Tying things together ◆ Industry analysis: help us select which industries we want to focus on and our business strategy within that industry to maintain a competitive advantage Porter’s Five Forces framework (understanding the landscape): ○ The big idea is that profitability comes from market power; you become profitable when you offer something to customers that they aren’t able to get elsewhere (high quality and low price) ○ Porter’s forces will erode this profitability until your making just enough profit to not pack up ○ Rivalry between competitors: how many other companies are positioned within their industry? (low rivalry competitors will continue as normal, but when it is high competitors will be on alert of people’s profit’s and how they can undercut you, and the gain will be short term, no one will be stuck in the same place). ○ 4 different factors on rivalry between competitors ◆ Risk of new entrants- high margin increased the amount of people entering the market ◆ Risk of substitution- if customer’s can satisfy in a different market then your unlikely to sustain high profitability ◆ Market power of buyers: few buyers can influence price because there isn’t enough people who will buy it ◆ Market power of supplies: Suppliers with many different customers are able to increase prices when they see them becoming profitable  ◆ Firm analysis: way of making sense of our internal capabilities and what we can already do and what we should abandon or invest in to improve VRIO Framework (understanding the organization) ○ Resources: could be anything you can use to create value ◆ Ex: Materials, technologies, skills, reputation, routines, relationships ◆ Creativity can help you find resources where other could not ◆ It helps us evaluate resources and it ability to achieve a comparative advantage ○ Organized- are u actually do anything we the resource you already own and are you putting it to good use ○ Competitive parity: if you are not putting it to use you are putting yourself at a disadvantage. Won't be hard for others to do better ○ Valuable- the resources allows you to do something that people value ○ Rate- Competitors either can copy easily or cannot ○ Inimitable- whether it is difficult for a competitors to achieve the same effect with different means What resources are valuable is dependent on what your are trying to achieve/goal Resources are only valuable when deployed alongside others (activities must fit together) ◆ Evaluating current and potential positions Week 3: Culture, inertia and change Organizational Culture and Change: ➔ Exploring intersections of organization theory and strategy: ◆ Organizational culture A key characteristic of of organizations A focus for organizational design, and a key focus for strategy  A critical context for effective and impactful strategizing ◆ Organizational inertia and change Redesign and strategic choices both entail organizational change Inertia explain why organizations stay the same; and why change is difficult ○ How to think practically about change, and a repertoire of tactics Culture ➔ Shein’s model of organizational culture ◆ He highlights 3 different layers of culture Artifacts: 1st layer, aspects of a culture that are relatively visible and observable. Ex: patterns of behaviours ○ It is important because it is important to how people behave and they include patterns of behaviour that can be important to fulfilling our strategy and creating trust ○ It is important because of the information they can provide about less obvious cultural dynamics. How things work and why they work. Ex: someone’s personality and why they act the way they do ○ These are the visible, tangible elements of an organization. Artifacts are the most obvious and accessible layer of culture, but they are also the hardest to interpret because they require context to fully understand. Artifacts include things like: ◆ Office layout and design ◆ Dress code ◆ Communication styles (e.g., formal or informal) ◆ Ceremonies, rituals, and traditions ◆ Language and jargon ◆ Technology and tools ○ While artifacts are easy to observe, they don't necessarily reveal the deeper cultural meanings unless you understand the underlying values and assumptions. Espoused beliefs and values: 2nd layer, ○ This layer consists of the organization's stated values, beliefs, and philosophies that guide decision-making and behaviors. These are  the principles the organization claims to follow or believes in. Examples of espoused beliefs and values include: ◆ Mission and vision statements ◆ Ethical guidelines ◆ Codes of conduct ◆ Stated goals (e.g., customer-centricity, innovation) ◆ Leadership philosophies ○ However, there can be a gap between what is espoused and what is actually practiced. Sometimes ideals the organization promotes may not always align with actual behaviors Underlying Assumptions: :The Deepest Layer ○ These are the core, unconscious beliefs and assumptions that drive behavior in the organization. These assumptions are so deeply embedded in the culture that they are often taken for granted and may not even be discussed or acknowledged by members of the organization. They represent the fundamental assumptions about how the world works, what is considered normal, and how people should behave in the organization. For example: ◆ Assumptions about human nature (e.g., whether people are inherently lazy or motivated) ◆ Assumptions about time and efficiency (e.g., long-term vs. short-term focus) ◆ Assumptions about relationships (e.g., hierarchical vs. egalitarian) ◆ Assumptions about success (e.g., focusing on innovation vs. operational efficiency) ○ These underlying assumptions are so ingrained in the culture that they are rarely questioned and often shape how the organization adapts to changes or deals with external pressures. 4 points about culture ○ The three layers of culture are all important in their own right- how things are done, how things are justified, and what sort of things are assumed ○ These layers are interrelated, and the lower levels are more critical, explain and influence the higher levels ○ The elements of culture can affect each other in two directions ○ Because all the elements are interrelated they can pin each other into place, making it hard to change a culture significantly ◆ Dual set of implications Culture as context:  ○ What kind of choices and behaviours are currently legitimate and with the way people do things ○ What kind of choices and ideas could be lightmated and become acceptable to people and how this might be achieved Culture as focus: ○ Culture as a strategic resource– arrays of activities and orientation that are key to making and sustaining capabilities, and to effective positioning ○ Culture as related to change – a potential source of inertia Interia: ➔ Pragmatic sources of inertia ◆ Refer to practical, often structural or operational factors that cause an organization to resist change or maintain status quo ➔ Normative Sources of inertia ◆ Refer to the societal, cultural, and institutional norms and expectations That shape an organization's behavior and make it resist change. These sources of inertia are related to the rules, standards, and beliefs that organizations and their members hold about what is “right,” “acceptable” or “expected” In a given context. These Norms can be external bracket imposed by industry standards, societal expectations, etc.) or internal (developed within the organization over time). They create a sense of stability and conformity, but also limit the flexibility needed for Innovation and adaptation. ➔ Cognitive sources of Inertia ◆ Refer to the mental frameworks, cognitive biases, and the ways of thinking that limit an organization's ability to adapt, innovate, or change. These sources of inertia are deeply embedded in the way people perceive the world, interpret information, and make decisions. They often arise from Individual and Collective mental models that shape how people are problems, solutions, and their  environment. cognitive inertia can prevent organizations from seeing the need for change, understanding the scope of change required or effectively implementing the strategies ◆ ➔ Responses to change ◆ Enthusiastic support - what we aim for ◆ Compliance - people doing what they're asked to do ◆ Passive resistance - people are hoping the change will fail and they will avoid any extra work for the change to become a success ◆ Act of resistance - people go out of their way to undermine what you're trying to do to maintain status quo Change: ➔ Disruption and building momentum ◆ We want to Undermine status quo and build momentum with the proposed change and creating a space for people to talk ◆ ➔ Entrenching a new normal ◆ Once pressure is taken away, people will start to go back to familiar ways. In order to entrench a new way we look at three strategies. First we want to ensure everyone has the resources to enact the change and they are putting them to good use (enabling and policing). Second, celebrate those who have achieved success in the change and cast those who resist the change in a bad light ( valorizing and demonizing). Third, ensure that people are familiar with the new status quo (normalizing and routinizing) ◆ ➔ Incumbent responses  ◆ Remember, others will be working to maintain the status quo… Resistance may be passive, or it may look like this: Week 4: Institutional theory and Corporate social responsibility Institutional theory: Starting points ➔ The impact of the environment ◆ Technical (thinking about how quickly technology is changing and how organic organization are better suited to changing technologies and technical task definitions) ◆ Socio-cultural (shaped what organizational types people deemed ration or comprehensible, what products appeal to people, how stakeholder respond to you organization) ◆ Theorizing institutions Basic definition: the facts of social life ○ Something we can observably note as a fact about how people think and act within a society. They are often taken for granted and are so natural we don't question them ○ Ex: Canadians drive on the right, money is a means of exchange, and it is possible to own property, physicians must be formally trained, shops will exchange goods for money Regulative/pragmatic dimension ○ Canadians drive on the right ◆ Fines, Crashes, (Road Rage) Normative dimension ○ Canadians drive on the right ◆ Irresponsiblity, safety, anger Cognitive dimension ○ Canadians drive on the right ◆ Obvious, habitual, observable Interdependence ○ Dollar is a means of exchange, shops exchange goods for money and it is possible to own property all relate to each other ◆ Institutional logics Refers to the whole set of roles, relationships, activities that define a recognizable area of social life  ○ Ex: family life (affects childcare, court decision etc) ◆ Roles of father, son, sibling ◆ Interrelationship based on duty, affection, responsibilities Questions of legitimacy ➔ Every organization is dependent on stakeholders: ◆ Finances, employees, customers, supplies, activists, the state… ◆ Those stakeholders invest time and resources based on social evaluations Of competency Of morality Of rationality ◆ Organization pursue social legitimacy (belief that you as an organization are competent, moral, rational, and sensible) They pursue based on self-interest (if you need stakeholders for resources then you need to appear legitimate They pursue based on member commitments (members believe in the criteria that other evaluators are using to judge the organization) ➔ Institutional logics shape social evaluations Of competency (Ex: university never provide grade cause people will worry you don’t understand how university work or value you degree) Of morality (Ex: working 9-5 is seen as responsible and professional, and flexible hours may be seen as lazy) Of rationality (Ex: prioritizing small, short-term loans to borrowers with proven repayment histories is viewed as rational) ➔ Organization must gain legitimacy in 2 main ways ◆ Substantive decision: structures, governance, routines, incentives (lead to bureaucracy) ◆ Symbolism and Rhetoric: espoused motivations, justifications and gestures (In universities we have graduation ceremonies, awards, scholarships, speaker, keeps people engaged and achieving the core purpose of the organization) Corporate social responsibility ➔ What comes to mind when you hear CSR ◆ Good behaviours- with social benefits Ex: investing in communities, reducing carbon footprint, avoid discrimination in hiring, and inhumane working conditions ◆ Window dressing (matter of image management and public image) Ex: donating to charities not because of the merits, but the fact that it marks customers feel good about the company making them more inclined to buy the products ◆ But also: a system of moral beliefs, experts and expectations that shape how we evaluate whether or not a organization is being socially responsible  ➔ CSR is an institutional logic…a whole system for elevating, rewarding and punishing different kinds of organizational behavior ➔ This system is not new. The same set of questions keeps cropping up-especially in times of stress for the business community: “How does the unprincipled pursuit of profit make society a better place?” The instrumental justification for CSR ➔ Do good, so that you may do well- ◆ Instrumental motivations They talked about how investing in CSR would allow you to perform better as an organization and be more profitable than before ○ The ability to avoid public pressure, activists, boycotts and regulations– reputational concerns ○ Make the most of ethical consumerism–”(more than a) license to operate” ◆ Two general approaches cosmetic–PR for good deeds, token or serious gestures, to enable people to see you are a good organization Strategic–seek profitable lines of good behaviour: ○ Take account of the social impact of strategic decisions–for the sake of survival ○ Have an agenda– not just responsive CSR, but transformation of the value chain in line with strategy, and leverage of the firm's capabilities to improve social and competitive contexts ○ Make CSR part of the value proposition (Ex: whole foods) – focus on active, performancing-enhancing social responsibility, rather than simply avoiding responsibility Critique, and the ethical justification for CSR ➔ Does the interest of the firm run towards CSR? ◆ Maybe sometimes…Some forms of CSR, in certain circumstances, may enhance profitability (consumers invested in ethical consumerism and avoiding boycotts) ◆ But some forms of socially desirable CSR may well not be profitable– or may reduce profits ◆ Furthermore, irresponsible and corrupt behaviour can also be immensely profitable ◆ It’s not the case that doing good will always help you do well: at least, you may do as well or better by being badly behaved, while managing to keep a positive “face.” Just don’t get caught… ➔ So, if we’re interested in business that makes the world a better place– if you want to do good, as much or more than you want to do well, what are we left with?  ◆ Be good because it's good to be good…Not exactly an inspiring motto–but at bedrock, the ultimate in moral justification. Do what is right; and, usually, struggle to work out what that is ◆ Return to ethics–and to the contemplation and construction of a good life ➔ CSR can be costly, not profitable and may not be important to your target market